Riyadh has been criticised for not moving quickly enough on its promised economic reforms, but recent successes show momentum is building
Three years after the Vision 2030 economic blueprint was announced in Saudi Arabia, the first truly measurable impacts of the subsequent National Transformation Programme are becoming apparent.
Over the past six months, confidence in the Saudi economy has been boosted by significant developments and project announcements in a broad spectrum of sectors that lend substance to the prospect of meaningful economic diversification within a reasonable timeframe.
The opening up of Saudi Arabia’s leisure and entertainment sector is perhaps the most substantive development to date, having paved the way for the establishment of a cinema industry, mixed-gender sporting events, music concerts and the unveiling of the Qiddiya entertainment city megaproject. The removal of certain travel and civil restrictions on women in late August has added to the sense of change in the air, even if the full effect of the move remains to be seen.
Similarly consequential have been the financial sector reforms. These have been delivered over several years, but came to a symbolic final fruition at the end of August with the inclusion of the second tranche of Tadawul-listed stocks in the MSCI Emerging Markets index. The true importance of the progress in the country’s financial system, however, is the move towards greater financial transparency. This is also deeply entwined with the listing of Saudi Aramco.
Riyadh has also expanded the country’s public-private partnership programme to include water transmission pipelines, in a sign that the kingdom is growing less reactionary to the notion of private parties managing sovereign assets.
There is even a modicum of optimism in the construction sector, where sentiment is improving after five tough years thanks to the movement of projects under the Red Sea Development Company.
The challenges the Saudi government will face as it moves onto more controversial reforms remain mountainous, but there is a sense that Riyadh is tackling problems head on and shaping itself into an economy investors can rely on.
Included in MEED’s Saudi Arabia special report:
- Saudi reform efforts make measured progress
- Security becomes top priority for Saudi Aramco
- Saudi banks chart stable course
- Tadawul’s inclusion on MSCI Emerging Markets Index is big milestone
- Refining Saudi’s strategy for the low oil price era
- Saudi downstream project activity triples in 2019
- Aramco presses ahead with unconventional gas campaign
- Renewables and water projects drive investment in Saudi utilities sector
- Confidence returns to the Saudi construction market
- Riyadh makes some progress with transport schemes
- Saudi Arabia data bank: September 2019