Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud: Viewpoint

Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud

Viewpoint: Mohammed bin Salman bin Abdulaziz Al Saud

The government’s economic renewal of the Kingdom is progressing steadily in accordance with Saudi Vision 2030. The budget for 2020 reflects and reinforces our commitment to implement reforms, plans and programmes to achieve our vision, setting specific goals in a number of areas to help create a vibrant and ambitious society, as well as a prosperous economy.

The government is working to improve the quality of life in the Kingdom by developing and diversifying the economy, improving job opportunities, and enhancing public services in terms of financial and economic stability, the main pillar of sustainable economic growth. The economic and structural reforms implemented since 2017 have had positive effects on our economic performance, and we recently recorded a notable increase of real GDP growth rates in the non-oil sector.

We aim to create an attractive investment environment that contributes to steering the national economy towards our goals of diversification, growth and prosperity. We are encouraging the private sector to play a more prominent role in the economy. It is of the utmost importance to engage with private business, as it is an essential partner for the development of the Kingdom. In this regard, the continuing programme of reforms designed by the government to develop businesses and create an attractive environment for investors has enhanced the country’s ranking in the World Economic Forum’s “Global Competitiveness Report 2019” and the World Bank’s ease of doing business index.

Maintaining financial and economic stability is an essential pillar of sustainable growth, and results confirm that we are progressing towards the Vision 2030 objectives. We are continuously reviewing and updating our policies and programmes to ensure their effectiveness, taking into account global economic conditions and the interest of our country and its citizens. The 2020 budget has been prepared in light of a global economic atmosphere characterised by challenges, risks and protectionist policies, which in response require more flexibility in the management of public finances and an ability to strengthen the economy in order to better face those challenges and risks. Financial control policies and the development of public financial management have contributed to the continued decrease of the budget deficit, which is expected to decline to around 4.7% of GDP in 2019, compared to 5.9% in 2018 and 9.3% in 2017. This confirms the success of ongoing efforts to ensure financial sustainability and progress in implementing projects to strengthen the private sector.

The 2020 budget continues to support programmes that contribute to achieving Vision 2030. This includes the financing of major projects and supporting micro-, small and medium-sized enterprises, as well as entrepreneurs. These are some of the most important engines of growth that will push diversification, and open up new fields for investment and employment.

The budget also includes reviews of some of the programmes and schedules to ensure the continued development and modernisation of government infrastructure and services. The government focuses on improving the efficiency and quality of spending to make the best use of state resources and achieve the highest possible social and economic benefits.

The Public Investment Fund and the National Development Fund, which are the local and external investment mechanisms and the growth arm of the economy, are also contributing to diversification of income sources. These are among the most important goals of Vision 2030. The recent initial public offering of Saudi Aramco is a significant step forward, and the government will continue to encourage the participation of the private sector. Opportunities for private business will continue to arise, enhancing its role in job creation, and in the diversification of our economy.

This viewpoint was adapted from Crown Prince Mohammed bin Salman’s statement of the 2020 state budget. In March 2020 approximately 5% of the 2020 budget was allocated to stem the negative effects of Covid-19.

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