Saudi Arabia’s biggest challenge is diversifying its economy beyond oil, said Faisal Alibrahim, the minister of economy and planning.
The kingdom aims to increase the private sector’s share of the economy to 65% from the low 40s and to develop sectors such as advanced manufacturing “that will help us leapfrog away from oil,” said Alibrahim, speaking Monday at the Milken Institute Global Conference in Beverly Hills, California.
“We won’t shy away from investing in tourism and tourism-related sectors,” he said. “These are sectors that did not exist in the past, and we’re trying to catch up.”
The minister also said the nation has “a very large VC ecosystem that is growing fast.”
“We still have a long way to go, but it is something we are prioritizing,” he added.
The push to expand away from oil comes amid new measures to attract foreign investment and workers. They are part of Saudi Crown Prince Mohammed bin Salman’s ambition to open the country to international markets, despite many barriers related to its strict interpretation of Islamic law.
One of the measures include a restriction on state entities from doing business with international companies that don’t have their regional headquarters in the country by January 2024. As of end of 2022, almost 80 companies have applied for licenses to move their headquarters to Riyadh, according to Saudi Investment Minister Khalid Al-Falih.
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