A new perspective on Saudi Arabia’s Vision 2030

There is a certain amount of confusion among observers about Saudi economic strategy. We can gain clarity on this if we look at the many initiatives of Vision 2030 in the manner that a venture capitalist would look at his portfolio of investments. Doing so, we would see Crown Prince Muhammad bin Salman as placing bets on a large number of sectors, thereby hedging his risks since the economy only needs to win a few of these bets for actual diversification away from oil to take a meaningful step forward.

Here, key chips will obviously remain on the core oil, gas, and petrochemical sectors, still with decades of productivity and market demand ahead of them. They will be developed further upstream and downstream with an additional emphasis on research in petrochemicals to produce more products that can be derived from crude oil. Oil demand is not going away, and the Kingdom, as the lowest-cost producer, maintains a massive competitive edge in this industry for the foreseeable future. Recent discoveries of gas reserves have further cemented this advantage and will also increase Saudi industrial competitiveness with abundant gas feedstock in the pipeline. 

Four new and important sectors, namely, mining, tourism, sports, and entertainment, are seen as particularly promising since either they have a clear global competitive advantage or else there is substantial pent-up domestic and regional demand for their products and services. Here, for example, Saudi Arabia has already discovered more than $2.5 trillion worth of minerals that can be commercially mined and is also going to invest downstream in refining them. Additionally, ventures are already being put together to refine minerals mined in Africa as African-based mining companies see Saudi Arabia as more stable and better equipped with infrastructure than the countries where the raw minerals are being extracted and, hence, as a more reliable location for their large downstream investments.