Economic shocks spur Saudi to 'reprioritise' reforms: official

Economic shocks spur Saudi to 'reprioritise' reforms: official
Saudi Arabia's Finance Minister Mohammed Aljadaan attends a session at the Qatar Economic Forum in Doha on May 14, 2024. (Photo by KARIM JAAFAR / AFP)


Global economic "shocks", from the coronavirus pandemic to the war in Gaza, have prompted Saudi Arabia to revise its ambitious economic reform plans, the kingdom's finance minister said on Tuesday.


The world's biggest crude exporter is more than halfway through its Vision 2030 programme intended to lay the groundwork for a prosperous post-oil future.


The programme features several so-called giga-projects -- including a planned mega-city known as NEOM -- long dogged by questions about their viability.


Speaking at the Qatar Economic Forum on Tuesday, Saudi Finance Minister Mohammed al-Jadaan noted that Vision 2030 launched in 2016, well before the pandemic, wars in Ukraine and Gaza and problems like inflation and supply chain disruptions.


"All of these collective shocks that are facing the world calls us also to reprioritise, to look at what we are doing, and how can we actually optimise what we are doing, optimise our plans," Jadaan said.


Giving the reforms "more time" could ultimately be better for the Saudi economy, allowing the private sector to grow alongside the giga-projects, he said.


"If you don't allow your economy to catch up with your projects, basically what will happen is you will import a lot more," Jadaan said.


"And you will not allow your economy, your private sector to catch up and build their factories, manufacturing facilities, service providers to actually support the projects that we are building."


It is not the first time Jadaan has signalled a change in approach to Vision 2030, which is overseen by Saudi Arabia's hard-charging de facto ruler Crown Prince Mohammed bin Salman.


At a briefing with journalists in December, Jadaan said officials had decided to push the timeframe for some major projects past 2030, though he also noted that others would be accelerated.


And at a special meeting of the World Economic Forum in Riyadh last month, Jadaan said officials "don't have ego" and could "change course" and "adjust" in response to economic conditions.


He has not disclosed which projects might see their timelines accelerated or extended.


The most high-profile project is NEOM, whose plans include a futuristic ski resort and twin skyscrapers 170 kilometres (105 miles) long, known as The Line.


Unveiling The Line in 2022, Prince Mohammed said its population would exceed one million by 2030 before climbing to nine million by 2045.


However Bloomberg reported in April that under revised projections, just 300,000 people would be living in The Line by decade's end, and only 2.4 kilometres of the project would be completed by then.


NEOM officials have not commented on that report.


NEOM executive director Tarek Qaddumi told an investor roadshow in Hong Kong last month that the population target of nine million would be met "over time".