This week’s Future Investment Initiative conference, the fourth installment of year yearly industry event hosted by Saudi Arabia’s sovereign Public Investment Fund (PIF), and which was presented this year as a multi-hub virtual conference, wrapped on Thursday.
The final day of the event included surprising remarks from HRH Crown Prince Mohammed bin Salman, who revealed ambitious plans for sustainable urban development in Riyadh as part of the Kingdom’s redoubled efforts toward economic diversification away from petroleum over the next decade: plans which could include a second listing for the national oil producer (and world’s sixth-largest company), Saudi Aramco.
‘’All of Riyadh’s features set the groundwork for job creation, economic growth, investment, and many more opportunities,’’ the Crown Prince said in a conversation with Former Italian Prime Minister Matteo Renzi, as part of a panel session titled “The Future of Riyadh.”
The Crown Prince said the Kingdom is aiming to make Riyadh one of the top ten urban economies worldwide—it currently ranks 40th—and to grow its population from 7.5 million residents today to 15-20 million by 2030.
“I have no doubt that world economies are not based on nations, but on cities,” he said, asserting that 85 percent of global economic growth—be it industry, innovation, education, services or something else—occurs in urban areas.
The Crown Prince said that Riyadh accounts for around half of Saudi Arabia’s non-oil economy, while the cost of job creation in the capital is roughly 30 percent lower than in other Saudi cities. He said the cost of real estate and infrastructure development in Riyadh is also 29 percent less than in other Saudi cities, and lauded the quality of Riyadh’s infrastructure as the result of “sound management and planning performed by His Highness King Salman over a period of 55 years and more.”
Another round?
The Crown Prince said that a second listing of Saudi Aramco could be on the table, as part of the Kingdom’s plans to raise funds for the Public Investment Fund (PIF), which invests the country’s sovereign oil wealth.
He said that proceeds generated from a second listing would be reinvested domestically and internationally by PIF to benefit Saudi citizens.
Five year plan
The Crown Prince’s remarks underscored an increasingly emphatic push on the part of Saudi Arabia to reduce its dependence on oil revenues.
Earlier this week, PIF unveiled the next phase of its ambitious Vision Realization Program. The strategic roadmap is aimed at growing PIF’s assets under management to $1.07 trillion, and contributing $320 billion to Saudi Arabia’s non-oil GDP, by 2025.
PIF plans to do this through a core domestic strategy that will focus on 13 non-oil sectors for investment: healthcare, utilities and renewable energy, telecommunications-media-technology (TMT), food and agriculture, automotive, transportation and logistics, real estate, aerospace and defense, construction and building components, entertainment, sports and leisure, financial services, metals and mining, and consumer goods.
Under the previous, four-year Vision Realization Program, PIF tripled its AUM to nearly $400 billion, created 10 new economic sectors, launched more than 30 companies and created 331,000 jobs in Saudi Arabia.
Upon the release of this week’s updated roadmap, the Crown Prince praised PIF for its “significant progress at a time of great uncertainty in the global economy” over the past four years, and that the new strategy would extend these achievements, by making PIF the leading catalyst for Saudi Arabia’s economic transformation and diversification.
H.E. Yasir Al-Rumayyan, Governor of PIF, said the fund’s strategy would focus on “funding new human futures by improving quality of life, driving environmental and economic sustainability, and developing new sectors and jobs.”
This push for sustainable diversification also received a nod at the FII conference. During the event, the Saudi Stock Exchange (Tadawul) and the Future Investment Initiative Institute signed a Memorandum of Understanding (MOU) to partner on several Environmental, Social and Governance (ESG) measures.
