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Saudi Arabia launches a futuristic economic zone

IT WAS like Davos in the desert: some 3,500 politicians, business bosses and bankers from around the world crowded into a vast conference centre in Riyadh for a jamboree called the Future Investment Initiative. This was a giant coming-out party for “Vision 2030”, the economic plan to move Saudi Arabia away from dependence on oil. It is the brainchild of the country’s crown prince, Muhammad bin Salman, widely known as MBS. A cornerstone of the plan is selling shares in Saudi Aramco in what is touted as the world’s biggest IPO if it goes ahead next year.

The young prince proclaimed that he wants the kingdom to be “a country of moderate Islam that is open to the world and open to all religions.” As for extremist ideas, “we will destroy them today.” His striking remarks came at the launch of an equally striking mega-scheme: a futuristic city-cum-economic-zone called NEOM (from the Greek neo, meaning new, and the Arabic mostaqbal, meaning future).

Spread over 26,500 square kilometres (10,200 square miles) and along 468km of coast, NEOM will operate under its own rules rather than those of the rest of the kingdom. It could thus create an environment optimised for drone deliveries, say, or driverless cars. Energy is to come entirely from renewable sources, thanks to an abundance of sun and wind. Everything that can be automated will be. NEOM is envisaged as a hub between Europe, Asia and Africa, and a home drawing in people with the skills to create world-class businesses in industries from biotechnology to food.

The ambitions for NEOM are huge. It will supposedly attract $500bn of investment, from the kingdom’s Public Investment Fund and international backers. It wants to lead the world in both efficiency and income per head. It aspires to be “the safest, most efficient, most future-oriented, and best place to live and work.”

Sceptics can point to plans elsewhere for “smart cities” (such as Masdar in the United Arab Emirates) that are launched with much fanfare but fail to live up to the hype. In Saudi Arabia itself, the King Abdullah Financial District in Riyadh is a $10bn white camel. Will NEOM be different?

It starts, at least, with the credibility that comes from its big-name supporters. At the launch were an ebullient Masayoshi Son, the Japanese head of a $100bn “Vision Fund”, and Stephen Schwarzman, head of Blackstone, a private-equity giant. Klaus Kleinfeld, a former boss of Arconic, Alcoa and Siemens, is to be NEOM’s chief executive. The prospect of creating a dynamic zone without the barriers to enterprise found elsewhere in the country has such people genuinely enthused.

Still, three big questions stand in the way of the NEOM dream becoming a reality. The first is timing. Can the project come together fast enough to maintain momentum? So far, the details remain sketchy, and the timing vague. The government says the $500bn will arrive “over the coming years”. Yet a fall in oil prices since 2014 has already squeezed public finances: this year Saudi Arabia’s government will probably run a fiscal deficit of 9% of GDP and the economy has ground to a halt.

Second, can NEOM generate bottom-up creativity to match the top-down vision and planning? A little “chaos” is needed, said the man dressed in Silicon Valley casual next to Mr Kleinfeld at the launch: Marc Raibert, the boss of Boston Dynamics, a robotics company.

Whether Saudis are prepared to sit back and let such creative chaos happen will also help to answer the third, and perhaps most important, question: will NEOM attract the sort of international talent (including women) it will need to achieve its ambitions? To do so, it will have to be a much more relaxed, open place than the kingdom is today. True, it is starting to change, as MBS’s comments this week made clear. Thanks to his influence, women will at last be allowed to drive next year. Maybe NEOM can accelerate such progress. But there is a long way to go.

Unless it becomes a truly desirable place in which to live and work, NEOM will risk realising one of its goals, but not in the way intended. It hopes to be the first city where robots outnumber people.

This article appeared in the Middle East and Africa section of the print edition under the headline “There’s no place like NEOM”


Saudi Arabia’s youth embrace crown prince’s desire for liberalisation

Saudi Arabia’s crown prince almost didn’t say one of the most revolutionary things ever uttered by a member of the House of Saud.

“For many reasons, today is not the right day to discuss [extremism],” Mohammed bin Salman told a panel at the Future Investment Initiative in Riyadh on Tuesday.

“We were not like this in the past… we want to go back to what we were before – a country of moderate Islam that is open to all religions and to the world,” he said to applause.

In a later interview with The Guardian, the crown prince said that the country’s conservatism was in part fallout from Iran’s Islamic Revolution.

“What happened in the last 30 years is not Saudi Arabia. What happened in the region in the last 30 years is not the Middle East. After the Iranian revolution in 1979, people wanted to copy this model in different countries, one of them is Saudi Arabia. We didn’t know how to deal with it. And the problem spread all over the world. Now is the time to get rid of it.

“Seventy per cent of [the Saudi] population is under 30 and we won’t allow the 30 per cent to hold them back.”

The comments – Prince bin Salman’s most direct criticism of Saudi Arabia’s puritanical religious establishment to date – appear to have cemented his reputation as a bold and liberal reformist.

Of course, his words were carefully chosen, no matter how nonchalantly they were delivered.

Riyadh is keen to diversify its revenue streams and open up to the modern world following a global plunge in oil prices, but the state’s continuing human rights abuses mean the declaration has been met with scepticism internationally.

At home, however, many think the prince has sent a clear message to the kingdom’s hardliners: the 32-year-old heir to the throne, who will mostly likely set the agenda in Saudi Arabia for decades, is quickening the pace of social change – and does not expect the religious establishment to challenge him.

Saudi social media has lit up with praise for Prince bin Salman since yesterday’s comments: “Finally, we can join the 21st century,” one woman posted on Twitter. “He’s going to change history,” said another user.

“This country needs someone like him,” 25-year-old Yousif al-Helw, from Jeddah, told The Independent.

“He’s a lot more brave in spearheading reforms, whereas previous – older – Saudi rulers were always worried about keeping the conservatives at bay.”

People in the kingdom have watched from afar as Arab Spring demands in other countries have ended in the rolling back of freedoms or war.

In Saudi Arabia’s restive east, armed protests demanding an end to discrimination against Shia citizens have led to a brutal crackdown which have left parts of Qatif province looking like war-torn Syria.

While many of Saudi Arabia’s tireless rights activists would have preferred a bottom-up, more democratic movement for change, soome feel that any change is better than none.

“There’s excitement about the momentum in contrast to the stagnation of years past, but uncertainty about the direction,” said one young professional living in Riyadh, who did not want to be named.

The crown prince, who was suddenly appointed to the post in June this year at the expense of his uncle, is not without his critics.

In his role as defence minister – a position he has held since 2015 – bin Salman has proved hawkish, attracting censure over his role in Saudi Arabia’s bloody intervention in the Yemeni civil war, as well as his aggressive stance on regional rival Iran.

The prince is also regarded as one of the primary decision makers behind the Gulf states’ recent cutting of ties with Qatar.

But even if it’s just domestic, and even if implemented through the will of an absolute monarchy, it seems change for the better is on the cards.

“I definitely think [Prince bin Salman] is genuine, because he doesn’t have a reason not to be,” Mr Helw said. “There isn’t real formal opposition in Saudi. He doesn’t need to do this for show, because the people have no say.”


Saudi prince’s bold plan for a $640b futuristic megacity

HE’S been heir to the Saudi throne for less than six months and Crown Prince Mohammed bin Salman is already shaking things up in big ways.

The young prince was behind Saudi Arabia’s recent shock decision to finally allow women the right to drive — one of his first moves towards dragging the ultraconservative kingdom into a more progressive future.

And now he’s starting to unshackle Saudi Arabia from its traditional reliance on oil exports with a very ambitious new plan.

In a rare public address on Tuesday, Prince Mohammed, 32, announced plans for a $640 billion futuristic megacity that will be Saudi Arabia’s next economic powerhouse.

Saudi Arabia’s visionary crown prince Mohammed bin Salman, has some big changes in store for the conservative kingdom. Picture: Fayez Nureldine / AFP

Saudi Arabia’s visionary crown prince Mohammed bin Salman, has some big changes in store for the conservative kingdom. Picture: Fayez Nureldine / AFPSource:AFP

The project, dubbed NEOM and spruiked as “humanity’s next chapter”, is a business and industrial zone extending to neighbouring Jordan and Egypt and spanning a whopping 26,500sq k — making it 33 times bigger than New York City, and more than twice the size of greater Sydney.

The proposed megacity will be financed by the Saudi government and private investors and powered entirely by wind and solar energy. It will focus on the food, entertainment, energy and water, biotechnology and advanced manufacturing industries.

The NEOM zone would serve as another revenue stream for Saudi Arabia, the world’s top oil exporter, which has struggled with slumping oil prices since 2014.

NEOM was revealed to the world at an investment conference in Riyadh on Tuesday. Picture: AFP/Fayez Nureldine

NEOM was revealed to the world at an investment conference in Riyadh on Tuesday. Picture: AFP/Fayez NureldineSource:AFP

Announcing the project at a major investment conference in the capital Riyadh, Prince Mohammed said NEOM would be an example of the hi-tech future he envisioned for his notoriously conservative country.

He held up two mobile phones — one, a modern smartphone and the other, a decade-old device — to illustrate the difference between futuristic NEOM and anything else, Reuters reported.

“This project is not a place for any conventional investor,” the Prince said. “This is a place for dreamers who want to do something in the world.

“The strong political will and the desire of a nation. All the success factors are there to create something big in Saudi Arabia.”

Former Alcoa boss Klaus Kleinfeld, pictured here with the crown prince, has been named chief executive of NEOM.

Former Alcoa boss Klaus Kleinfeld, pictured here with the crown prince, has been named chief executive of NEOM.Source:AFP

The NEOM zone will sit adjacent to the Red Sea and the Gulf of Aqaba, between Egypt and Saudi Arabia, and close to the maritime trade routes that use the Suez Canal.

Saudi Arabia’s Public Investment Fund, which will partially fund the project, said NEOM would be a gateway to the proposed King Salman Bridge that will link Egypt and Saudi Arabia.

“NEOM is situated on one of the world’s most prominent economic arteries,” the fund said.

“Its strategic location will also facilitate the zone’s rapid emergence as a global hub that connects Asia, Europe and Africa.”

Jordan and Egypt, which are close allies of Saudi Arabia, are yet to comment on the plan, according to Reuters.

Riyadh said it was in contact with potential investors and the project’s first phase would be completed by 2025.


The $640 billion megacity is Prince Mohammed’s boldest move yet in his mission to rapidly modernise Saudi Arabia, which has long been ruled by strict religious law and under the influence of hard line religious clerics.

The King Abdullah financial district in Riyadh. Picture: Waseem Obaidi/Bloomberg

The King Abdullah financial district in Riyadh. Picture: Waseem Obaidi/BloombergSource:Bloomberg

He has a plan for social and economic reforms under what he calls Vision 2030, including the NEOM project. Allowing women to drive was another major reform under Vision 2030; in another, Saudi Arabia may soon bring back cinemas.

Prince Mohammed, who was appointed crown prince in June by his father, King Salman bin Abdulaziz Al Saud, is relatively popular among his fellow Saudi millennials.

And he knows they are crucial in his vision for his country’s future, in which he also wants to see a more moderate observation of Islam.

“We are simply reverting to what we followed — a moderate Islam open to the world and all religions,” he told the Future Investment Initiative conference in Riyadh.

“Seventy per cent of the Saudis are younger than 30. Honestly, we won’t waste 30 years of our life combating extremist thoughts. We will destroy them now and immediately.”

The crown prince with US President Donald Trump at the Oval Office in March. Picture: Mark Wilson/Pool via Bloomberg

The crown prince with US President Donald Trump at the Oval Office in March. Picture: Mark Wilson/Pool via BloombergSource:Bloomberg

In a subsequent interview with The Guardian, Prince Mohammed said the past three decades had seen his country ruled by rigid doctrines that came about in reaction to the Islamic revolution in Iran in 1979 — and the time for that was over.

“What happened in the last 30 years is not Saudi Arabia. What happened in the region in the last 30 years is not the Middle East,” he said.

“After the Iranian revolution in 1979, people wanted to copy this model in different countries, one of them is Saudi Arabia. We didn’t know how to deal with it. And the problem spread all over the world. Now is the time to get rid of it.”

Expanding on his vision for NEOM and Saudi Arabia’s economic future, the Prince added: “We are a G20 country. One of the biggest world economies.

“We’re in the middle of three continents. Changing Saudi Arabia for the better means helping the region and changing the world.

“So this is what we are trying to do here. And we hope we get support from everyone.”


Mohammed bin Salman’s programme of consensual change

Saudi Arabia will soon become “a place for dreamers who want to do something in the world”. That was the striking pledge made by the kingdom’s Crown Prince, Mohammed bin Salman, to a gathering of investors from across the world in Riyadh on Tuesday. Even the most implacable critics of Saudi Arabia will have to concede a new dawn has broken. For change in Saudi Arabia is being ushered in by a young man working under the watchful gaze of his father, King Salman, whose receptiveness to the aspirations of his country’s young is matched only by his determination to build a future worthy of them.

A string of enhancements to culture and society have been introduced in the past few months, including the announcement of an entertainment city south of Riyadh in April. This was followed by an historic decision in September to overturn the long-standing ban on female drivers in the kingdom. Sweeping social transformation has been has been accompanied by thorough and detailed plans to diversify the economy and make it less reliant on oil revenues.

Vision 2030, a brainchild of Prince Mohammed, is the blueprint for Saudi Arabia’s modernisation. The kingdom is turning a 200-kilometre stretch of its coastline on the Red Sea into a semi-autonomous tourist haven as part of the plan. When completed, it is estimated to create upwards of 35,000 jobs and bring in 15 billion riyals (Dhs14.7bn) in revenues annually. This colossal project, however, is only one part of Vision 2030, whose crowning glory will be NEOM, a $500 billion business and industrial zone on the Gulf of Aqaba that will extend into Jordan and Egypt. Part financed by Saudi Arabia’s sovereign wealth fund and Japan’s Softbank, NEOM, when finished, will be a transnational avatar of Dubai: a hub of innovation, and a gateway to and embodiment of the future.

On Tuesday, Prince Mohammed drew applause and cheers when he announced that Saudi Arabia will soon embrace a “moderate Islam that’s open to all religions”. Extremism will not be spared. “We will not spend the next 30 years of our lives dealing with destructive ideas. We will destroy them today”. What Prince Mohammed is superintending might be called a “consensual revolution”; what we are witnessing is epoch-making transformation without any of the chaos that usually accompanies change. That can be explained, in part, by the willingness of the leadership to engage with and understand the needs and wishes of the young people who collectively represent the kingdom’s future

It is important to note that Saudi Arabia’s focus on its own future has not distracted it from its sense of obligation to others. On the same day as Prince Mohammed was sharing his vision, Riyadh’s foreign minister, Adel Al Jubeir, emphasised his country’s commitment to bringing stability to the region. The self-confidence radiating from a fast modernising Saudi Arabia can only strengthen the Middle East.


Crown prince pledges ‘moderate’ Saudi Arabia

RIYADH, Saudi Arabia – Powerful Crown Prince Mohammed bin Salman pledged a “moderate, open” Saudi Arabia on Tuesday, October 24, breaking with ultra-conservative clerics in favor of an image catering to foreign investors and Saudi youth.

The Saudi strongman, 32, did not mince words in declaring a new reality for the kingdom, hours after announcing the launch of an independent $500 billion megacity – with “separate regulation” – along the Red Sea coastline.

“We want to live a normal life. A life in which our religion translates to tolerance, to our traditions of kindness,” he told international investors gathered at an economic forum in Riyadh.

“Seventy percent of the Saudi population is under 30, and honestly we will not spend the next 30 years of our lives dealing with destructive ideas. We will destroy them today and at once,” the crown prince said.

One of the Saudi millennials in attendance was Abdul Aziz, a 27-year-old policy consultant.

He lauded the young prince for “pushing the boundaries of what’s possible” in the rigid kingdom and for using the televised speech to highlight what he sees as an abandoned legacy of moderation.

“It showed the political and social change in Saudi Arabia is not a transformation. Saudi Arabia is going back to its original roots of a moderate Islam, a tolerant society,” Abdul Aziz told Agence France-Presse.

Prince Mohammed, known by his initials MBS, said he would see to it his country moved past 1979, a reference to the rise of political Islam in the years following the assassination of King Faisal in 1975.

The early 1970s had ushered major change into the oil-rich kingdom, including the introduction of television and schools for girls.

But that came to a halt as the Al-Sheikh family, which controls religious and social regulation in the kingdom, and the ruling Al-Saud family slowly reinforced the conservative policies Riyadh is known for.

Prince Mohammed’s statement Tuesday is the most direct attack by a Saudi official on the Gulf country’s influential conservative religious circles, whose stranglehold on Saudi society now appears to face serious challenges.

‘Return to what was’

“We are returning to what we were before – a country of moderate Islam that is open to all religions, traditions and people around the globe,” he said.

While the Saudi government continues to draw criticism from international rights groups, the crown prince has pushed ahead with reforms since his sudden appointment on June 21.

Monitors, including Amnesty International, say Saudi Arabia has in parallel stepped up its repression of peaceful rights activists.

Saudi authorities last month arrested more than 20 activists, including two popular Muslim preachers, without disclosing any charges against them.

But the young prince is widely regarded as being the force behind King Salman’s decision last month to lift a decades-long ban prohibiting women from driving.

Prince Mohammed’s comments came hours after the opening of the Future Investment Initiative, a 3-day economic conference that drew some 2,500 dignitaries, including 2,000 foreign investors, to Riyadh.

Earlier Tuesday, Saudi Arabia’s Public Investment Fund – controlled by MBS – announced the launch of an independent economic zone along the kingdom’s northwestern coastline.

The project, dubbed NEOM, will operate under regulations separate from those that govern the rest of Saudi Arabia.

Stephen Potter, vice chairman of the Chicago-based wealth management company Northern Trust, said he was impressed by the crown prince’s vision.

“It sends out a strong message to not just Saudis but the whole world that the kingdom is poised for change,” Potter said.

A Saudi attendee was more skeptical.

“Looks very impressive on paper but we’ll have to see how it is executed,” he told Agence France-Presse, declining to be named. –


I will return Saudi Arabia to moderate Islam, says crown prince

Saudi Arabia’s crown prince, Mohammed bin Salman, has vowed to return the country to “moderate Islam” and asked for global support to transform the hardline kingdom into an open society that empowers citizens and lures investors.

In an interview with the Guardian, the powerful heir to the Saudi throne said the ultra-conservative state had been “not normal” for the past 30 years, blaming rigid doctrines that have governed society in a reaction to the Iranian revolution, which successive leaders “didn’t know how to deal with”.

Expanding on comments he made at an investment conference at which he announced the launch of an ambitious $500bn (£381bn) independent economic zone straddling Saudi Arabia, Jordan and Egypt, Prince Mohammed said: “We are a G20 country. One of the biggest world economies. We’re in the middle of three continents. Changing Saudi Arabia for the better means helping the region and changing the world. So this is what we are trying to do here. And we hope we get support from everyone.

“What happened in the last 30 years is not Saudi Arabia. What happened in the region in the last 30 years is not the Middle East. After the Iranian revolution in 1979, people wanted to copy this model in different countries, one of them is Saudi Arabia. We didn’t know how to deal with it. And the problem spread all over the world. Now is the time to get rid of it.”

Earlier Prince Mohammed had said: “We are simply reverting to what we followed – a moderate Islam open to the world and all religions. 70% of the Saudis are younger than 30, honestly we won’t waste 30 years of our life combating extremist thoughts, we will destroy them now and immediately.”

The crown prince’s comments are the most emphatic he has made during a six-month reform programme that has tabled cultural reforms and economic incentives unimaginable during recent decades, during which the kingdom has been accused of promoting a brand of Islam that underwrote extremism.

The comments were made as the heir of the incumbent monarch moves to consolidate his authority, sidelining clerics whom he believes have failed to support him and demanding unquestioning loyalty from senior officials whom he has entrusted to drive a 15-year reform programme that aims to overhaul most aspects of life in Saudi Arabia.

Central to the reforms has been the breaking of an alliance between hardline clerics who have long defined the national character and the House of Saud, which has run affairs of state. The changes have tackled head-on societal taboos such as the recently rescinded ban on women driving, as well as scaling back guardianship laws that restrict women’s roles and establishing an Islamic centre tasked with certifying the sayings of the prophet Muhammed.

A woman sits behind the wheel of a car in Riyadh last month.
 A woman sits behind the wheel of a car in Riyadh last month. Photograph: STR/EPA

The scale and scope of the reforms has been unprecedented in the country’s modern history and concerns remain that a deeply conservative base will oppose what is effectively a cultural revolution – and that the kingdom lacks the capacity to follow through on its economic ambitions.

The new economic zone is to be established on 470km of the Red Sea coast, in a tourist area that has already been earmarked as a liberal hub akin to Dubai, where male and female bathers are free to mingle.

It has been unveiled as the centrepiece of efforts to turn the kingdom away from a near total dependence on oil and into a diverse open economy. Obstacles remain: an entrenched poor work ethic, a crippling regulatory environment and a general reluctance to change.

A promotional video for Neom, a new economic zone on the Red Sea coast

“Economic transformation is important but equally essential is social transformation,” said one of the country’s leading businessmen. “You cannot achieve one without the other. The speed of social transformation is key. It has to be manageable.”

Alcohol, cinemas and theatres are still banned in the kingdom and mingling between unrelated men and women remains frowned upon. However Saudi Arabia – an absolute monarchy – has clipped the wings of the once-feared religious police, who no longer have powers to arrest and are seen to be falling in line with the new regime.

Economically Saudi Arabia will need huge resources if it is to succeed in putting its economy on a new footing and its leadership believes it will fail to generate strategic investments if it does not also table broad social reforms.

Prince Mohammed had repeatedly insisted that without establishing a new social contract between citizen and state, economic rehabilitation would fail. “This is about giving kids a social life,” said a senior Saudi royal figure. “Entertainment needs to be an option for them. They are bored and resentful. A woman needs to be able to drive herself to work. Without that we are all doomed. Everyone knows that – except the people in small towns. But they will learn.”

A screengrab from the promotional video for Saudi Arabia’s new economic zone.
 A screengrab from the promotional video for Saudi Arabia’s new economic zone. Photograph: YouTube

In the next 10 years, at least five million Saudis are likely to enter the country’s workforce, posing a huge problem for officials who currently do not have jobs to offer them or tangible plans to generate employment.

The economic zone is due to be completed by 2025 – five years before the current cap on the reform programme – and is to be powered by wind and solar energy, according to its founders.

The country’s enormous sovereign wealth fund is intended to be a key backer of the independent zone. It currently has $230bn under management. The sale of 5% of the world’s largest company, Aramco, is expected to raise several hundred billion dollars more.


US treasury secretary Mnuchin back Saudi Vision 2030

The United States treasury secretary Steven Mnuchin gave his government’s strong and clear support to recent announcements by the Kingdom of Saudi Arabia in an address given at the Future Investment Initiative being held in Riyadh.

Referring to the public statements by crown prince Mohammad bin Salman Al-Saud, chairman of the Public Investment Fund, Mnuchin said that the call for moderation and tolerance will lead Saudi Arabia to a “brighter future” and that NEOM was an impressive new pillar in the country’s development plans.

Beforehand, he reiterated the United States’ strong support to Saudi Arabia’s Vision 2030 reform programme stating that the US stood fully with the kingdom as it lays out a new and successful pathway for its economy.

The treasury secretary made his comments after he attended the official opening of the new International Centre for Targeting Terrorist Financing, which will be co-chaired by the United States and the Kingdom of Saudi Arabia.

Mnuchin referred to this initiative as being one of the critical policies and initiatives of the Trump administration and noted that Saudi Arabia’s leading role in its development will be instrumental in securing its success.

Powered by the Public Investment Fund, the Future Investment Initiative is taking take place from October 24th-26th in Riyadh.

The invitation-only event is being organised in the context of Saudi Arabia’s Vision 2030


Saudi Public Investment Fund unveils Program 2018-2020 in Riyadh

The Public Investment Fund Program 2018-2020 has today been launched as the latest constituent of the Saudi Arabia Vision 2030 Vision Realisation Programs.

The PIF Program is one of twelve Vision Realisation Programs, and acts as a roadmap for the next three years to strengthen the organisation’s position as the engine behind economic diversification in the kingdom.

Furthermore, the program underpins PIF’s role in supporting a crucial component of the Vision 2030 agenda, to transform Saudi Arabia into a global investment powerhouse.

The four key objectives underpinning the program include growing and maximising PIF assets; launching new sectors; localising advanced technologies and knowledge; and building strategic economic partnerships.

Over the past two years, the PIF Board – chaired by crown prince Mohammad bin Salman Al-Saud – has undertaken a wide range of actions to drive forward the transformation of PIF as it develops into one of the world’s leading and most impactful sovereign wealth funds.

These activities include developing expertise and more than tripling the size of the fund’s staff to around 200, while undertaking major reforms to the fund’s investment, governance, legal, risk and compliance and finance functions.

The newly-launched PIF Program outlines how the Fund aims to complement private sector development in the kingdom through its new domestic investment pools, split between the fund’s Saudi Holdings, Saudi Sector Development, Saudi Real Estate & Infrastructure Development, and Saudi Giga-Projects pools.

The scale of ambition attached to the fund’s domestic pools is evidenced by the announcement of the NEOM Project, the Red Sea Project, and the Al Qidiya Project, as well as the establishment of nine companies focused on launching promising new sectors in the kingdom, including the Saudi Arabian Military Industries company, the Fund of Funds, and the Saudi Real Estate Refinancing Company.

The PIF Program, which is underpinned by 30 separate initiatives, will see the fund’s assets under management increase to SAR 1.5 trillion (over $400 billion) by 2020, creating 20,000 direct domestic jobs, more than half of which are high-skilled roles, and 256,000 construction jobs, which will increase PIF’s contribution to real GDP from 4.4 per cent to 6.3 per cent, and increase the share of local content to SAR 50 billion (over $13 billion).

Prince Mohammad bin Salman Al-Saud, said: “The PIF Program represents a vital milestone as we work towards realising Vision 2030.

“As well as being recognised for being well-capitalised, the fund also wants to be known as being well-run, transparent and well-governed, and the PIF Program will ensure this ambition is delivered.

“At home, the PIF Program will unlock value in the domestic portfolio and drive forward strategic and sustainable diversification by creating opportunities in a range of different industries.

“Internationally, the fund has begun to invest in some of the world’s most innovative companies and formed partnerships that will support long-term income diversification and ensure Saudi Arabia is at the forefront of emerging trends.”

The PIF Program 2018-2020 will be explored further over the remainder of the PIF-hosted Future Investment Initiative, which is bringing together global leaders, investors and innovators in Riyadh, Saudi Arabia, to explore the trends, opportunities and challenges shaping the investment landscape and world economy.


UPDATE 1-Saudi Arabia’s PIF aims to manage over $400 bln in assets by 2020

RIYADH, Oct 25 (Reuters) – Saudi Arabia’s Public Investment Fund (PIF) aims to increase its assets under management to 1.5 trillion riyals ($400 billion) by 2020 as part of the country’s Vision 2030, an economic reform plan aimed at boosting private-sector growth and developing non-oil industries.

The country’s main sovereign wealth fund, which is expected to receive proceeds from the planned sale of 5 percent of state oil company Saudi Aramco’s shares, has currently around $230 billion worth of assets under management.

PIF plans to create 20,000 direct domestic jobs, and 256,000 construction jobs by 2020. This will increase PIF’s contribution to Saudi Arabia’s gross domestic product from 4.4 percent to 6.3 percent, it said in a statement on Wednesday, during a huge investment conference in Riyadh arranged by the fund.

Investments will be in sectors such as real estate and infrastructure as well as in new areas of activity in the Saudi economy through the establisment of companies such as the Saudi Arabian Military Industries company and the Saudi Real Estate Refinancing Company.

One of the biggest tasks under PIF’s responsibility is the delivery of a $500 billion plan to build a business and industrial zone extending into Jordan and Egypt.

PIF will also seek to maximise value in the fund’s existing assets, and has set a new target to increase total shareholder return to 4-5 percent from 3 percent, it said on Wednesday.

“The PIF Program represents a vital milestone as we work towards realising Vision 2030,” Prince Mohammad bin Salman Al-Saud, the plan’s architect, said in a statement.

Outside of Saudi Arabia, PIF’s investments will be in a number of assets such as fixed-income, public equity, private equity and debt, real estate, infrastructure and alternative investments such as hedge funds, the fund said. ($1 = 3.7498 riyals)

(Reporting by Katie Paul; Writing by Davide Barbuscia; Editing by Jason Neely, Greg Mahlich)


Saudis To Lift Sovereign Wealth Fund Assets To $400B By 2020

As it is trying to boost private-sector growth and diversify its economy away from crude oil, Saudi Arabia aims to make its Public Investment Fund (PIF) one of the world’s largest sovereign wealth funds and double its assets to US$400 billion (1.5 trillion Saudi riyals) by 2020.

The Saudis published the 2018-2020 program of PIG on Wednesday to detail the objectives in domestic and international investments and expected annual returns in each of the fund’s planned investment pools. The program is one of twelve realization programs part of the Vision 2030 plan to diversify the Saudi economy championed by Crown Prince Mohammad bin Salman Al-Saud.

“It also seeks to grow PIF into one of the largest sovereign wealth funds in the world, as well as to build strong economic partnerships to deepen and strengthen the impact and role of Saudi Arabia on the regional and global stages,” PIF’s program reads.

As of September 30, 2017, PIF’s assets stood at US$224 billion (840 billion Saudi riyals).

Moving forward, the initiatives are expected to raise PIF’s assets that are expected to generate between 4 percent and 5 percent in average annual total shareholder returns to 2020. Over the long-term, the fund has identified investment pools in six areas—Saudi equity holdings, Saudi sector development, Saudi real estate and infrastructure development, Saudi giga-projects, international strategic investments, and an international diversified pool. Each of the investment pools are expected to yield long-term returns of between 6.5 percent and 9 percent.

In international investments, PIF plans to invest in fixed income, public equities, private equities, real estate and infrastructure, alternative investments (including hedge funds), and direct investments.

PIF is expected to receive part of the proceeds from the listing of 5 percent in Saudi oil giant Saudi Aramco currently planned for next year.

A few days ago, Aramco once again refuted reports of the past month that it could delay the listing of 5 percent of its shares in what is expected to be the biggest initial public offering ever, with Aramco’s chief executive Amin Nasser telling CNBC in an interview that the IPO is on track for the second half of 2018, as planned.



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Quote by the Prince

"We seek to be proud of our country, and allow the latter to contribute to the development of the world, whether on the economic, environmental, civilisational, or intellectual levels."

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