Saudi Arabia's King Salman approves $19 billion plan to boost private sector

Saudi Arabia's King Salman approves $19 billion plan to boost private sector
The Saudi monarch has approved a list of economic measures put forward by his son Mohammed bin Salman, designed to boost the private sector, with emphasis on technology and housing.
2 min read
14 December, 2017
The multi-billion dollar boost to the country's economy forms part of MbS' Vision 2030 [Getty]
Saudi Arabia's King Salman has issued a royal decree approving a private sector stimulation plan worth 72 billion riyals (19 billion USD), it was announced on Thursday by the Saudi Press Agency.

The list of steps aiming to revive the flagging economy was drawn up by Saudi Arabia's de facto leader and president of the country's economic development council, Crown Prince Mohammed bin Salman.

The list of measures, staged over four years, mainly comprises a vast array of multi-billion dollar investment and trade incentives, as well as sizeable grants and loans for growing small and medium sized enterprises. 

Technology features strongly on the list of measures, with nearly $3.7 billion dedicated to a "building technologies stimulation initiative", and a further $682 million going towards initiatives for building fibre optic broadband.

A much-needed boost has also been given to housing in a bid to tackle the country's chronic accommodation shortage, with over half a billion USD allocated to subsidised housing loans. A further $100 million has been put towards an air conditioning units initiative.

King Salman delivered a speech to the Shoura council on Wednesday in which he touched upon the spending boost and emphasised the importance of the country's housing programme.

According to Shoura council member Dr Ferdous al-Saleh, the king, "focused on the benefits and interests of Saudi citizens through housing and he also made it very clear that the government supports the private sector".

The list of economic steps form part of Crown Prince Mohammed bin Salman's ambitious 'Vision 2030' programme to diversify the Saudi economy and re-adapt it for a post-oil era.

The Saudi economy has been in the doldrums due to dwindling oil prices over the past two years, which have damaged the country's public finances, and pegged unemployment at 12.8 percent.

The government has been burning through its once vast reserves of foreign currency to finance the growing budget deficit.

No details have been given about where the money for the latest stimulation package is coming from, however recent spending suggests it may have been taken from the foreign currency reserves.

Part of Vision 2030 relies on increased domestic spending in order the boost the country's floundering economy and slow growth. Recent and high-profile liberalising reforms announced by the crown prince, including opening cinemas, permitting music concerts and allowing women into sports stadiums, are hoped to have considerable economic impact for the country.