The world’s biggest oil exporting nation is raising its budget for infrastructure projects this 2019 as part of the 2030 economic reform strategy.
Crown Prince Mohammed bin Salman who is behind the vision 2030 is set to sign about 70 deals in relation to the overhaul of Saudi’s economy come 2030. For the next 11 years, Saudi Arabia is planning to increase its budget for building airports, roads and railways for about $36B.
According to Transport Minister Nabeel Al Amudi, the transport investment will be divided into various sectors with the “bulk being spent on railways”. This move is set to diversify Saudi’s economy, away from its dependence on crude oil sales.
“The kingdom will focus on chemicals, power and natural gas businesses in its industry plan,” said Energy Minister Khalid Al Falih.
Shifting Away from Oil Dependence
For the longest time, Saudi Arabia is the world’s biggest exporter of crude oil for power, generation, transmission and distribution business. However, in 2016, Saudi is claiming that it stocks have declined approximately 70m barrels. Some experts are even making a conclusion that wells will ultimately dry outcome 2030. Which explains Saudi Arabia’s initiative to create more avenues to drive sales and improve the economy without dependence on the oil business.
Whenever oil production goes low, Saudi’s GDP will be affected, which badly hurt its economy. By building new industries, the kingdom will have more opportunities for growth in terms of revenue.
Just last year, oil prices have stumbled approximately 20 per cent, compared to 2017. This is a big crisis for the kingdom as their economy is dependent on the oil business.
New infrastructures are being mapped out but according to Nabeel Al Amudi, a new airport in Riyadh is under consideration and five airports will be expanded.