Vision 2030
What is Vision 2030?
Vision 2030 is a Saudi Arabian nationwide development strategy aimed at changing the structure of the economy in the country, as well as its position in the international economy. Initiated in the mid-2010s, the strategy aims to diversify the economy by lessening its reliance on oil.
"Vision 2030" thus expresses a combination of the country’s economic needs and political ambitions. The plan aims not only to stabilize its growth in the long run but also to move the country towards a diversified and competitive global economy.
The Dangers of Oil Dependence
For decades, the economy of Saudi Arabia has been dependent on oil for its public expenditures, employment, and development. This has made the country vulnerable to changes in oil prices in the international market. Such sudden changes in oil prices form a challenge for public investment in the areas that are heavily dependent on these revenues.
Apart from these fluctuations, there are changes taking place globally that could pose a challenge to oil in the global economy. These changes include decarbonization, as well as different energy sources that will shape oil’s position within the global economy. Vision 2030 responds to these threats by diversifying Saudi Arabia’s economy, making it less reliant on oil.
Diversification Goals
Essentially, the vision entails the expansion of the Saudi Arabian economy by the development of new sectors, in addition to enhancing private sector involvement. Some of the primary objectives include the development of sectors like technology, tourism, manufacturing, logistics, and entertainment, along with the creation of more jobs for locals.
The diversification process has a political component as well. Vision 2030 helps to create new engines for growth and jobs at home, thereby reinforcing domestic legitimacy and stability. It also allows Saudi Arabia to interact with the world economically, technologically, and financially, without being so heavily reliant on the hydrocarbons market.
How Vision 2030 is Implemented
Vision 2030 is achieved by means of regulatory reforms and investment initiatives undertaken by the state. Instead of just waiting for market dynamics to do the work of Vision 2030, the state takes the initiative of investing in key sectors.
This model is characterized as a state-driven process of economic change, where public institutions are responsible for the allocation of funds to drive the process of structural change. Major development projects are the key tools of implementation of Vision 2030.
The Role of the Public Investment Fund
The Public Investment Fund is the main instrument through which Vision 2030 can be operationalized. Vision 2030 sets the strategic goals, and the PIF has the means to achieve those goals. Through local investments, PIF contributes to the development of infrastructure, industry, and employment. Through foreign investments, PIF helps to integrate the Kingdom of Saudi Arabia into the international economy.
In this manner, PIF actualizes the implementation of Vision 2030 at an economic level. The alignment of Vision 2030 with PIF is evidence of how countries are using sovereign investment institutions as a means of accelerating economic and political agendas.
Importance of Vision 2030 to the Project
The Vision 2030 framework creates the strategic environment in which the investments of PIF must be understood. Without such a framework, the investments of PIF may appear to be independent financial decisions. Using the Vision 2030 framework, the investments of PIF appear to occur in a strategic, coordinated effort.
Based on the above introduction, the project will focus on Vision 2030 as the justification for the utilization of capital as a state power tool for Saudi Arabia.