Saudi Arabia’s economic diversification efforts are advancing rapidly.
Showcasing the country’s innovative strategies, His Excellency Saudi Minister of Economy and Planning Faisal Alibrahim spoke at a panel at the ongoing Davos 2024 and emphasized how the country is a global exemplar.
During the panel titled “Investors of First Resort: Government Inc.,” Alibrahim underscored Saudi Arabia’s strategy, which involves taking decisive steps and adopting a hands-on learning approach.
Also included in the panel are Tharman Shanmugaratnam, president of Singapore; Scott Sandell, chairman, chief executive officer (CEO) and chief investment officer, New Enterprise Associates; Mariana Mazzucato, professor at the University College London; and Dr. Kai-Fu Lee, CEO of 01.Al and chairman of Sinovation Ventures. WEF Managing Director Saadia Zahidi served as the moderator.
Saudi Arabia’s PIF
In the panel, the minister also discussed the pivotal role of the country’s Public Investment Fund (PIF) in nurturing a profitable environment for the private sector.
According to a report from Global SFW, the PIF was the leading investor among the world’s sovereign wealth funds in 2023. The PIF increased its investments significantly, spending $31.6 billion across 49 deals last year, which is 33 percent higher than the previous year.
Reinforcing this strategic expansion, Alibrahim explained the broader vision behind these investments.
“PIF, today, is not just investing for returns. Contrary to the belief that achieving a double bottom line is not feasible, the PIF is also creating an environment in which returns can be achieved through a developmental lens,” noted Alibrahim.
“This approach is not solely driven by returns but is also developmentally driven. In this regard, the PIF has built, in parallel with its mobilization of assets and resources, an organic capability,” he added, further highlighting how that capability is “working with the best and attracting the best talent from around the world.”
Keys to successful economic diversification
Specifically, Saudi Arabia has prioritized 13 sectors to advance its economic diversification efforts. At Davos 2024, Alibrahim particularly stressed the importance of collaborative efforts in the green energy sector. As he explained, various stakeholders must work together to accelerate innovation and technology to make the transition to green energy successful.
The people are also at the core of the country’s Saudi Vision 2030. Alibrahim shared that investing in human resources is key to attaining long-term success.
Apart from this, Saudi Arabia’s economic diversification strategy also includes international partnerships, such as with Singapore, to enhance its public sector’s proficiency.
Alibrahim also highlighted the importance of long-term strategic thinking in addressing global challenges, encouraging cooperation between the public and private sectors for global solutions. In this light, he also expressed his observation that more sovereign wealth funds worldwide are employing an “impatient capital” approach to address strategic issues directly.
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