How Saudi Arabia plans to become a supply chain investment hotspot
Saudi Arabia plans to position itself as a major supply chain hub for international companies, according to a government announcement.
Crown prince Mohammed bin Salman recently launched the Global Supply Chain Resilience Initiative (GSCRI), which aims to leverage the country’s resources, infrastructure and location to attract wider investment.
Under this initiative the government will establish special economic zones to create an attractive environment for investors.
State news agency SPA said the plan includes of financial and non-financial incentives worth SAR 10bn ($2.66bn) – with the aim to attract four times that amount in external investment.
The country is also maintaining its course on regulatory reforms to become more attractive to foreign firms. While the announcement did not go into detail, these are likely to focus on areas such as limits on foreign ownership of companies, a known obstacle often cited by international firms wishing to set up operations in Saudi Arabia.
“The GSCRI will bring the kingdom closer to achieving its Vision 2030 aspiration to be a top 15 global economy by 2030 and leave a prosperous legacy for future generations,” said SPA.
“The initiative aims to enable global investors to make optimal use of the kingdom’s natural resources and untapped potential, and form strong relationships with regional and global markets.”
Under the initiative, the kingdom will emphasise its strong economy, its strategic location that links three continents, and its extensive industrial, logistical and digital infrastructure.
Saudi Arabia is already working on developing more than 40 industrial and economic clusters, plus five economic zones that specialise in sectors such as manufacturing, biotechnology and cloud computing. The country’s national investment strategy supports sector-specific approaches.
Efforts to attract tech sector investment have seen Saudi upgrade digital infrastructure – giving it one of the world’s most digitally connected populations.
The internet penetration rate at the start of 2022 stood at 97.7%, and the 2021 Digital Competitiveness Report ranked Saudi Arabia second out of all G20 economies.
Consultancy Arthur D Little predicts the digital economy will contribute around 20% of Saudi GDP by 2025.
The country has also launched major initiatives such as the Green Saudi Arabia and the Green Middle East initiatives to attract green technology investment and aims for renewable energy to account for of 50% of electric power production by 2030.