Saudi Arabia, smarting from a three-year oil slump, said Wednesday that it aims to nearly double the assets of its sovereign wealth fund by 2020 through a series of investment initiatives. The Public Investment Fund (PIF), chaired by Crown Prince Mohamed bin Salman, said the program comprising 30 business initiatives would boost its assets to $400 billion in the coming three years, up from $230 billion now.
The newly unveiled NEOM mega economic zone, with investments topping $500 billion, is envisaged as the crown jewel of the planned investments, a statement said. Saudi Arabia, the world’s top oil exporter, has lost hundreds of billion of dollars since crude prices plummeted in mid-2014, posting huge budget deficits.
Prince Mohamed last year launched Vision 2030, consisting of economic austerity and development programs, to diversify the economy away from oil. The kingdom, which pumps 10 million barrels of oil per day, has nearly $500 billion of fiscal reserves managed by the country’s central bank.
The PIF did not reveal the nature of the business initiatives it will undertake but highlighted the NEOM project launched on Tuesday by the crown prince. Saudi Arabia has pledged to inject $500 billion in the NEOM project, envisioned as a special economic zone over an area of 26,500 square kilometers (10,230 square miles) on the northern Red Sea coast extending into Jordan and Egypt.
PIF said its initiatives, including NEOM, will create 20,000 “direct domestic jobs” in addition to nearly 300,000 construction jobs, boosting its contribution to Saudi gross domestic product (GDP) from 4.4 percent currently to 6.3 percent.
The announcement came as Saudi Arabia hosted a three-day Future Investment Initiatives conference, which has attracted more than 2,500 dignitaries and top investors.