Saudi Arabia: From The Big Push To The Long Push
Building Resilience Beyond Vision 2030
46 Pages Posted: 13 Aug 2024
Date Written: August 01, 2024
Abstract
In 2016, Saudi Arabia launched Vision 2030 to diversify its economy and enhance sovereign wealth management, marking a shift from past practices. By 2024, significant progress includes channeling oil revenues into domestic investments, representing a "Big Push" across the economy. This paper proposes policies for a sustainable economic transition from the "Big Push" to a "Long Push" beyond this decade. It highlights reduced fiscal dependence on oil and increased domestic investment via the Public Investment Fund (PIF), focusing on emerging sectors like AI, renewable energy, and targeted foreign partnerships to boost innovation. To ensure stability during the Long Push, the paper recommends strengthening rule-based fiscal policy, stabilizing public spending, and managing foreign assets and oil income sustainably. It suggests expanding the PIF's portfolio to include traditional foreign assets for resilient dollar-based income, consolidating surplus foreign assets under Central Government institutions, and developing diversified, income-generating portfolios managed by the PIF and the Saudi central bank (SAMA). These strategies aim to position the PIF for sustained income generation beyond 2030, ensuring Saudi Arabia's long-term economic stability and growth.
Keywords: Saudi Arabia, Vision 2030, fiscal sustainability, public investment, oil revenues, Public Investment Fund, SAMA, infrastructure, Artificial Intelligence, Sovereign Wealth Fund, Sovereign Development Fund, fiscal rule
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