Saudi Arabia and Abu Dhabi in ambitious push to diversify their economies

Oil-rich Middle Eastern governments are renewing efforts to diversify their economies away from hydrocarbons, even as they continue to benefit from higher oil prices this year.

Within hours of June 30, Saudi Arabia and Abu Dhabi announced ambitious plans to expand into new areas of manufacturing and other industries.

In Saudi Arabia, Crown Prince Mohammed bin Salman (MBS) announced a series of “national aspirations and priorities” for research, development and innovation (RDI) over the next two decades.

The program covers areas such as health, sustainable environment, energy and industrial leadership, and the “economy of the future”. MBS said its goal was to help Saudi Arabia become globally competitive in the coming years and cement its position as the region’s largest economy.

“Our ambition for Saudi Arabia is to become a global leader in research, development and innovation by 2040, with an annual investment equivalent to 2.5 percent of GDP,” said the crown prince, who also chairs the newly created Supreme Council. RDI.

He added that the plan would add $16 billion to Saudi GDP by 2040, while creating high-value tech jobs. Job creation is the main concern of the authorities.Unemployment among Saudis is now at lowest level Seven years later, but still at 10.1%, the percentage of women is much higher.

To achieve its goals, Saudi Arabia plans to form partnerships and co-invest with multinational corporations, international research centers, non-profit organizations and other organizations.An RDI agency was also established, according to a statement officially released saudi news agencywill “develop a moon landing program, a flagship program [and] project. “

It is unclear how the new RDI plan fits into MBS’s overarching economic diversification strategy of Vision 2030, which was launched in 2016.

Saudi Arabia’s efforts to take its economy in a new direction are being felt across the region, as governments work to prepare their economies and citizens for the end of the oil age — a daunting task at the best of times, Even more so now when oil revenues are so high.

Abu Dhabi targets manufacturing

Hours before the latest Saudi initiative was announced, authorities in neighboring Abu Dhabi unveiled a new plan. Industrial strategy their own.

Sheikh Khaled bin Mohammed bin Zayed Al Nahyan, chairman of the Abu Dhabi Executive Office, said the UAE government plans to invest AED10 billion ($2.7 billion) between now and 2031, Double the size of its manufacturing industry and create 13,600 jobs.

The strategy will focus on seven sectors: chemicals, machinery, electricity, electrical equipment, transport, agri-food and pharmaceuticals, with one goal of increasing Abu Dhabi’s non-oil exports by 143% to AED178.8 billion by 2031 .

The government has a long-term focus, with Sheikh Khaled saying the strategy will aim to “create a smart circular economy and develop sustainable ecosystems” [and] Invest in future technologies. “

“The Ministry of Industry and Advanced Technology aims to … prepare for the future,” he said, adding that it would “help diversify the economy, leverage competitive advantages and integrate efforts to build a strong industrial sector.”