RIYADH: Saudi Arabia has continued attempts to diversify its economy away from oil by investing $35 billion in a mining and minerals complex. The complex at Ras al-Khair Industrial City, inaugurated by King Salman this week, is part of economic reform plans announced earlier this year to almost quadruple the mining sector’s contribution to gross domestic product to 240 billion riyals ($64 billion) by 2030.
The kingdom has ramped up its efforts to ease its reliance on oil exports after low crude prices pushed state finances deep into deficit. Its ministry of finance on Wednesday announced a total public debt of 342.4 billion riyals ($91 billion), as the country adjusts its economy in line with cheap oil prices. With its spending constrained by low oil prices, however, the government concedes it will have to rely more in future on private sector investment by local and foreign firms. “The key question Saudi Arabia will need to answer is how quickly they want to develop the mining sector, how much they want foreign investors to participate, and the risks and rewards they would offer to investors and retain for the government,” Paul Robinson, director at mining consultancy CRU Group, told Reuters.
One of the next big projects planned for Ras al-Khair, a port on the eastern coast of Saudi Arabia, is the construction of a ship repair and shipbuilding complex costing over 20 billion riyals. Construction is to start in 2018 and commercial operations in 2022. Riyadh has been trying to raise non-oil related revenues in line with its economic project “Saudi Vision 2030”. A member of the Shura Council said last Sunday that the country would begin a new nationalisation plan that would create a million new jobs and decrease imports in the country. A large number of wage freezes have been seen across the country as ministers try to decrease a general economic dependence on the state. It has been reported that there are around two times as many Saudis employed in the public sector as in private companies.
