Arab News, Sun, Apr 21, 2024 | Shawwal 12, 1445
Investment opportunities in Saudi Arabia abound beyond major cities
Saudi Arabia:
In the heart of Saudi Arabia, amidst the towering skylines of Riyadh,
Jeddah and Dammam that have long symbolized the nation’s economic strength, a
new narrative is taking shape. It is a story of decentralized development, where
attention is shifting away from the bright lights of the cities to the
lesser-explored corners of the Kingdom.
In recent years, there has been a noticeable pull towards the untapped potential
of smaller towns and regional municipalities, captivating the interest of
investors, entrepreneurs, and policymakers alike.
This shift marks a departure from the traditional belief that growth is solely
concentrated in urban centers, signaling a fresh era of exploration and
diversification.
As Saudi Arabia steers towards a more resilient and inclusive economy, the
growing fascination with these areas, which had not received much attention
before Saudi Vision 2030 was announced, underscores the evolving priorities and
ambitions guiding the Kingdom’s economic trajectory.
Talat Hafiz, a renowned economist, told Arab News that the focus on developing
small towns, helps to limit internal movement of people to urban and large
cities to seek job opportunities and look for better living.
“It also supports the government efforts in reaching comprehensive sustainable
economic development,” he said.
Commenting on what sectors or industries within these smaller towns are
experiencing the most significant growth, Hafiz said that the case differs from
one place to another as each city has its own economic characteristics and
competitive advantages.
“In some towns, tourism is the most competitive advantage while the industrial
sector is more competitive and advantageous in the others,” he pointed out.
The economist noted that Saudi Vision 2030 has fostered the capabilities of
local planning decentralization, which would allow municipalities to undertake
tasks that boost the city in collaboration with the private sector.
He added that that, as a result, several small towns and cities have been
upgraded to the level of urban cities which in turn has improved the
infrastructure and public services.
“Boosting the capability of small towns is coupled with the development of
universities and medical and educational facilities, which in turn has attracted
investment, created job opportunities and limited internal immigration,” Hafiz
said.
Nasser Al-Qaraawi, another economist, said that Saudi Vision 2030 took into
consideration the need to alleviate congestion within major cities due to the
excessive focus on them.
He added that the excessive population density in these major cities, compared
to other cities, has made life difficult, noting that ineffective urban planning
strategies contributed to the overcrowding, especially by young people seeking
job opportunities and education.
“This was followed by the aftermath of the stock market crisis in 2006,” he told
Arab News.
Al-Qaraawi added that when the 2030 plan was announced, developing areas
surrounding the larger cities and less developed regions were given the
opportunity for growth.
However, he further said, these regions unfortunately vary in success as some
municipalities are unable to perform to their full potential due to bureaucratic
hurdles.
Al-Qaraawi recommended restructuring the municipalities, as development
indicators highlight the pressing need to catch up and enact meaningful change
within these local governments to fulfill the state’s goals and meet the
citizens’ aspirations.
Investment opportunities in smaller municipalities include the following:
Diverse investment opportunities in EP municipality
Eastern Province’s urban administration has unveiled 362 diverse investment
opportunities, spanning cities and governorates.
Covering over 20,000 assets across 116 million sq. m., the initiative includes
sectors like infrastructure, transportation and tourism. Investors were urged to
capitalize on incentives like contractual extensions and exemption periods.
These investment portfolios serve as a database for significant investment
growth in the region, according to the Saudi Press Agency.
Jazan as key investment hub, coffee capital
With its significant port and refinery, Jazan has experienced a surge in
investment, driven by rapid infrastructure expansion. The economic zone aims to
attract SR11 billion ($2.93 billion) in foreign investments by 2040,
leveraging its untapped mining reserves. The region is poised to become a hub
for the mining sector, projected to be Saudi Arabia's third pillar of industry.
Additionally, Jazan’s integrated economic center is expected to generate 17,000
direct jobs by 2040 and contribute significantly to the gross domestic product.
During the Cityscape Global Exhibition, held in Riyadh from Sept. 12-13 last
year, Jazan Municipality announced 5,000 investment opportunities to be launched
from 2023 to 2027, with a total value exceeding SR5 billion.
Among the most prominent developmental and investment projects presented were
the Jazan Gateway, Water Park City, Al-Wadi Park, and Jazan Private University
as well as Jazan Private Medical City.
On the other hand, the region’s renowned coffee industry adds to its cultural
heritage, with plans for the International Saudi Coffee Exhibition to support
local farming initiatives and transform Jazan into a global trade center.
The Sustainable Rural Agricultural Development Program has provided more than
SR155 million in support to the coffee sector, benefiting over 3,000 farmers.
The Ministry of Environment, Water, and Agriculture, in collaboration with the
private sector, is implementing various projects, including opportunities for
coffee cultivation.
Northern Borders region attracts more investors
The Kingdom seeks to establish a logistics zone in Arar, where investors will be
granted land plots, according to Minister of Commerce Majid Al-Qasabi, who made
the statement during his speech at the Northern Borders Investment Forum, held
in November 2023.
According to a release issued by the Arar Municipality in January 2024, Saudi
Arabia’s Northern Borders region saw a 58.3 percent growth in factory numbers in
the third quarter of 2023, with total investment hitting SR74.3 billion.
The statement added that the area, driven by a strategic regional development
office, attracted increased corporate spending for business setups during that
period, rising from SR73.9 billion in the third quarter of 2023.
In February 2023, Crown Prince Mohammed bin Salman announced the establishment
of the Strategic Office for the Development of the Northern Borders region to
enhance the quality of life in the area.
Asir region to exploit huge tourism potential
In September 2021, the crown prince unveiled a SR50 billion tourism strategy for
Asir, aiming to attract over 10 million visitors by 2030. Dubbed “The Arabian
Highland,” the plan entails comprehensive development, focusing on cultural and
natural assets to establish Asir as a year-round destination.
Projects include enhancing tourist attractions on Asir’s mountains, leveraging
the region’s rich culture and heritage for social and economic growth. The
strategy taps into Asir’s tourism potential, emphasizing geographical diversity
and modernizing infrastructure.
In October 2023, the crown prince announced a master plan for the new Abha
International Airport, increasing capacity to accommodate 13 million passengers
annually and enhancing air connectivity to 250 destinations, aligning with Saudi
Vision 2030.
In the same month, he launched Ardara Co. to develop the Abha Valley project,
contributing to Saudi Arabia’s National Tourism Strategy to position the Kingdom
as a global tourism hub by 2030. These initiatives create opportunities across
sectors like hospitality, agriculture, and entertainment, bolstering private
sector growth.
Taif attracts investments of over SR11 billion
Investment agreements exceeding SR11 billion were announced on the first day of
the Taif Investment Forum, held in November 2023, according to the Saudi Press
Agency.
Under the theme “Invest in Taif,” the three-day forum saw active participation
from industry leaders in the UK, China and South Korea. Several high-ranking
officials from Saudi government agencies and the private sector also attended.
Sultan Al-Saadoun, the general supervisor of the forum, emphasized that the
investment agreements are the result of partnerships between the public and
private sectors in over 27 projects.
He added that these projects will create more than 10,000 job opportunities for
the people of Taif of both genders.
Ghazi Al-Quthami, president of the city’s Chamber of Commerce and Industry,
underscored Taif’s potential for investments in various sectors, such as
tourism, agriculture, industry, and healthcare.
He added that the chamber is actively collaborating with relevant entities to
expand investment opportunities in the city.
Al-Jouf provides 700 investment opportunities in 2023
The municipality of the northern region of Al-Jouf, which is home to the Sakaka
solar power plant, announced in February 2024 it had introduced more than 700
opportunities in the municipal sector of the region during 2023 through the
‘Furas’ municipal investment portal.
The region’s mayor, Atef Al-Shara’an, emphasized the municipality’s commitment
to presenting the available investment opportunities to investors in accordance
with the plans of the Ministry of Municipal and Rural Affairs and Housing, and
the goals of Vision 2030 of the Kingdom, according to SPA.
Al-Shara’an added that the investment opportunities presented during the past
year varied between major, medium, small, and temporary opportunities in all
commercial, recreational and tourist as well as sports, service, seasonal
events, and other fields.
Recently, the region’s mayoralty announced the bid opening for eight commercial
and residential investment opportunities for national investors and institutions
at Al-Esawia sub-municipality. The bid evaluation meeting is scheduled for April
15.
Yanbu emerges as entertainment hub
A contract worth SR1.1 billion has been granted to build a new entertainment hub
in Yanbu to boost economic diversification in Saudi Arabia.
The contract was awarded by Public Investment Fund subsidiary Saudi
Entertainment Ventures, also known as SEVEN, to a joint venture between Al
Bawani Co. and UCC Saudi, according to a press release.
The statement emphasized that the entertainment hub will be located along the
seafront promenade on Al Nawras Island, aiming to greatly enhance the city’s
local entertainment scene.
In a press statement, issued in September 2023, SEVEN said that the company is
investing more than SR50 billion to build 21 entertainment destinations across
Saudi Arabia.
The company has earlier announced that it had already begun construction works
on its entertainment destinations in the Al Hamra district of Riyadh and Tabuk.
Buraidah Municipality unveils 28 investments opportunities
The Qassim region, home to Buraidah city, stands as a province abundant in
natural and agricultural resources. Notably, it hosts the Middle East’s only
bauxite mine, yielding approximately 5 million tonnes of ore and contributing to
the Kingdom’s aluminum production of 1.8 million tonnes in 2020.
The Buraidah Municipality has recently unveiled 28 investment opportunities for
the first quarter of 2024.
These opportunities encompass a wide range of sectors, from commercial, health,
and tourism activities to transportation, construction, and entertainment
projects. Additionally, investors can explore prospects in agriculture,
education, and other sectors, promising diverse avenues for growth and
development.
It is apparent that, by tapping into regional potential and spreading
development initiatives, the Kingdom aims to reduce reliance on oil revenues,
stimulate job creation, and foster widespread prosperity, in line with the goals
of Saudi Vision 2030.