The World Competitiveness Yearbook of the International Institute for Management Development for 2023, revealed the Kingdom reaching the 17th position globally out of 64 countries as the most competitive in the world, and the third among the G20 countries…writes Mohammed Abdul Mannan
Saudi Arabia, where the Indians arrived as migrant workers during the British times after the discovery of oil and currently accounts for 2.2 million – the largest expatriate community – and contributing in US$13.052 billion in 2021, is in the midst of a massive socio-economic and infrastructural transformation. The Arabian Peninsula’s largest country has achieved a significant economic milestone by surpassing a Gross Domestic Product (GDP) of SR4.155 trillion (US$1 trillion) for the first time, ahead of its 2025 target. The economy experienced an impressive growth rate of 8.7 per cent, outperforming all other G20 member-states. The private sector contributed SR1.634 trillion to the GDP, constituting 41 per cent of its total. Non-governmental investments experienced remarkable growth, reaching SR907.5 billion. The private sector workforce witnessed substantial expansion, growing to 9.422 million in 2022, reflecting an impressive growth rate of 16.6 per cent.
In May 2023, the World Tourism Organization (WTO) revealed that the Kingdom was the world’s second-fastest-growing tourism destination. It had been ranked 13th globally, advancing by 12 places since 2019 on its index, as one of the top countries receiving international tourists in 2022. According to its barometer, the Kingdom also advanced 16 places in the international tourism revenue index, achieving 11th place in 2022, compared to 27th place in 2019 globally. The country received about 7.8 million international tourists for all purposes during the Q1 of 2023, representing its highest quarterly performance, up 64 per cent compared to the same period in 2019.
In 2023, there had been 20 per cent more international capacity than in 2018 and it now exceeds domestic capacity. In 2023, SAUDIA represented 41 per cent of capacity, with private budget carrier Flyadeal and hybrid short-haul operator Flynas representing a further 25 per cent of the market. Reflecting robust economic growth, its financial markets reported a remarkable performance by the end of 2022, with the Capital Market Authority witnessing 49 new listings, marking a completion rate of 204 per cent. The stock market’s capitalization as a proportion of the GDP also increased by 91 per cent, exceeding the initial Vision 2030 strategic objective of 77 per cent. The World Competitiveness Yearbook of the International Institute for Management Development for 2023, revealed the Kingdom reaching the 17th position globally out of 64 countries as the most competitive in the world, and the third among the G20 countries.
Investment funds soared to a historic peak of 1,130, marking a 34.68 per cent surge from the 839 funds in the same period last year. An official document projected the government would post a budget deficit of 1.9 per cent of the GDP in 2024, 1.6 per cent of GDP in 2025, and 2.3 per cent of GDP in 2026, with “limited budget deficits” continuing in the medium term. The total expenditure is seen rising to SR1.262 billion in 2023, before slowing down marginally to SR1.251 billion in 2024. For 2024, the government expects total revenues at SR1.172 trillion and total spending of SR1.251 trillion. According to a September 2023 report by American newswire Bloomberg, the Kingdom awarded construction contracts worth US$250 billion since 2016, when it embarked on an ambitious plan to transform the economy. Property and infrastructure projects of US$1.25 trillion value have been announced across the country, according to property consultant Knight Frank.
Assets under the management of the Public Investment Fund’s (PIF) – the sovereign wealth fund- have swelled to US$603 billion in 2022, and it hopes to boost its total assets to a whopping SAR4 trillion by 2025, of which 24 per cent will be international. As it rides a new wave of socio-economic growth, the oil-rich Kingdom has become a head-turner. As it pursues an ambitious aviation and tourism agenda, it has launched two new state-owned airlines which are scheduled to start flying from 2024/2025. One of the three airlines in operation, national carrier SAUDIA is weighing options including a debut bond sale to fund new aircraft orders, as it prepares to almost double its fleet by 2030. The Kingdom plans to boost international arrivals to 70 million. A whopping US$100 billion has been dedicated to airports and the air transport sector to handle 330 million passengers and 4.5 million tons of air cargo by 2030. It is working towards 250-plus destinations connectivity from across its 29 airports. The Kingdom’s three carriers are set to face stiff competition from the two new state-owned carriers scheduled to start flying in 2024/2025. NEOM Bay Airport is the first of four airports to be developed under Vision 2030, the massive economic development program launched in 2016 with US$100 billion dedicated to airports and the air transport sector.
The world’s largest producer and exporter of oil and the fastest-growing tourism market in the G20 is targeting to handle 330 million passengers and 4.5 million tons of air cargo by 2030. It is working to have 250-plus destinations connectivity from across its 29 airports. By that time, the country will house the world’s largest airport by size, spreading across 776 square kilometres in Jeddah. After being shuttered for the 41st time in history due to the 21st century’s second pandemic, the Holy Cities of Makkah and Madinah are recording the world’s largest human gatherings. The Kingdom wants to raise the tourism sector’s contribution to the GDP to more than 10 per cent to over US$100 billion to become one of the world’s top five tourism destinations by attracting 100 million annual visitors by 2030. It has pledged to invest up to US$64 billion by 2028 to develop its domestic entertainment sector. Saudi Arabia will see its first underground and driverless Metro of 176 kilometres taking off in 2023/24 to carry 400,000 passengers. The capital city is also developing an integrated 1,900-kilometre bus network with around 3,000 stops and three Bus Rapid transit (BRT) lines as it suffers from chronic traffic jams caused by over nine million road trips a year.
The country is constructing the world’s largest airport by size – spread across 776 square kilometres. Construction is on in Jeddah for a skyscraper expected to become the world’s tallest building, reaching a height of 1,000 metres, taller than the current record-holder, the 828-metre-tall Burj Khalifa in Dubai. Jeddah Tower will hold a Four Seasons hotel, residences, offices as well as the world’s highest observation deck on a constructed building. The fastest-growing tourism market in the G20 wants to be one of the world’s top five tourism destinations by attracting 100 million annual visits by 2030. It wants to host the World Expo in Riyadh in 2030, and the T20 cricket league. It will host the Asian Cup in 2027. It wants to host the 2034 Asian Games and also the Olympics. Saudi Arabia has started planning to bid to host the football World Cup in 2034 after, abandoning its plans to co-host in 2030 with Egypt and Greece.
It has already won the right to host the 2029 Winter Games. The country is speeding towards becoming a global player in international sports by spending billions of dollars on high-profile deals. Saudi Arabia wants to host 2035 Women’s World Cup for women, and could go head-to-head with an English bid for the tournament. To rejuvenate its domestic football, it has picked up the most sought-after football stars like Neymar, Cristiano Ronaldo and Karim Benzema, doling out million-dollar salaries and opulent mansions. According to a report in a British daily, the Kingdom has started planning a bid to host the football World Cup in 2034 after abandoning its plans to co-host it in 2030 with Egypt and Greece. The country had already won the right to host the 2029 Winter Games. The Kingdom got an impressive tourism revenue surplus of US$6.1 billion during the Q1 of 2023, an astounding 225 per cent rise compared with the same quarter of 2022.
If the Kingdom gets the rights to host the Expo 2030, the five-month exhibition will welcome over 120 million visitors to Riyadh and 40 million to the massive site. The mega event will be a “unique opportunity for international visitors to experience its impressive transformation, rich cultural heritage and extraordinary hospitality.” Its US$7 trillion investment is turbocharging its drive to be a prime destination in the 21st century, with six UNESCO World Heritage Sites adoring its landscape as it rains on average six times a year.
Saudi Arabia has remained focused on developing cutting-edge Air Traffic Management facilities. Its Jeddah FIR covers all of the Saudi airspace, with only 56 per cent of the airspace fully utilized and used freely and the rest remaining with the military. Saudi Air Navigation Services (SANS) manages air traffic over two million square kilometres across a wide variety of terrains and environments. The sole Air Navigation Services Provider (ANSP) has the world’s tallest air traffic control tower at King Abdul-Aziz International Airport in Jeddah, since 2017, measuring 446 feet – taller than the Great Pyramid of Giza. Work is underway to deploy the Middle East’s first virtual air traffic control tower at Al Ula International Airport.
The Kingdom has seen 13 commercial airlines take off in its history. The Kingdom recorded the highest-ever passenger numbers – 103 million – in 2019. That year, total international flights number reached 159,795 and domestic flights stood at 225,721. The country also got its first aircraft leasing company. Two new airlines are due to start flying in 2024/2025. It is working towards enabling its airports to handle 330 million passengers by 2030, a decade before the Middle East airports, with Saudi Arabia in the lead, handling 1.1 billion passengers. From having its first airport in Dhahran in the 1940s, Saudi Arabia now boasts 29 airports. Jeddah’s King Abdul-Aziz International Airport tops in connectivity and destinations served – 55 airlines and 109 cities. Next comes Riyadh (38 airlines, 80 cities), Dammam (32 airlines and 48 cities) and Madinah (15 airlines and 28 cities).
Red Sea International Airport will start international operations in 2023/24, with five mini terminals. A new airport in Jeddah, billed to emerge as the world’s biggest facility, will handle up to 185 million passengers by 2050. After being called a ‘Forbidden Kingdom’ for being one of the 10 toughest countries to obtain visit visas, Saudi Arabia is going all out to warmly welcome the world, including Lesbian, Gay, Bisexual, Transgender and Queer (LGBTQ) visitors. The Kingdom has introduced one-year, fee-based e-visas for tourism, events, visiting relatives or Umrah, and a free four-day stop-over visa for passengers booked on its flag carrier, Saudia, and budget airline, Flynas. Its goal is to attract 100 million tourists a year by 2030. The government has plans to spend US$1 trillion over the decade to turn the Kingdom into a mass-market tourist destination. The hotel segment alone has been projected to generate US$2.5 billion in revenues in 2023 as life comes back to normal following the years run of the 21st century’s second pandemic. Saudi Arabia’s growth and prosperity in the coming time will for sure make the world astonished. It is right now like a camel on wings.
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