- Minister Khalid calls on PIF to make room for the private sector.
- PIF chairman said that last year the fund would focus on domestic projects.
- The foundation’s initial strategy for 2021-2025 ends in December this year.
Saudi Arabia’s investment minister urged the kingdom’s Public Investment Fund (PIF) on Tuesday to ease its spending on domestic projects and make room for more private sector investment as the fund prepares to draw up a new strategic plan.
“It’s time we maybe scale back this government or PIF spending to prove and see some of these value chains and clusters and let the private sector start investing,” Khalid al-Falih said on Tuesday as financial titans gathered in Riyadh for the country’s flagship investment conference.
Crown Prince Mohammed bin Salman’s Vision 2030 economic plan has led to hundreds of billions in spending on projects designed to transform the kingdom’s economy away from its dependence on hydrocarbons.
At last year’s edition of the Future Investment Initiative (FII) conference, PIF chairman Yasir Al-Rumayyan said the fund would use more of its resources to fund domestic plans to wean the economy off oil and said the fund planned to cut its overseas investments.
But many of the plan’s flagship projects have been delayed by low oil prices and a budget deficit that has forced Saudi Arabia to prioritize and cut back.
Saudi Arabia’s PIF, one of the world’s largest sovereign wealth funds with more than $900 billion in assets, sits at the heart of Vision 2030. The fund’s initial strategy for 2021-2025 ends this year, and it is due to publish an updated strategy.
Foreign investment in the country is set to grow 24% by 2024 to $31.7 billion, Rumayyan said earlier Tuesday as he opened the event, where attendees include Colombian President Gustavo Petro, Blackrock’s Larry Fink, JP Morgan’s Jamie Dimon and Citi’s Jane Fraser.
Falih later added that 90% of FDI was in Saudi Arabia’s non-oil sector, without giving details.
“We just did a transaction here in the Kingdom, and we had five times more demand than we could supply. It was for a pipeline in Jafurah, and the amount of money that was interested in investing here in the Kingdom was at a record level,” Fink said on a panel.
“To me, this is just an indication of the transformation here in the Kingdom, but more importantly, throughout the region, and I think we’re seeing more and more as the GCC becomes one of the most important destinations for capital.”
The Jafurah deal, which raised $11 billion for Saudi state oil giant Aramco upfront in exchange for payments over 20 years to investors, is in exactly the sector the kingdom is trying to reduce its reliance on.
