Arab News, Saturday, Aug 29, 2020 | Muharram 10, 1442
Saudi energy think tank urges greater private sector funding
Saudi Arabia: A Saudi energy think tank said that greater
private sector involvement in funding and delivering projects would spur the
non-oil economy in the Kingdom.
It is one of five key recommendations in a paper published by the King Abdullah
Petroleum Studies and Research Center that could maximize the impact of
government spending on the economy beyond oil.
It also highlighted the need to improve the Kingdom’s business environment,
involving the private sector in investment and job creation projects, and
working on reprioritizing government spending, increasing local content and
reducing imported goods and services.
The study concluded that government expenditure would have a greater positive
impact if it was underpinned by investment in education, vocational training and
capacity building.
Regional governments are accelerating their economic diversification agendas as
they respond to a six-year period of weaker oil prices that deteriorated further
in the last four months as the coronavirus pandemic smothered demand for
gasoline and aviation fuel.
Moody’s expects the Saudi economy to grow at an average rate of around 3 percent
during 2021-24, which is nearly double the average during 2015-19 (1.6 percent)
but lower than the 4.1 percent growth rate recorded during 2005-14.