PIF’s Local Content and Private Sector Growth Initiatives Drive Economic Reform in Saudi Arabia

0
333

The musahama program, a local content growth initiative, aims to increase the proportion of local content spending in PIF’s domestic portfolio to 60 percent by the end of 2025. This program requires PIF companies to incorporate local content considerations into their design and procurement policies.

PIF’s suppliers development strategy aims to support the growth and development of local suppliers and vendors to meet the increasing needs of the fund portfolio companies. This year, the wealth fund plans to organize vendor boot camps for tier 2 and tier 3 contractors to help them qualify as vendors.

The private sector hub, the last initiative, provides a dedicated platform for sharing investment and supplier opportunities with the private sector. The hub is now operational, featuring over 100 opportunities, and will be continually updated and enhanced.

Jerry Todd, the head of the National Development Division at PIF, stated that both programs will ensure PIF and its portfolio companies incorporate local content considerations into their activities and operations. This approach will contribute to the development of local industries, the establishment of long-term supplier and vendor partnerships, the strengthening of local capabilities, the enhancement of the competitiveness of local players, the improvement of supply chain resilience, and the stimulation of innovation in the Saudi economy.

The three new initiatives align with PIF’s objective of increasing its contribution to local content to 60 percent by 2025, supporting the private sector in increasing its contribution to GDP by up to 65 percent by 2030, creating job opportunities, localizing technology, and driving technology and knowledge transfer in Saudi Arabia.

PIF launched these initiatives during its inaugural two-day private sector forum in Riyadh, which is attended by PIF executives, ministers, senior government officials, and representatives from 50 PIF portfolio companies, as well as over 4,000 private sector participants.

As Saudi Arabia aims to wean itself off its heavy reliance on oil revenues under Vision 2030, PIF is a crucial component of the kingdom’s economic reform initiative. The wealth fund is investing heavily in various sectors, such as sports, electric cars, and new cities, with the goal of accumulating assets worth $3 trillion by 2030.

Additionally, earlier this week, the wealth fund announced Riyadh Air, a new national airline in Saudi Arabia wholly owned by the fund. Riyadh Air is expected to contribute $20 billion to the Gulf state’s non-oil GDP growth and create over 200,000 jobs, both directly and indirectly. The new airline has ordered 39 Boeing 787 Dreamliners, with options for 33 more, as it aims to serve over 100 destinations worldwide by 2030.