DUBAI: Saudi Arabia is to inject SR72 billion ($19.2 billion) into the private sector of the economy in a bid to stimulate activity in the non-oil sector, which has been hit by the slowdown in government spending as a result of oil revenue weakness.
Housing and small business are major beneficiaries of the stimulus package. Among the measures announced in a decree by King Salman are a SR21.2 billion initiative on subsidized loans to provide housing, a SR13.8 billion injection into new building technologies, and a proposal valued at SR10 billion to support the funding of big infrastructure initiatives.
Other big items include a SR1.5 billion initiative to support companies in financial distress, and a SR7 billion plan to refund government fees to small and medium enterprises (SMEs).
A statement from the Center for International Communication (CIC) in Riyadh said the decree was based on recommendations from Crown Prince Mohammed bin Salman, who is also deputy prime minister and president of the powerful Council for Economic and Development Affairs.
The growth of the non-oil economy is a crucial part of the Vision 2030 strategy which seeks to reduce the Kingdom’s dependency on oil revenue and government spending. The private sector of the Saudi economy is still largely dependent on spending by government agencies for its economic activity. The government is planning some $200 billion worth of state sell-offs in one of the biggest privatization plans in history, in addition to the planned $100 billion initial public offering (IPO) of shares in Saudi Aramco.
“The private-sector stimulation packages aim to strengthen competitive capabilities of a number of segments of the national economy, develop its outcomes as well as improve the business and investment environment and facilitate their implementation,” the CIC added.
Other smaller items in the stimulus package include an export promotion program worth SR5 billion, and a broadband and optical fiber investment worth SR2.56 billion, and measures to invest in high-efficiency air-conditioning units.
Commerce and Investment Minister Majid Al-Qasabi explained in an interview with Bloomberg that the package was part of a SR200 billion, four-year program announced last year to spur the private sector to faster growth and higher rates of job creation.
“Next year is the year for stimulus. That’s how we will strengthen our bonds with local and international investors,” Al-Qasabi said.
Economists have been looking for an upturn in the non-oil sector for some time. Fahad Al-Turki, chief economist with investment bank Jadwa, said: “The government’s efforts to raise non-oil revenue through structured economic reform seems to be bearing fruit … We expect to see a significant ramp-up in government capital spending in the final quarter of 2017.”
The full 2018 budget will be announced in Riyadh next week, with economists expecting further guidance on the progress of the non-oil sector. There was however some skepticism among experts over whether the stimulus package would be enough to significantly affect growth rates, which have fallen to near zero for the overall economy this year, according to the IMF, and are forecast at just 1.1 percent next year.
Monica Malik, chief economist of Abu Dhabi Commercial Bank, told the Financial Times: “Finally seeing signs of the plan is clearly positive. However, the success of the stimulus framework is dependent on how well it integrates private-sector capabilities with the government’s development objectives. A framework that provides funding or support for the private-sector investment would likely not drive a pick-up in activity given the weak domestic backdrop.”
Other analysts have detected some signs of recovery in the non-oil and consumer sector. “Trade data shows that in the three months to September, non-oil imports declined at their slowest pace since late 2015. Data on ATM withdrawals and point-of-sale transactions suggest that the reversal of cuts to civil service bonuses is finally providing some support to consumer spending,” said Jason Tuvey, Middle East economist at London-based Capital Economics.
But he did not necessarily see a significant fiscal boost to the economy from next week’s budget. “Overall, we still expect fiscal policy to be tightened, but there has been a shift, away from spending cuts in the ‘austerity’ phase to revenue-raising measures next year,” he added.
In 2018, government revenue will be boosted by the introduction of value added tax, while expenditure will be reduced by the reduction or elimination of some subsidies.
Saudi Arabia plans $19bn boost for private sector
Saudi Arabia plans $19bn boost for private sector
Multilateralism strained, but global cooperation adapting: WEF report
DUBAI: Overall levels of international cooperation have held steady in recent years, with smaller and more innovative partnerships emerging, often at regional and cross-regional levels, according to a World Economic Forum report.
The third edition of the Global Cooperation Barometer was launched on Thursday, ahead of the WEF’s annual meeting in Davos from Jan. 19 to 23.
“The takeaway of the Global Cooperation Barometer is that while multilateralism is under real strain, cooperation is not ending, it is adapting,” Ariel Kastner, head of geopolitical agenda and communications at WEF, told Arab News.
Developed alongside McKinsey & Company, the report uses 41 metrics to track global cooperation in five areas: Trade and capital; innovation and technology; climate and natural capital; health and wellness; and peace and security.
The pace of cooperation differs across sectors, with peace and security seeing the largest decline. Cooperation weakened across every tracked metric as conflicts intensified, military spending rose and multilateral mechanisms struggled to contain crises.
By contrast, climate and nature, alongside innovation and technology, recorded the strongest increases.
Rising finance flows and global supply chains supported record deployment of clean technologies, even as progress remained insufficient to meet global targets.
Despite tighter controls, cross-border data flows, IT services and digital connectivity continued to expand, underscoring the resilience of technology cooperation amid increasing restrictions.
The report found that collaboration in critical technologies is increasingly being channeled through smaller, aligned groupings rather than broad multilateral frameworks.
This reflects a broader shift, Kastner said, highlighting the trend toward “pragmatic forms of collaboration — at the regional level or among smaller groups of countries — that advance both shared priorities and national interests.”
“In the Gulf, for example, partnerships and investments with Asia, Europe and Africa in areas such as energy, technology and infrastructure, illustrate how focused collaboration can deliver results despite broader, global headwinds,” he said.
Meanwhile, health and wellness and trade and capital remained flat.
Health outcomes have so far held up following the pandemic, but sharp declines in development assistance are placing growing strain on lower- and middle-income countries.
In trade, cooperation remained above pre-pandemic levels, with goods volumes continuing to grow, albeit at a slower pace than the global economy, while services and selected capital flows showed stronger momentum.
The report also highlights the growing role of smaller, trade-dependent economies in sustaining global cooperation through initiatives such as the Future of Investment and Trade Partnership, launched in September 2025 by the UAE, New Zealand, Singapore and Switzerland.
Looking ahead, maintaining open channels of communication will be critical, Kastner said.
“Crucially, the building block of cooperation in today’s more uncertain era is dialogue — parties can only identify areas of common ground by speaking with one another.”
