RIYADH — Saudi Arabia announced plans to diversify its economy away from oil.
The dramatic move is part of the Saudi “2030 Vision,” a plan distributed to attendees at the inaugural MiSK Global Forum in Riyadh on Tuesday. The Saudi plan seeks to bolster private sector investment to create more opportunities for the growing number of young people in the kingdom and the region.
“The Arab world must create 60 million jobs by 2020 to meet the employment needs of its youth," Ahmad Alhendawi, the United Nations Secretary-General’s Envoy on Youth, said in a speech at the Global Forum. "The majority of the people in the Middle East today are young people.”
The plan calls for an increase in the private sector's contribution to the economy from 40% to 65% of GDP by 2030. The government hopes to increase foreign direct investment and foster a more active role for smaller domestic Saudi businesses. The Saudi’s hope that by 2030, small and medium size entrepreneurs in the economy will account for 35% of GDP. Today they account for just 20% of GDP.
“To meet these goals, a change in attitude will be as necessary as well as shift in government policy,” said Abdul Habodal, who is working in Saudi Arabia’s emerging aerospace industry and attended the event. A 2015 Gallup survey found 81% of Saudi workers preferred jobs in the public sector to working in the private sector.
Alhendawi was followed by speakers ranging from local Saudi business people to BP CEO Bill Dudley. Earlier, Bill Gates had addressed the crowd via a pre-recorded video. The speeches urged the large Saudi audience to launch businesses within the kingdom.
The conference is a small part of a larger Saudi solution to its demographic challenge. Unemployment in the Kingdom stands at nearly 12 percent. Saudi women face an unemployment rate of roughly 33 percent, the highest in the world. Two thirds of Saudi Arabia’s population is under thirty years of age. With oil trading below $50 per barrel, the government cannot simply create jobs.
“Attitudes are beginning to change, slowly and more youth are seeking opportunities in the private sector," said Osama Al-Fahel, a Saudi entrepreneur. "That’s where the excitement is.”Al-Fahel is a part owner of Black Cherry, a gourmet chocolate company in the coastal city of Jeddah. He hopes his modest business will grow to become as popular as Al-Baik, the popular fried chicken eatery. Saudi men will drive hours across the kingdom's desert roads to eat there. Women are still banned from driving automobiles in the country.
While the plan and the conference are driven by economics, security concerns also play a role. A lack of jobs in Saudi Arabia has contributed to regional instability. Idle youths in Saudi Arabia and elsewhere in the region are ideal targets for terrorist recruiters.
“For me, the best way is to solve the challenge of violent extremism is about providing better economic opportunities, Alhendawi told the American Media Institute in Riyadh, "and to make sure youth are better integrated into local communities.”