The Minister of Finance affirmed that achieving the desired economic diversification cannot be completed without full adherence to fiscal discipline, emphasizing that fiscal sustainability is the solid foundation upon which all development plans are built. These statements highlighted the direct correlation between the efficiency of government spending and the growth of non-oil sectors. The Minister revealed a striking figure reflecting the dynamism of the private sector: the number of establishments owned by citizens has reached 1.65 million.
The importance of fiscal discipline in the development equation
The emphasis on fiscal discipline comes at a time when Saudi Arabia is undergoing radical economic transformations. Economic diversification is not merely an ambitious goal, but a strategic path that requires meticulous management of financial resources. Fiscal discipline here means the ability to finance major projects and development initiatives without exposing the state budget to the risks of uncontrolled deficits or severe vulnerability to the volatility of global energy markets. By controlling expenditures and directing them towards sectors with sustainable economic returns, the state ensures the continued flow of liquidity into the economy, thereby bolstering the confidence of both domestic and international investors.
A surge in the growth of national establishments
In discussing the fruits of economic reforms, the figure announced by the Minister of Finance regarding the number of citizen-owned establishments reaching 1.65 million is a clear indicator of the success of private sector empowerment programs. This figure reflects significant growth in entrepreneurship and small and medium-sized enterprises (SMEs), which are considered the main drivers of job creation and innovation in modern economies. This increase did not happen by chance; rather, it is the result of a package of legislative facilitations, improvements to the investment environment, and streamlined business start-up procedures adopted by the government in recent years.
Historical context and Vision 2030
Historically, prior to the launch of Vision 2030, the Saudi economy was almost entirely dependent on oil revenues, making it vulnerable to the economic cycles associated with oil prices. With the launch of the Fiscal Balance Program (later renamed the Fiscal Sustainability Program), the Kingdom established a clear roadmap for decoupling government spending from the volatility of oil prices. This structural transformation has paved the way for the current discourse on genuine economic diversification, underpinned by a sound fiscal foundation.
Expected economic effects
Combining fiscal discipline with the growth of the national business base holds positive implications for the future of the national economy. Domestically, this leads to an increased contribution of the non-oil sector to GDP, a key objective of the Vision. Internationally, the Kingdom's commitment to fiscal discipline enhances its credit rating and makes it a more attractive destination for foreign capital seeking stable economic environments and sound governance.
