Saudi Arabia’s grand vision for the future includes becoming less reliant on oil based revenues. To help with this process the younger generation of royals are looking to change the image of the Kingdom in order to attract foreign direct investment. Saudi reforms are being put in place in order to increase the attraction to the outside world across a whole range of business areas such as tourism, manufacturing, financial services, transportation and more.
Saudi reforms are imperative in order to increase the number of jobs for the growing younger generations. There is a changing demographic in the kingdom due to the baby boom over the last 20-30 years with many of the younger generation feeling disenfranchised. A new generation of upcoming Saudi leaders are looking to the West for new investment opportunities and they are being encouraged by the reaction of young Saudis on social media and elsewhere.
(Reuters) – The powerful young prince behind modernizing reforms in Saudi Arabia presents himself as the champion of his nation’s plugged-in youth, and his visit to Silicon Valley this week sought to bolster that image.
The 31-year-old Deputy Crown Prince Mohammed bin Salman has unabashedly pitched his “Vision 2030” reforms at the 70% of the staid Islamic kingdom’s people younger than him, promising to unlock their “talent, potential and dedication.”
He has also tried to overcome Western stereotypes of Saudis, meeting foreign media to sell his vision of market-oriented reforms and a transformation of the kingdom’s society. Pictures of the denim-clad prince in Silicon Valley served both purposes.
His modernizing message has strongly resonated on social media with younger Saudis, whose concerns sometimes seemed misunderstood or ignored by older royals, and where hashtags referencing the prince receive large volumes of traffic.
“The Saudi youth and the government are finally speaking the same language,” said Manal al-Sharif, a banker and mother of two teenage girls in Jeddah.
Saudi Prince Aims For Silicon Valley Appeal to Gleam at Home
Religious tourism is set to grow in Saudi Arabia as the number of pilgrims increase year by year for festivals such as Umrah. This has led to plans to many new hotel openings in the kingdom.
Saudi Arabia is expected to have a steady stream of new hotel openings over the next five years amid a jump in pilgrim numbers as part of its 270 billion riyal (Dh264.43bn) National Transformation Plan.
The kingdom wants to increase the number of Haj pilgrims to 2.5 million by 2020 from 1.5 million and more than double Umrah pilgrims to 15 million from 6 million, according to the plan revealed last week. Saudi Arabia also wants to boost tourism spending by two-thirds to 174.8bn riyals from 104.8bn riyals.
“Although currently there are no definitive plans available regarding where the additional revenue will be spent, we expect that the priority targets will include expansion of tourism infrastructure in the country, training Saudi workforce to participate in the growth of this sector, and developing and upgrading tourism facilities across the country,” said Rashid Aboobacker, the associate director at TRI Consulting, in Dubai.
New Investment Required
The plan envisages raising the number of hotel rooms and apartments by about 40 per cent to 621,000 from 446,000.
Real estate development has always been a good investment over the long term Dubai. The UAE as a whole provides a mature market, strong demand, excellent infrastructure, no restrictions on returning capital to its country of origin, and a tax free environment to make such investments. Dubai is also strategically located with access to half of the world’s population within 6 hours of flying. This has attracted a multitude of businesses to invest and setup in the emirate which has led to boom in commercial and residential real estate. Combined with a stable business environment, the city of Dubai is well placed to take advantage of the opportunities in the future with real estate development being a core driver.
China’s current status as a global financial giant has not been achieved overnight but earned through consistent efforts. The resultant rise in affluence has given wings to Chinese investors. This has encouraged them to flock to other countries in the hope of making savvy investments. As a way of preventing the over-saturation of the Chinese markets, the Chinese government has been rallying investors to look for investment opportunities abroad. The Chinese real estate market underwent drastic changes in the past few years that left investors high and dry. The changes have mostly been influenced by low rental yields, stock market downturn and low interest rate, high prices and low capital gains. As a result, the Chinese have found the UAE’s, especially Dubai’s, real estate sector a lucrative investment option.
The Chinese were ranked the seventh biggest property investors in Dubai in 2015, investing around $460 million in the first nine months of the year. Juwai.com said Chinese investor interest in the Dubai real estate market rose by 1,200 percent by August 2015, as compared to the previous year. But let’s consider a few points that help clarify why UAE makes so much sense to China’s wealthy.
A successful restructure of the Saudi Arabian Public Investment Fund (PIF) would represent a great opportunity for Saudi Arabia to have a positive impact not only the region, but also the world, according to a London Business School strategy expert.
Nearly 30 per cent of new entrants into the UAE’s retail space last year comprised food and beverage openings, new research showed on Tuesday, and that percentage could rise next year.