Growth of non-oil industries in Saudi Arabia hits 17-month high
Author: PM editorial | Date: 8 Feb 2017
Ride-hailing apps Uber and Careem expected to play big part in modern, diverse economy
Saudi Arabia’s non-oil sectors have experienced their fastest growth for 17 months.
The growth is partly attributed to an injection of cash from the government, after it issued $17.5 billion in foreign bonds last October and paid off debts to the construction industry and other private sector organisations.
This meant the Purchasing Managers’ Index (PMI) rose to 56.7 in January, from 55.5 in December.
“The rise in Saudi Arabia’s PMI to the highest level in 17 months is an encouraging start to the year, particularly as it reflects faster output and new order growth in January,” Khatija Haque, head of regional research at Emirates NBD, told Arab News.
One private sector organisation keen to contribute to the kingdom’s growth is ride-hailing app Uber. Saudi Arabia’s state-owned Public Investment Fund (PIF) announced last year that it was investing $3.5bn in Uber as part of its push for economic diversification.
The growth of Uber and its local rival Careem also make careers a real possibility for Saudi women who are not allowed to drive themselves to work.
“Many of my colleagues and friends credit Uber for bringing them to work, for Uber facilitating a trip during the lunch break to run errands,” Princess Reema Bandar al-Saud, a member of Uber’s global policy advisory board, told the Financial Times.
Furthermore, the Financial Times believes the central role the PIF is being given in the kingdom’s reform and diversification plans mean it could soon become one of the world’s most powerful sovereign wealth funds – especially after it completes the initial public offering for 5 per cent of Saudi Aramco in 2018 and nets a potential US$100bn.
While diversification is crucial to Saudi Arabia’s Vision 2030, so is Saudisation – prioritising Saudis for jobs over expats. With that in mind, the Saudi Commission for Tourism and National Heritage (SCTH) has signed an agreement with tourism facilities to advance Saudisation in the tourism and heritage sectors.
The Tourism Information and Research Center has predicted that job opportunities in the sector are expected to reach 1.7 million by 2020.