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The world’s top oil exporter, Saudi Arabia, is creating a tourism development fund with an initial investment of US$4 billion as part of efforts to diversify away from oil and polish its image as an attractive tourism destination.
OPEC’s biggest oil producer, which allowed women to drive for the first time in 2018, is looking at developing tourism as part of its Vision 2030 program to have its economy less dependent on oil and more open to foreign investment.
“The Tourism Development Fund will play a critical role in developing outstanding tourism experiences and unlocking the full potential of Saudi Arabia as a destination,” Tourism Minister Ahmed Al-Khateeb said in a statement, reported by Saudi Gazette.
“The launch of the fund at this time, as the tourism sector faces unprecedented global challenges, is testament to investor and private-sector confidence in the long-term outlook for tourism in Saudi Arabia. The social and economic importance of the sector cannot be understated: it drives growth and diversification, attracts international investment, creates job opportunities and enhances quality of life for millions of Saudis,” the minister noted.
Last year, Saudi Arabia launched a new visa regime to attract international tourists, but it will likely have to wait for years until tourists start traveling after the pandemic again and choosing the Kingdom as a destination.
Related: What’s Next For Big Oil?
Saudi Arabia’s economy is suffering from the sharp contraction in oil revenues due to the oil price crash, reduced demand, and the OPEC+ cuts that made the Saudis slash their production to 8.5 million bpd from 12 million bpd in April.
Diversification has also been an issue with the Saudi economy despite years of assurances that the Vision 2030 is doing that.
The World Bank said in its Global Economic Prospects report earlier this month that the oil price collapse during the pandemic is yet another reminder for energy-exporting emerging markets to diversify their oil-dependent economies.
“Even if oil prices rise as global oil demand recovers, the recent plunge in prices is another reminder for oil-exporting countries of the urgency to continue with reforms to diversify their economies,” Ayhan Kose, Director of the World Bank’s Prospects Group, commented.
By Tsvetana Paraskova
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.