With a new initiative, Saudi Arabia hopes to bring in international industrial firms and secure investments totalling 40 billion Saudi riyals ($10.6 billion) in the first two years after the program’s launch.
What is the Purpose of GSCRI?
Saudi Arabia will set aside 10 billion riyals in financial and non-financial incentives for investors under the Global Supply Chain Resilience Initiative (GSCRI), established by the Kingdom’s Crown Prince Mohammed Bin Salman, according to a statement by the Ministry of Investment. The kingdom’s resources, infrastructure, and location will be utilised by the Global Supply Chain Resilience Initiative to boost industries and economies across Europe, the Americas, and Asia while improving Saudi Arabia’s standing in the world economy.
Saudi Arabia is launching the initiative to rank among the top 15 economies in the world by 2030. The kingdom previously announced last year that it intends to invest more than 500 billion riyals by 2030 to expand its transportation sector as part of a strategy to become a global logistics hub. This new international supply chain project follows that announcement.
The Saudi Arabian Government’s National Strategy for Transport and Logistics, unveiled last year, aims to increase the sector’s share of the country’s GDP from 6% in 2021 to 10% by 2030.
According to the ministry, the new supply chain initiative in Saudi Arabia will make it possible for investors from all industries to take advantage of the nation’s resources and capabilities and support and develop these value chains.
The initiative also aims to assist foreign investors in utilising the unrealised potential of the nation and building solid connections with both local and international markets.
To draw the regional headquarters of foreign corporations to the Gulf state, it also includes plans to establish several special economic zones in the “near future.”
The ministry stated that Saudi Arabia wants to bring in 40 billion riyals through its new initiative in “quality, industrial and service investments” in international supply chains. Saudi Arabia provides investors with “a resilient economy,” the biggest in the Arab world and the G20’s fastest-growing economy, a prime location, and a reliable supply of raw materials for manufacturing.
By overseeing the creation of projects to produce green and blue hydrogen, the top oil exporter in the world supports its initiatives for creating a circular economy.
Incentives to Entice Overseas Investment
It is noteworthy that the National Incentives Committee announced in June 2022 that it would focus on the following incentives:
- Tax and customs incentives.
- Financial compensation depends on the type of economic activity.
- Job localisation requirements.
- Government assistance in communications, agriculture, energy, industry, and the environment.
- Privileges in communications in terms of privatisation fees and mining concessions.
- Secure financing with slim profit margins.
The committee will keep focusing on formulating and creating investment projects resulting from domestic and foreign investments.