Economic Growth

Rewriting the economic playbook to fire-up new engines of growth

A Saudi man walks on a street past a field of solar panels at the King Abdulaziz city of Sciences and Technology, Al-Oyeynah Research Station May 21, 2012. Saudi Arabia, the world's top oil exporter, may finally be getting serious about overcoming the technical and financial hurdles for tapping its other main resource: sunshine. Saudi Arabia wants to generate much more solar power as it lacks coal or enough natural gas output to meet rapidly rising power demand. Doing so would allow it to slash the volume of oil it burns in power plants bankrolled by billions of dollars worth of saved oil earnings. Picture taken May 21, 2012. To match story SAUDI-SOLAR/  REUTERS/Fahad Shadeed   (SAUDI ARABIA - Tags: ENERGY BUSINESS) growth

What can be learned from Saudia Arabia's practical, pragmatic and equitable approach to growth? Image: REUTERS/Fahad Shadeed

Faisal Alibrahim
Minister of Economy and Planning, Ministry of Economy and Planning of Saudi Arabia
This article is part of: World Economic Forum Annual Meeting
  • High-growth ambitions are colliding with the realities of today's geoeconomic landscape. To navigate, the world needs a clear and irreversible pathway towards inclusive, sustainable and resilient growth.
  • A new economic playbook that succeeds can only be drafted if we double down on global collaboration, not if we turn away from it.
  • Saudi Arabia’s social and economic transformation offers a model of how to do this and how to turn our greatest challenges into unprecedented opportunities.

The need for global stability has never been greater. With an increasingly polarized geopolitical landscape and a highly fragmented global economy, the world is facing the prospect of slow, low growth and a high-debt future.

Global growth is forecast to reach modest levels of between 2.7%-3.2% in 2025. At the same time, macroeconomic risks such as inflation, debt and uneven recoveries persist. On top of this, splintering trade ties, technological disruptions to business and labour markets and the complexities of the energy transition are reshaping the foundations on which growth has traditionally been built.

As high-growth ambitions collide with the hard realities of the geoeconomic landscape, we need a clear and irreversible pathway towards inclusive, sustainable and resilient growth.

Let’s be clear: this is not a call for growth at all costs. It’s about stewarding global growth that is conscious of the costs of inaction – to people, the planet and our shared prosperity.

Opportunities to rebuild and reimagine economic development models in the wake of both the global financial crisis of 2008 and the recovery from the COVID-19 pandemic were not fully grasped. Now, we are compelled to course correct. We will only draft a new economic playbook that succeeds if we double down on global collaboration, not if we turn away from it.

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The pages of this playbook must provide guidance on how nations, economies and communities can: break down silos and foster global dialogues; how they can take control of disruption and turn it into a positive force for innovation; and how they can steer sustainable transitions that leave no one behind, while unlocking human potential.

These principles are timely and critical. Despite talk of deglobalization, the world has never been more interconnected. Throughout the history of global economic development, we’ve seen that openness and integration drive progress, while isolation leaves people behind. In today’s hyper-connected world, no nation can truly prosper and progress alone.

The risks to economic cohesion, fiscal robustness, lingering inequalities and energy access are not unconnected and affect us all. As such, tackling them demands bold, collaborative action and solutions.

Saudia Arabia’s approach

In this context, Saudi Arabia’s social and economic transformation under Saudi Vision 2030 offers a model of a movement that has turned our greatest challenges into unprecedented opportunities.

Today, non-oil activities comprise more than half of Saudi Arabia’s real GDP, the highest in its history. With a 4.6% growth in total GDP and a 4.8% growth in non-oil activities forecast for 2025, the country is on course to be one of the fastest-growing major economies, proving the power of diversification.

GDP growth in Saudi Arabia

Saudi Arabia’s transformation journey has shown that stability and prosperity are not mutually exclusive; rather, stability is a prerequisite for growth and prosperity. By building on our stable foundations, Saudi Arabia’s approach to transformation has been one of planning with confidence and delivering with optimism. This philosophy is the linchpin of a strategy that aims to reinforce resilience, boost productivity and further enhance integration with the global economy.

But our focus extends beyond domestic resilience – Saudi Arabia has become a meeting point for global dialogues that promote collaboration across sectors.

When Saudi Arabia hosted the World Economic Forum Special Meeting on Global Collaboration, Growth and Energy for Development in Riyadh in April 2024, the international community turned to Saudi Arabia’s global growth platform for bold thinking and innovative solutions. From this meeting it was clear that to thrive in today’s fast-evolving world, economies must innovate and adapt or risk drifting towards irrelevance. Capturing the potential of this disruption means investing decisively in advanced technologies, such as artificial intelligence (AI), to secure and drive future-proof growth.

An example of this in action is Google’s new AI hub in Saudi Arabia, which is projected to contribute $71 billion to the local economy by creating localized applications. Global tech and innovation partnerships like this exemplify how Saudi Arabia is proactively driving disruptive innovation, as we seek to become a global leader in AI and emerging digital technologies.

Saudi Arabia’s digital economy, which already accounts for 14% of GDP, is a cornerstone of its transformation. Recent initiatives, including a streamlined digital regulatory framework, are designed to further expand the digital economy’s contribution to real GDP, to ensure that the benefits of technological progress permeate every sector of the economy and to support long-term, sustainable growth.

At the same time, the global need to steer sustainable transitions has never been clearer. There is no silver bullet to the climate crises we face, but by investing in renewable, clean and low-carbon energy solutions, we can steer the world towards the net-zero future we urgently need.

Saudi Arabia is serious about contributing to – and driving the response to – this global need. Under the Saudi Green Initiative renewable energy capacity has increased by 300% since 2022. By investing in carbon capture and storage technologies, food and water resilience initiatives, Saudi Arabia is taking a practical, pragmatic and equitable approach to protecting people, the planet and resources.

To address the growing climate challenge, unlocking a sustainable stream of opportunities for more people to realize their potential is a global necessity.

Unlocking human potential

Human capital is the beating heart of any transformation. Without an empowered people, change, innovation and progress won’t get off the ground. If we give people the tools and skills to not only navigate but lead the future of the global economy, inclusive growth can soar to new heights.

By investing in education, technology and skills development to harness the energy of our young population, while simultaneously addressing the needs of its ageing population through innovations in healthcare and intergenerational collaboration, pro-people policies can unlock vast human potential.

The challenges of human development, technological disruption, sustainable transitions and geoeconomic fragmentation make clear that it is our duty, as a global community, to commit to steadfast collaboration, take bold decisive action and co-design innovative solutions that respond to the challenges we face today.

We have a unique opportunity to rewrite the economic playbook and fire-up new engines of inclusive global growth. If we seize this opportunity, we will transform this era of uncertainty and fragmentation into one of stability, resilience and shared prosperity.

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