Saudi Arabia’s Regional Development: 5 Key Factors for Success

Under its revolutionary Vision 2030, Saudi Arabia is focusing on economic diversification and social development as it aspires to become one of the largest 15 economies in the world.

To this end, unlocking growth potentials in regions outside the Kingdom’s urban centers will play a vital role, according to a new report by the international management consulting firm Arthur D. Little (ADL).

Saudi Regions Development                             

As the Kingdom is undertaking a major socioeconomic transformation, developing Saudi regions has a real potential to deliver growth.

The report points to the annual GDP gap between urban and regional centers in Saudi Arabia. In established urban centers, such as Riyadh, Dammam, and Jeddah, annual GDP per capita averages around SAR 107,000 ($28,500).

On the other hand, annual GDP per capita in regional growth centers, such as Aseer, Al-Qassim, and other provinces, is around SAR 73,000 ($19,500). Closing this gap by only 10% will contribute to the annual GDP by about SAR 27bn ($7.2bn).

Success Factors

The ADL report outlined 5 key factors that drive success in regional development efforts. These are: strategy, governance, human capital, infrastructure, and attracting investment.

The first step is to forge a clear, visionary strategy. This strategy should leverage the region’s comparative and comparable advantages, align with national priorities, and follow sustainable development practices.

Second, regional development programs must establish clear governance. This requires understanding stakeholder intentions and roles in the region’s development, developing clear governance framework, and establishing coordination mechanisms.

Human Capital

The third factor is to invest in regional human capital to make sure there are plenty of well-trained and skilled talents that meet Saudi Arabia’s demand.

Therefore, this requires introducing tailored human capital development programs, and retaining highly educated and skilled individuals in rural regions.


The ADL’s report noted that developing regional infrastructure is crucial to enabling trade, investment, and social development, which lead to economic growth.

To enhance infrastructure in regions outside urban centers, the Kingdom has to consider financing or co-financing infrastructure development programs, in addition to adopting an integrated approach to infrastructure development.

Attracting Investments

As Saudi Arabia is seeking to increase the contribution of domestic foreign direct investment (FDI) to GDP from 3.8% to 5.7% by 2030, regional development programs should promote private sector’s participation by creating an attractive investment environment.

This can be achieved by establishing a dedicated investment-attraction unit, identifying opportunities and promoting packages, as well as providing support and facilitation service.

Public-Private Collaboration

Dr. Abdul Rahman Baashen, head of the Al Shorouk Center for Economic Studies in Jazan, underscored the successful collaboration between Saudi Arabia’s public and private sectors, which has resulted in great achievements, in line with Vision 2030 objectives.

Baashen also highlighted the vital role of the Saudi Public Investment Fund (PIF), which doubled its revenues to $88.5bn in 2023. He told Asharq Al-Awsat that this is the product of the growth in PIF portfolio’s market value and the strong performance of the National Industrial Development Program, which increased by 87%.

Furthermore, he pointed to rapid growth in key sectors like energy, industry, mining, and logistics as a driver for development.

Global Investment Hub

Saudi Arabia has become a global investment hub that attracts investors from across the world, owing to investment opportunities provided by the giga-projects launched under Vision 2030.

These include: NEOM, boasting the world’s smartest technology and unparalleled support for entrepreneurship; ROSHN, promoting modern societies and lifestyles; the captivating Red Sea project, introducing a new era of tourism in the Kingdom and beyond; Qiddiya, the hub of entertainment, sports, and the arts in the Kingdom; and Diriyah, a one-of-a-kind project showcasing rich cultural heritage and tourist attractions.

The Saudi General Authority of Statistics (GASTAT) announced that the FDI into Saudi Arabia increased by 5.6% in the first quarter of 2024 to reach $2.5bn (SAR 9.5bn).

Moreover, FDI inflows rose by 0.6% in Q1 2024, reaching $4.5bn (SAR 17bn), and the outflows declined by 5.1%, totaling $1.9bn (SAR 7.5bn). Moreover, the Kingdom’s non-oil activities hiked by 3.4% year-on-year in the first quarter of 2024.

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