Since Saudi Crown Prince Mohamed bin Salman (MBS) came to power, 485,000 companies were shut down in the Kingdom, 158,000 employees lost their jobs, and 324,000 commercial registrations were canceled by the Ministry of Municipal Affairs.
Heavy losses were reported to state-run and private companies over the three years, sources familiar with the matter affirmed.
Saudi Arabia is spending hundreds of billions of dollars on a diversification drive championed by MBS and dubbed Vision 2030. While part of that will be funded by oil revenue, the government also needs to attract foreign investment and borrow.
However, experts have warned that the sharp decline in foreign investments by 85% in just one year is a real disaster that proves that foreign investors do not trust the projects launched by MBS due to his poor human rights record at home and abroad.
The Saudi economic loss also rose following the sharp decline in oil prices due to the Corona pandemic, as the Kingdom was one of the most affected countries due to its complete dependence on oil resources.
Foreign companies are scaling back their operations in Saudi Arabia as the business environment has become more hostile in the country.
Meanwhile, the Kingdom has been under growing fire due to the unprecedented wave of human rights violations over the past few years, during which scholars, preachers, and economists were arrested. This has led to foreign investment in Saudi Arabia remaining stubbornly low, with some companies scaling back their operations or delaying promised expansion plans.
The lack of clear and binding laws and a clear structure for putting procedures into place in Saudi Arabia, along with the challenging working environment, have all contributed to the crisis’ worsening.
Despite the expensive Saudi advertising campaigns, the majority of global businesses still deal with Saudi Arabia as a source of funding, proving that it is not a reliable place to place investments.
