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Saudi Arabia plans to start a tourism development fund with an initial $4 billion investment, the ministry of tourism said on Sunday, as part of plans to diversify the economy in the face of the coronavirus pandemic and low oil prices.

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The Tourism Development Fund will launch equity and debt investment vehicles to develop the tourism sector in collaboration with private and investment banks, the ministry said in a statement.

“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,” Minister of Tourism Ahmed al-Khateeb said in the statement.

A diver underwater in Umluj, Saudi Arabia. (Saudi Ministry of Tourism)

Tourism is one of the main pillars of Saudi economic reforms aimed at weaning the country off its dependence on oil revenue.

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Saudi Arabia last year opened up to international tourists, launching a new visa regime while appealing to foreign companies to invest in the sector, which it hopes will contribute more than 10% of gross domestic product by 2030, up from 3 percent currently.

Analysts predict a severe economic contraction in Saudi Arabia this year, hit by the economic impact of measures to contain the COVID-19 pandemic and by a sharp drop in oil revenue because of low crude prices.

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