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.
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.