An important economic engine as Saudi Arabia looks to attract more international tourists is tourism, which accounts for about 5% of the country’s GDP.
As part of its efforts to become a regional center for entertainment and draw in more visitors, Saudi Arabia announced additional cultural expenditures totaling around $1 billion.
The Cultural Investment Conference in Riyadh revealed that a Chinese business is giving around half of the funds, with the remaining portion coming from the state-backed Cultural Development Fund, or CDF, and organizations it supports.
According to a statement from the Saudi Ministry of Culture, the Chinese media company ORI promised to spend 2 billion riyals ($533 million) to set up its regional headquarters in Saudi Arabia. The company plans to use the kingdom as a regional base to invest in fashion, tourism, and film.
Earlier this week, Crown Prince Mohammed bin Salman announced the investments during the Cultural Investment Forum in Riyadh. The investments are part of his Vision 2030 initiative to diversify the economy away from oil and will increase cultural expenditure. With the monarchy predicting a larger deficit this year than originally thought, the plan’s increased expenditure is having a negative impact on the public budget.
In an effort to draw in more international tourists, Saudi Arabia anticipates that tourism, which accounts for about 5% of the country’s GDP, will be a significant development driver. The kingdom intends to create 600 museums by 2030, according to Culture Minister Prince Badr bin Farhan, while the country’s sovereign wealth fund is building a futuristic metropolis and resorts on the Red Sea coast.
The CDF expanded its funding options for cultural endeavors by announcing a $266 million facility with private lenders such as Lendo SA, Al Raeda, and Abdul Latif Jameel Finance. After investing almost 500 million riyals on businesses in the media, visual arts, fashion, and museum sectors, the Cultural Assets Group, which has the support of the CDF, said that it is looking to invest a further 300 million riyals. BSF Capital will oversee around $100 million in CDF funds for domestic film industry investments.
According to Lebanon-based Audi Capital, it is launching a $40 million fund that will concentrate on Saudi and international artists’ modern and contemporary works.
“To generate wealth for investors, we will keep and promote them via exhibits and museum loans before selling them over time.” Chief Executive Officer Daniel Asmar, a former Middle East and North Africa Managing Director of Sotheby’s, remarked.