OPEC-kingpin Saudi Arabia launches $4 billion tourism development fund

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OPEC-kingpin Saudi Arabia launches $4 billion tourism development fund

In what could be contemplated as one of the wickedest timings to invest on travel and tourism industry given the scale of menacing uncertainties mingling around the globe over the ongoing pandemic outbreak, the Saudi Ministry of Tourism had unveiled a plan to roll out a $4 billion tourism development fund on Sunday.

In point of fact, latest approach of the Kingdom of Saudi Arabia to initiate a havoc-scale tourism development program appeared to be the most dolorous move the Saudi Crown Prince Mohammed bin Salman had taken thus far as part of his plan to diversity the Saudi economy amid a growing number of disdains including the pandemic outbreak alongside a multi-year low crude oil futures’ prices.

Debts and stocks to finance the $4 billion Saudi tourism development project

Apart from that, in the face of a lofty budget deficit the Mideast oil tycoon would likely to meet with on fiscal 2020-21, the Saudi Ministry of Tourism was quoted saying at its statement that the tourism development project would be financed by debts and stocks, though industry analysts expressed sheer scepticism over Saudi’s fundraising plans that involved debts from private lenders alongside investment banks.

More importantly, a number of multinational lenders alongside investment funds had distanced themselves during an early December IPO of the Saudi’s state-backed oil behemoth Aramco last year and the funds were mostly obtained by the Mideast investors, while Saudi’s latest attempt to diversity its economy by launching a tourism development fund as large as $4 billion would likely to meet with a parallel approach from the global investors, suggested analysts.

Meanwhile, taking account of the pandemic-driven challenges, which had stoked the heaviest blow over the global travel and tourism industry, Saudi Tourism Minister Ahmed al-Khatib was quoted saying on Sunday, “The launch of the fund at the present time, while the tourism sector faces unprecedented global challenges, demonstrates the confidence of the investor and the private sector in the long-term outlook for tourism in Saudi Arabia.