The Role of Government Funding in The Development of Saudi Arabia’s Logistics Industry
The government of Saudi Arabia manages several controlled funds and finance entities dedicated to the development of the country’s economy and society. Each has a specific mandate and focus, but all (and others not listed here) potentially contribute to the improvement of the nation’s logistical infrastructure. This article describes 10 such funds (there are several more) and the roles they can play in the development of the infrastructural support and commercial performance of logistics in Saudi Arabia.
(Depending on the specific needs and priorities of the logistics industry, one or more of the funds may be contributing. )
- The Saudi Industrial Development Fund (SIDF) supports the expansion and development of the industrial sector in Saudi. This can include funding for logistics-supportive/-enabling infrastructure projects, such as the development of transportation networks and logistical centres.
- The Saudi Arabian General Investment Authority (SAGIA) has responsibility for drawing foreign direct investment into Saudi. This activity includes attracting investment in logistics infrastructure projects, such as the construction of new sea ports, airports, freight handling areas, and other transportation related infrastructure.
- The Public Investment Fund (PIF) is the largest sovereign wealth fund in Saudi Arabia. Its aim is to support the country’s economic development through strategic investment. For this reason, the fund may invest in logistics projects, as well as in technological innovations of relevance to the logistics industry.
- The Saudi Fund for Development (SFD) finances the development of projects in developing countries, including logistics infrastructure projects such as transportation networks and logistics centres.
- The Human Resources Development Fund (HRDF) supports the growth of human capital and resources inside Saudi Arabia. As such, it can contribute to training and competency-building programmes for logistics and supply chain professionals.
- The Agricultural Development Fund (ADF) provides finance for agricultural projects across Saudi Arabia. These can include infrastructure projects relevant to the transportation and distribution of agricultural products.
- The Saudi Credit and Savings Bank (SCSB) offers financing and credit services to individuals and businesses. This can bring capital to logistics capability- and opportunity-seeking companies and transportation services.
- The Real Estate Development Fund (REDF) finances housing and real estate projects in Saudi Arabia, which may include logistics projects related to the development of logistics facilities such as distribution centres and warehouses.
- The Social Development Bank (SDB) provides financing for social development projects. Such projects could include infrastructure projects related to transportation and distribution of social services and goods.
- The Saudi Export-Import Bank (SAUDI EXIM) supports financing and insurance services for Saudi Arabia’s export industry. These could assist in the development of logistics services and transportation infrastructure.
The development funds of Saudi Arabia provide significant assistance to the growth of logistics infrastructure and capabilities in the country. By funding logistics, investing in technology and innovation, supporting SMEs, encouraging PPPs, and providing capacity building and training, such funds are adding efficient and effective logistics to the country’s economic formula.