Sustaining Foreign Direct Investment in Saudi Arabia: An Analysis of Investment Protection Frameworks and Their Impact on Economic Growth Within Vision 2030

Abstract

Saudi Arabia’s Vision 2030, unveiled by Crown Prince Mohammed bin Salman on 25 April 2016, aims to diversify the economy beyond oil dependency and engender robust foreign direct investment (FDI). This research investigates the primary economic challenges impeding foreign investors from entering the Saudi market and devises effective strategies to sustain FDI inflows. The study employs a comprehensive methodology, including an extensive literature review spanning from 2016 to 2023, supported by quantitative statistical analysis using a Multiple Linear Regression Model and qualitative insights derived from Delphi interviews with industry experts. The study’s outcomes reveal a significant disparity between the targeted FDI growth from 3.8% to 5.7% of GDP and the existing trajectory, highlighting pressing economic challenges that require immediate attention. Key findings indicate that factors such as population growth, government spending, and trade openness significantly influence FDI dynamics, with a particular emphasis on the positive impact of investment protection agreements. The integration of qualitative methodologies further elucidates the importance of robust legal frameworks and regulatory reforms in fostering an investor-friendly environment. Overall, this research provides strategic recommendations for improving the investment landscape in Saudi Arabia, aligning with the broader goals of Vision 2030, and enhancing the country’s attractiveness as a global investment destination. The commitment to fostering a conducive investment ecosystem serves as a pivotal mechanism for driving economic growth and achieving sustainable development goals within the Kingdom.