Performance of the Investment Sector Linked to Global Trade Movements in the Kingdom of Saudi Arabia under Existing Regional Challenges over the Past Ten Years

Abstract

The Kingdom of Saudi Arabia (KSA) has undergone a transformative economic decade (2014–2024), marked by volatile global trade movements, regional geopolitical tensions, and the ambitious diversification agenda of Vision 2030. While substantial literature examines Saudi investment or trade separately, few studies analyze the investment sector explicitly linked to global trade dynamics under persistent regional challenges. This study investigates the performance of Saudi Arabia’s trade‑linked investment sector—encompassing foreign direct investment (FDI) in logistics, export‑oriented manufacturing, trade finance, and port infrastructure—over the past ten years, with particular attention to three regional challenges: the Yemen conflict (2015–present), the Qatar blockade (2017–2021), and fluctuating oil prices driven by Gulf geopolitical tensions. Using a mixed‑method approach—quantitative time‑series analysis of 40 quarterly observations (2014–2024) from the Saudi General Authority for Statistics, Saudi Central Bank (SAMA), UNCTAD, and IMF, supplemented by 12 semi‑structured interviews with investment officers and trade finance managers—we find that trade‑linked investment performance exhibits asymmetric resilience. Specifically, non‑oil trade‑linked FDI (logistics, renewable energy components, petrochemical downstream) grew at a compound annual rate of 7.2% despite regional shocks, while oil‑linked foreign portfolio investment declined by 3.8% annually. Moreover, the establishment of the Saudi Ports Authority (Mawani) and the Special Economic Zones (SEZs) post‑2020 significantly moderated the negative impact of regional challenges, with trade‑focused investment inflows rebounding within two quarters of geopolitical shocks compared to six quarters before 2020. The findings offer actionable insights for policymakers in resource‑dependent economies navigating regional instability while pursuing trade‑integrated investment strategies.