This post is part of an AGSIW series on Saudi Vision 2030, a sweeping set of programs and reforms adopted by the Saudi government to be implemented by 2030.

Saudi Arabia did one thing right this week. It is seeing some positive news in the return on investment in its outwardly placed capital in new technology. Letting other people manage the money seems to be working.

Saudi Arabia, via its sovereign wealth fund, the Public Investment Fund (PIF), is a major partner in the SoftBank Vision Fund, an investment fund focused on new technology. The Vision Fund is part of the larger company SoftBank, which is a telecommunications provider and investor. SoftBank’s operating profit has jumped by nearly 50 percent this quarter, including a profit of 245 billion yen (about $2.21 billion) in the Vision Fund, specifically. The Vision Fund is the brainchild of Masayoshi Son, the head of SoftBank, who convinced Saudi Arabia (through its PIF) in 2017 to partner with him, along with Apple Inc. and other backers, to pool nearly $100 billion to deploy in robotics, artificial intelligence, e-commerce, ride-sharing, satellites, and future technology companies. That initial bet seems already to be paying off.

The PIF is not just a passive investor, however. Much of Vision 2030 – the ambitious economic and social plan to diversify Saudi Arabia’s economy, jump start its private sector, and create jobs for young people – relies on the PIF as an orchestrator of economic growth. In fact, the PIF is so central to the government’s growth strategy that finding resources to feed the PIF has become a national economic priority. The initial public offering of a small stake in the state-owned oil giant Aramco was intended to provide funds to the PIF for its broader national economic growth strategy. That strategy now looks somewhat unwieldy, given that the IPO has been postponed.

The PIF has roughly $230 billion in assets, about $150 billion of which is in holdings of Saudi-listed companies. The PIF is spread broad and thin, splashing out on a number of investments both domestically and abroad that could yield early successes like the Vision Fund, and others that have a domestic policy objective that is less lucrative. For example, the PIF is now tasked with creating and backing finance companies like the new Saudi Real Estate Refinance Company, to provide better access to mortgages for citizens.

Not only is the PIF on a spending spree, it is also trying to sell off assets to raise cash. In a twist of accounting gymnastics, the PIF may sell its stake in the petrochemicals giant SABIC to Aramco. This would inject cash into the PIF, which currently owns 70 percent of SABIC shares, and allow Aramco to expand its operations downstream into petrochemical production, and also provide a very healthy asset on the Aramco balance sheet, should it seek debt financing in the future. It would also require Aramco to borrow in the short term to complete the purchase. This is the equivalent of a state-owned entity selling another mostly state-owned entity to raise capital to spend on state projects.

One of the main targets of domestic investment in state development projects includes the futuristic new city of Neom, a $500 billion-megacity on the Red Sea coast. Closer inland and to larger population centers are PIF plans to build infrastructure via a joint fund with Blackstone.

In the case of the infrastructure fund, Saudi Arabia will invest its own money in the hopes of pairing with international investors in a fund managed by Blackstone. The fund is struggling to target good local investments and find international partners willing to put capital into the fund.

In some cases, the PIF’s investments have strong risk appetite, particularly in the technology space, showing a departure from most sovereign wealth fund approaches as caretakers of national wealth. For example, just this week, the PIF bought a significant stake in Tesla, the battery and electric car company.

There is little public discussion in Saudi Arabia of how government-funded investment strategy works for the benefit of citizens. Of course, in Saudi Arabia citizens are not shareholders of the PIF, but rather beneficiaries of the government’s largesse. The government remains the largest employer and source of economic activity in the country. Its domination of the economy continues, including efforts of the PIF to spend, or invest, its way to growth. Luckily, higher oil revenue is cushioning the impact of continued deficit spending.

According to research by HSBC, government spending increased 34 percent year-on-year in the second quarter of 2018, mostly because of the continued expansion of the public-sector wage bill, which accounts for nearly half of government spending. Capital expenditure increased 45 percent year-on-year in the second quarter of 2018, illustrating the “spend until it grows” strategy.

So, in effect, the PIF is an extension of larger fiscal policy in Saudi Arabia in which the logic is to spend to grow. And just like any other investment, some will be winners – like the lucky technology investments of the SoftBank fund – and others will be disappointments. In fact, many of the choices the PIF makes now will determine what resources exist for domestic investment many years later, when oil revenue might be gone and foreign reserves have dwindled.