We need our ministers to address us more
Many countries try to diversify their economy but only a few are successful in doing so. What strategy does Saudi Arabia have to be among those successful?
This was a question directed to three Saudi ministers (energy, finance and commerce) at the recent World Economic Forum session at Davos.
Not only was it interesting for us Saudis to watch because we have a fairly new finance minister we’re unfamiliar with after replacing one of the longest serving ministers of 22 years, but also it was his second rare public appearance in dictating the Kingdom’s plans for achieving the ambitious Vision 2030.
It was also another rare occasion where more than one minister convened in one public forum. The last one was the press conference when the new fiscal budget was announced in December.
Another one was when the ministers appeared in that unforgettable episode of Al-Thaminah on MBC when one of them insisted Saudi Arabia is on the verge of bankruptcy — the following episode brought together economists and experts to angrily debunk that bold claim.
At Davos, the ministers echoed that Saudi Arabia aims to be a market-driven model and private sector led.
Its oil economy is traditionally drained by the giant “unproductive” public sector and lacks alternative sources of income. Now the Vision 2030 aims to achieve just the opposite of that.
“KSA imported $1.3 trillion worth of goods. We need to change its consuming culture to a production one,” said Minister of Commerce and Industry Majed Al-Qassabi.
The ministry is fighting bureaucracy, revamping 30 laws and bylaws to make Saudi Arabia competitive, and supporting SMEs who are in fact the real drivers of job creation, he said, adding that $1.3 billion have been allocated to SMEs.
Saudi Arabia also has untapped opportunities. For instance, it has potential to be a logistics hub due to the geographical location by the Red Sea.
To be honest, these points are not new to us — but perhaps to the world hearing them announced at a global forum and being translated in English. But what’s indeed surprising is the presence of two non-Saudis with extensive experience in doing business in Saudi Arabia joining the conversation.
The CEOs of Dow Chemical and Black Rock Inc. were asked if Saudi Arabia was an attractive business environment for investors.
Laurence D. Fink replied Saudi Arabia is “market-based” and there’s government commitment.
“A market is going to dictate the valuations,” he said. “Every conversation I’ve heard was an understanding this is a partnership with the investors. The Kingdom understands the investors have to be rewarded.”
“We launched the largest Western exchange-traded fund (ETF). We are working opportunities to be part of the MSCI index which will expand the investors considerably.”
Dow Chemical’s Andrew N. Liveris said, “I can confirm that Saudi Arabia’s has full transparency, as much as compared with our experience in the United States. This is especially apparent when we have multi-billion dollar dealings with the country.”
Asked what are the risks they expect to see while executing the Vision 2030, Al-Qassabi did not specify. He said, “The key is to know how to correct and re-navigate the compass as you’re going through the plan.”
I would certainly wish to see a press conference taking place in Saudi Arabia especially towards April, the 1-year anniversary of the Vision 2030, with all the ministers discussing their progress in each sector and the challenges they faced. There needs to be communication between the ministries and the citizens in order to achieve the transparency which the government set the tone last year during a televised press conference of Vision 2030.