Oil revenues greatly deteriorated this year to the extent that many Saudis accept the call to give up complete dependence on oil which they’ve grown addicted to for decades. The proposed solution is bitter but it’s necessary to save the country, protect the future of the coming generations and build a stronger state and healthier economy.
The declaration of the state’s new budget a few days ago woke many people up to the fact that we are entering a new phase. Work has begun to reduce dependence on oil and decrease the role of the “mother” government. Saudi Arabia is transferring within the spirit and text of the project. It says it depends on the private sector a lot as it chose it as a major partner to provide key services in terms of education, medication, transportation and other fields. This successful model can be seen in countries which do not count on the public sector in their economy.
Transferring a big part of these tasks to the private sector is a wise move but I think the problem is that the private sector is weak and it cannot be depended upon to perform the major aspired-to tasks as except for a few companies, the rest are just a massive market of scattered shops that live off the easy money coming from oil. If the government looks forward to transforming into a country where the private sector is efficient and productive, it must rely on the economy of big companies. With all my respect to experts who always talk about supporting medium and small-sized institutions and who believe it’s a solution to hire thousands of people, I think the best option for Saudi Arabia is the opposite of that. Transforming into a market of large-scale companies will contribute to developing services and industries, facilitate citizens’ training and employment process and protect Saudization which the government failed to impose on the private sector for 30 consecutive years. Big companies can organize the market and develop it in their favor. Companies that have high capital can introduce complicated and costly technology, spend on building big networks for distribution and expand across the country. Perhaps it’s best for countries with labor intensive industries, like Egypt, or countries with low investments, like Pakistan, to develop small institutions because they are the way to employ people with minimum costs.
Since the government decided that the private sector is its partner, it must shake it up and re-establish itAbdulrahman al-Rashed