Saudi Arabia’s economic transformation

Every Saudi today is well aware of the economic challenges and the critical situation that the country faces. The majority of educated citizens remain resolved to persevere and are willing to contribute in any way to overcome these challenges. The diversification of the nation’s economy is being addressed with a sense of urgency and utmost concern. The whole nation is mobilized to achieve this ambitious goal through the National Transformation Plan which has become a buzz phrase that is attracting public interest and inspiring economists and the private sector to contribute.

The Jeddah Economic Forum (JEF) 2016, which was inaugurated by Prince Khaled Al-Faisal, Emir of Makkah and adviser to the Custodian of the Two Holy Mosques, on Mar. 1, focused on potential privatization opportunities in Saudi Arabia in various economic sectors. The theme of the Forum was Public-Private Partnerships (PPPs): Collaboration for Impact. The speakers included government officials, policy makers, Saudi economists, business leaders and global experts who discussed the expectations of investors from government and private partners, debated solutions and explored privatization opportunities in education, healthcare, utilities, transportation, infrastructure and municipal affairs.

Many entrepreneurs and young graduates who attended the conference were eager to play a role in supporting the ambitious national transformation plan. I did not meet any defeatists and I did not encounter any skeptics. Everyone I met was full of energy with a positive attitude toward the future.

One of the popular sessions that attracted a lot of young men and women was the one on sports, which was held on the sidelines of the Forum. Many sports enthusiasts were keen to attend the session titled, “The Future of Sports in Saudi Arabia”. Prince Abdullah Bin Musaed, General President of Youth Welfare, spoke about the need to raise the standard of sports in the Kingdom and promised to “create a competitive sector that will have many investment opportunities in the coming years.”

He said that the sports industry is among the most productive and lucrative businesses in the world and that the government is keen to encourage private investments in sports. He promised that the General Presidency of Youth Welfare would facilitate privatization in the sports sector and said that it is working on enabling qualified managers and addressing the issue of the financial instability of some clubs.

He also spoke about promoting sports for Saudi women and plans to establish a special department which will promote women’s sports activities. Hopefully, Saudi women will finally be able to obtain licenses to open their own sports facilities and employ qualified trainers and coaches to encourage sports for women. This move is a very significant development that could influence a new energized generation of healthy and contributing young people.

Developing the economy

During the three-day conference, the panelists addressed three important aspects to develop the Saudi economy: diversification, productivity and SMEs. Business leaders concluded that without solid regulations and guarantees to support businesses, investors will remain reluctant to contribute. Their debate focused on strategies for alternative revenue sources and achieving maximum efficiency services.

The experts outlined major national challenges that include creating more jobs for Saudis, providing a positive urban environment and developing health and municipal sectors through privatization. They also listed restrictions that impede the participation of the private sector and stressed the need for public-private partnerships. These recommendations if implemented could really usher in a transformation that would greatly impact our troubled economy.

Officials have also announced plans to support small- and medium-sized enterprises, (SMEs) in Saudi Arabia. Experts assert that SMEs are key to any economy’s growth, and, therefore, they should be supported to develop a productive service sector and to offer complementary services to large enterprises. However, in order to promote SMEs, the experts urged the need to formulate a structured SME strategy to incorporate public and private ventures. The government needs to allocate a certain percentage of its contracts to SMEs, provide loans to support them, eliminate bureaucratic measures and facilitate licensing procedures.

Getting the economy back on track continues to be a national priority. It remains very critical to create enough jobs in non-oil sectors to serve the expanding workforce population. The government needs to provide equal opportunities for men and women to guarantee a more progressive knowledge-based society. Maybe the decline in oil prices is not so bad for Saudi society after all.

This article was first published in the Saudi Gazette on Mar. 05, 2016.
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Samar Fatany is a Chief Broadcaster in the English section at Jeddah Broadcasting Station. Over the past 28 years, she has introduced many news, cultural, and religious programs and has conducted several interviews with official delegations and prominent political personalities visiting the kingdom. Fatany has made significant contributions in the fields of public relations and social awareness in Saudi Arabia and has been involved in activities aiming at fighting extremism and enhancing women’s role in serving society. She has published three books: “Saudi Perceptions & Western Misconceptions,” “Saudi Women towards a new era” and “Saudi Challenges & Reforms.”