Saudi Arabia witnessing major economic transformation

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Time: May 02, 2018

Riyadh — The Saudi economy continues to be the focus of attention of major companies and investors around the world, Finance Minister Mohammed Al-Jadaan said here on Tuesday.

The minister was delivering the keynote address at the 13th Euromoney Saudi Arabia Conference with the attendance of 1,700 delegates from 28 countries and scores of influential speakers.

Attracting delegates from across the Middle East and beyond, the two-day forum, explores financial opportunities and challenges in the Kingdom.

Jadaan said: “In its Executive Board Article IV Consultation with Saudi Arabia, the International Monetary Fund (IMF) praised the magnitude of the economic reforms being carried out by the Kingdom’s government, as well as the progress being made in achieving the objectives of the structural reform agenda under Vision 2030, particularly with respect to consolidating the country’s fiscal position, which is beginning to bear fruit.

He said the world is expecting positive growth rates in both developed and emerging markets, which will increase expectations of improved economic growth in the Kingdom, despite risks to global markets, and large and rapid changes in the oil market as well.

The finance minister also said the government was on-track to cut the budget deficit to 7 percent of its GDP.

Privatization is at the forefront of delegates’ minds, as the Kingdom aims to raise $10 billion through the sale of government assets over the next two years, with the most recent plans to sell sports clubs and a major desalination plant, among other state-owned assets, announced in April.

In addition, the role of the financial sector in driving sustainable growth in the Kingdom was a key topic.

Tens of billions of dollars are entering Saudi Arabia ahead of a potential MSCI upgrade to emerging market status, and national and international investors are tracking the progress of the market with interest.

One of the highlights of the morning keynotes was an interview with Mohammed El-Kuwaiz, Chairman of Saudi Arabia’s Capital Market Authority, about the Authority’s role in supporting these dynamic changes.

“Innovation is driving change in the Kingdom of Saudi Arabia,” said El-Kuwaiz.

“The challenge is that innovation has always been faster than regulation and we need to fit innovative businesses within the existing regulatory framework,” he added.

Tadawul CEO Khalid Abdullah Al-Hussan highlighted the new opportunities being created by the launch of Real Estate Investment Trusts (REITs) in the Kingdom:

“Our REITs pipeline is healthy and we are positive about the main market. We want to see more of these launches, and are working to bring them to market.”

Also on-stage was a series of international keynote interviews with senior executives of some of the world’s largest banks, including Citigroup, HSBC and BNP Paribas.

The conference was preceded by an hour-long networking session and pre-conference special session on public-private partnership (PPP) infrastructure, featuring representatives from the International Finance Corporation; National Center for Privatization & PPP (NCP); and ASMA Capital Partners.

The final keynote interviews of the morning included Yousef Al-Shelash, Chairman of the Board of Directors and founding shareholder of Dar Al-Arkan Real Estate Development Company and Yasir Al-Sharif, CEO of Jabal Omar Development Company.

With women gearing up to resume driving in the Kingdom next month, female employment and financial inclusion were also hot topics.

Saudi Arabia has set itself a target of boosting the number of women in the workforce in line with the Vision 2030 economic development strategy. This area was explored in the day’s first panel, titled The Saudi and Global Economy: 2018-2019.

Following a networking lunch hosted by chemicals manufacturer SABIC, the afternoon sessions opened with a keynote address from Dr Fahad AlShathri, Deputy Governor for Research and International Affairs, Saudi Arabian Monetary Authority, followed by a keynote interview with Louis Taylor, Chief Executive of the United Kingdom’s export credit agency, UK Export Finance.

The second panel discussion of the day focused on debt capital markets, with a keynote interview with Fahad A Al-Saif, President, Debt Management Office, Adviser to Minister of Finance, Ministry of Finance, Kingdom of Saudi Arabia to set the scene.

The panel the reviewed issuances made in the past two years, considering the factors that influenced market choice, and debating what new structures, currencies and tenors the Kingdom might capitalize on this year.

Oil, gas and energy prices were key areas of interest for delegates, with the Kingdom preparing to list state oil company Saudi Aramco and crude prices hitting $75 per barrel for the first time in four years. There is also the prospect of Donald Trump re-imposing sanctions on oil from Iran, and potentially introducing them in Venezuela.

Victoria Behn, Director, Middle East and Africa at Euromoney Conferences, said: “Today’s first day of The Euromoney Saudi Arabia Conference has been a fascinating series of discussions, highlighting the remarkable range of changes taking place in the Kingdom at the moment. We’re very grateful to all our speakers and look forward to welcoming delegates back for the closing day tomorrow.”

The Euromoney Saudi Arabia Conference is organized in partnership with Saudi Arabia’s Ministry of Finance.

This article was first published Saudi Gazette
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