Saudi economy: growth … catalyst
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IT WAS not easy for the Kingdom of Saudi Arabia to record growth in the first quarter of this year, when the global economy was struggling due to continuous recession which started eight years ago.
The Saudi economic upturn is proof of the success of the plans supervised by Crown Prince Mohammad bin Salman. These plans are being executed delicately, especially in regard to improving non-oil revenues to diversify sources of income.
In this context, we should not dismiss or belittle the event which was vital in reducing the cost of projects and public works. This event is the decisive handling of illegal profiteering in tenders, as well as uprooting the elements of corruption and bribery — whether in reviewing the cost of projects or through the so-called ‘Ritz Hotel’ case. Top officials and businessmen suspected and accused of paying bribes or fraud in tenders were subjected to thorough investigation in this case. The positive result was the Kingdom’s recovery of about $100 billion stolen public funds.
In addition, positive results were achieved in restoring hope operation, crushing the Iranian expansion project in Yemen, and imminent declaration of the final victory and solution to the Yemeni crisis which continued for four years.
All of these formed the basic steps in restoring the wheels of development after years of squandering public funds, evasiveness and fraud. All of these are credited to the current Saudi administration that has successfully resolved crises in the region and its southern borders, in addition to the operation to reform the administration. This is a clear manifestation of the ability to distance consequences of regional events from the country. By the way, it is considered a unique trait in this modern era.
According to economic experts, what has been achieved in recent months is considered an excellent base for higher growth rate in the coming year; especially with the increasing oil prices that are expected to stabilize at a fair price as per the estimates in the public budget.
Without a doubt, such developments require provision of catalysts to the private sector. This should be demanded from the Crown Prince as he is the designer of the Saudi economy. These catalysts will enhance private sector participation in the development process, particularly after putting an end to the phenomenon of disguised unemployment that left a wide gap in the local market. This necessitates encouraging Saudis to replace them.
Moreover, the social openness limited by the Sharia requires more facilities, especially after allowing Saudi women to drive which will result in billions of savings that would have been spent on expatriate drivers.
The second part of Saudi’s private sector participation will be in neighboring countries which suffered a lot due to civil wars, especially Iraq that has started to recover.
Definitely, Iraq will launch a major reconstruction process — an exceptional opportunity for major Saudi companies specialized in construction materials and other services.
In addition to what was mentioned above, profits will be collected as a result of agreements signed by King Salman and the Crown Prince in US, Russia, China, Britain and France. These agreements aim to transfer advanced industries and technology to Saudi Arabia; thereby, generating new job opportunities for Saudi citizens.
Numbers have proven that the plan adopted by Crown Prince Mohammad bin Salman has started bearing fruits. However, much more work must be done in providing a basket of investment catalysts to help businesses which will yield valuable results in 2030 once the integrated vision becomes a reality.
By Ahmed Al-Jarallah
Editor-in-Chief, the Arab Times
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