Britain can help KSA achieve its development goals, says UK’s economic secretary

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Basil Al-Ghalayini, chairman of BMG Financial Group, at the London Stock Exchange, with financial experts Edward Frazer, CEO of Trinity Group, and Michele Troiani, head of UK and Europe buyside relationship management at LSEG. (AN photo by Ziyad Alarfaj)
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Basil Al-Ghalayini, chairman of BMG Financial Group, at the London Stock Exchange. (AN photo by Ziyad Alarfaj)
Updated 12 July 2018

Britain can help KSA achieve its development goals, says UK’s economic secretary

  • An Arab News-BMG forum heard how the UK could step up support for Saudi Arabia’s ambitious reform plans
  • UK's Economic Secretary to the Treasury John Philip Glen said that as Britain prepares to break with Europe, that “now, more than ever” the UK stands behind Saudi Arabia’s ambitious vision for its future. 

LONDON: Britain is uniquely placed to help Saudi Arabia successfully achieve its development program for its financial sector, a key part of the Kingdom’s Vision 2030 reforms, the UK’s economic secretary to the treasury told a forum in London on Wednesday.

Addressing the 12th BMG Economic Forum, held in conjunction with Arab News, John Philip Glen MP said that as Britain prepares to break with Europe, that “now, more than ever” the UK stands behind Saudi Arabia’s ambitious vision for its future. 

“Today is a fantastic opportunity to consider the prospect of even further investment and dialogue between the UK and the Kingdom,” he said. 

“We are committed to strengthening these linkages even further as the UK leaves the EU to ensure we remain the gateway of the markets of the future and secure the commercial opportunities that this country voted to explore and deepen as Great Britain.

“We applaud Saudi Arabia’s ambition and stand as a willing Western partner.”

In his speech, titled “UK collaboration with Saudi Arabia’s Vision 2030 program,” Glen outlined how the UK could step up support for Vision 2030, helping the Kingdom to achieve a world-class Financial Sector Development Program (FSDP), one of the 12 executive programs launched by the Council of Economic and Development Affairs (CEDA) to achieve the objectives of Vision 2030.

“The FSDP sets the ambition of the Kingdom for its financial sector such as digitization, a drive toward a cashless society, and improved financial inclusion,” said Glen. 

“The FSDP also seeks to stimulate growth and capital markets development and we commend Saudi Arabia for its ambitious and comprehensive plan and I believe that we have much to offer the country.

“By engaging with Vision 2030, the UK can become a delivery partner, supporting the Kingdom’s vision to spurt growth and unlock potential. 

“The UK shines as a global financial hub with world-class expertise and a host of financial services that we could lend to Saudi Arabia and we believe Britain is uniquely placed to help translate the FSDP for an ambitious vision into something tangible and sustainable.”

He said that, as the Kingdom drives ahead with it blueprint for its future, the UK wants to ensure it offers more than just “warm words of support.” 

“British enterprise has entrenched fundamental strengths and the global reach of our financial markets and technology is one of one these,” he said.

Glen said that he envisions the UK helping Saudi Arabia achieve its development program for its financial sector by leveraging its cutting-edge expertise to develop the digital payments infrastructure in the Kingdom and encourage the entry of new service providers. 

“London is a global leader in technology so we can leverage our homegrown talent and exchange best practices with Saudi Arabian companies,” he continued. 

“The UK is also uniquely placed to support the upskilling of Saudi finance professionals.”

Glen said there is also work underway with the London Stock Exchange to help firms in the Kingdom to bolster their financial services capabilities. UK firms specializing in providing professional qualifications could further help Saudi Arabia establish a “financial sector academy,” as well as support other FSDP areas of focus by business-lending, asset management, capital market development and savings products. 

“We are committed even further to supporting Saudi Arabia’s capital markets and private sector-led initiatives to encourage deep and more liquid markets.”

Glen also hailed the Kingdom’s privatization program, one of 12 key elements of the Kingdom’s Vision 2030 reform plan. The government plans to raise about $200 billion through privatization, on top of the initial public offering of Saudi Aramco, which could bring in $100 million.

“Over the weekend my boss, our Chancellor of the Exchequer, met (Saudi) ministers of commerce and finance to discuss how the UK can support Saudi Arabia in delivering Vision 2030, expressing a desire for the private sector to lead this change,” he said.  “Because as a country and a government we believe freedom and rival potential of business is the driver of growth

“As a country, we have marched to the beat of commerce and the drum is only getting louder as we continue to strengthen our position as a financial engine of the world and a champion of the free market. 

“I hope that we can continue to work together to support stronger and deeper bonds and connections beyond borders, across markets, for many years to come.”

Senior Saudi officials, international sovereign fund officials, emerging fund managers, CEOs, investment bankers, and lawyers were among the speakers at the forum.

The high-level event, which forms the first of the annual two-day BMG Summer Retreat, discussed investment opportunities in Saudi Arabia and the Kingdom’s vision for the future, among many other topics. 

Government officials, regulators, and industry chiefs gathered on the iconic atrium balcony at the London Stock Exchange as the daily 60- second countdown officially marked the start of Wednesday’s trading — and served as a precursor to the forum.

Al-Ghalayini and Dr. Robert Barnes, CEO of Turquoise and global head of primary markets at the London Stock Exchange Group, stepped forward and completed the daily ritual of placing a bespoke engraved glass tablet onto the podium, setting off the 8 a.m. bell.

Talat Hafiz, secretary general of the Media and Banking Awareness Committee at Saudi Banks, led the first panel of the forum, under the theme “Business and Financial Environments in Saudi Arabia.”

“Saudi Arabia is ... the heart of the Arab world and an investment powerhouse,” said Hafiz.

Hussain Shobokshi, businessman and consultant and columnist, said: “Our biggest commodity used to be oil. Now, I believe our biggest commodity is youth.”

G-20 calls for more dialogue on rising trade tensions

Handout photo released by the G20 Press Office showing the Governor of the Bank of England Mark Carney on a screen as he speaks during a meeting on digital technology as a key to financial inclusion, on the second day of the G20 meeting of Finance Ministers and Central Bank Governors, in Buenos Aires, on July 22, 2018. (AFP)
Updated 23 July 2018

G-20 calls for more dialogue on rising trade tensions

  • The Group of 20 nations is composed of traditional economic powers such as the United States, Japan and Germany and emerging nations such as China, Brazil, India and Argentina
  • Trade tensions remain high and they threaten to escalate further

BUENOS AIRES, Argentina: The world’s top financial officials called Sunday for more dialogue on trade disputes that threaten global economic growth, with one warning that differences remain and tensions could escalate further.
The two-day meeting of finance ministers and central bankers from the Group of 20 nations came as the United States clashes with China and other nations over trade, with the nations imposing tariffs on billions of dollars of the other’s goods.
A final communique said that although the global economy remains strong, growth is becoming “less synchronized” and risks over the short and medium terms have increased.
“These include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies,” the communique said. “We ... recognize the need to step up dialogue and actions to mitigate risks and enhance confidence.”
On Friday, President Donald Trump renewed his threat to ultimately slap tariffs on a total of $500 billion of imports from China — roughly equal to all the goods Beijing ships annually to the US The White House has also itemized $200 billion of additional Chinese imports that it said may be subject to tariffs.
The US has also imposed tariffs of 25 percent on steel and 10 percent on aluminum, including from Europe. China, the European Union, Canada, Mexico and Turkey have counterpunched with taxes on US goods. EU tariffs on American products include Harley-Davidson motorcycles, cranberries, peanut butter, playing cards and whiskey.
EU financial affairs commissioner Pierre Moscovici warned that such disputes are a threat.
“Protectionism, I want to insist on that, is good for no one,” Moscovici told reporters. “Trade wars are not easy ... they create no winners, only casualties.”
US Treasury Secretary Steven Mnuchin disputed that protectionism is the issue.
“People are trying to make this about the United States and protectionism. That’s not the case at all,” he said at a news conference. “This is about the United States wanting fair and free trade. ... We very much support the idea that trade is important for the global economy, but it’s got to be on fair and reciprocal terms.”
Mnuchin said there had been no “substantive discussions” with China about trade during the meeting. Asked what it would take to re-start talks with the Asian giant, he said, “Anytime that they want to sit down and negotiate meaningful changes, I and our team are available.”
As the gathering wound up, Moscovici said differences of position remain despite talks.
“These meetings have been taking place in an international context which is very challenging. ... Trade tensions remain high and they threaten to escalate further,” he said.
Christine Lagarde, managing director of the International Monetary Fund, has warned that a wave of tariffs could significantly harm the global economy, lowering growth by about 0.5 percent “in the worst-case scenario.”
Mnuchin disagreed Sunday, saying that overall, the US economy has not been harmed by the trade battles set off by Trump’s get-tough policies. He acknowledged, however, that some individual sectors have been hurt and said US officials are looking at ways to help them.
“We see some micro impacts where people, our counterparts, are targeting very, very specific items, in very specific communities,” he said. “But from a macro standpoint, we do not yet see any significant impact on the economy.”
So far, global markets have remained generally calm despite the US-China trade war and the other trade conflicts.
But analysts say they expect Trump will impose more tariffs on China and potentially other key US trading partners. With those nations almost certain to retaliate, the result could be higher prices for Americans, diminished export sales and a weaker US economy by next year, they say.
Moscovici said the G-20 meeting had not been tense. He said that countries must remain “cool-headed and maintain a proper sense of perspective” and that the EU remains open to dialogue.
“That’s why EU President Jean-Claude Juncker and EU Trade Commissioner Cecilia Malmstrom will meet with Trump” in Washington next week, he said. “We hope this meeting will be productive and successful.”
Mnuchin said that the US looks forward to those discussions.
The Group of 20 nations is composed of traditional economic powers such as the United States, Japan and Germany and emerging nations such as China, Brazil, India and Argentina.
Officials in Buenos Aires also discussed issues including the future of work and infrastructure for development, the international tax system and financial inclusion. It is the third of five meetings by finance ministers and central bankers scheduled in advance of a meeting of G-20 national leaders in Argentina to be held Nov. 30-Dec 1. Mnuchin said Trump plans to attend.