Vision 2030 has helped Saudi economy’s accelerating pace of reforms, conference told

Governor of the Saudi Arabian Investment Authority (SAGIA) Ibrahim Al-Omar said the Kingdom was demonstrating mobility. (Arab News)
Updated 01 December 2018
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Vision 2030 has helped Saudi economy’s accelerating pace of reforms, conference told

JEDDAH: Saudi Arabia’s Vision 2030 has contributed to the accelerating pace of reforms and improving competitiveness, the governor of the Saudi Arabian Investment Authority (SAGIA) told a meeting.

Speaking at the annual meeting of the OECD Working Group for the Middle East and North Africa, Ibrahim Al-Omar said the Kingdom was demonstrating “great mobility as it rapidly develops and modernizes the country’s investment systems and procedures, a process that will enhance its position on the international investment map and increase the competitiveness of the Saudi economy.”

He said Saudi Arabia had many advantages in international trade and investment, “such as its important strategic location linking three continents and forming an ideal bridge between East and West, as well as the presence of diverse natural resources and a youthful workforce, nourished with generous government support of education and training.”

He said the government’s efforts in education would raise the level of young national talent and equip them with the skills necessary to meet the challenges faced with global competition.

Referring to reports issued by organizations such as the World Bank that placed the Kingdom fourth among the Group of 20 countries (G-20) in terms of the scope of economic reforms.

He said the reforms had advanced the country’s investment environment and “generated positive expectations by the International Monetary Fund on the Saudi economy and its growth rates over the next few years.”

Meanwhile Mohannad Shehadeh, Minister of State for Jordanian Investment, told the annual meeting that the Middle East and North Africa region was facing challenges  in providing job opportunities to a large and growing number of  job seekers.

Shehadeh said that the essential next steps would involve investing in the world, integrating global value chains, stimulating local investment, and expanding partnerships with the private sector.

He said this was especially the case given that the region holds “one of the most important keys to global trade through the rich resources and immense potential created by its geographical location bridging Eastern and Western markets.”

He said it was important to be optimistic about the commercial and investment capabilities of the MENA region.

And he said he was confident that the region would progress quickly towards a comprehensive and sustainable future, with good job opportunities and conditions for young people.

Speaking at a later discussion focused on investment regulations and policies, Deputy Governor of Investment Climate, Dr Ayed bin Hadi Al-Otaibi, said Saudi Arabia had submitted a new model for a unified agreement for Arab capital investment, which had been unanimously approved.

He said the role of government was central in providing the legislative structure and legal frameworks that contributed to the growth in inter-regional investments of the region’s countries.

Al-Otaibi said governments needed to intensify bilateral discussions between the business sector and other institutions in the region.

He said joint business councils needed to expand to help target private sector investments towards areas that would enable economic integration between countries, leveraging each country’s comparative advantage.


India names Modi demonetization backer as cenbank head

Visitors are seen standing next to a logo of the Reserve Bank of India (RBI) at the bank's head office in Mumbai on December 5, 2018. (AFP)
Updated 12 December 2018
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India names Modi demonetization backer as cenbank head

  • Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization

MUMBAI: Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.
The announcement by Prime Minister Narendra Modi’s administration came just a day after Urjit Patel resigned from the post, following months of clashes between the two institutions over lending curbs and how to deploy the central bank’s surplus reserves.
Pressure on the RBI to take immediate steps to boost the economy, including a transfer of the excess reserves to the government, could well rise after Modi’s ruling Bharatiya Janata Party (BJP) suffered likely election losses in three key states on Tuesday.
Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization — will serve a three-year term as governor, effective immediately.
RBI watchers said they expected the 61-year-old, who retired last year as secretary of the department of economic affairs having previously served on the RBI’s board, to put relations between the Mumbai-based bank and the finance ministry in New Delhi on a stabler footing.
Investors will also look closely at his ability to hold up against outside influences after recent efforts by the Modi government to gain greater control over the central bank’s regulatory powers.
“The incoming governor will have to work hard to prove that he has his own independent mind,” said Deepak Jasani, head of retail research at Hdfc Securities.
Investors said any openly political appointee with little macro-economic experience, would not sit well with financial markets that already sold off following the BJP’s election setbacks.
But Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai, said he expected India’s debt and currency markets to react positively.
“He is a bureaucrat...We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead given that inflation has come off sharply,” he said.
Finance Minister Arun Jaitley told Reuters partner ANI that the government acknowledged the bank’s independence.
“Government will fully support the RBI and coordinate with it in areas where consultations of government are required to make sure India’s economy benefits from both government policy decisions and areas which fall within domain of the RBI,” ANI tweeted, quoting Jaitley.

SWIFT APPOINTMENT
Pronab Sen, India’s former chief statistician, said he was surprised by the speed of Das’s appointment.
“If you have a situation where a position as important as the governor of the RBI is filled within 24 hours of the resignation of the incumbent, that will raise eyebrows,” Sen told Reuters.
“People are going to say, clearly this guy had already been identified. And, the situation was created where Urjit Patel had to quit.”
Das — widely seen as a contender for the top RBI job after Raghuram Rajan’s term ended in 2016 — did not answer calls from Reuters to his mobile phone.
RBI officials who have worked with him closely said Das was likely to be more inclusive in the decision-making process than Patel.
“He has a balanced approach and is good at consensus building,” said a former deputy governor. .”..We have had our fair share of differences. But he has always been solution-centric rather than festering on those differences.”
Das worked in the finance ministry under both Modi’s government and the previous coalition led by the main opposition Congress party and was also involved in drafting the Insolvency and Bankruptcy code aimed at protecting small investors.
He came under fire for his pro-demonetization stance and was the most vocal bureaucrat at the time Modi withdrew the high-value bank notes to fight tax evasion.
Das last year criticized the methodology of global rating agencies and sought a sovereign rating upgrade for India.