Euromoney conference highlights Kingdom’s status as first-class investment destination

Economic reforms introduced by Custodian of the Two Holy Mosques King Abdullah have transformed Saudi Arabia into a first-class investment destination in the globe, Finance Minister Ibrahim Al-Assaf said yesterday.
He was inaugurating the Seventh Euromoney Saudi Arabia Conference in Riyadh.
The event opened with informative speeches made by senior ministers in the presence of 1,500 delegates, which included 400 foreign participants.
The four ministers present at the inaugural ceremony included Al-Assaf, Economy and Planning Minister Muhammed Al-Jasser, Commerce and Industry Minister Tawfiq Al-Rabiah and Vice Minister for Labor Mofarrej Al-Haqbani, who was present on behalf of Labor Minister Adel Fakeih.
Viscount Rothermere, chairman of Daily Mail & General Trust, made the welcome address.
“In view of the sound economic stability, I see no obstructions in the implementation of the government’s huge investment programs,” Al-Assaf said.
The minister also stressed that the governmental support for the development of the national economy, would stabilize the sustainable growth, especially in the light of the high volumes of Saudi nonoil exports.
The investment spending of the Kingdom is estimated at SR 260 billion.
“It is fortunate that the conference coincides with the seventh anniversary of King Abdullah’s ascension to the throne and the Saudi people pledging allegiance to him,” Al-Assaf said, noting that the Kingdom achieved an economic growth of 6.8 percent despite slowing global economic growth rate.
The economic growth in developed countries is slower than the developing countries, he pointed out.
He called on developed countries to take more steps to strengthen global growth.
He stressed the need for developed states to adjust the public finances over the medium term, reduce public debt secure financial stability and strengthen market confidence, productivity and growth.
He indicated that international cooperation is a key factor to sustain global growth and to ensure economic stability.
In his speech, Minister Al-Jasser pointed out the Kingdom is considered as one of the most influential and progressive countries in the global economy.
“It is the largest economy in the Middle East, and also a member of the G20 dealing very seriously with its international responsibilities” he noted
Al-Jasser said the government had allocated SR 1.4 billion for the implementation of the 9th current development plan, which included SR 731 billion for the development of human resources, including education, technical and vocational training, development of sciences, technologies and innovation.
“We have ample opportunities for investments in various sectors such as infrastructure development, education and health,” said the minister.
“The existence of a good banking system based on well-established rules creates a conducive climate for investment,” he said.
The other areas include the construction of railway network, mining and industries in the areas of production of phosphate and aluminum, he said.
Speaking on behalf of Labor Minister Adel Fakieh, his Vice Minister Al-Haqbani said: “Our main challenge continues to be the creation of job opportunities for Saudi nationals in the private sector. We need to create large numbers of job opportunities in the private sector for the increasing number of Saudi nationals, who enter the labor market annually. Our interventions therefore have to simultaneously address three areas: Job demand, job supply and market clearance.”
Speaking on the job demand initiatives, Al-Haqbani said they need to be both short- and long-term.
“First, we are to focus on increasing demand for Saudi nationals by substituting some of the eight million expatriate jobs in high-quality fields in the Kingdom. In the longer-term, the Kingdom needs larger scale initiatives including implementation of multi-year plans, hoping to gain some positive results in the near future.”
Al-Haqbani added: “Job supply is our second challenge. We have to deliver improved standard of training and education. I have to say here that in Saudi Arabia the majority of students turn after high school to study literary and theoretical disciplines, while in most countries of the world, especially in industrialized countries, the majority of students tend to study technical and applied disciplines. The ministry of labor seeks to change this trend in coordination and cooperation with the educational and training entities.”
Re-designing the process of job seekers getting into available jobs is the third challenge to improve market clearance mechanisms, the vice minister said.
“Our objective is for Saudi nationals to become the first choice of employers. And job-seekers must be able to provide more relevant value to private sector employers. The Ministry of Labor is developing a mutually reinforcing system of career counseling, training and capability building, coupled with support to find the right match between employers and job seekers. “
Enlightening the audience on a host of fresh initiatives undertaken by the labor ministry during the last 12 months, he said that Hafiz program is a support scheme for job-seekers.
“It provides job search support, job-matching, and basic training to more than a million young job-seekers. It also provides unemployment benefits of SR 2,000 per month (for a maximum of one full year) for Saudis while they are seeking jobs. Our vision for Hafiz going forward is to host integrated services for job seekers: Job counseling, training and match-making with employers would each complement each other. “
He pointed out that the Kingdom is developing a comprehensive database of 66 key labor market indicators. This ‘dashboard’ initiative is known as our Labor Market Observatory, Al-Haqbani said.
“It will help us track and understand labor market statistics, performance, and outcomes. It will be a key tool for fact-based decision-making by both researchers and policy-makers,” he added.
” One of our most important initiative is the Saudization initiative known as Nitaqat. It is a classification and ranking system of private sector employment of Saudi nationals, by market sector and company size. It primarily aims at increasing Saudi nationals’ employment in the private sector. Istiqdam is the initiative to provide expatriate workforce to the private sector through Labor Recruitment and Reassignment Companies,” Al-Haqbani said.
These companies are expected to be set up very soon. They will give employers access to flexible or project-based labor, the minister added.
Public-private partnerships will encourage vocational education suppliers into partnerships that may be employer-led or specialization-led.
This initiative aims to increase the current capacity of the technical and vocational training and raise its efficiency in accordance with the labor market needs. “Our aim is to re-invent Technical and Vocational Training Corporation (TVTC) and widen the range of Public Private Patnership (PPP) models of delivery,” Al-Haqbani added.
“Small and medium-size business reforms are underway. We have identified 38 specific initiatives to stimulate entrepreneurship and growth within SME businesses. These will be launched in the near future,” he said.
He also said job placement centers (Taqat) had been set up to register and counsel job seekers, address gaps in their capabilities, and match them to vacant positions. These centers represent another model of PPP. We will encourage many more public-private partnerships into this role.
The Internet-based ‘Virtual Labor Market ‘has automated job search engines, and is now accessible to everyone with Internet access. “Coupled with this initiative, we are making online training available in e-learning modules for job seekers to use as needed,” he added.
The Kingdom’s labor inspection system must assure compliance with regulations and to reinforce transparency. The Ministry is working in collaboration with the ILO to ensure that our labor inspections are in-line with international labor standards.
“We must improve the quality of Saudi employment. We do not want companies only to ‘make their quotas.’ We want more Saudi nationals to develop and grow into leadership positions in their companies. We will move beyond only counting the total Saudi staff and measure the true quality of employment by evaluating the overall wage bill of Saudis within each business,” he said.
“We must improve the quality of expatriate employment. We are evaluating the use of Nitaqat to assess the skills and qualifications of the expatriate workforce and raise the quality of guest workers.”
He added: “We will continue to develop Nitaqat to contribute to the achievement of the key objectives of achieving full employment, sustainable increase in the contribution of national human resources and raising labor productivity to match the standards of global economies, as stipulated in the Saudi Employment Strategy.”
He said private sector leadership is essential to quickly adapt to changing requirements and get up to speed faster, in training delivery, job placement centers, or even the payment of unemployment benefits.
“Our Ministry will increasingly rely on private-public partnerships, encourage creative incentive systems and regulations to increase competition in providers, and set performance-based systems with clear KPIs,” he said.
Commerce and Industry Minister Tawfiq Al-Rabiah said the Kingdom’s nonoil exports have increased by 37 percent, a remarkable increase, which indicates the success of the Kingdom’s diversification programs.
“Thanks to King Abdullah for his wise economic policies that have made the Kingdom an important country in the globe,” he said.
“We look forward to marching forward in the development of our economy in the coming years,” the minister said, adding that the Kingdom had taken preventing measures against money laundering, protection of intellectual property rights and commercial fraud to make the Kingdom a safer place for trade investment.
He said the Kingdom occupies the first place in the global oil reserves, production and its exports, and it also enjoys the fourth place worldwide in terms of gas reserves.
Saudi Arabia is the largest producer of petrochemicals in the Arab world and also it has been classified as one of the top 20 economies in the world.
Enumerating the steps taken by the Kingdom to develop its economy further, the minister said a national strategy is being formulated to reach sustainable industrial growth through a knowledge-based economy.
The other measures include setting up of a investor friendly business environment, generous spending on infrastructure developments, construction of new networks, especially in the sectors of rail transport, land transport, maritime and logistics services.