Saudi economic reforms ‘yielding positive results,’ says IMF

IMF Managing Director Christine Lagarde sits alongside Ahmed Alkholifey, Governor of the Saudi Arabian Monetary Authority (SAMA), during the G20 Finance Ministers and Central Bank Governors Meeting in Washington, DC. (File/AFP)
Updated 16 May 2019

Saudi economic reforms ‘yielding positive results,’ says IMF

  • Non-oil sector expected to grow at a faster rate this year
  • Fiscal deficit seen rising to 7 percent of GDP in 2019

LONDON: Economic reforms underway in Saudi Arabia have started to yield “positive results,” the IMF said on Wednesday — although the fund cautioned that challenges, notably the level of government spending, remain.
The International Monetary Fund (IMF) issued its preliminary findings on the Kingdom’s economy following an official staff visit to the country, prior to the preparation of a final report.
It found that reforms under the Vision 2030 program — the ambitious plan to diversify Saudi Arabia’s economy set out three years ago — were paying off. 
“Reforms to the capital markets, legal framework, and business environment are progressing well,” the IMF said. 
“Non-oil growth has picked-up, female labor force participation and employment have increased.”
Other factors the IMF cited include the “successful introduction” of value-added tax (VAT), energy price reforms, and an increase in fiscal transparency.
But several challenges remain, the IMF cautioned. 

“Government spending has risen, supporting growth but raising medium-term fiscal vulnerabilities to lower oil prices. Fiscal consolidation is needed to reduce these vulnerabilities. More generally the economic footprint of the public sector is still large,” it said.
The IMF said unemployment among Saudi nationals remains high.
“To deliver a diversified, productive and competitive economy, reforms need to make Saudi nationals more competitive for private sector jobs, raise foreign direct investment, and increase the availability of finance for young and growing companies,” it said.
The fund said Saudi Arabia’s non-oil sector is expected to grow at a faster rate this year, at 2.9 percent.
Yet the IMF said it expects Saudi Arabia’s fiscal deficit — the difference between government spending and revenues — to rise to 7 percent of GDP in 2019, from 5.9 percent last year.
It urged fiscal consolidation to reduce the impact of “medium-term” vulnerabilities. 
“If oil prices are lower than assumed in the government’s budget plan, the country would face large fiscal deficits unless spending was reduced,” it said.
The fund said the government should consider lowering its wage bill and increasing the VAT rate. 
“A reduction in the government wage bill, a more measured increase in capital spending, and the better targeting of social benefits will all yield fiscal savings. The introduction of the VAT has been very successful, and consideration should be given to raising the rate from 5 percent, which is low by global standards, in consultation with other GCC countries,” it said.


A Middle East online tutoring startup eyes Saudi Arabia’s market

Updated 25 May 2020

A Middle East online tutoring startup eyes Saudi Arabia’s market

  • Platform allows parents and students to find qualified tutors after filtering for price, location or ratings
  • GCC countries tipped to account for 15 million students this year, with increase in demand for tutoring

DUBAI: Hunting for a tutor online? The web is a great place to explore for its dizzying number of options, but as you click and consider each option, their very abundance can at times be confounding.
What should you choose and what should you ignore, especially when the outcome can affect your future?
To take the stress out of this task, Audrey Nakad came up with the idea of Synkers, an app that helps parents and college students find experts for the extra coaching the latter require.
The educational enterprise co-founded by Nakad, a Lebanese-Canadian national, provides information on qualified tutors after filtering for price, location or ratings.

Synkers, an app that helps parents and college students find experts for the extra coaching the latter require. (Supplied)

The tutors are screened and their qualifications verified — they can be professionals or senior students who have scored 95/100 on the courses or subjects they offer.
A separate B2B business model gives educational institutions the option to adopt the entire platform for their own students and access detailed insights and reports.
“Synkers was founded to ease a major pain point for parents: The ability to find qualified and experienced private teachers for their kids,” said Nakad, 28.
The idea was born from personal experience. As an undergraduate in Montreal, she worked as a private tutor and teaching assistant but had a hard time finding students.
At the same time, her sister Sibylle was struggling to find a qualified tutor to help her with her study material.


That led the siblings and their friend Zeina Sultani to found Synkers in Lebanon in September 2017. They began with 40 tutoring hours and 80 tutors.
Initial funding came from the Lebanese government, with Beirut-based technology accelerator [email protected] providing $30,000.
“With $30,000, we were able to build our first prototype, go to market and acquire our first paying customers within three months,” said Nakad.
“Soon after, we closed a seed round of $700,000 from Phoenician Fund I (a venture capital firm). This round allowed us to build a stronger product and team, reach product-market fit and, most importantly, expand to a new market, the UAE.”
By the end of 2019, the educational technology startup had partnered with Lebanon’s Ministry of Education.

FASTFACT

$177.6bn

Revenues generated by private tutoring by 2026. (Source: India-based Zion Market Research)

Over the last four years, Synkers has gained more than 60,000 students, over 1,000
vetted tutors, given 90,000 tutoring sessions, and achieved a 21 percent student improvement rate, according to Nakad.
Worldwide, demand for private tutoring has been growing rapidly. Zion Market Research, an India-based firm, projects that global revenues in the sector will reach $177.6 billion by 2026, up from $96.2 billion in 2017.
The Middle East currently accounts for $3.1 billion of total revenue, Synkers research shows. “With innovation and technology, our world is evolving so fast that our jobs and the skills needed to do them are constantly changing,” said Nakad.
“This makes it very difficult for schools to continually adapt their curriculum and way of teaching to prepare their students for the future.”
As the Gulf alone is expected to account for 15 million school students this year, Synkers hopes to scale up quickly to capitalize on the region’s market growth.

Audrey Nakad came up with the idea of Synkers. (Supplied)

In 2017, the company joined a Dubai Future Accelerators international program that paired innovators with government organizations to solve contemporary challenges.
The resulting collaboration with Dubai’s Knowledge and Human Development Authority (KHDA) led to Synkers partnering with the American University in Dubai and Lebanese and French private schools in the UAE.
The next steps for Synkers include expansion into Saudi Arabia, ideally by 2021. Egypt, the region’s largest market by population, will follow in 2022, with Jordan and Bahrain after that.
“We are very excited to announce that we are closing a pre-series A round with strong VCs from the region and Europe in order to grow in the region and enter Saudi Arabia,” said Nakad.

------

READ MORE: Startup sets the pace in Middle East’s virtual-currencies business

------

“In the next five years, we are looking to grow our user base from 60,000 learners to 2 million across the region.
“Our vision is to develop the largest community of knowledge exchange, and empower any knowledge holder to influence and teach the world.”
What sets Synkers apart from other online tutoring companies? Beyond the personalized adaptive learning plans and a significant investment in its tutors, Nakad pointed to the academic and socioeconomic benefits of Synkers’ peer-to-peer system, inspired by Harvard University.
“Students connect with people who are just like them,” she said. “They have the same background and experiences, which allows them to connect on an individual level and work together to mutually succeed.”

  • This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.