Saudi finance minister losing no sleep over oil price

Saudi Finance Minister Mohammed Al-Jadaan believes the Kingdom’s economy remains on track to hit key targets of the Vision 2030 strategy. (SPA)
Updated 31 October 2019

Saudi finance minister losing no sleep over oil price

  • Speaking to delegates at the Future Investment Initiative (FII) in Riyadh, Al-Jadaan said the key focus for the long-term strategy is to grow the non-oil sector of the economy
  • Al-Jadaan highlighted tourism, technology, sports and entrainment as well as construction, where statistics showed a big turnaround to 3 percent growth

RIYADH: Saudi Finance Minister Mohammed Al-Jadaan is losing no sleep over the price of oil because he believes the Kingdom’s economy remains on track to hit key targets of the Vision 2030 strategy despite a recent downgrade in forecast growth.
Last week, the International Monetary Fund (IMF) slashed its 2019 gross domestic product (GDP) growth predictions for all Gulf countries, but with an especially steep fall for Saudi Arabia. The new IMF projection is for a mere 0.2 percent, down from 1.9 percent earlier this year.
Speaking to delegates at the Future Investment Initiative (FII) in Riyadh, Al-Jadaan said the key focus for the long-term strategy is to grow the non-oil sector of the economy.
“What we’re focusing on is non-oil GDP growth, and the IMF agrees that we’ve maintained that growth at 2.9 percent and that’s our target,” he added.
“Our key performance indicator for Vision 2030 is non-oil GDP and how we’re going to grow it.”
Asked if he was sleeping well despite the volatility in global crude prices, the minister said: “I watch the oil price regularly every day because we have a long-term focus. We want to get out of the interim volatility.”
He added: “I have no trouble sleeping, and I enjoy a good night’s sleep when the oil price is going up — but not too much.”
The IMF said lower oil production was the main reason for its cut in forecast, but added that the attacks on Saudi Aramco facilities at Abqaiq and Khurais in September “add uncertainty to the near-term outlook.”
Al-Jadaan said the IMF action was influenced by the oil market. “This year, Saudi oil production is minus 3 percent because we decided to reduce our oil production so we, and our partners in OPEC+ and the Gulf, make sure there’s a stable market in the world and long-term sustainability for the industry,” he added.
Saudi Energy Minister Prince Abdul Aziz bin Salman earlier told the FII of his strategy for long-term sustainability and profitability in the energy business, with the emphasis on downstream operations and on the “circular carbon economy” to reduced emissions of greenhouse gasses.
Al-Jadaan said the global economic situation had influenced the IMF toward downgrade. “They’re also looking at what’s happening globally, and we’re watching that very closely too so that we’re prepared, and that fiscal and economic policies can respond to these international challenges,” he added.
Al-Jadaan said improvement in the non-oil sector was due to greater competitiveness and structural reform pushed through by the government.
He pointed to the Kingdom’s recent 30-place leap up the World Bank ranking for ease of doing business to No. 62 globally. This improving business environment is being seen in certain sectors of the Saudi economy, he said.
Al-Jadaan highlighted tourism, technology, sports and entrainment as well as construction, where statistics showed a big turnaround to 3 percent growth — the first time there has been such an improvement since 2014, he added.
On an FII panel that also included Bahrain’s Finance Minister Shaikh Salman bin Khalifa Al-Khalifa and his Kuwaiti counterpart Naif Falah Al-Hajjraf, there was agreement that boosting the private sector is the way to go for oil-dependent regional economies.
Al-Khalifa said: “The importance of the private sector is critical for growth. We’re moving from government-led growth to enabling the private sector.”
Al-Hajjraf made an impassioned plea to maintain the economic infrastructure of the Gulf Cooperation Council (GCC) despite the tensions that have led Saudi Arabia, the UAE, Bahrain and Egypt to cut trading links with Qatar.
“What has been achieved in the GCC is too good to let go. We don’t just think of the GCC, we believe in the GCC,” he said.


UK to purge Huawei from 5G by 2027, angering China and pleasing Trump

Updated 53 min 34 sec ago

UK to purge Huawei from 5G by 2027, angering China and pleasing Trump

  • UK to purge Huawei from 5G by 2027
  • No new 5G components to be bought from end of 2020

LONDON: Prime Minister Boris Johnson ordered Huawei equipment to be purged completely from Britain’s 5G network by 2027, risking the ire of China by signalling that the world’s biggest telecoms equipment maker is no longer welcome in the West.
The seven-year lag will please British telecoms operators such as BT, Vodafone and Three, which had feared they would be forced to spend billions of pounds to rip out Huawei equipment much faster. But it will delay the roll out of 5G.
The United States had long pushed Johnson to reverse a decision he made in January to grant Huawei a limited role in 5G. London has also been dismayed by a crackdown in Hong Kong and the perception China did not tell the whole truth over the coronavirus.
Britain’s National Security Council (NSC), chaired by Johnson, decided on Tuesday to ban the purchase 5G components from the end of this year and to order the removal of all existing Huawei gear from the 5G network by 2027.
The cyber arm of Britain’s GCHQ eavesdropping agency, the National Cyber Security Center, told ministers it could no longer guarantee the stable supply of Huawei gear after the United States imposed new sanctions on chip technology.
Telecoms companies will also be told to stop using Huawei in fixed-line fiber broadband within the next two years.
“This has not been an easy decision, but it is the right one for the UK telecoms networks, for our national security and our economy, both now and indeed in the long run,” Britain’s Digital, Culture, Media and Sport Secretary Oliver Dowden told parliament.
“By the time of the next election, we will have implemented in law, an irreversible path for the complete removal of Huawei equipment from our 5G networks.”
In what some have compared to the Cold War antagonism with the Soviet Union, the United States is worried that 5G dominance is a milestone toward Chinese technological supremacy that could define the geopolitics of the 21st century.
With faster data and increased capacity, 5G will become the nervous system of the future economy — carrying data on everything from global financial flows to critical infrastructure such as energy, defense and transport.
After Australia first recognized the destructive power of 5G if hijacked by a hostile state, the West has become steadily more worried about Huawei.
White House national security adviser Robert O’Brien is meeting representatives of France, the UK, Germany and Italy in Paris this week to discuss security, including 5G.
The West is trying to create a group of rivals to Huawei to build 5G networks. Other large-scale telecoms equipment suppliers are Sweden’s Ericsson and Finland’s Nokia .

End of ‘Golden Era’?
Hanging up on Huawei, founded by a former People’s Liberation Army engineer, marks the end of what former Prime Minister David Cameron cast as a “golden era” in ties, promoting Britain as Europe’s top destination for Chinese capital. Cameron toasted the relationship over a beer with President Xi Jinping in an English pub, which was later bought by a Chinese firm.
Trump, though, has repeatedly asked London to ban Huawei which Washington calls an agent of the Chinese Communist state — an argument that has support in Johnson’s Conservative Party.
Huawei denies it spies for China and has said the United States wants to frustrate its growth because no US company could offer the same range of technology at a competitive price.
China says banning one of its flagship global technology companies would have far-reaching ramifications.
In January, Johnson defied Trump by allowing what he called high-risk companies’ involvement in 5G, capped at 35%.