INTERVIEW: World Economic Forum brings a touch of Davos to Saudi Arabia

(Illustration by Luis Grañena)
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Updated 17 February 2020

INTERVIEW: World Economic Forum brings a touch of Davos to Saudi Arabia

  • Based on the 2030 strategy in Saudi Arabia, there are a lot of trailblazers in innovation and technology

Børge Brende, president of the World Economic Forum (WEF), brought a little flavor of Davos to Saudi Arabia last week. And it was not just that the overnight temperature in the Saudi capital fell to a low of 2 degrees Celsius — only marginally warmer than the Swiss town that hosted the annual gathering of the global elite last month.

It was also the buzz in the lobby of the Four Seasons hotel in Kingdom Tower in Riyadh, which will be the venue for the first-ever regional meeting of WEF to be held in Saudi Arabia. All that was missing was the clatter of snow spikes and the tinkle of Alpine cow bells.

“I’ve brought Davos weather with me,” said the 54-year-old Norwegian, who has been WEF president since 2017, after a ministerial-level career in his country’s government, including a stint as foreign minister. Brende was leading the WEF advance party tasked with agreeing the final details of the meeting, scheduled to be held in early April with around 600 official delegates and speakers as well as a substantial entourage of aides, observers and media.

It will be a big event in what promises to be a busy year for the Kingdom, which will culminate in the G20 Summit of global leaders in November. Preparations for that event — the first time a G20 Summit has been held in the Middle East — are well underway, and the WEF meeting could be seen as an essential trial run for the G20 extravaganza.

The decision to stage the event in Saudi Arabia was announced at a plenary session that Brende moderated with some of the leading policymakers from the Kingdom at Davos in January. Why was Riyadh chosen this time for an event that the WEF has previously staged in Jordan, Egypt and the UAE?

“Saudi Arabia is the first country in the Arab world to hold the G20 presidency, so that merits a lot of focus this year,” Brende said. “We also know that Saudi Arabia is the largest economy in the region, and among our members and partners there’s a lot of interest now to see how the G20 agenda can also reflect the industrial changes we’re faced with through the Fourth Industrial Revolution.”

That concept — abbreviated to 4IR — has been pioneered by WEF founder Klaus Schwab to describe the huge technology-driven changes underway in the global economy and society as information technology and digital communications come together to affect the lives of everyone on the planet.

Technological innovation has been eagerly embraced by the Kingdom’s policymakers as part of the Vision 2030 strategy to diversify its economy away from oil dependency and boost the job-creating potential of the private sector.

Brende suggests there is a challenge of perceptions with regard to rapid economic change in the region. “In the Middle East, you’re faced with two kinds of realities at the same time. It’s one of the youngest populations in the world, and there’s a lot of innovation underway — entrepreneurship and startups. But at the same time there are a lot of conflicts and proxy wars going on in the region,” he said.

“So there are two realities, but we’ll focus mainly on the opportunities. For example, we’ll have 50 startups from the Middle East attending the Riyadh meeting. We want to showcase the silver linings that are there and all the dynamic startups in the region,” he added.

“One of the challenges is that a lot of the media focus on the region is on polarization and proxy conflicts, but we’d also like to underline that based on the 2030 strategy in Saudi Arabia, there are a lot of interesting trailblazers in innovation and technology.”


BIO

BORN: Norway, 1965

EDUCATION: Norwegian University of Science and Technology

CAREER

  • Member of Norwegian Parliament
  • Environment minister
  • Trade and industry minister
  • Foreign minister
  • Secretary-general, Norwegian Red Cross
  • President, World Economic Forum

WEF is not primarily a peace-making or conflict-resolution forum, but its mission statement — “committed to improving the state of the world” — implies an interest in bringing opponents together in some kind of reconciliation. Does Brende see any possibility of resolution to some of the region’s apparently intractable antagonisms from the April meeting?

“I hope that there will be enhanced dialogue in the region, and also with all the young people coming — global shapers and leaders, the startups — there will be inspiration to other countries that will be participating. There are so many opportunities in the region that aren’t sufficiently capitalized on,” he said.

However, Brende does not believe that Iran will be present at the event. “There’s no plan currently to have Iran in Saudi Arabia,” he said. Israel is also unlikely to attend. Brende does not anticipate any problem with Qatari involvement in the meeting, despite the continuing standoff with the Kingdom. “I’ve seen that there are initiatives to improve the relationship with Qatar, and will be discussing that while I’m here,” he said.

Big delegations are expected from all G20 members, with strong participation from European, North American and Asian countries. They will gather at a crucial time for the global economy. “We’re facing a situation of slowing growth, so there has to be a real strategy on how to avoid recession. We think that technology investment is a good way to increase future competitiveness,” Brende said.

But he expressed about the economic implications of the coronavirus outbreak in China, which is certain to impact growth and — significantly for the Kingdom — will reduce demand for oil. “China, the second-largest economy in the world, is growing at the lowest rate of growth for 30 years, and is also struggling with the coronavirus. We at WEF are vigilant and following the situation,” Brende added. 

The meeting will focus on six main “platforms,” each of which has big implications for Saudi Arabia, the Middle East and North Africa (MENA): Employment, training and skills; financial inclusion; energy transformation; urbanization and smart cities; environmental issues; and the growth-enhancing potential of the 4IR.

“As one of the youngest regions in the world, millions of new jobs have to be created every year, and that’s a question of addressing the huge skill gap which exists. We’re trying to do this via the skills ‘accelerator’ that the forum has launched,” Brende said.

“We’re looking at a billion new and reskilled jobs by 2030 in cooperation with the private sector, and we’re also setting up a center for the 4IR in Riyadh. The new technologies give the opportunity for many countries that were maybe not the winners of previous industrial revolutions to leapfrog in development.” G20 education ministers will be form a large contingent at the MENA meeting to address these issues, Brende said.

Energy will be a major item on the April agenda. It will discuss what policies are needed to ensure that the transition from fossil fuels does not impact the macroeconomic environment of countries, such as Saudi Arabia and others in the Arabian Gulf, that still depend on hydrocarbons. 

It will also examine the sensitive issue of government subsidies. Along with other regional economies with a big public sector, Saudi Arabia has sought to pare back subsidies in energy, water and food. The WEF meeting in Riyadh will debate what safety nets need to be in place to ensure that vulnerable segments of populations remain protected.

Brende welcomes the relaxation of travel restrictions in the Kingdom, such as the introduction of electronic visas, and hopes to see a big female involvement in the April meeting.

The Davos annual meeting has been criticized in the past for the comparatively low level of women attending as delegates, with some 24 percent at last January’s event. “That’s about the same level as in government and private business, but we’d like to have gender parity. If we can get better than that in Riyadh, it would be great,” he said.

Senior policymakers in the Kingdom have given the event their “full endorsement,” he added, and while in Saudi Arabia he met with Crown Prince Mohammed bin Salman. “We want to underline that the 4IR is a huge opportunity, not a threat, for the Middle East. The region has shown it can deal with conflict and still achieve economic growth. It’s resilient. We hope the meeting will underline how the visions of growth and inclusion win out over conflict and polarization,” Brende said.


Dubai, Abu Dhabi governments ease burden of private businesses hit by coronavirus

Updated 35 min 20 sec ago

Dubai, Abu Dhabi governments ease burden of private businesses hit by coronavirus

DUBAI: The Dubai International Financial Centre (DIFC) in implementing a series of fiscal easing initiatives over the next three months starting April 1 to help all businesses operating in the financial free zone.

Under the conditional scheme, existing DIFC-registered businesses can take advantage of a 10 percent discount of renewal fees for their licenses, while new registrants will have their annual licensing fees waived during the next three months.

The DIFC will also allow deferred payments for all properties owned by DIFC Investments for a period up to six months, while property transfer fees would be discounted from between five percent to four percent for any related transaction during the three-month period.

“The transfer must be registered with the DIFC Registrar of Real Properties within 30 days following the expiry of the three-month period,” the DIFC said.

The free zone will likewise facilitate the free movement of labor in and out of DIFC between other free zones, provided employers have the necessary secondment arrangements in place and employees are recorded with registry services so they can access buildings and offices within the DIFC.

“The well-being of our community is of utmost importance. We are working continually to ensure all health and safety measures are implemented swiftly and effectively as directed by the relevant government authorities,” Arif Amiri, the DIFC Authority Chief Executive Officer, said.

Over in Abu Dhabi, the Abu Dhabi Department of Economic Development (ADDED) on Tuesday issued a circular waiving Dh246 million in penalties levied on private companies, boosting the stimulus package announced by the government earlier this month.

The waiver of penalties for economic licensing violations would benefit 72,242 private companies including SMEs in commercial and industrial sectors, the ADDED said.

The waived violations include fines for delay in license renewal amounting Dh240.98 million and violations related to practicing economic activities valued at Dh5.66 million.

Together with the stimulus package, the latest initiative would boost the “resilience of the commercial and industrial sectors” and enable the “private sector to adjust swiftly to global economic challenges,” the ADDED said.