Saudi bets big on AI developing local capabilities to disrupt economy

Saudi bets big on AI developing local capabilities to disrupt economy
Saudi Arabia aims to attract $20 billion investment in data and AI (Shutterstock)
Short Url
Updated 21 April 2022

Saudi bets big on AI developing local capabilities to disrupt economy

Saudi bets big on AI developing local capabilities to disrupt economy
  • Saudi Arabia has been at the forefront of adopting the latest technology in the region as part of its Vision 2030 and National Transformation Program 2020

RIYADH: With artificial intelligence disrupting the world economy, the Middle East cannot remain left behind as Saudi Arabia and the UAE are driving the adoption of AI in the region. 

The Middle East is projected to accrue 2 percent of the total global benefits of AI in 2030, equivalent to $320 billion, with Saudi Arabia set to have the largest gains during that period with AI contributing over $135.2 billion to its economy, according to a PwC report. 

While businesses can derive great benefit from using AI applications, industry experts Arab News spoke to pointed out that the region has a number of hurdles to overcome.

“We have to build the right ecosystem for AI and all other new technologies. We also have to ensure good and effective investment in ‘data’ collection, data privacy, smart infrastructure development, and human resources development,” said Fawwaz Al-Shammari, senior vice president and digital industries country head at Siemens. 

Saudi Arabia has been at the forefront of adopting the latest technology in the region as part of its Vision 2030 and National Transformation Program 2020.

He pointed out that the private sector — be it companies, startups or entrepreneurs — should first see the real need for the market to find the right solutions and build the right skill sets within the Kingdom. 

While from the government perspective, Al-Shammari suggested that the investment should be in the right regulations to ensure the implementation of the legal framework “that will regulate the market and also make it easy for private companies, startups and entrepreneurs to invest in AI applications and solutions.”

Attracting foreign investment 

Saudi Arabia aims to attract SR75 billion ($20 billion) investment in data and AI as part of the target outlined under the National Strategy for Data & AI. 

While there is some investment in AI in Saudi Arabia, supported by a commitment by the government to digitally transform the country, the PwC report pointed out that “investment is currently largely driven through domestic sources, and in particular the country’s sovereign wealth fund.” 

“In order to maintain momentum in the pace of technological advancement in the country, there is a need for it to attract more foreign investment which is currently constrained by the challenges in the business environment,” the report noted. 

The PwC report suggested that “addressing concerns raised by the business community will allow the Kingdom to attract external investment which will bring with it skills and expertise to upskill the local population.” 

First, businesses that need humans can be replaced with technical solutions that use AI. The second way is to use AI to improve performance, cut costs, and increase productivity in internal processes

Talal Al-Tamimi, co-founder and chief technology officer at Ebana

Saudi Arabia aims to transform its workforce by training and developing a pool of 20,000 AI and data specialists and experts, of whom 5,000 will be equipped with strong skills and will be highly qualified in line with the National Strategy for Data & AI. 

Talal Al-Tamimi, co-founder and chief technology officer at Ebana, said there are two ways that AI is used to help businesses grow in Saudi Arabia. 

“First, businesses that need humans can be replaced with technical solutions that use AI. The second way is to use AI to improve performance, cut costs, and increase productivity in internal processes.”

He noted that “many of the pioneer workers are rushing to adopt some technical solutions, such as AI, blockchain, or others, without first looking at whether there is a real need or problem that they can solve for the people they want to help.” 

“They end up failing and wasting their investment,” Al-Tamimi pointed out.

He believes that the technologies in which AI is used are “not the goal, but are just a tool available to you.” 

“They come in handy when there is a real need for them. There are several requirements for the success of any AI such as a high volume of data and a strong infrastructure to use these tools,” added Al-Tamimi.

Data security 

Being a new technology revolutionizing many markets and disrupting all kinds of businesses, Al-Shammari pointed out that there are several risks and challenges in adopting AI. 

The regulations and the data privacy are the key challenges globally for AI, but he said the government in Saudi Arabia is addressing these challenges from an early stage by creating the Saudi Data & AI Authority as well as the National Center for Artificial Intelligence. 

“They have a clear mandate of developing the strategy that highlights the opportunities, setting the roadmap, and addressing all challenges by finding the right solutions and technologies based on the best practices,” said Al-Shammari. 

He said another major challenge is creating the required talented people within the country, which will address the real need for AI and provide the right solutions and applications.

Mohammed Mohaya Al-Mutairi, an adviser in quality and institutional excellence, pointed out that AI applications are important in many fields, “but they are more important in the current era than ever before for business organizations.” 

He said the use of AI applications enables enterprises to achieve several benefits, including improving decision-making processes, solving administrative problems, reducing costs and improving quality — all of which contribute directly and indirectly to improving the competitiveness of business organizations.

“This will ensure the creation of competitive advantage and benefit from business intelligence, which contributes to standing out and creating new opportunities for excellence and growth in a competitive environment,” explained Al-Mutairi who is also the director of institutional excellence at the General Authority for Endowments.

He urged enterprise leaders to focus well while deciding whether there is a need to apply business intelligence within the organization or not, and the timing of that decision. 

“Only after making this decision can they adopt the project and start implementing it and providing support for the teams to overcome challenges and difficulties in order to create a stimulating and conducive environment that supports creativity and innovation,” Al-Mutairi concluded.


Saudi green efforts paying off as Kingdom ranks first globally in renewable production 

Saudi green efforts paying off as Kingdom ranks first globally in renewable production 
Updated 9 sec ago

Saudi green efforts paying off as Kingdom ranks first globally in renewable production 

Saudi green efforts paying off as Kingdom ranks first globally in renewable production 

RIYADH: Saudi Green Initiative has started reaping the results as the Kingdom has been ranked first globally in renewable energy production, according to the latest Green Future Index report.

Saudi Arabia’s Ministry of Energy announced that the Kingdom has also advanced 10 places in the overall ranking of the Green Future Index to garner the 51st spot — a milestone achievement made just two years after the launch of the SGI by Crown Prince Mohammed bin Salman.

The Green Future Index ranking is published by the Massachusetts Institute of Technology in the US, and it is widely considered one of the most authentic reports that signal the progress made by countries in terms of sustainability.

Saudi Arabia also ranked first in the Arab world, and 20th globally in terms of carbon dioxide emissions reduction.

The SGI is considered one of the most effective plans adopted by any country to fight climate change. Under this program, 10 billion trees will be planted in the Kingdom to revive the health of the environment.

Since the launch of the SGI, Saudi Arabia has planted 18 million trees within the Kingdom and of those 13 million are mangroves.

Under the goals outlined in SGI, Saudi Arabia is also eyeing to achieve the target of placing 30 percent of its land and sea territory under protection by 2030.

Regionally, the SGI plans to plant 50 billion trees across the Middle East and restore an area equivalent to 200 million hectares of degraded land, which will in turn reduce global carbon levels by 2.5 percent.

Apart from planting trees to ensure sustainability, the SGI is also steadily steering the Kingdom to become a global leader in carbon capture technology and renewable energy production.

Earlier in March, a report released by S&P Global revealed that Saudi Arabia and the UAE are leading the region’s fight against climate change by producing 90 percent of the Gulf’s renewable energy.

According to S&P Global, installed solar capacity in the two countries surged from 165 megawatts in 2016 to 3 gigawatts by the end of 2021.


Qatar’s first Green Guarantee issued for a solar project 

Qatar’s first Green Guarantee issued for a solar project 
Updated 32 min 26 sec ago

Qatar’s first Green Guarantee issued for a solar project 

Qatar’s first Green Guarantee issued for a solar project 

RIYADH: Standard Chartered Bank and Siemens Energy have issued Qatar’s first Green Guarantee – an initiative designed to increase sustainable and responsible banking practice in the country. 

The Green Guarantee was granted for a solar power project that is projected to play a significant role in the country’s national climate change action strategy and its goal of reducing its carbon footprint while enhancing its energy independence.

This Green instrument is intended to aid in the project’s completion and long-term sustainability. 

Green guarantees can serve as a powerful de-risking mechanism, accelerating the flow of private financing into climate mitigation and adaptation projects in developing nations. 

“The road to net zero requires partnership, innovation, as well as decarbonization. This is highlighted in the development of this innovative Green Guarantee as a trading instrument with Standard Chartered, which will support the development of an important solar power project in Qatar,” Daniela Schoeppner, vice president of Finance Hub Middle East at Siemens Energy said. 

The collaboration between Standard Chartered Bank, Qatar, and Siemens Energy creates an entirely new benchmark for sustainable finance in Qatar and serves as a model for companies and institutions interested in promoting responsible and sustainable finance practices. 

The announcement is the latest move by countries in the region to push ahead with sustainable investments.

In February, Saudi Arabia’s Ministry of Industry and Mineral Resources also signed a memorandum of understanding with Standard Chartered Bank to evaluate the requirements for sustainable investment in the mining sector in the Kingdom, in line with its Vision 2030 objectives. 

The MoU focuses on promoting knowledge transfer, technological enablement, job creation and executing the outcomes of the Future Minerals Forum. 

It will also encourage local and foreign businesses to discover investment potential in Saudi Arabia’s mining and mineral sectors. 

Saudi Arabia’s Public Investment Fund announced in February that it has raised $5.5 billion through its second green bond sale. This follows the PIF’s initial green bond issuance amounting to $3 billion in October 2022.  

The money will be used to fund sustainable investments by the sovereign wealth fund through its Green Finance Framework. 

The first offering was more than eight times oversubscribed, with a subscription request totaling $25.9 billion. 

The most recent bond issuance was more than six times oversubscribed, with books surpassing $33 billion, and it was offered in three tranches – $1.75 billion for 7 years, $2 billion for 12 years, and $1.75 billion for 30 years. 


Alistithmar Capital inks agreement with Safa Investment Co. to launch $292.9m real estate fund 

Alistithmar Capital inks agreement with Safa Investment Co. to launch $292.9m real estate fund 
Updated 50 min 16 sec ago

Alistithmar Capital inks agreement with Safa Investment Co. to launch $292.9m real estate fund 

Alistithmar Capital inks agreement with Safa Investment Co. to launch $292.9m real estate fund 

RIYADH: Alistithmar Capital, the investment arm of Saudi Investment Bank, has signed an agreement with Safa Investment Co. to launch several real estate funds – with the first estimated to be worth $292.9 million.   

Both companies will cooperate to help support the Kingdom’s growth in the real estate sector through funds that target the residential space in main cities with particular focus on Riyadh.  

The funds aim to enhance the growth of the invested capital through the acquisition of land in the targeted geographical areas to develop high-quality residential complexes and sell them ready for habitation.  

Khalid Al-Rayes, CEO of Alistithmar Capital, explained that the company’s cooperation with Safa Investment will open opportunities to achieve greater returns.  

According to Safa Investment Co., the agreement aims to bridge the gap between demand and supply in the real estate market in all its sectors through projects that target strategic and vital areas in the most prominent neighborhoods in Riyadh and other cities.  

In March, Alistithmar Capital received approval from the Capital Market Authority for its Alistithmar Capital Quarterly Dividend Fund.  

Saudi Arabia’s real estate sector is witnessing massive traction and development with a huge increase in property values.  

Real estate prices in Saudi Arabia increased by 1.6 percent in the fourth quarter of 2022, compared to the same period in 2021, primarily driven by a rise in residential property values  

The price of residential properties increased by 2.6 percent in the fourth quarter of 2022, mainly fueled by a 2.7 percent rise in land plot prices.  

Moreover, Saudi Arabia is planning to relax its property ownership laws for foreigners as the Kingdom eyes attracting investments into the real estate sector as part of its strategy to diversify its economy. 


Global growth to hit three-decade low: World Bank  

Global growth to hit three-decade low: World Bank  
Updated 15 min 42 sec ago

Global growth to hit three-decade low: World Bank  

Global growth to hit three-decade low: World Bank  

RIYADH: The global economy is set for a “lost decade” according to the World Bank as it forecasts that economic growth is set to hit a 30-year low.

A report from the organization warns average global domestic product growth will drop to 2.2 percent a year between 2022 and 2030 – down from the 3.5 percent rate that prevailed in the first decade of this century.

According to its latest forecast, the decline for developing economies will be especially steep – with growth shrinking from 6 percent a year between 2000 and 2010 to 4 percent a year up until 2030.  

 “A lost decade could be in the making for the global economy. The ongoing decline in potential growth has serious implications for the world’s ability to tackle the expanding array of challenges unique to our times—stubborn poverty, diverging incomes, and climate change.” said the World Bank’s Chief Economist and Senior Vice President for Development Economics Indermit Gill.  

He added: “But this decline is reversible. The global economy’s speed limit can be raised—through policies that incentivize work, increase productivity, and accelerate investment.” 

Analysts from the World Bank theorized that if the world embraced sustainable and growth-oriented policies, potential GDP growth could be raised by 0.7 percentage points to an annual average rate of 2.9 percent. 

“The global economy’s “speed limit”— the maximum long-term rate at which it can grow without sparking inflation — is set to slump to a three-decade low by 2030. An ambitious policy push is needed to boost productivity and the labor supply, ramp up investment and trade, and harness the potential of the services sector,” stated the report.  

Aligning monetary, fiscal, and financial frameworks is the first World Bank recommendation that could be used to moderate the fluctuations of business cycles, therefore instilling investor confidence. 

The report also suggested ramping up investments, cutting trade costs and increasing labor force participation as ways to enhance potential growth in the national economies.  

Additionally, capitalizing on the services sector could become the new engine of economic growth.

The World Bank concluded: “International economic integration has helped to drive global prosperity for more than two decades since 1990, but it has faltered. Restoring it is essential to catalyze trade, accelerate climate action, and mobilize the investments needed to achieve the Sustainable Development Goals.” 


Bahrain GDP grows close to 5% in 2022; fastest pace in almost a decade 

Bahrain GDP grows close to 5% in 2022; fastest pace in almost a decade 
Updated 28 March 2023

Bahrain GDP grows close to 5% in 2022; fastest pace in almost a decade 

Bahrain GDP grows close to 5% in 2022; fastest pace in almost a decade 

RIYADH: Bahrain posted a real gross domestic product growth rate of 4.9 percent in 2022, the highest economic growth pace since 2013, its Ministry of Finance and National Economy announced in its annual economic report.  

The report also highlighted that Bahrain is steadily progressing in its economic diversification journey, as its non-oil real GDP witnessed 6.2 percent growth in 2022, the highest since 2012.  

The growth of Bahrain’s non-oil GDP in 2022 also surpassed the 5 percent annual target set by its economic recovery plan.  

Bahrain launched its multi-year five-pillar economic recovery plan in 2021, aiming to enhance the strength of the Kingdom’s economy, its long-term competitiveness, and its recovery post-pandemic.  

“The positive results posted today are the cumulation of many years of hard work and careful planning by the Government of Bahrain to lay the foundations for a sustainable, diverse, and prosperous economy,” said Bahrain’s Minister of Finance and National Economy Shaikh Salman bin Khalifa Al Khalifa. 

According to him, central to these efforts has been the comprehensive Economic Recovery Plan, launched in 2021, “which is an investment in our nation’s people, our businesses, and the future of Bahrain.” 

The program is touted to be Bahrain’s largest-ever reform program, with over $30 billion catalyzed for investment and significant labor market and regulatory reforms to improve the ease of doing business. 

Al Khalifa added: “These results are a statement of our intent to secure a balanced budget by 2024, provide long-term fiscal sustainability and create an economy that delivers for everyone across the Kingdom.”  

The annual report also revealed that Bahrain reported a drop in deficit to GDP to -1.1 percent, a drop in debt to GDP to 100 percent, and a primary surplus of 3.3 percent.  

In October 2022, speaking exclusively to Arab News, Khalid Humaidan, CEO of Bahrain’s Economic Development Board, said that the country is benefitting from a high level of foreign direct investment, securing $921 million in the first nine months of 2022.  

He also added that the board has identified six priority sectors which include manufacturing, logistics, tourism, information and communications technology, financial services, and oil and gas.  

“We think if we focus on our priority projects, our priority sectors will be achieved, and we will be able to achieve other goals that we have in the economic recovery plan. Fiscal balance by the end of 2024 — we’ve committed to that target as a government, and that will happen by growing the non-oil GDP in the country,” said Humaidan.