You are here

  • Home
  • Structural reforms in Saudi Arabia’s economy to continue: Finance minister  

Structural reforms in Saudi Arabia’s economy to continue: Finance minister  

Structural reforms in Saudi Arabia’s economy to continue: Finance minister  
Saudi Finance Minister Mohammed Al-Jadaan said that continuous implementation of the ambitious plan is necessary for the Kingdom to catalyze its economic growth and maintain fiscal sustainability.  Photo/Supplied
Short Url

https://arab.news/cp67a

Updated 01 October 2023
ARAB NEWS  
Follow

Structural reforms in Saudi Arabia’s economy to continue: Finance minister  

Structural reforms in Saudi Arabia’s economy to continue: Finance minister  
Updated 01 October 2023
ARAB NEWS  
Follow

RIYADH: Saudi Arabia will continue its fiscal and structural reforms as the Kingdom is steadily embarking on its economic diversification journey in line with the goals outlined in Vision 2030, said a top government official.  

Saudi Finance Minister Mohammed Al-Jadaan said that continuous implementation of the ambitious plan is necessary for the Kingdom to catalyze its economic growth and maintain fiscal sustainability.  

The minister added that the government program will help Saudi Arabia develop promising economic sectors, enhance investment attractions, stimulate industrial growth, raise the percentage of local content and promote non-oil exports, according to the pre-budget statement from the Ministry of Finance.  

“The Kingdom continues to support social protection programs and shows continued progress toward the objectives of the Fiscal Sustainability Program,” said the ministry in the pre-budget statement.  

It added: “These objectives were achieved by directing expansionary spending to accelerate the implementation of major programs, projects and sectoral and regional strategies to contribute toward gross domestic product growth, attract investments, and stimulate the local economy.”  

According to Al-Jadaan, Saudi Arabia remained financially resilient over the past few years when the world faced economic headwinds for various reasons, including the COVID-19 pandemic and geopolitical tensions.  

He further pointed out that the Kingdom is well equipped with strong government reserves and sustainable levels of public debt that can accommodate any crises that may occur in the future.  

The minister noted that Saudi Arabia’s agile nature of additional spending will help the Kingdom to have control in the medium term, allowing an extension of implementation periods for projects and strategies.  

Al-Jadaan added that Saudi Arabia’s sovereign wealth fund is crucial as the Kingdom is pursuing its economic transformation program.  

The Public Investment Fund has spearheaded this economic diversification journey by investing in various strategic sectors.  

According to the fund’s annual report, it currently holds assets worth SR2.23 trillion ($595 billion).  

The fund has established 70 companies, 25 of them, including Saudi Coffee Co. and Halal Products Development Co. were founded in 2022.  

PIF’s annual report added that these companies offered 1,81,000 jobs in 2022. 

Topics: Saudi budget Finance Minister

Related

Special Saudi Arabia revises budget estimates for 2023 on ‘expansionary spending’ policies video
Business & Economy
Saudi Arabia revises budget estimates for 2023 on ‘expansionary spending’ policies

BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech

BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech
Updated 10 December 2023
Arab News
Follow

BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech

BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech
Updated 10 December 2023
Arab News

RIYADH: Saudi fintech startup Jeel Pay has obtained a permit from the Saudi Central Bank to provide buy-now-pay-later solutions.  

Jeel Pay is a fintech firm that created a solution to streamline the payment and collection procedures within educational institutions.

This decision by SAMA brings the total number of companies authorized to practice BNPL activity in the Kingdom to seven, according to a statement. 

It also increases the number of licensed and authorized financing companies to 58, reflecting SAMA’s ongoing endeavor to support post-paid companies.

In alignment with Vision 2030 goals outlined in the National Fintech Strategy, the Kingdom aims to have 525 such companies, which will create 18,000 jobs and generate SR13.3 billion ($3.56 billion) in direct gross domestic product contributions.    

To achieve these objectives, SAMA is focused on fostering innovation within the financial sector and enhancing inclusion and accessibility across the Kingdom.  

In October, Saudi fintech startup KadiPay obtained a permit from SAMA to provide BNPL solutions.

In late July, the bank granted the same permit to another BNPL platform known as Tabby. 

In early July, amid efforts to affirm its commitment to supporting the fintech sector, the Saudi Central Bank granted BNPL platform Tamara a permit to pursue post-paid payment activity.

A permit was also given to MIS Forward in March to implement a BNPL solution, allowing customers to purchase from merchants without paying term-financing fees.

Also in March, Saudi Venture Capital announced its intent to boost this sector further by dedicating $80 million to its “Investment in Fintech VC Fund” in hopes of stimulating financing for startups and small and medium enterprises.  

This strategic decision to invest in the flourishing fintech scene is expected to further develop the ecosystem, which raised $239 million in funding in 2022, according to venture data firm MAGNiTT.

Speaking to Arab News in July 2022, SAMA’s Deputy Governor for Development and Technology Ziad Al-Yousef said that the bank is planning to make Saudi Arabia a regional financial technology hub as part of its strategy to implement the Financial Sector Development Program envisaged in the Kingdom’s Vision 2030 blueprint.   

He added at the time that the central bank is developing regulations to address new business models to assist and guide entrepreneurs in the payments, investments and financing sector. 

Topics: BNPL

Related

BNPL company KadiPay receives SAMA permit, boosting Saudi fintech
Business & Economy
BNPL company KadiPay receives SAMA permit, boosting Saudi fintech

Rich nations, GCC urged to use SDRs to fund climate action in Africa

Rich nations, GCC urged to use SDRs to fund climate action in Africa
Updated 10 December 2023
Ranvir Nayar
Follow

Rich nations, GCC urged to use SDRs to fund climate action in Africa

Rich nations, GCC urged to use SDRs to fund climate action in Africa
Updated 10 December 2023
Ranvir Nayar

DUBAI: Leaders of the Gulf Cooperation Council countries have been called upon to seize the global leadership in innovative climate finance through their unused special drawing rights with the International Monetary Fund to help generate additional lending under climate finance for African economies.

“We are having conversations with various countries that have SDRs that are not used because, frankly, they don’t need them. And so this is a real opportunity for leadership by the really forward-looking, innovative leaders in the Gulf and elsewhere. So, we had a very productive conversation that we helped organize with the COP28 presidency, France, Japan, the African Development Bank, and the Inter-American Development Bank on Finance Day at COP28. And I think there was real momentum in the room. Japan had a very forward-leaning statement and France also had a very strong statement,’’ Eric Pelofsky, vice president, Global Economic Recovery, at the Rockefeller Foundation, told Arab News.

In August 2021, in response to the COVID-19 pandemic, the IMF issued a historic $650 billion in SDRs in order to help countries around the world with the necessary cushion to weather the storm. As these SDRs were issued on the economic size and existing reserves, some of the richest countries got the most of the SDRs, while leaving all of Africa with barely 5 percent or $33 billion in SDRs.

As a result, most of these SDRs have remained unused by the rich nations. Over the past few months, there have been calls by various civil society organizations and finance experts for the rich countries to repurpose or pledge their SDRs to allow poorer nations to raise much-needed funds for themselves. Though the rich nations agreed to pledge $100 billion worth of their SDRs for climate finance for Africa, there still remains a shortfall of $15 billion. 

This is where the GCC leaders can step in, say the experts as their own unused SDRs can be leveraged to raise the much-needed funds for the African nations as well as other vulnerable countries. This is an area where the Rockefeller Foundation has been working intensively, most notably the climate change meeting, known as COP28, that is currently going on in Dubai.

Enthused by the outcome of the Finance Day discussions, Pelofsky said that he would continue to push the issue at the forefront in order to rope in more countries that have surplus SDRs that they don’t need.

“We think that it has generated some real momentum and we are continuing these conversations. I think we will see a lot more progress after the IMF publicly announces a board decision, which may happen by January, which would add hybrid capital to a list of approved uses of SDRs. And after that happens, we are going to see more countries come forward with their SDRs,” the executive added.

Civil society organizations and experts have set a target to raise$5 billion worth of SDRs for this purpose, which in turn could be leveraged to raise $20 billion worth of additional funding for climate finance. 

“I think it is a real opportunity to show leadership both from an innovative finance standpoint and it’s also an opportunity to show leadership globally because it signals that not only does the Gulf (countries) care about Africa, but it is also committed to its economic success,’’ added Pelosky, who has in the past served as a special assistant to the president of US for the Middle East and North Africa at the National Security Council.

Besides leveraging unused SDRs, another way in which the Rockefeller Foundation and especially Pelofsky and his team have tried to raise funds for climate finance is by looking at the capital adequacy norms followed by the multilateral development banks, notably the World Bank, following a report by a G20 committee which found that the MDBs were being far too conservative in their capital adequacy frameworks and that there was much more lending that could be done using their existing funds.

Pelofsky said that after this report was published, the Rockefeller Foundation commissioned a study by a London-based financial risks analysis firm which determined there was adequate headroom for an additional lending of close to $190 billion by the World Bank alone.

“So you’re talking about roughly $190 billion of additional headroom in the World Bank alone that could help drive development and climate resilience in countries that get money from the World Bank. And so from our standpoint that is a huge opportunity to start to change the trajectory of these countries which are facing debt crisis, food crisis, fuel crisis, and interest rate crisis. So we have been talking to lots of leaders around the world about this study and how one could actually go about implementing,” Pelofsky added.

 

Topics: COP28

Related

New climate change framework launched by IsDB insurance arm at COP28
Business & Economy
New climate change framework launched by IsDB insurance arm at COP28

UAE to launch the EV charging stations company

UAE to launch the EV charging stations company
Updated 10 December 2023
Arab News
Follow

UAE to launch the EV charging stations company

UAE to launch the EV charging stations company
Updated 10 December 2023
Arab News

RIYADH: The UAE is set to launch the establishment of the Emirates Electric Vehicle Charging Stations Co. as part of 10 newly approved initiatives, according to the country’ prime minister. 

Sheikh Mohammed bin Rashid Al-Maktoum, who is also the ruler of Dubai, presided over a Cabinet meeting at the Dubai Expo, coinciding with the 2023 UN Climate Change Conference.

He stated that the Cabinet approved 10 new initiatives to achieve the country’s recently established environmental targets.  

These include the adoption of the general framework for the 2031 Biodiversity Strategy, aimed at monitoring and protecting natural systems, ensuring their sustainability, and enhancing the national workforce’s proficiency in this field.

The initiatives also encompassed a global appeal for carbon removal from the waste sector. Sheikh Mohammed highlighted the launch of a national carbon credit registry, enabling government and private entities to assess and document their contributions to carbon emission reduction with authenticated government certificates. 

Moreover, the Cabinet approved the fifth national report, documenting the success of national efforts to reduce carbon emissions across various sectors. 

They also endorsed the first edition of the country’s long-term low-carbon development strategy and the establishment of the Emirates Electric Vehicle Charging Stations Co.

In addition, the UAE introduced a policy for sustainable aviation fuel and smart construction in the country.  

The prime minister emphasized that the UAE continues to earnestly work on sustainability and climate change, considering it a fundamental and consistent element in its comprehensive and ongoing development journey. 

He stated: “We reviewed the national efforts of the country in the environmental field, which included more than 120 decisions in sustainability, climate change, and the development of our natural resources issued by the council over the past five years.”

Adding: “In 2023 alone, we launched more than 60 new decisions, forming an integrated system of policies, legislation, strategies, and initiatives to enhance the country’s efforts and profile in addressing the world’s participation in mitigating the effects of climate change.”

The country achieved a 10 percent reduction in greenhouse gas emissions from 2019 to 2021 and secured the top regional position in the 2022 Environmental Performance Index, jumping 38 positions globally compared to 2018. 

Sheikh Mohammed highlighted that the UAE secured the second position globally in the Energy Transition category of the 2023 Global Green Future Index.

According to him, the UAE has invested over $50 billion in clean energy projects across 70 countries and pledged another $50 billion in the sector over the next decade.

 

 

Topics: EV COP28 Dubai Expo

Saudi Arabia, China to jointly promote key initiatives 

Saudi Arabia, China to jointly promote key initiatives 
Updated 10 December 2023
Arab News
Follow

Saudi Arabia, China to jointly promote key initiatives 

Saudi Arabia, China to jointly promote key initiatives 
Updated 10 December 2023
Arab News

RIYADH: Key initiatives in Saudi Arabia and China will soon be exposed to extensive promotional efforts thanks to the close partnership between the two countries, according to the Asian country’s commerce minister. 

Wang Wentao disclosed that both sides will work hand in hand to jointly stimulate China’s Belt and Road Initiative as well as the Kingdom’s Saudi Vision 2030, Reuters reported.

This announcement comes following Saudi Investment Minister Khalid Al-Falih’s meeting with China’s commerce and industry chiefs in Beijing on Sunday to discuss boosting collaboration in trade, investment, and technology. 

The officials also tackled the potential of expanding cooperation in energy, resources, infrastructure, and technology.

This falls in line with the diplomatic ties between the two countries, which span over 30 years, and China is currently the Kingdom’s largest trading partner. 

It also aligns well with how bilateral trade and investment have grown significantly between both sides in recent years. 

During his visit, Al-Falih also met with Zhang Hu, the vice governor of Guangdong province. They both participated in a workshop as part of the Invest in Saudi Arabia tour in China, according to a post on X, formerly Twitter.   

“I also met a number of executives from leading Chinese companies in the manufacture of cars, electric batteries, and information technology, where we focused on developing Saudi-Chinese investments,” Al-Falih said in the post. 

Saudi Arabia and China are working together to strengthen their already well-established strategic ties. 

In September, the Kingdom’s minister of industry and mineral resources held meetings with key Chinese officials in Beijing. The minister also toured various companies and factories located in different Chinese cities as part of his trip.

Bandar Alkhorayef held talks with China’s Vice Minister of Commerce Wang Shouwen, during which they discussed ways to boost economic collaboration and trade ties, the Saudi Press Agency reported at the time. 

The top officials also discussed investment opportunities in several economic sectors, including mining. At the time, the Saudi minister highlighted Saudi Arabia’s progress in the field of industries and mining. 

He also briefed his Chinese counterpart about the existing opportunities in various sectors within the Kingdom. 

Topics: Saudi Arabia China

Related

Beijing to host China-Saudi Investment Conference on Tuesday
Saudi Arabia
Beijing to host China-Saudi Investment Conference on Tuesday

Jazan City completes 53 key projects valued at $2.39bn

Jazan City completes 53 key projects valued at $2.39bn
Updated 10 December 2023
Arab News
Follow

Jazan City completes 53 key projects valued at $2.39bn

Jazan City completes 53 key projects valued at $2.39bn
Updated 10 December 2023
Arab News

RIYADH: Saudi Arabia’s Jazan City for Basic and Transformative Industries has completed 53 capital projects exceeding SR9 billion ($2.39 billion), revealed Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef. 

During the city’s projects award ceremony RAWAS, he highlighted that these projects span across multiple sectors, aiming to enhance the city’s investment opportunities. 

The minister stated that 24 projects have been established in the fields of infrastructure and roads, 18 in public facilities and housing, and 11 projects for other services. 

Furthermore, private sector investments in Jazan City have surpassed SR32 billion, with ongoing discussions about future projects estimated to be valued at around SR10 billion, added Alkhorayef. 

“The inauguration of these projects completes the ongoing projects in Jazan City for Basic and Transformational Industries, falling under the initiative to develop the basic facilities for industrial areas in the city, such as the seawater cooling system project costing over SR1.2 billion, and the project to establish a 1,000-megawatt power station in the industrial area, costing over SR400 million,” the minister said.  

He added that key projects enhancing the special economic zone include constructing a security wall, gates, and infrastructure, with investments exceeding SR1 billion.   

Furthermore, Jazan City is poised to launch a series of capital projects. This includes the second phase of developing the general industrial area, projected at SR350 million, and phase two of the maritime area’s infrastructure. The latter is aimed at bolstering investments in residential spaces and improving living standards, estimated at SR400 million. 

“Jazan City for Basic and Transformational Industries has aligned its projects with several national strategies, including the National Industrial Strategy launched last year, incorporating several future capital projects within this strategy’s initiatives, such as the ready-made buildings for food industries — phase one, estimated to cost approximately SR420 million,” he added.  

In the context of partnerships, Alkhorayef emphasized the impactful returns on government investments in capital projects.  

He noted that each riyal invested yields an impressive eightfold return from the private sector. 

This substantial financial gain not only underscores the economic viability of these projects but also paves the way for more investment opportunities, thereby fostering the region’s economic and industrial growth. 

Topics: Jazan SaudiVision2030

Latest updates

US says China’s actions in South China Sea undermine regional stability
US says China’s actions in South China Sea undermine regional stability
Lydia Ko delivers big moment to win mixed team event with Jason Day
Lydia Ko delivers big moment to win mixed team event with Jason Day
Girona make a genuine title contender statement with 4-2 win at Barcelona to go top in Spain
Girona make a genuine title contender statement with 4-2 win at Barcelona to go top in Spain
EU ministers consider next steps in response to Israel-Hamas war
EU ministers consider next steps in response to Israel-Hamas war
’Nothing more to say’: Trump cancels plan to testify in NY fraud trial
’Nothing more to say’: Trump cancels plan to testify in NY fraud trial

Search form

Print Edition
Read pdf version Subscribe now
© 2023 SAUDI RESEARCH & PUBLISHING COMPANY, All Rights Reserved And subject to Terms of Use Agreement.