Saudi reforms set to stay on track

Authorities in Saudi Arabia seem determined to press ahead with elaborate economic reforms regardless of where the oil prices are. In other words, economic liberalisation initiatives would continue even if prices rebound.

In retrospect, oil prices have remained low since mid2014 on the back of growth in production outside Opec member-states, notably in the US through its shale oil. Also, technology is enabling them to enhance production, therefore ensuring firm supplies.

Responding to my queries, a prominent Saudi economist and former diplomat Abdullah Bin Ebrahim Al Quiz emphasised that the kingdom intends to carry out wide-ranging schemes related to implementing Vision 2030, and making slow — but steady — progress on the privatisation programme. He made the remarks whilst addressing the Doha Forum last week.

Introduced in 2016, the vision envisages a Saudi economy less dependent on oil in years to come. More specifically, the National Transformation Plan (NTP) 2020 is helping in the implementation by opening up the economy to investors.

Measures include restructuring Saudi Aramco, including the listing of its shares on international bourses. The initial public offering is expected to be one of the largest in the world. The objectives entail transforming Aramco into a global industrial conglomerate.

Not surprisingly, numerous stock exchanges have expressed the desire to host Aramco shares. Japan reportedly offered a listing on the Tokyo Stock Exchange, and the offer was made during the visit of King Salman Bin Abdul Aziz to Japan in March. Accordingly, a joint group was set up to study the listing possibilities.

Concurrently, the UK would also like to entice a listing, and was on display when British Prime Minister Theresa May visited Saudi Arabia in April. Xavier Rolet, chief executive of the London Stock Exchange, joined May on the trip.

Strengthening the UK’s commercial ties with Saudi Arabia and other Gulf countries has become more important as Britain moves to leave the EU. The UK is offering to be the partner of choice for Gulf countries.

Coinciding with the visit of US President Donald Trump to Saudi Arabia, Aramco was due to select a partner for a joint venture aimed at overseeing government-related infrastructure projects in Saudi Arabia. Astoundingly, Trump selected Saudi Arabia as the first country to visit during his first foreign trip as President. The trip by the President entails meetings with leaders of GCC states plus heads of numerous other Arab and Muslim countries.

Turning to economic moves, Saudi Arabia recently revealed two exceptional initiatives for the purpose of enhancing employment of Saudi nationals. One such requires employment in shopping malls throughout the kingdom to Saudi nationals only.

The move is designed to address the joblessness among Saudi females. According to Al Quiz, the unemployment rate stands at 12 per cent. However, this is a bigger problem for Saudi females and comes to around 34 per cent by one account.

Another scheme requires the authorities to do away with the phenomenon of foreign nationals working in the public sector within the next three years. Some 70,000 immigrant workers are attached to government entities.

Saudi officials appreciate the challenges encountering the kingdom and are devising solutions to overcome them.