Bandar bin Ibrahim Alkhorayef, Minister of Industry and Mineral Resources • Interview

Saudi Arabia’s priorities have shifted as a result of COVID-19, and the Minister of Industry and Mineral Resources sees a great opportunity to build up the country’s resilience and produce more things locally.

The COVID-19 crisis has tested leadership structures all over the world. How did Saudi Arabia form a response in the early days of the crisis?

I have come to see this as an opportunity not only to learn but also to act on things we likely would have difficulties convincing society and government to move ahead with. The industrial sector in Saudi Arabia is so important that the government created this new ministry to support it, along with mining. The resilience we have witnessed is a demonstration of how the country is prepared. Saudi Arabia stood out as one of the best prepared in terms of citizens having access to essentials such as food, medicine, and daily supplies. The disruption to the overall supply chain system worldwide is also reordering how countries go about their old way of doing things. We will definitely have new rules in the future, so the bold decision by the government to let this crisis be led by health and safety shows how the country is serious about the wellbeing of its people.

Are there trends in digitalization in response to COVID-19 that will likely continue beyond the crisis?

We have become much more efficient because of digitalization. We had the tools available in the past, but never had the urge or need to push that last mile to use it and be comfortable with it. Today, when we look at our industrial sector and how to build an ecosystem such as our industrial cities, it proves we were on the right track. The Minister of Communication was talking about the infrastructure that it has built in the last three years, and if that had not been done, we would be in a different situation today. This has been a test of our vision’s direction.

Which of your efforts to stimulate the economy have been most important, and how have you coordinated with SAMA and other agencies?

As a government official, the most important thing is how we were able to coordinate all the efforts. There were many committees created that filtered or consolidated in higher committees. There was one specifically for the economy that I was a part of, and it had all the ministers who oversaw areas on the economic side. The beauty is the ability to bring all these heads together and make them look at one thing. That is how we minimized the negative consequences on the economy and ensured that the essentials were available. The affected sectors received assistance. We realized from the beginning the biggest impact would be on cashflow, so we addressed everything in this manner from the start. At the level of industry and mining, we started by rescheduling and delaying payments for all loans for all SMEs in 2020. This was granted without any discussion, so they did not even need to apply. All medium-sized companies in essential sectors such as food, drugs, and supply chain also received this automatically. The remaining medium and large companies had to apply, as we needed to assess their individual issues. We also monitored if these initiatives were actually being utilized effectively, as we designed different initiatives of different types. We asked all entities with an oversight of the economic sector how they could help. In my area, we had MODON, the Royal Commission, Exxon Bank, and SIDF, who we put together to come up with ideas on how we could help. We reduced some fees, some were waived, projects were given extension times, and licenses were extended. Currently, we are monitoring how these packag

“The bold decision by the government to let this crisis be led by health and safety shows how the country is serious about the wellbeing of its people.”

es actually helped the different sectors, what more we can do, and how we can improve. The numbers for the month of June are extremely positive; we had 118 new industrial licenses issued in June and around 2,000 new employees come into the system, so things are picking up slowly. Overall, many of the systems we have put in place under pressure will endure.

What allowed you to pass the mining regulation so early in your tenure, and what will the short-term outcome be?

This is definitely an exciting sector. The decision to join mining with industry gives a clear idea of how the government intends to develop the mining sector. Mining is a sector with a large amount of raw material but the intention is to create a value chain through the industrial sector. The law intends to improve the clarity and transparency of how we do things in this country, and FDI will be an important part of growing this industry. We were also able to clarify how we deal with water resources because a great deal of mining projects will require water resources. Finally, as this sector is capital intensive in the long term, we need to ensure there are the tools to ensure different players are able to access financing. Saudi Arabia has many different resources in this sector that are untapped, so there is a great opportunity and more to come up with aggressive plans to push this through and communicate with international players.

How will you balance the opportunities for Ma’aden and international players?

Ma’aden is a player in this sector like anyone else. One thing that is clear in all investment is that international FDI is 100% treated like local. We will not give any nationality or country an advantage, as we are looking for investors with the ability to explore the opportunity. If anything, we will favor international players because of the element of expertise and knowledge they bring. We are serious about attracting investors at the national level.

What are your priorities for 2021 and 2022, and what have you learned from managing the ministry and country through this crisis?

Winston Churchill said to never waste a crisis, and I definitely intend not to waste this crisis. My priorities have shifted with this crisis in a positive way. International trade will change, and we need to understand how this will affect us. This has forced us to build up our own resilience and ability to produce essentials here. In addition, in the past we looked at the industrial sector as a rigid sector that is capital intensive with no room for small players. This is changing now, on not only the service and supply sides but also the technology side. This is a great opportunity, and we will help entrepreneurs take advantage of the sector. As part of our program, we have created an opportunity for mask manufacturing players to triple their capacities, and we will provide them with a loan and an offtake agreement to guarantee their investment. We are set to produce 10 million masks a day up from 600,000, which signals how strong we are as a country and how good a foundation we have. The government is excited about utilizing this difficult time to push the pipeline of projects and ensure there is no obstacle from its end. We want our newly established Exim Bank to help people facing difficulties due to the business slowdown to have access to international markets, for example. The number of changes happening will definitely keep us on our toes for at least the next 12 months.