![\"View](\"https:\/\/www.alj.com\/app\/uploads\/2019\/08\/1.png\")
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In the same report, an overwhelming 90 per cent of the region\u2019s CEOs indicated they were very<\/em> or somewhat <\/em>confident of revenue growth over the next three years \u2013 some four per cent higher than the global average.\u00a0\u00a0 And demonstrating an increasingly international corporate mindset, the same CEOs were shown to be more open to new strategic alliances and joint ventures than their counterparts globally (49 per cent to 40 per cent).<\/p>\n Bloomberg, meanwhile, citing the recent Saudi Arabian Monetary Authority report of June 1, said the government\u2019s budget deficit fell to 4.6 per cent of GDP in 2018 (markedly lower than 2017\u2019s 9.3 per cent); during the same period, government revenue increased by 30 per cent, and spending by 11 per cent to approximately 1 trillion Saudi riyals [2].<\/p>\n Recognizing the importance of greater economic diversification in the coming years, the International Monetary Fund estimates that non-oil commercial growth in Saudi Arabia will strengthen to 2.9 per cent in 2019, before ballooning to 3-3.25 per cent in the medium term as today\u2019s ongoing reforms pay dividends [3].<\/p>\n Together, the findings paint a rousing picture of a country determined to become a vibrant incubator for corporate innovation \u2013 a country using the challenges of today as a springboard for opportunities of the future.<\/p>\n Reasons for optimism are well justified.\u00a0\u00a0<\/p>\n This year the government had the biggest ever budget at its disposal, more than US$ 293 billion, with US$ 53 billion allocated to a medium-term Private Sector Stimulus Plan.\u00a0\u00a0 In June 2019, Saudi Arabia made its debut on the MSCI Emerging Markets Index<\/a>, with the MSCI stating this followed \u201ca number of regulatory and operational enhancements in the Saudi Arabian equity market that effectively improved market access for such investors.\u201d<\/em> [4]<\/p>\n If the country is riding the crest of a wave, the ambitious and ongoing reform program must absorb some of the credit.<\/p>\n The 2018 introduction of Value Added Tax (VAT) helped bring Saudi Arabia\u2019s economic framework more in line with the international model \u2013 and at 5 per cent across most goods and services it alienated very few CEOs, with four-in-five still rating business and personal tax in the country as competitive or very competitive.[5]<\/p>\n The lifting of the ban on women drivers in 2018 frees a whole new demographic of the workforce to earn, pay taxes and become entrepreneurial.\u00a0 As does the announcement in August 2019 that women will be able to apply for passports and travel abroad without the permission of a male guardian.\u00a0 The Saudi Arabian Ministry of Information said the move is a vital part of the country\u2019s \u201cefforts to promote women\u2019s rights and empowerment, equal to men[1]<\/strong><\/a><\/em>\u201d.<\/p>\n In a further hallmark of gradual liberalization, the entertainment industry is set for an enormous boost as cinemas open for the first time since 1979, and a wide range of international music and performance artists come to the country.\u00a0 PwC estimate that film exhibition alone will generate US$ 266.6 million in GDP and create a thousand new jobs by 2020 [6] \u2013 to say nothing of the associated benefits, as a more relaxed society helps attract more overseas businesses and tourists.<\/p>\n The IMF is clear that this series of reforms is already translating into tangible results, recognizing a growth in non-oil revenues and greater fiscal transparency [7].<\/p>\n Still, says the IMF, challenges persist.\u00a0 While Saudi Arabia is gradually reducing its economic dependence on fossil fuel production, the country remains vulnerable to fluctuating international oil prices and the relative proportion of the economy occupied by the public sector remains large compared to many other countries.<\/p>\n Tackled together, however, Saudi Arabia can continue moving swiftly towards the IMF\u2019s ideal of a \u201cdiversified, productive and competitive economy\u201d.<\/em><\/p>\n Central to Saudi Arabia\u2019s reforms process is the Saudi Vision 2030 national development strategy, the far-reaching blueprint for reducing oil dependency, diversifying the local economy, improving public services and encouraging more overseas trade.<\/p>\n Unveiled in 2016 by Crown Prince Mohammad bin Salman, Vision 2030 has been pivotal in opening up Saudi Arabia to the global marketplace.\u00a0 As an early indicator of its effectiveness, Reuters noted that in 2018 foreign investment in Saudi Arabia swelled to US$ 3.5 billion, a rise of 110 per cent [8].<\/p>\n Announcing the figures, economy and planning minister Mohammed al-Tuwaijri also revealed that five sectors of the economy are set for privatization in 2019, creating some 12,000 jobs and up to 25-40 billion Saudi riyals of revenue by 2020.\u00a0<\/p>\n Managed via the Council of Economic and Development Affairs<\/a> (CEDA), Vision 2030 encompasses a number of flagship projects to help Saudi Arabia become a global investment powerhouse while positioning itself as a transportation, travel and logistics hub connecting Asia, Africa and Europe.<\/p>\n Around 80 projects fall under the Vision 2030 banner, many funded by the Public Investment Fund, all reflecting the new international attitude pervading the country.\u00a0<\/p>\n Among them is a semi-autonomous Red Sea<\/a> tourism and leisure development on the northern section of the Hejazi coast, comprising 50 islands and 34,000 square kilometers of land, to be \u201cgoverned by laws on par with international standards\u201d and with simplified visa arrangements [9].\u00a0<\/p>\n Elsewhere, a General Authority for Entertainment has been unveiled by royal decree, its \u00a32 billion fund covering sports events, culture centers, concert venues and a theme park.\u00a0<\/p>\n Also in the pipeline is a US$ 200 billion solar power generation project in partnership with Japan\u2019s SoftBank, to provide Saudi Arabia with 200 gigawatts of energy [11].<\/p>\n Investment experts at the Oxford Business Group (OBG), in describing the future of Saudi Arabia as \u201cbright and young\u201d, suggest that the Vision 2030 goals are highly attainable.\u00a0 In the OBG\u2019s survey of Saudi CEOs, 82 per cent believed the country \u201cwould be successful or very successful when it came to realizing Vision 2030 goals\u201d<\/em>, causing the OBG to note a \u201csense of renewed dynamism, spurred by a large demographic of highly educated young nationals \u2013 with 70 per cent of the population in Saudi Arabia under the age of 30\u201d.<\/em>\u00a0<\/em><\/p>\n The Vision 2030 project prompted the Saudi Arabian General Investment Authority (SAGIA) to further reform its investment strategy with the launch in 2017 of its Tayseer committee.<\/p>\n Tayseer is designed to boost the business environment for the private sector in four key ways: by making government services more efficient; by establishing Saudi Arabia among the top 20 countries for doing business globally; by introducing new regulations to stimulate the private sector; and by involving the private sector more directly in decision-making.<\/p>\n New rules have already been introduced to regulate cross-border trading, protect investors, strengthen contracts and improve transparency. A further hundred reforms are awaiting approval, convincing the World Bank to rank Saudi Arabia as the 4th \u2018best reformer\u2019 among G20 nations in 2018.<\/p>\n Vision 2030 formalizes the country\u2019s ambition to increase Foreign Direct Investment<\/a> from 3.8 per cent of GDP to the international benchmark level of 5.7 per cent of GDP by 2030. And with China\u2019s economy tipped to be outperforming the USAs by 2030, ever closer links are being sought with the Far East<\/a>. Already China is the biggest importer of goods to Saudi Arabia, and the second biggest market for Saudi Arabian exports. It\u2019s a potent mix not lost on The Washington Post<\/em>, who believe that \u201cthese growing ties between the Gulf and Asia have the potential to reshape geopolitical patters and relationships\u201d.<\/p>\n His Excellency Eng. Ibrahim Al-Omar<\/a>, SAGIA governor, says: \u201cAs we continue to work to deliver on the promise of the Vision by driving reforms aimed at enhancing the ease of doing business in the Kingdom, and identifying and promoting investment opportunities, I expect Saudi Arabia will share a larger space on the world stage of recognized exciting places to do business.\u201d<\/p>\n So, the strategies are reaping rewards and are a tantalizing foretaste of greater economic activity to come.\u00a0 Ernst & Young (EY) recorded 26 IPOs across the MENA region in 2018 together raising nearly US$ 3 billion; the Gulf Cooperation Council (GCC) members accounted for 18 of those IPOs, collectively worth more than US$ 2.5 billion; and of those, Saudi Arabia led the way in both volume and value, with 12 IPOs valued at US$ 1.472.4 billion [12].<\/p>\n EY highlighted two Saudi IPOs of particular significance in late 2018: Alkhabeer REIT (raising US$ 64.1m) and the National Company for Learning and Education (raising US$ 66.7m).\u00a0\u00a0<\/p>\n Further, EY note the country is planning to privatize an additional 20 companies in 2019, across sectors including water, agriculture, energy and sports, adding: \u201cTo help increase transparency, the government plans to retain minority interests in the businesses and undertake IPOs and other transactions for a certain percentage of each asset.\u201d<\/em><\/p>\n For its part, the Saudi Arabia Monetary Agency (SAMA<\/a>) says it has seen increasing interest from regional banks wanting a Saudi presence.\u00a0 Swiss bank Credit-Suisse this year received the go-ahead for a banking licence in Saudi Arabia, while other foreign investment banks \u2013 such as Citigroup and Moelis & Co \u2013 have also been seeking permission to operate in the country.\u00a0\u00a0<\/p>\n Speaking to Reuters, SAMA Governor Ahmed al-Kholifey<\/a> said, \u201cWe see this as a vote of confidence in our economy and in the banking sector in particular.\u201d<\/em> [13]<\/p>\n As one of country\u2019s cornerstone businesses, Abdul Latif Jameel<\/a> is at the forefront of the private sector\u2019s rapid growth and transformation.<\/p>\n Its impact on Vision 2030, and the evolving corporate environment of Saudi Arabia from a multinational perspective, is demonstrated through its ever-expanding investments across a diverse range of industries: transportation, manufacturing, energy, financial services, real estate and more.<\/p>\n Already in 2018, Abdul Latif Jameel teamed up with Al Muhaidib Group<\/a> to found a new joint venture, Muheel<\/a>, an integrated facilities management (IFM) company inspired by Vision 2030\u2019s \u2018Thriving Economy Open for Business concept\u2019<\/em>. Then there\u2019s the massive infrastructure deal it has agreed to develop a desalination plant in Shuqaiq<\/a> on the Red Sea Coast, a US$ 600 million project set to create 700 new jobs and supply clean water to thousands of homes and businesses, in line with Vision 2030\u2019s goal of increasing investment and employment.<\/p>\n As more companies domestically capitalize on the modernized corporate environment in Saudi Arabia \u2013 and as more foreign governments and businesses recognize the potential of its people, its skills and its ambition \u2013 Abdul Latif Jameel\u2019s outward-looking and forward-thinking approach means it is well equipped to lead the charge towards 2030.<\/p>\n HH Crown Prince Mohammad bin Salman, speaking of his vision for the country through the prism of Vision 2030, said the scheme \u201cguides our aspirations towards a new phase of development \u2013 to create a vibrant society in which all citizens can fulfil their dreams, hopes and ambitions to succeed in a thriving economy.\u201d<\/em> [14]<\/p>\n REFERENCES:<\/p>\n [1] https:\/\/www.pwc.com\/m1\/en\/ceo-survey.html<\/a><\/p>\n [2] https:\/\/www.bloomberg.com\/news\/articles\/2019-06-02\/saudi-arabia-s-economic-growth-seen-picking-up-again-in-2019<\/a><\/p>\n [3] https:\/\/www.imf.org\/en\/News\/Articles\/2019\/05\/15\/mcs051519-saudi-arabia-staff-concluding-statement-of-the-2019-article-iv-mission<\/a><\/p>\n [4] https:\/\/www.msci.com\/www\/blog-posts\/saudi-arabia-inclusion-and\/01297979912<\/a><\/p>\n [5] https:\/\/oxfordbusinessgroup.com\/blog\/billy-fitzherbert\/obg-business-barometer\/how-do-ceos-saudi-arabia-view-local-conditions-during-times-of-global-economic-uncertainty?utm_source=Oxford%20Business%20Group&utm_medium=email&utm_campaign=10248469_OBG%20Business%20Barometer%3A%20Saudi%20Arabia%20CEO%20Survey&utm_content=KSASurvey-Jan19-BillyAnalysis&dm_i=1P7V,63NRP,QZEKVW,NYQTI,1<\/a><\/p>\n [6] www.pwc.com\/m1\/en\/publications\/cinemas-in-saudi-arabia-opportunity.html<\/a><\/p>\n [7] https:\/\/www.imf.org\/en\/News\/Articles\/2019\/05\/15\/mcs051519-saudi-arabia-staff-concluding-statement-of-the-2019-article-iv-mission<\/a><\/p>\n [8] https:\/\/uk.reuters.com\/article\/us-saudi-budget-energy-industry-idUKKBN1OI0QU<\/a><\/p>\n [9] https:\/\/www.telegraph.co.uk\/travel\/galleries\/the-worlds-most-visited-cities-where-does-london-rank\/mecca\/<\/a><\/p>\n [10] https:\/\/www.cnbc.com\/2017\/10\/24\/saudis-500-billion-plan-to-neom-business-city.html<\/a><\/p>\n [11] https:\/\/www.reuters.com\/article\/us-saudi-softbank-group-solar\/softbank-says-it-is-working-with-saudi-pif-on-solar-power-project-idUSKCN1MC28T<\/a><\/p>\n [12] https:\/\/www.ey.com\/en_gl\/newsroom<\/a><\/p>\n [13] https:\/\/www.ey.com\/en_gl\/newsroom<\/a><\/p>\n [14] https:\/\/vision2030.gov.sa\/en<\/a><\/p>\n [1]<\/a> Saudi Arabian women finally allowed to hold passports and travel independently<\/a>, CNN, 2 August 2019<\/p>\n","protected":false},"author":18,"featured_media":50620,"template":"","tags":[],"acf":[],"yoast_head":"\n![\"Saudi](\"https:\/\/www.alj.com\/app\/uploads\/2019\/08\/2.png\")
<\/p>\nReforms help future-proof corporate landscape<\/h2>\n
![\"Women](\"https:\/\/www.alj.com\/app\/uploads\/2019\/08\/3.png\")
<\/p>\nStriving for a golden Vision of the future<\/h2>\n
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Other big-budget schemes include the US$ 500 billion NEOM<\/a> project, a proposed \u2018smart city\u2019 in the Tabuk Province near the border with Egypt and Jordan.\u00a0 With its own tax and labor laws and an independent judicial system, the 26,500 sq km development will be part-funded by an IPO of state-owned oil company Saudi Aramco in 2020\/2021 [10].\u00a0<\/p>\nReforms help elevate Saudi Arabia to business\u2019 top table<\/h2>\n
IPOs signify value and booming confidence<\/h2>\n
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<\/p>\nForward thinking, outward looking<\/h2>\n