Interview with Mr. Ajlan Bin Abdulaziz Alajlan, Chairman of the Riyadh Chamber of Commerce and Industry

17 Dec Interview with Mr. Ajlan Bin Abdulaziz Alajlan, Chairman of the Riyadh Chamber of Commerce and Industry

Three years into the Crown Prince’s Vision 2030 plan to reduce Saudi Arabia´s dependence on oil by diversifying its economy and developing public service sectors such as health, education, infrastructure, mining, entertainment and tourism. What are the biggest challenges and opportunities that lie ahead in order to achieve the Kingdom’s goals? How is the private sector contributing to its implementation?

 As representatives of business sector at the Riyadh Chamber, we are keen to make certain that the private sector copes with the aspirations of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz and HRH Crown Prince, Mohammed bin Salman, in achieving the targets of Vision 2030. We believe that this Vision is an essential groundwork for diversifying sources of income, enhancing investment environment, creating jobs, supporting national industry, and assisting in the provision of logistics for private investment – related events and activities.

From the very beginning of the Vision, we at the Riyadh Chamber have come a long way to keep pace with this economic transformation aimed at diversifying the Kingdom’s sources of income. In a study titled “The Role of the Private Sector in Achieving Vision 2030”, prepared by Riyadh Economic Forum, which the Chamber regularly organizes, 13 initiatives were developed to enhance the private sector’s ability to achieve Vision goals. The same study, however, pointed to eight key Vision goals that are of paramount importance to the private sector.

According to the study, the National Transformation Program consists of 543 initiatives, with a budget of about SR 268 billion (approximately US$ 71.5 billion), covering the period 2016-2020. Of these initiatives, there are 124 that are closely related to the private sector, representing 23% of the total. The overall budget allocated to the initiatives related to the private sector amounted to SR 130 billion (approximately US$ 35 billion), or 49% of the program’s total budget.

Therefore, the role of the private sector is mounting at every stage of Vision realization. This transformation coincides with the development of many investment opportunities that open the way for the private sector to play a major and effective role in achieving the goals of the Vision. Through this relationship, it is clear how the goals of the Vision are of paramount importance to the private sector, as they aim to grow its contribution from 40% to 65% of GDP.

As regards challenges, it is true that there are challenges facing the relaunch of the private sector in this respect, but through communication with the leadership and other government agencies we strive together to find solutions to these challenges. We have come a long way, as most of these challenges are administrative and organizational, which makes finding solutions thereto an easy job.

The participation of the Saudi and international private sector is expected to grow its contribution from 40% to 65% of GDP by 2030. Key initiatives and role that the Riyadh Chamber of Commerce plays in the privatization strategy of the Kingdom.

The economic mobility and the new programs, initiatives and mechanisms of the Kingdom’s Vision encourage the private sector to play a prominent role in benefiting from the privatization of government projects. Privatization of such projects as airports, railways, service and educational institutions and other activities would lead to activation of competition in all sectors.

In addition, all projects to be privatized will surely provide the Kingdom’s Vision 2030 with more resources to achieve the goals. Lately, a series of projects have been implemented in the Kingdom within their established timelines; some of them were completed even earlier. We will soon see some significant effects of the privatization of numerous projects, where they’ll certainly be followed by concurrent and strategic economic changes in all areas.

Talking about the Riyadh Chamber’s role in this respect, we’ve had many initiatives to back the move to privatization due to our firm conviction of the private sector’s leverage and ability to upgrade the services level in various projects to be privatized and in infrastructure projects, as well. That is why we are keen to enhance the role of the business sector, striving to assist it through the sectorial committees of the Riyadh Chamber and prepare plans, programs and events that contribute to diagnosing the challenges. In this regard, I’d like to confirm that the Kingdom is capable to enter a new phase of privatization programs and hopefully achieving successes in its endeavors in this respect.

Personal views on the role that the private sector should play in order to turn KSA into a knowledge-based economy.

Saudi Arabia is well positioned to turn into a knowledge-based economy. It has a determined plan to achieve an optimal position in the world in this respect, hopefully ranking 30^th amidst the top ranking countries in the sector by 2030. To achieve this goal, the growth of the IT sector shall be accelerated at rates ranging between 10% and 15% per annum until 2030. Thankfully, we have the factors that would help to rapidly turn KSA into a knowledge-based economy. Those factors include the strong national will to bring about a shift in the economic structure of the Kingdom from a mono-active economy to a modern economy based on technology and knowledge. Moreover, the Saudi economy has many comparative advantages, including economic stability, low-cost energy, and factors conducing to the economic openness and investment drawing climate. In addition, the Kingdom has numerous technological and information entities, young human resources base supporting the effort to turn KSA into a knowledge-based economy, increased government spending on ICT projects, upgraded e-government transactions, and increased household and private spending on the sector products by more than 15% annually.

As private sector representatives sensing the importance of our role in this respect, we prepared a study presented in the seventh session of the Riyadh Economic Forum titled “Development of IT Sector as a Driver and a Promoter of Development and Turning KSA into a Knowledge-based Economy”. The study’s recommendations provided for the need to establish an institutional entity for the knowledge-based economy to activate the performance of various bodies involved in the development of such a knowledge-based economy, and the need to develop a future vision for a clearly defined and feasible road map. Therefore, we can say that the private sector is a major partner in turning KSA into a knowledge-based economy.

Your priorities and agenda as Chairman of the Riyadh Chamber of Commerce, the most important organization representing the private sector in the country. What’s top of your agenda for the rest of the year?

The Saudi business sector in general and that of Riyadh region in particular are both responsible in promoting the national economy. The Riyadh Chamber is keen to contribute to and participate in the preparation of studies, plans, meetings and programs to help all sectors to play their role in achieving the goals of the Vision. This is carried out by organizing meetings and holding workshops in which various economic entities participate to develop common visions of the issues raised, or coming up with initiatives to assist the sector in fulfilling its role and assuming its responsibilities by maintaining the economic development through its role in achieving the goals of the Kingdom’s Vision 2030.

Furthermore, we have a lot of ambitious plans to add more to the achievements accomplished in the tenures of the successive boards of directors. We are also keen to work to improve the environment for business sector to play its role in achieving sustainable development.

Tell us what sectors offer the best opportunities in terms of investment, trade and cooperation from foreign investors.

Our role, as a Chamber, in this respect is to promote the crucial communicative function of the distinguished global strategic partnership program to increase the contribution of FDI to GDP from 3.8% to 5.7% as per the goals of the Vision. Today, all the economic sectors in the Kingdom have numerous promising opportunities. Taking a look at the giant development projects launched by the Custodian of the Two Holy Mosques and HRH Crown Prince, the budget of which amounted to billions of riyals, will tell that such projects will open wide investment prospects for foreign and domestic companies. Now, the Saudi market has become the focus of attention of many companies willing to take advantage of the available promising investment opportunities in many sectors including energy, health, education, industry, agriculture and others.

Most world economic reports talk about Saudi Arabia’s progress in global competitiveness. This is an important indicator of successful economic policies and business environment improving strategies in place, which confirms the feasibility of the economic reforms performed in light of Vision 2030. Moreover, the development of non-oil sectors undertaken will encourage foreign investors to continue to invest and expand and increase Saudi Arabia’s attractiveness to foreign investment. This is further evidenced by the many alluring opportunities in various economic ‎sectors, the big-sized Saudi market, and the Kingdom’s distinctive location; all of ‎which are important factors for successful investment business.

Main benefits and incentives that foreign investors can find in Saudi Arabia.

The big leap that resulted in a transformational breakthrough in Saudi Arabia and referred to by the Global Competitiveness Report reveals the strenuous effort exerted to improve business environment. This, in turn, enhances the chances of drawing more leading global investments. Today, Saudi Arabia is witnessing constructive mobilization in promoting business environment and opening new prospects for investment. International and domestic reports also state that the Saudi economy is poised to achieve new growth rates this year and next.

In this respect, I’d like to point out that the Saudi Arabian General Investment Authority (SAGIA) has revealed that 267 new foreign investment projects were granted licenses to start business in the first quarter of 2019, with an average of around 4 licenses a day, an increase of 70% compared to that of the first quarter of 2018. This demonstrates the successful draw of high quality and high valued foreign investments, the marketing success of the investment opportunities at the international and local levels as well as the successful economic reforms package the Kingdom has achieved.

There are many incentives that SAGIA provides for as supportive and advisory services to help companies find solutions for their business issues and offer them local solutions using its cumulative stock of global knowledge and experience. Besides, SAGIA offers specialized consulting services to companies in various sectors, in addition to its core services in providing information on investment basics, policies, guidelines and procedures applicable in the Kingdom to those investment opportunity seekers, ensuring equality between Saudi and non-Saudi investors, protecting properties of all investments as required by the regulations in the Kingdom, and finally enhancing investment sustainability.

The Crown Prince recently mentioned that the Kingdom will be a very different place in five years’ time. What are your views on the recent changes in the KSA – both economically and culturally speaking?

The aspiring Vision 2030 launched by HRH Crown Prince, Mohammed bin Salman, has brought about a remarkable transformation as regards the economic reforms in the Kingdom. This transformation has taken place through diversification of income sources utilizing all the Kingdom’s economic components, capabilities and advantages in all sectors. It is certainly a forward-looking Vision by which we will move beyond the oil depending stage, as a source of income, to optimize the available economic and investment promising resources.

The birthdate of Vision 2030 witnessed a launch of many projects in different regions of the Kingdom in pursuit of its goals. These projects covered service, entertainment and other areas, which positive impact reflected on the economy in general. International financial reports projected that Saudi Arabia’s economic growth in 2019 may be higher than the earlier forecast of 1.8% as the non-oil sector expands faster than the economy as a whole. Undoubtedly, this economic activity in various sectors will have a positive impact economically and socially.

Key message to the international audience of Newsweek, representing the high profile, global business elite and investor community.

I do thank you for this interview and for giving me the opportunity to address the distinguished readers of your respectful wide-spread magazine given its sober manner in addressing international and domestic issues. Through this respectful magazine, I’d like to assure all businesspersons, investors, entrepreneurs and those interested in economic issues that the Saudi economy in the rein of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, and HRH Crown Prince, Mohammed bin Salman, is witnessing an unprecedented development boom.

To cut it short, Vision 2030 opened wide horizons of joint cooperation between the Saudi and foreign business sectors to work together and utilize the promising investment opportunities featuring the Saudi economy. The incentives offered by the Kingdom to encourage domestic and foreign investors make the Kingdom one of the best and safest places for promising investment future. We are fully prepared to build bridges of economic and trade cooperation with all friends from all over the world for the interest of our peoples. I’d also like to extend a big welcome to all businesspersons in all countries and invite them to visit KSA to acclimatize to the reality of economic development in all sectors.