The Kingdom of Saudi Arabia, the world s largest oil producer, is building a modern and diversified economy in line with its Vision 2030.

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1 From left to right: King Salman bin Abdulaziz Al Saud; Prince Saud bin Naif, Governor of The Eastern Province; Former Crown Prince Mohammed bin Naif; Crown Prince Mohammed bin Salman Photo Credit: Bandar Algaloud Revamp of a Nation The Kingdom of Saudi Arabia, the world s largest oil producer, is building a modern and diversified economy in line with its Vision The post-oil era is fast approaching and Saudi Arabia, the world s largest oil producer, is ready for the challenge. At the Saudi Arabia Path to 2030 panel during the 2017 World Economic Forum in Davos, the Kingdom s delegation projected confidence and positivity as it announced its plans to transform and modernize the economy. The delegation emphasized the measures the country is taking to create a more market-driven, privatized economy. Large jumbo jets don t fly with one engine Saudi Energy Minister Khalid Al-Falih told the panel, alluding to the Kingdom s firm commitment to move beyond its dependence on oil. Saudi Arabia has the largest economy in the Middle East and it is already rolling out various projects and initiatives in line with Vision 2030, the ambitious plan that was announced by the Crown Prince Mohammed bin Salman. The widereaching development plan to build up the private sector and create a thriving economy and vibrant society will have a profound effect on the region and the global market. With the diversification from oil production to mining, tech start-ups and entertainment offerings, Saudi is going above and beyond to move the country forward, leaving virtually no sector untouched. Investors at Davos indicated their enthusiasm and optimism about the government s progress as it works to make Saudi Arabia a more attractive place for investment and innovation. Privatization and investment Attracting investment both domestic and foreign is key to Saudi s plan, along with the privatization of government-held sectors. In a strategic move to facilitate foreign investment, Saudi Arabia has adopted new measures that will allow foreign investors to obtain business visas within 24 hours from the Saudi Arabian General Investment Authority (SAGIA). Requests for foreign business delegations will take two days instead of the previous three days, a move aimed to streamline the process and encourage investors to visit the Kingdom. Privatization in the energy sector is set to make an even bigger impact in the coming years. Aramco, the national oil company, is preparing to go public, with the Kingdom intending to sell up to 5 percent of the company. Not only will the listing advance Saudi s goal of privatization, a large portion of the initial public offering (IPO) will go to fund the Saudi Public Investment Fund (PIF), a key vehicle to stimulating the Saudi economy. The privatization and strengthening of other sectors such as healthcare and aviation is also a priority. By 2030, 295 hospitals and 2,259 health centers will be privatized. Saudi plans to privatize 27 of its airports by the middle of 2018, as well as sectors of air navigation and IT services, with the airports to become operating companies. Foreign investments are intended to exceed 75 percent in some airports in order to guarantee a sufficient proportion of foreign operators in the privatization process. Tech Kingdom The PIF is set to be the biggest sovereign wealth fund in the world, with $2 trillion worth of assets. The world s number-one oil producer can now add another distinction to its name: Saudi Arabia is now the number-one technology investor in the world, thanks to the PIF s contribution to Japanese firm SoftBank s Vision Fund. Over the next five years, $45 billion will be invested in SoftBank, which aims to push the Vision Fund to $100 billion, in order to invest in emerging technologies such as artificial intelligence and the Internet of Things (IoT). Tech giants Apple, Qualcomm Inc. and Oracle have confirmed that each of them will invest $1 billion in the Fund. In addition to the SoftBank investment, the PIF has already invested $3.5 billion in car-hailing app Uber, the largest-ever single investment in the company. Car-hailing apps are a popular investment in the Kingdom: in December, the Saudi Telecom Company (STC) announced it had acquired a 10 percent stake ($100 million) in Careem, Uber s local rival app that is present in 11 countries. Kingdom Holding Company has invested $105 million in the U.S.-based Lyft. Mobily Ventures, meanwhile, has invested in Easy Taxi. Small and Medium Enterprises The Government established the General Authority for Small and Medium Enterprises with a $1.1 billion fund to boost the contribution of the private sector to the economy and help create jobs for young Saudis, as well as facilitate funding for small businesses. SMEs are the backbone of economic growth; in Saudi Arabia, they make up 99 percent of all businesses, with 86 percent of them owned by foreigners. The General Authority aims to increase Saudi ownership of SMEs while attracting foreign investment. In a strategic move by the government, new incentives were initiated for SMEs to establish themselves in the King Abdullah Economic City. Designed to increase economic growth, create new jobs and enhance the country s competitiveness, King Abdullah Economic City is rapidly expanding. King Abdullah port is the Kingdom s first privately owned port, and is ranked the fastest-growing in the world. Once fully developed, it will be able to handle 20 million shipping containers and 15 million tons of bulk cargo per year.

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4 Ushering in a new era of economic growth :: Saeed Raddad Group A leading business group in the Kingdom of Saudi Arabia and the Arabian Gulf region, has had an influential and substantial presence in the commercial and business life of Saudi Arabia since 1982, with more than 10,000 employees. In this interview, Group president Saeed R. Al Zahrani speaks about the future of the Saudi economy and its attractiveness as an investment destination. Where do you see the Saudi economy in 2020 and beyond? A productivity-led transformation of the economy could enable Saudi Arabia to again double its GDP and create as many as six million new jobs by We estimate this would require about $4 trillion in investment. Eight sectors mining and metals, petrochemicals, manufacturing, retail and wholesale trade, tourism and hospitality, health care, finance, and construction have the potential to generate more than 60 percent of this growth opportunity. Saudi Arabia s economy is one of the largest in the world and also one of the least understood. During the decade from 2003 to 2013, it almost doubled in size on the back of a protracted oil boom. At the same time, it underwent a significant modernization that brought prosperity and change to Saudi society. Household income for Saudi nationals after adjustment for inflation grew by about 75 percent during the decade, 1.7 million Saudi jobs were created, and $450 billion was invested in health, education, and infrastructure, helping to boost living standards and improve the quality of life. What are the critical influencing factors shaping the Saudi economy? All stakeholders, including the private sector, foreign investors, and households, will need to be involved in this transformation. The state will have to embrace a new delivery philosophy while businesses adapt to a more competitive environment and the individual Saudi citizen takes more personal accountability. The transition will be challenging, but the new era of economic growth and employment it could usher in would be more sustainable than the oil booms of the past. What has been the biggest success in diversifying so far? At a headline level, the macroeconomic challenge in Saudi Arabia is to pick up the momentum toward economic diversification and to build additional engines of growth and jobs alongside the petroleum-dominated business environment. A far greater emphasis is being made here, from boosting education to streamlining rules, but there s still a substantial amount of work to do. Diversification into non-hydrocarbon exports has progressed somewhat; the share of non-hydrocarbon trade to non-oil output has increased. Non-oil commodity exports have been impressively strong, albeit starting from a narrow base. What makes Saudi a unique place to invest and puts it above regional competitors? The key reasons for investing in the Kingdom include: It is one of the world s 25 largest economies and the largest economy in the Middle East and North Africa Region - MENA. The Kingdom is one of the world s fastest growing countries worldwide, with per-capita income forecast to rise from USD $25,000 in 2012 to USD $33,500 by It has substantial cost advantages due to the low domestic cost of energy and industrial land due to generous subsidies and incentives. It provides duty free access to other GCC and MENA economies and enjoys good transport and infrastructure links which will soon be supplemented by a national rail system. How will non-oil businesses be affected by diversification away from oil? In Saudi Arabia economic policy is being guided by the National Transformation Plan, unveiled earlier this year, and closely identified with the Crown Prince Mohammed bin Salman. The overriding objective is to make the private sector and productivity growth the drivers of economic activity, rather than oil-fueled state spending. The process is not without its challenges, and there does seem to be a tension between the Saudization drive and a broader liberalization agenda, but overall the NTP is an appropriate framework to guide the country away from its long-standing dependence on oil and to move the fiscal position on to a sustainable footing. How can current business owners help spur investment? Saudi Arabia is one of the best performing rapidgrowth economies in the EY G20 Entrepreneurship Barometer 2013, thanks to laudable efforts to reform its overall business environment in recent years. As one example, in the latest World Bank Doing Business ranking, it is ranked 22nd out of 185 countries, a major gain from its position of 38th overall in This reflects the strong progress being made locally. But this favorable overall performance masks significant variation across some of the different entrepreneurship pillars. The country s strongest performance is within tax and regulation. There s no doubt that Saudi Arabia provides businesses with an accommodating and streamlined tax regime, which has been a major selling point in recent years. Saudi Arabia s oil focused industry has influenced how its economy has evolved. Almost half of GDP is accounted for by oil, which has reduced the impetus to push for high productivity in the non-oil economy. Saeed R. Al Zahrani, Saeed Raddad Group President The macroeconomic challenge in Saudi Arabia is to pick up momentum toward economic diversification and to build additional engines of growth and jobs alongside the petroleum-dominated business environment Saudi Arabia is one of the best performing rapid-growth economies in the EY G20 Entrepreneurship Barometer 2013, thanks to laudable efforts to reform its overall business environment in recent years. As one example, in the latest World Bank Doing Business ranking, it is ranked 22nd out of 185 countries, a major gain from its position of 38th overall in 2006 The Government is now working to diversify away from oil. This will be a gradual process, but in time it should provide the underpinnings for a strengthened culture of entrepreneurship. Education is one of the key foundations of innovation-led growth, and there are encouraging signs of progress in this area. Saudi Arabia is investing heavily in education, and the creation of a number of science and universities focused on research and development (R&D) in recent years highlights the effort being made in this area. Education now accounts for a significant proportion of all government spending and the Kingdom has invested notably in boosting both workforce skills and universities research capacity, which will surely bear fruit in the future. A less tangible aspect of this is the need to bolster the culture of entrepreneurship locally, which remains one of the challenges ahead.

5 Investment in tech and innovation, public-private partnerships key to Saudi goals Salman Al Jishi, Chairman of the Salman Group of Companies :: Salman Group of Companies In this interview, Salman Al Jishi, Chairman of the Salman Group of Companies, talks about economic diversification in Saudi Arabia, the importance of investing in innovation, technology and R&D, and the current business and interests of his company, whose main areas are printing and packaging. What is your view on the Saudi economy? There has been successful implementation of strategy to grow non-oil sectors to decrease the dependence on oil and gas s contribution to total GDP, with strong implementation of Vision 2030 to ensure follow through. Non-oil businesses will be positively impacted by diversification away from oil, as they receive increasing benefits and subsidies to encourage investment and growth in this sector. We are seeing proactive investment in non-oil sectors and investment in research and development. Innovation to build technology: that can be exported to build foreign reserves. How is the fourth industrial revolution going to impact Saudi industry? Saudi Arabia has limited resources and mostly blue-collar skilled manpower. Technology will help spur automation to help reduce dependence on foreign blue-collar workers and instead enable a highly trained and educated Saudi workforce to replace them. Dependence will shift from skill sets to automation to ensure efficient operations while maintaining high-quality products. How can Saudi position itself globally? Invest heavily in research and development to be technology leaders in oil and gas, as well as nonconventional sources of energy primarily solar energy. The Saudi government can lead in E-Governance to reduce delays, increase efficiency and transparency as well as promote self service and accountability through key performance indicators (KPIs). This will lead to reduced costs and thereby set an example for the private sector. We can focus on reducing the cost of desalination and increasing innovation to aid agriculture in desert conditions. We can also focus on research in medical science and on growing the entertainment and tourism industries by promoting religious, historical and adventure sites. How can Saudi apply what it has learned from the oil and gas sector to other sectors? A key lesson learned from the oil and gas sector is that technology owners dictate the terms and earn the highest returns on investment. Rich deposits of local resources attract foreign investment; the abundance of sunlight, for example, attracts investment in solar energy. We must invest in building, nurturing and promoting a culture of innovation, research and development that creates cutting-edge technologies that can be registered as patents and sold internationally. This can be done by designing a system that rewards innovation and supports R&D activities through closer cooperation between the private sector, government and universities. How will the one-day visa process for foreign investors shape Saudi businesses? Will it hinder the Saudi creative process if more foreigners are allowed to set up businesses and are able to bring in foreign talent more easily? No; on the contrary, it will facilitate business, attract foreign investors and foster a healthy competitive environment in which best practices will be employed to make Saudi more globally competitive. To what level will public-private collaboration guide the economy moving forward? Public-private partnership (PPP) initiatives will be increasingly necessary to invest in research and development, as well as invest in mega projects to remain globally competitive especially in nonoil sectors and key industries such as manufacturing of defense equipment and their consumables. Special PPP initiatives using the local private sector with their foreign technology partners to implement Vision 2030 strategies and programs will be necessary. Investment in the medical industry, housing, infrastructure and mining will also be necessary. What role will economic cities play for existing and new businesses? Economic cities will play a pivotal role in providing a platform for the clustering of industries, such that collaborative investment and contribution in research and development can be made and the results publicly shared to reduce cost and promote healthy competition to ensure top-quality products and competitive pricing. What factors make Saudi Arabia a unique place to invest? What places it above regional competitors? It is a very safe and politically stable country with sound economic policies. It has rich reserves of resources available and a very strategic location. It also has the advantage of low cost energy, and the potential to remain in this position with the development of solar energy. Salman Group What is the purpose of the logistics park project? The logistics park project s purpose is to provide a convenient one-stop shop to help around 35 young Saudi graduates invest in setting up a transport company to service a ready-made market of 650 industries in the Dammam 2nd Industrial City. It will be a self-sufficient logistics complex with diesel and maintenance facilities complete with secured labor and VIP housing within a gated compound. It will have recreation facilities as well as a gasoline station, a food court, mini market and adjoining C-class hospital. Can you describe the Foreign Joint Venture Company s activities and what it hopes to achieve? I am an entrepreneur at heart and believe in sourcing technologies globally and implementing them in project s ba sed loc ally in S audi Arabia. I am always looking for like-minded investors to partner with in JV Projects, using their local projects, harnessing government incentives that are designed to attract foreign investments. Can you tell us about the group s business and investments? Our main business is printing and packaging, which has grown successfully over the past two decades to become one of the leading suppliers to global MNC players such as P&G, McDonalds, Kraft, Burger King and KFC to name a few. We have newly invested in a V-Belt manufacturing plant as part of our effort to diversify into high technology and contribute towards achieving Vision 2030 s goal of growing the non-oil sector. We are also making efforts to study the feasibility of investing in the education sector to bring highquality education to the local economy.

6 Women s role in shaping the economy The economic potential of Saudi women is prominent, and society is moving to recognize their worth. :: Hind AlZahid The economy of Saudi Arabia is changing, and so is the role of women in the Kingdom. As the government moves to diversify the economy away from its oil dependency, the opportunities for Saudi women are increasing. Under Vision 2030 the government seeks to boost female employment, aiming to increase women s participation in the workforce from 22 percent to 28 percent by The Saudi woman should take this opportunity and use it to achieve leadership positions. She must accomplish in her own homeland what she has already achieved in foreign countries, says Hind AlZahid, the head of the Businesswomen Center in the Kingdom s Eastern Province. All Saudi women should help our political leadership in fulfilling the objective set forth in this vision, to raise our participation in the job market. Saudi women are ready to participate: many are highly trained, with an estimated 60 percent of all university graduates in Saudi bieng women. Many also hold post-graduate degrees from foreign universities. Vision 2030 s employment goal will depend on the cooperation of the public sector, private sector, and non-profit stakeholders such as the Businesswomen Center, which provides support for businesswomen and job seekers through seminars, training and project consulting. Societal change is an underlying theme of Vision 2030, and in order for Saudi women to succeed they will need the support of these various stakeholders, as well as encouragement from their families and society. Women s Representation The role of Saudi women began to change more rapidly after 2011 when women were appointed to the Shura Council and to run and vote in municipal elections. Today, Saudi women represent 20 percent of the Shura Council; municipal elections held in 2015 saw more than 900 women campaign for office and over 130,000 registered to vote. In the end, a total of 38 women were elected to municipalities across the nation, therefore paving the way for future candidates. These milestones are an important step in helping women become real participants in developing the economy, as women will be in a better position to shape future policies and initiatives. Indeed, the Saudi woman was able to prove herself, Ms. AlZahid says. But still, we need time in addition to flexible, clear and smooth decisions to encourage women s activity in general. The presence of female representation in decision-making positions will support this approach and enable reaching beyond the 2030 Vision regarding Saudi women. So far the government has taken several steps to open up new sectors of the job market to women. Women are now able to work in retail stores such as pharmacies and cosmetics stores and in hospitality. The Ministry of Labor and Social Development recently announced the goal of creating 141,000 telework and work-from-home jobs to provide employment for women and the disabled. Telework jobs will also reach women who live outside of major cities where employment opportunities are not as readily available. Women in the Private Sector Thanks to the government s initiatives, the number of women working in the private sector has surged, with 477,000 Saudi women employed in the private sector in Universities and educational institutes are expanding areas of study and programs for Saudi women to ensure that female candidates are qualified when they enter the job market. Some Saudi women have taken leading roles in family businesses, while others have turned to entrepreneurship, successfully managing businesses out of their home a move that allows them to balance work and family. Women s advancement in high-level positions is perhaps most apparent in the financial sector, where women now fill important leadership roles. Samba Financial Group named Rania Nashar as it s Chief Executive Officer, while Arab National Bank appointed Latifa AlSabhan as its Chief Financial Officer. Their appointments followed the naming of NCB Capital s CEO Sarah AlSuhaimi to Chair Saudi Arabia s stock exchange Tadawul, the region s largest with a combined market capitalization of $439 billion. AlSuhaimi, the first woman to occupy this position, is no stranger to breaking glass ceilings: in 2014 she became the first female to head a Saudi investment bank when she became CEO of NCB Capital. Hind AlZahid recently became the first Saudi woman to work as an executive director and member of Dammam Airports Executive Board. The economic potential of Saudi women is prominent, and society is moving to recognize their worth. This year, the country held its first-ever Saudi Women s Day, a three-day celebration in Riyadh. Alwaleed Philanthropies, a charity that aims to help empower women, marked International Women s day in March with a first-of-its-kind conference. Over 3,000 people, including successful Saudi women from Hind AlZahid, Head of the Businesswomen Center in the Eastern Province all fields, attended the conference, which highlighted women s achievements. The conference speakers and attendees proved that, despite the obstacles they have faced, Saudi women are more than capable of breaking glass ceilings. The Saudi Women Can campaign, which was launched at the conference to promote the evolving role of women, builds on their capability to succeed. With the support of the government s Vision 2030, there is no stopping Saudi women s positive contribution to the Kingdom s future and the heights of success they can reach. Saudi women can and they will. Women s advancement in high-level positions is perhaps most apparent in the financial sector, where women now fill important leadership roles. Samba Financial Group named Rania Nashar as it s Chief Executive Officer, while Arab National Bank appointed Latifa AlSabhan as its Chief Financial Officer. Their appointments followed the naming of NCB Capital s CEO Sarah AlSuhaimi to Chair Saudi Arabia s stock exchange Tadawul, the region s largest with a combined market capitalization of $439 billion. AlSuhaimi, the first woman to occupy this position, is no stranger to breaking glass ceilings: in 2014 she became the first female to head a Saudi investment bank when she became CEO of NCB Capital.