03 March 2016
JEDDAH: On the first day of panel discussions at Jeddah Economic Forum (JEF) 2016, on Wednesday, speakers expressed the need for structural reforms across all markets as a means to combat the current crisis in the global economy.

Speakers were cautiously optimistic about economic transformation in Saudi Arabia. They stated that a strong institutional framework for investment could be put in place; specifically a legal framework for public private partnership (PPP).

Abdulaziz O. Sager, chairman, Gulf Research Center, said the PPP theme is very important. Saudi Arabia's transformation plan requires strong partnership between the government and business sectors.

This forum offers a platform for exploring the opportunities available in various economic areas.

He said the Saudi economy will overcome any difficulties because there is clarity of government vision.

The first working day of the JEF examined PPP's role in the development of the Saudi Arabia's economy, including lessons learned from the experience of other nations, regional neighbors and other international members, and the need to overcome regulatory challenges.

The day began with keynote speeches from Saad Mohammed Mareq, adviser to the Makkah governorate on the development of the Makkah economic zone, which was followed by Turkish Minister of Transport, Maritime Affairs and Communications Binali Yildirim who outlined the role of the PPP model in promoting his country's infrastructure development.

Hasan S. Al-Jabri, CEO of SEDCO Capital, said: "We are excited about the forum theme, which is PPP and the prospects of collaboration for impact. It is very timely. We have seen lot of forums in the past with similar activities to facilitate the private sector to nationalize, institutionalize and commercialize."

These important opportunities lead to lower costs, higher efficiency and job creation, he added.

Speakers held a consensus that the challenges facing the world economy were tough, and the region was going though troubled times politically, however Saudi Arabia's program of economic reforms, with its emphasis on encouraging private sector investment, was on the right track to achieve diversified growth.

Ibrahim Al-Ghelaiqah, senior economist at the World Bank observed: "Saudi Arabia needs to develop three aspects of its economy: Diversification, productivity and SMEs. There's a need for professional investment management systems."

He added: "The old days are gone. The institutional challenges of implementing PPP are the most dangerous. However, the low oil price means that it is essential to gain (private sector) investment, which will hopefully leave the economy in a better shape in 5-10 years."

Anthony Smith, chairman, PPP experts, dealt with some of the challenges and said: "Saudi Arabia, in its government, has a high placed political champion for PPP. The Kingdom is now in a global market; if you have a market you still need to make it attractive -- investors are looking worldwide for opportunities."

Fred Hochberg, chairman and president of the US-based Export-Import Bank, commented on the strong basis of the US-Saudi economic relationship and said: "The Kingdom is taking impressive steps to diversify its economy. The United States under the Obama administration has authorized more exports to Saudi Arabia, helping to support infrastructure and PPP, than all previous administrations going back to 1992. Saudi Arabia is in a stronger position to take advantage of global economic challenges than many countries."

Khaled H. Biyari, Group CEO of Saudi Telecom Company (STC), spoke about developing a diversified economy and Gilberto Crombe, global chairman, Entrepreneurs' Organization, on developing an
entrepreneurial culture in all organizations, be they startups or mature businesses.

In the afternoon, the forum convened detailed sectorial panels addressing the economic opportunities and regulatory challenges inherent in moving the Kingdom from an oil-based to a diversified economy, including panels on municipality, sports, airports, and ports. These sessions were followed by private roundtables bringing government officials and handpicked investors together.

JEF was inaugurated on Tuesday night, with keynote speeches by Prince Khaled bin Faisal, adviser to Custodian of the Two Holy Mosques King Salman and governor of Makkah Region, and Malaysian Prime Minister Mohammed Najib bin Abdul Razak, as well as Deputy Prime of Turkey Mehmet Simsek.

Both Razak and Simsek stressed that the world economy and emerging markets were in a transformational period. He endorsed Saudi Arabia's approach to structural reform; welcoming more private sector involvement in the economy as a means to diversify from oil and overcome the hurdles posed by bureaucratic inefficiencies.

Simsek observed "Since the financial crisis, only two G-20 governments have actually met the group's target of reaching GDP growth of 2 percent per annum: Saudi Arabia and Turkey. World governments have now exhausted two of the three policy mechanisms; fiscal stimulus and monetary policy, the remaining policy tool is now a structural reform."

Lama Alsulaiman, JCCI board member supervising the JEF 2016 remarked: "Recent considerations to open the Saudi market to foreign investments will provide new job opportunities that will further enhance and develop local competencies up to international standards. JEF is the welcoming gate for foreign investments into Saudi Arabia."

© Arab News 2016