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As the World Economic Forum reaches its conclusion in the Swiss mountain resort of Davos, we present our guide to some of the revelations from the summit, which may have ramifications for the Gulf region.
Announcements were made covering everything from a new bankruptcy law for Saudi Arabia to plans for a Fourth Industrial Revolution Centre in the United Arab Emirates.
1. Kingdom planning further stimulus
Saudi Arabia is planning to conduct a further round of stimulus measures to boost private sector growth, the country's finance minister, Mohammed Al-Jadaan said.
In a session titled ‘Building Saudi Arabia's Future Economy’ that took place on Thursday afternoon, Al-Jadaan said that the Ministry of Finance had achieved its aim of bringing the government's budget deficit below 10 percent, and would continue to lower it.
"We said we are going to start significant financial reforms. We did, we started the VAT (on) 1 January this year, we started excise tax mid of last year, we reformed the energy price significantly," he said during a session that was live-streamed over the internet.
"Throughout this transition, you needed to make sure that the private sector is given breathing space and your people are being protected, particularly the less fortunate."
He said the latter had been achieved by creating a 'citizen account' facilitating payments for up to 10 million people.
"We also announced multiple private sector stimulus packages - 40 billion (Saudi riyals, or $10.67 billion) mid of 2017, another 72 billion (Saudi riyals) in September and another 80 (Saudi billion riyals) is coming in 2018."
2. Saudi bankruptcy law on the way
In the same session, discussing potential investment into the kingdom, the Minister of Economy and Planning, Mohammad Al Tuwaijri, said that a major reform of its legal system, which could help to attract investment, is likely to happen quickly.
"Investment is never an action, it's a reaction. People invest based on an ecosystem that is attractive, that is feasible, that is investment-friendly," Al Tuwaijri said.
"Saudi Arabia did not have a bankruptcy law, Saudi Arabia did not have a mortgage pledge law, Saudi Arabia did not have a franchising law. All of this has been done and the process, we expect in the next six weeks, all these laws will be hopefully announced," Al Tuwaijri said. "It's already been approved by our Shoura Council."
3. Aramco set to push into the U.S., but will time its IPO carefully
Saudi Arabia's state-owned oil firm, Saudi Aramco, is planning to expand in the United States, attracted by a political regime that has been friendly towards energy companies, as well as tax cuts, the oil giant's president and CEO Amin Nasser told Reuters.
In terms of the company's highly-anticipated initial public offering (IPO), finance minister Al-Jadaan told news channel CNBC International at Davos that it is planned for this year.
"The company is ready, the preparation is on track. I think a lot depends on how the market develops," he said.
"Obviously, we are not going to IPO at any price. It will need to be the right time, the right market environment." (Read more here).
4. UAE to establish Fourth Industrial Revolution Centre
Ahead of the event, the Prime Minister's Office of the United Arab Emirates announced that the country's Minister of Cabinet Affairs and The Future, Mohammed Al Gergawi, would sign a pair of agreements with WEF's founder and executive chairman, Klaus Schwab.
One of these is a pledge to cooperate on setting up a Fourth Industrial Revolution Centre in the UAE, and the other is to develop a scheme governing how data should be properly handled, to be called the Fourth Industrial Revolution Protocol.
The Fourth Industrial Revolution is a concept founded by Schwab that predicted a rapid change in economies and societies, which will be facilitated by a series of new technologies including automation, quantum computing, autonomous vehicles and 3D printing.
A report published by the World Economic Foundation and consultancy AT Kearney ahead of the summit stated that both the UAE and Saudi Arabia were flagged as "high potential countries" in terms of the adoption of these technologies, as they currently have a relatively small production base but enough resources and other capabilities to capitalise on them. (Read more here).
5. Kingdom to benchmark performance
Saudi Arabia also offered a first look at a new data tool aimed at measuring how its development plans are progressing. The kingdom said that an International Performance Hub would be an interactive platform, measuring 500 key performance indicators (KPIs) against 200 other countries. The system has been developed by the kingdom's National Centre for Performance Management. (Read more here).
Further reading:
Qatar says it seeks no escalation with UAE over military overflights
Saudi corruption cash settlements will help finance royal handouts- finance minister
Damac's Hussain Sajwani rules out oversupply scenario in Dubai realty market
U.S. says illicit activity is top cryptocurrency concern
(Writing by Michal Fahy; Editing by Shane McGinley)
(Michael.fahy@thomsonreuters.com)
© ZAWYA 2018
Announcements were made covering everything from a new bankruptcy law for Saudi Arabia to plans for a Fourth Industrial Revolution Centre in the United Arab Emirates.
1. Kingdom planning further stimulus
Saudi Arabia is planning to conduct a further round of stimulus measures to boost private sector growth, the country's finance minister, Mohammed Al-Jadaan said.
In a session titled ‘Building Saudi Arabia's Future Economy’ that took place on Thursday afternoon, Al-Jadaan said that the Ministry of Finance had achieved its aim of bringing the government's budget deficit below 10 percent, and would continue to lower it.
"We said we are going to start significant financial reforms. We did, we started the VAT (on) 1 January this year, we started excise tax mid of last year, we reformed the energy price significantly," he said during a session that was live-streamed over the internet.
"Throughout this transition, you needed to make sure that the private sector is given breathing space and your people are being protected, particularly the less fortunate."
He said the latter had been achieved by creating a 'citizen account' facilitating payments for up to 10 million people.
"We also announced multiple private sector stimulus packages - 40 billion (Saudi riyals, or $10.67 billion) mid of 2017, another 72 billion (Saudi riyals) in September and another 80 (Saudi billion riyals) is coming in 2018."
2. Saudi bankruptcy law on the way
In the same session, discussing potential investment into the kingdom, the Minister of Economy and Planning, Mohammad Al Tuwaijri, said that a major reform of its legal system, which could help to attract investment, is likely to happen quickly.
"Investment is never an action, it's a reaction. People invest based on an ecosystem that is attractive, that is feasible, that is investment-friendly," Al Tuwaijri said.
"Saudi Arabia did not have a bankruptcy law, Saudi Arabia did not have a mortgage pledge law, Saudi Arabia did not have a franchising law. All of this has been done and the process, we expect in the next six weeks, all these laws will be hopefully announced," Al Tuwaijri said. "It's already been approved by our Shoura Council."
3. Aramco set to push into the U.S., but will time its IPO carefully
Saudi Arabia's state-owned oil firm, Saudi Aramco, is planning to expand in the United States, attracted by a political regime that has been friendly towards energy companies, as well as tax cuts, the oil giant's president and CEO Amin Nasser told Reuters.
In terms of the company's highly-anticipated initial public offering (IPO), finance minister Al-Jadaan told news channel CNBC International at Davos that it is planned for this year.
"The company is ready, the preparation is on track. I think a lot depends on how the market develops," he said.
"Obviously, we are not going to IPO at any price. It will need to be the right time, the right market environment." (Read more here).
4. UAE to establish Fourth Industrial Revolution Centre
Ahead of the event, the Prime Minister's Office of the United Arab Emirates announced that the country's Minister of Cabinet Affairs and The Future, Mohammed Al Gergawi, would sign a pair of agreements with WEF's founder and executive chairman, Klaus Schwab.
One of these is a pledge to cooperate on setting up a Fourth Industrial Revolution Centre in the UAE, and the other is to develop a scheme governing how data should be properly handled, to be called the Fourth Industrial Revolution Protocol.
The Fourth Industrial Revolution is a concept founded by Schwab that predicted a rapid change in economies and societies, which will be facilitated by a series of new technologies including automation, quantum computing, autonomous vehicles and 3D printing.
A report published by the World Economic Foundation and consultancy AT Kearney ahead of the summit stated that both the UAE and Saudi Arabia were flagged as "high potential countries" in terms of the adoption of these technologies, as they currently have a relatively small production base but enough resources and other capabilities to capitalise on them. (Read more here).
5. Kingdom to benchmark performance
Saudi Arabia also offered a first look at a new data tool aimed at measuring how its development plans are progressing. The kingdom said that an International Performance Hub would be an interactive platform, measuring 500 key performance indicators (KPIs) against 200 other countries. The system has been developed by the kingdom's National Centre for Performance Management. (Read more here).
Further reading:
Qatar says it seeks no escalation with UAE over military overflights
Saudi corruption cash settlements will help finance royal handouts- finance minister
Damac's Hussain Sajwani rules out oversupply scenario in Dubai realty market
U.S. says illicit activity is top cryptocurrency concern
(Writing by Michal Fahy; Editing by Shane McGinley)
(Michael.fahy@thomsonreuters.com)
© ZAWYA 2018
