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Jeddah - Yasmine El Tohamy - RIYADH: Saudi Arabia has saved SR400 billion ($106 billion) over the last four years as a result of a spending efficiency program implemented as part of the Vision 2030 reform plans, according to Minister of Finance Mohammed Al-Jadaan.
Speaking at a dialogue session in Riyadh titled “Vision 2030 Creates Future Opportunities,” a meeting of the chairs of the Vision 2030 Realization Program Committees, Al-Jadaan said the savings came from a careful review of all projects to see where unnecessary spending could be cut.
A number of experts and academics told Arab News the key to the success of the savings initiative was the enhanced relationship between the public and private sectors and the drive for increased privatization of state assets.
In January, the CEO of the National Center for Privatization said in a TV interview that the center had raised SR3 billion in revenue from the sale of state assets in 2020 and was aiming to raise at least SR15 billion in 2021.
Abdullah Alyousef, CEO of ALIA ICT, one of the Kingdom’s fastest-growing information and communications technology firms, said the savings the minister outlined will increase investors’ confidence in the private sector and make them eye long-term investment opportunities in a more favorable way. “The private sector works with the government sector in different scopes and fields in a way that complements one another in order to achieve sustainable development, especially in terms of megaprojects,” Alyousef said.
The private sector works with the government sector in different scopes and fields in a way that complements one another in order to achieve sustainable development.
Abdullah Alyousef, CEO of ALIA ICT
In his dialogue session, Al-Jadaan said the Kingdom’s private sector participation program will enable the private sector to undertake many public sector projects offered by the government. He added that this was already taking place, as the private sector contribution to the program had risen from 45 percent to 51 percent in 2020.
Alyousef pointed out that this success would go some way to achieving the Vision 2030 goal for the private sector to account for 65 percent of gross domestic product (GDP) by 2030. The government is working hard to increase this by boosting the contribution of small and medium-sized enterprises (SMEs) from 22 percent to 35 percent by 2030. SMEs are regarded as economic growth drivers that can generate jobs for Saudi locals.
Dr. Mohammed Makni, the dean of the faculty of economics and management science at Imam Muhammad ibn Saud Islamic University, said good governance and transparency were key to encouraging more public-private partnerships.
In the past, the public sector used to bear the expenses of everything but today it has engaged the private sector in this process.
Dr. Mohammed Makni, Academic
Makni, who focused on the performance of listed companies and corporate governance, noted that many of the reports issued by the Ministry of Finance, including quarterly reports on the budget, outlined economic activity and performance in the Kingdom and whether Vision 2030 goals were being made and on target.
“We have seen an excellent performance by government agencies in terms of investment over the past five years. In the past, the public sector used to bear the expenses of everything but today it has engaged the private sector in this process, thanks to the Saudi leadership, who encouraged such a decision,” he said. Makni said it was important for the success of the national economy to reduce the pressure on government spending. The private sector will ease some of the burdens on the public sector and utilize its expertise to develop and manage projects that are being targeted for privatization.
At the dialogue session, the chairman of the National Transformation Program Committee, Mohammed Al-Tuwaijri, said 10 government ministries harmonize on a daily basis around specific goals related to Vision 2030. He added that empowering the private sector is one of the top priorities.
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