Ukraine keen to cooperate with KSA in digitalization push: vice minister

Ukraine keen to cooperate with KSA in digitalization push: vice minister
Oleksandr Bornyakov, Ukraine’s vice minister of digital transformation, further noted that Saudi Arabia’s business-friendly environment for foreign investments is one of the main reasons behind his current tour of the Kingdom. (SPA)
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Updated 12 May 2024
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Ukraine keen to cooperate with KSA in digitalization push: vice minister

Ukraine keen to cooperate with KSA in digitalization push: vice minister
  • European nation’s growing prowess in technology could help Saudi Arabia in its digital transformation journey

RIYADH: Saudi Arabia’s technological landscape is set to get a boost as Ukraine has expressed its eagerness to cooperate with the Kingdom in multiple sectors including agri-tech, fintech, and cybersecurity. 

Speaking to Arab News during his visit to the Saudi capital, Oleksandr Bornyakov, Ukraine’s vice minister of digital transformation, said the European nation’s growing prowess in technology could help Saudi Arabia in its digital transformation journey. 

During his visit to the Kingdom, the vice minister held meetings with the officials of the Kingdom’s information and investment ministries and the General Authority of Small and Medium Enterprises also known as Monsha’at.

“My visit is kind of like exploring — breaking the ice. Since we are the policymaking body in Ukraine, we know everybody in Ukraine from the tech sector. We want to hear from the local government
about what kind of problems they face, and what kind of things they need, and then, decide what’s the best fit for fulfilling those. I think there’s an interest in bringing this expertise to Saudi Arabia,” said the vice minister. 

He added: “From an educational perspective we build a framework of how we teach people from school to university. So they become very talented engineers. We have expertise in almost every sector like healthcare, automotive, energy, and finance. And when countries like Saudi Arabia, trying to digitize any of these fields, I think we could be helpful.” 

He said that his visit to Riyadh seeks to establish a relationship on the government level, which will in turn help them to cooperate with private sector entities including startups in the future. 

During his visit to the Kingdom, the Ukrainian vice minister also presented several digital products to Saudi officials that can be used on the government-to-government level. 

The world is changing fast, and I can’t imagine my life without many digital things that I have become used to. So I think any country that wants to follow up on this and, be on the edge of the technology has to change and invest a lot in this.

Oleksandr Bornyakov, Ukraine’s vice minister of digital transformation

He said that Saudi Arabia is quickly developing, and there is enormous potential for technological firms in the Kingdom. 

Bornyakov added that Saudi Arabia should build an entrepreneurship culture in the Kingdom so that local talents in the country can leapfrog in the technological sector with innovations and products. 

“The world is changing fast, and I can’t imagine my life without many digital things that I have become used to. So I think any country that wants to follow up on this and, be on the edge of the technology has to change and invest a lot in this. Because, in the West, many great things happen. Even Google, it came from students,” the official said. 

He added: “I think, Gulf countries and Saudi Arabia in particular also want to have this, this entrepreneurship culture. And, we know how to teach people how to do that, and, be part of this. I think that’s why we have this mutual interest. And I feel that Saudi Arabia is open to that experience.” Bornyakov further noted that Saudi Arabia’s business-friendly environment for foreign investments is one of the main reasons behind his current tour of the Kingdom. 

“Here, there is an investment environment. You can easily come to create a business in one or two days, then open a bank account, and then you are good to go. So this is one of the reasons that we decided to do this tour and, figure out who’s doing what,” he added. 

The vice minister also lauded Saudi Arabia’s efforts to diversify its economy away from oil aligned with the goals outlined in Vision 2030. 

“I think diversifying is a good idea. It’s actually what’s happening in Ukraine. When I started in 2019, the contribution of the IT sector to the gross domestic product was 2.5-2.6 percent, and now it is close to 5 percent. As of today, 41 percent of all Ukrainian export services are IT. 

“I think it is also something interesting here. The energy sector might be strong, for how many years, we do not know,” he said. 

According to Bornyakov, Ukraine is also steadily reducing its dependence on grains and heavy machinery, and technological products from the IT sector are becoming major contributors to the nation’s economy. 

“Historically, Ukraine was what? Grain and heavy machinery. Unfortunately, due to war, we lost a lot of factories and heavy machinery. And because we thought about IT, even though, less than a decade ago, but still, the sector was evolving very fast. We now have a source of export revenue, which is almost $8 billion every year, and just maybe five years ago, it was $3 billion or $4 billion,” he added. 

HIGHLIGHT

Oleksandr Bornyakov’s visit to Riyadh seeks to establish a relationship on the government level, which will in turn help them to cooperate with private sector entities including startups in the future.

Bornyakov also talked about the success of Ukraine’s Diaa application which allows Ukrainians to use digital documents on their smartphones instead of physical ones for identification and sharing purposes, along with accessing over 130 government services.  

According to the vice minister, there are 20 million active Diaa users in Ukraine, and he claimed that no other government app in the world can boast about such a huge user database.  He also added that such applications have huge potential in the Gulf Cooperation Council region, which will reduce the hassles of paper passports and other government documents, as it allows people to carry everything on a smartphone. 

“We want to implement the vision of President Zelensky to build a country in smartphone. Then we created a government super app called Diaa. We started by putting all the papers of a citizen like driver’s license, car titles, insurance, diplomas, birth certificates, tax IDs, and passport, everything on the phone, so you don’t carry paper. So, we were the first country in the world to introduce digital passports,” said Bornyakov. 

He added: “There is a huge demand for such apps since Gulf countries have a union, GCC. And if you travel, and if you want to identify yourself, you will have to use different passports and different procedures. We have a solution to solve all of these problems.” 

According to the vice minister, Ukraine has opened a source code for these applications, which makes countries use these codes to develop applications as per their requirements. 

“Recently, we have opened source code, so you don’t have to pay us. So you can take this and we can showcase and you can use the source code to build, something that you own as this union (GCC), and use it for the sake of its people. And that is one of the things we are happy to share with the world,” he added. 


New Murabba Co. pursues advanced tech alliances for Mukaab skyscraper: CEO

New Murabba Co. pursues advanced tech alliances for Mukaab skyscraper: CEO
Updated 6 sec ago
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New Murabba Co. pursues advanced tech alliances for Mukaab skyscraper: CEO

New Murabba Co. pursues advanced tech alliances for Mukaab skyscraper: CEO

RIYADH: New Murabba Co., supported by Saudi Arabia’s Public Investment Fund, is actively pursuing partnerships with advanced technology firms to fulfill the digital needs of Mukaab, a 400-meter skyscraper currently under construction, according to its CEO.

In an interview with Arab News during the eighth Future Investment Initiative summit, Micheal Dyke, CEO of the mixed-use real estate project, emphasized that the company is also looking for long-term collaborations with real estate and industrial partners.

Mukaab, situated in the Qirawan district of Riyadh, stands as one of Saudi Arabia’s most ambitious projects, expected to deliver an immersive shopping, dining, and cultural experience upon its completion.

The development of attractions like Mukaab is essential for Saudi Arabia, as the Kingdom is progressively diversifying its economy and positioning itself as a global tourist and business hub, in alignment with Vision 2030 goals.

“We need partnerships everywhere. Partnerships with stakeholders which we have. We need partnerships from industrial partners. So that, means unless we start to build and develop all of the infrastructure, whether that’s the roads, the cooling, the utilities and the actual real estate itself, we have to do that with partnerships,” said Dyke.

He continued: “The second area of partnership is very much in the technological space to develop the inside of the Mukaab and the immersive dome. The technology today exists, but not at the scale that we’re going to be deploying it. We need to work with the biggest of the best, but also the smartest, most agile, technologically savvy companies to really come together to say, let’s make long-term partnerships.”

Dyke highlighted a third type of partnership needed for New Murabba, which he described as “classic real estate partnerships” that involve investments in assets, the role of sub-developers, and partners in land sales.

According to Dyke, Mukaab is an architectural marvel that will operate 24 hours a day, 365 days a year, necessitating substantial technological support.

“Mukaab is truly a modern-day marvel. It is at a scale of the size that you cannot imagine. People think it’s a building. It’s not a building. It’s the most complex engineering thing ever undertaken by man or woman. In terms of scale, we have 20 Empire State buildings of size within Mukaab. We have the largest roof in the world, which is 16 hectares,” he said.

Dyke revealed that Mukaab will also feature 350,000 square meters of interconnected retail space in its deep basements.

He added that it will house the world’s largest immersive dome, boasting a diameter of 340 meters and a height of 380 meters.

“When you step inside the Mukaab, you will be transported to another world. You will feel in a different place. We have a central tower inside, which is larger than the Eiffel Tower. The tower will be inhabited by people and hospitality at the top. And as we come down to the four spirals at the bottom, that will be effectively world-leading retail, which does not exist today in terms of interactive digital retail,” said Dyke.

The official mentioned that Mukaab can accommodate a quarter of a million people at any given time, with 27,000 people fitting inside the dome and 15,000 in the hospitality area.

Dyke further stated that the New Murabba project is receiving full support and guidance from the government, and progress is being made steadily.

“We are lucky and fortunate that we are 100 percent fully owned by PIF. So what that means is our initial capital injection has come from PIF, but with every healthy financial ecosystem, we have a finite level of capital, and we have high expectations in terms of the return on that investment. So that means we must attract partners,” he added.

During the discussion, Dyke mentioned that by the end of the decade, New Murabba aims to provide over 100,000 housing units, with Mukaab as the city’s main attraction.

He noted that the downtown project will be equipped with various amenities, including facilities for education, hospitality, healthcare, and commercial buildings.

Additionally, Dyke stated that New Murabba will feature 4.5 sq. km of green space, which is two and a half times the size of New York’s Central Park.

Discussing the geographical advantages of the New Murabba project, Dyke remarked: “This is a city, it is not just a development. We have the core downtown which is neatly framed by King Khalid road to the west, King Salman road to the south, and Prince Turki road to the east.”


IMF projects 4% growth rebound in Middle East and North Africa next year

IMF projects 4% growth rebound in Middle East and North Africa next year
Updated 31 October 2024
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IMF projects 4% growth rebound in Middle East and North Africa next year

IMF projects 4% growth rebound in Middle East and North Africa next year

DUBAI: Growth in the Middle East and North Africa region is expected to rebound to 4 percent next year, but will hinge on a phase out of oil production cuts and headwinds subsiding, including from conflicts, the International Monetary Fund said on Thursday.

Growth in the region will remain “sluggish” at 2.1 percent in 2024, according to the IMF’s latest Regional Economic Outlook, launched in Dubai, lower than earlier projections as geopolitical and macroeconomic factors weigh.

The IMF cautioned that risks to the outlook for the whole region, including the Caucasus and Central Asia, “remain tilted to the downside,” and called for an acceleration of structural reforms, including in governance and labor markets, to lift prospects for medium term growth.

For 2024, the MENA growth estimate has been revised downwards by 0.6 percent from April’s report, mainly due to the extension of the Israel-Hamas conflict and further extensions of OPEC+ voluntary oil production cuts, Jihad Azour, the IMF’s director for the Middle East and Central Asia department, said in an interview.

He added that the “good news” was that inflation was gradually being brought under control across the region, and expected to average the 3 percent target rate in 2024, with the exception of Egypt, Iran and Sudan.

However, the outlook varies considerably across the region, with oil exporting countries expected to cope better with potential risks, supported by “strong” non-oil sector growth, Azour said.

Amid lower oil prices and lower oil production this year, non-oil growth in the Gulf Cooperation Council region has mostly outperformed overall growth as government led investment programs help drive domestic demand. Saudi Arabia, Kuwait, the UAE Qatar, Bahrain and Oman are part of the GCC.

Middle East and North Africa oil importers remain more vulnerable to ongoing conflicts and high financing needs.

“Even as these issues gradually abate, uncertainty remains high and structural gaps will likely hold back productivity growth in many economies over the forecast horizon,” the IMF report said.

The IMF has approved $13.4 billion in new funding to Middle East and Central Asian countries since January 2024, including for programs in Egypt, Jordan and Pakistan. 


Saudi Arabia could be next ‘Silicon Valley,’ experts say

Saudi Arabia could be next ‘Silicon Valley,’ experts say
Updated 31 October 2024
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Saudi Arabia could be next ‘Silicon Valley,’ experts say

Saudi Arabia could be next ‘Silicon Valley,’ experts say

RIYADH: Sentiments about Saudi Arabia becoming the next entrepreneurial hotspot are resonating as global venture capitalists gathered to discuss the region’s future. 

During a panel session at the Future Investment Initiative in Riyadh, industry leaders cited the Kingdom when asked which region is going to be the next Silicon Valley, as they drew comparisons between Saudi Arabia and the US.

“We’re really encouraged by what we’re seeing across the Middle East and North Africa region, especially in Saudi Arabia. The conditions here are very promising. We’ve seen similar patterns in the US over the last two decades, and, frankly, the world has become flat when it comes to entrepreneurship,” said Tony Florence, co-CEO at American-based venture capital firm NEA. 

During the panel, Florence emphasized that the Kingdom’s business environment is rapidly benefiting from the transformational journey of Vision 2030. 

“Over the next decade, I believe there will be rapid innovation and development in healthcare, tech, and AI (artificial intelligence). Saudi Arabia, in particular, is likely to be a net beneficiary of the trends we’ve been discussing over the past few days,” he added. 

Nabeel Koshak, CEO and board member of Saudi Venture Capital Co., echoed Florence’s remarks: “Many activities have evolved (in the startup sector). Actually, I’ve been part of this ecosystem building in Saudi Arabia since 2010 and it all trickles down to Vision 2030.” 

“Since the launch of Vision 2030, it was clear how important backing startups and SMEs was for job creation, developmental metrics and impact and commercial value,” Koshak added. 

He further said: “If we compared 2018 to 2023, it was only $60 million of deployed capital in 2018; it reached $1.4 billion in 2023, and that’s almost 21 multiple actually of the total amount deployed in Saudi Arabia.” 

He added that the Kingdom saw two venture-backed companies now planning to list on the public market, namely, Tamara and Tabby. 

“The exit landscape has also been improving significantly. We’ve seen nearly 100 M&A (mergers and acquisitions) and listing activities involving venture-backed companies across the MENA region. This momentum is attracting top-tier investors to Saudi Arabia, with major names like Wellington, Sequoia, General Atlantic, and TPG increasingly active in Saudi and across the broader MENA region,” he added. 

Sam Englebardt, founding general partner of New York-based VC firm Galaxy Interactive, also emphasized the Kingdom’s vast prospects. 

“Saudi Arabia has the potential to be a country with a large enough population to build and scale businesses domestically, supported by significant top-down backing. This extends across various industries, where the government’s ability to mandate changes and act swiftly creates substantial opportunities,” he said. 


Saudi economy minister highlights multiple factors reshaping investment landscape at FII8

Saudi economy minister highlights multiple factors reshaping investment landscape at FII8
Updated 31 October 2024
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Saudi economy minister highlights multiple factors reshaping investment landscape at FII8

Saudi economy minister highlights multiple factors reshaping investment landscape at FII8

RIYADH: The ongoing energy transition, the rise of artificial intelligence, and geopolitical tensions are reshaping the global investment landscape, according to a top minister. 

Speaking during the Future Investment Initiative in Riyadh on Oct. 31, Saudi Arabia’s Minister of Economy and Planning, Faisal Al-Ibrahim, said that the world needs efficiency-seeking investments to boost productivity and future growth. 

“Megatrends of the energy transition, artificial intelligence, and geoeconomic fragmentation are fundamentally reshaping the investment landscape. We can and must fulfill our shared responsibility to invest in the future and capture opportunities that come with these paradigm shifts,” said Al-Ibrahim. 

He added: “Today’s world calls for efficiency-seeking investments that can boost productivity and help the world to correct the low-growth, high-debt path that we as a global economy are currently sleepwalking alone.” 

According to the Saudi minister, mere investments do not materialize future growth, but the proper channelization of funds will bring better outputs. 

Al-Ibrahim also underscored the vitality of public-private partnerships to meet the investment demands for the future. 

“The public and the private sectors must evolve in parallel and together to become more aligned with the demands of our times. Investment alone does not drive growth. It is the starting point of prosperity and a catalyst for progress. But what matters is how and where we direct our investments,” said the minister. 

During his speech, Al-Ibrahim also highlighted Saudi Arabia’s achievements since the launch of Vision 2030 and added that the Kingdom’s non-oil sector is currently a significant contributor to economic development. 

“Since the launch of Saudi Vision 2030, our economy without oil has grown 20 percent. At the same time, we have witnessed a 70 percent increase in private investments in our non-oil sectors. For the first time in history, non-oil activities now make up 53 percent of our real gross domestic product,” he said. 

According to the minister, the Kingdom has opened the door to investments that infuse technology and innovation, and it has helped the nation to emerge as an investment powerhouse in the Middle East and North Africa region. 

Al-Ibrahim added that Saudi Arabia had implemented several regulatory reforms that have turned the Kingdom into a friendly investment destination for international entities. 

“What sets Saudi Arabia apart is not just we are the biggest economy in the Middle East. The world looks to Saudi Arabia for global solutions because we have long been a trusted and reliable partner. We have created a business environment that integrates innovation, provides more regulatory clarity, and offers practical solutions,” said the minister. 

He added: “Investors deploy their capital in Saudi Arabia with the confidence that they will get the results and returns. In the first half of 2024 alone, 184 global companies relocated their headquarters in the Kingdom. Investment licenses have risen by nearly 50 percent.” 

Speaking at FII8 on Oct. 29, Saudi Arabia’s Minister of Investment, Khalid Al-Falih, said the Kingdom 540 international companies have established their regional headquarters in Riyadh, meaning a 2030 target of 500 has already been surpassed.

Some prominent firms that opened their regional headquarters in the Kingdom include Northern Trust, Bechtel, and PepsiCo, as well as IHG Hotels and Resorts, PwC, and Deloitte. 

Through the regional HQ program, Saudi Arabia introduced new tax incentives for multinational companies moving their regional headquarters to the Kingdom. These incentives include a 30-year exemption on corporate income tax and withholding tax related to headquarters activities, alongside discounts and support services. 

In a separate panel discussion, Mohammed El-Kuwaiz, chairman of Saudi Arabia’s Capital Market Authority, said that the Kingdom is witnessing simultaneous growth in both the public market and private market, which includes venture capital firms. 

El-Kuwaiz added that Saudi Arabia seeks to attract $3 trillion of investments over the next few years to accomplish the Vision 2030 goals. 

“I imagine that the biggest wave of growth in Saudi Arabia is likely to come from the required pipeline of investments and financing needs. If you look at the quantum of investments required in Saudi from now to Vision 2030, estimates reach about $3 trillion. And that requires a lot of capital, both public and private capital at the same time,” said El-Kuwaiz. 

The CMA chief also highlighted that Saudi Arabia’s capital markets are becoming increasingly attractive to international investors. 

“In our case, the big story of the capital markets is both increase in the size as well as opening it up to international investment. International investment has moved from virtually nothing — five to six years ago to now slightly over SR400 billion ($106.50 billion), he added. 


Riyadh Air plans wide-body jet order next year: official

Riyadh Air plans wide-body jet order next year: official
Updated 31 October 2024
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Riyadh Air plans wide-body jet order next year: official

Riyadh Air plans wide-body jet order next year: official

RIYADH: Saudi Arabia’s new national airline, Riyadh Air, plans next year to order wide-body aircraft capable of seating more than 300 passengers, its chief financial officer told AFP on Thursday.

The order would be the third for the airline, which was created last year and plans to operate its first flights in the summer of 2025.

“We will do our third RFP (request for proposal) for an ultimate ultra wide body, which has in excess of 300 seats as well, but that will be next year,” Adam Boukadida said on the sidelines of the Future Investment Initiative investor forum in Riyadh, referring to the request for proposal procurement document.

“It could be Boeing, it could be Airbus. At the moment, we’re very happy having the relationship with both of these key suppliers.”

On Wednesday, Riyadh Air announced a multi-billion dollar deal to purchase 60 narrow-body Airbus A321neo aircraft from Airbus.

That brought the firm’s total aircraft orders to 132 after a deal inked last year with Boeing for 39 wide-body Dreamliner 787-9s, which seat just under 300 passengers, with options for 33 more jets.

Saudi Crown Prince Mohammed bin Salman sees aviation as a key component of his Vision 2030 reform agenda to remake the petroleum-dominated country, aiming to more than triple annual traffic to 330 million passengers by the end of the decade.

Riyadh Air expects to serve 100 routes by 2030 and more than 120 by 2035. 

Deliveries of the Airbus planes “will start from the second half of 2026 all the way out to 2030,” Boukadida said.

“This will bring us in excess of 130 aircraft before 2030, so we’re still on track for the second half of next year to commence operations to over 100 destinations by 2030.”

Also on Thursday, Riyadh Air announced the establishment of its first revolving credit facility of up to SR5 billion ($1.3 billion) involving eight financial institutions from Saudi Arabia and the Gulf region.

“This would help us fund our growth, but also provide a platform for us to grow up until 2030 to be an international player,” Boukadida said.