Vision 2030 'will boost investment'

LONDON: Saudi Arabia’s Vision 2030 will help boost investment flows into the country, diversify the economy, cut wastage and enhance global integration, several Western experts have said.
These are some of the views gathered in a survey by Aleqtesadiah in the United Kingdom recently in the wake of the unveiling of Vision 2030 in April, and the National Transformation Program 2020 (NTP) last week. Vision 2030, of which the NTP is a part, is led by the Council for Economic and Development Affairs, chaired by Deputy Crown Prince Mohammad bin Salman.
Harvey Benham, an international economist and consultant, was positive about the plan, which he described as a “comprehensive theoretical framework for the development process” embarked upon by the government, had clear financial goals and outlined the relationship between the private and public sectors.
He said another good sign was that Riyadh was setting in place through the Council for Economic and Development Affairs a range of strong institutions that will be empowered to drive the process, rather than being a drain on public resources.
Henry Drake, a professor of public finance, said the NTP would help ensure the Kingdom is integrated more fully into the global economy through its plan for comprehensive reform, including balancing the budget and ensuring more effective spending.
“There is no doubt that the previous oil boom and the associated financial returns enhanced the negative culture of fiscal indiscipline among government institutions in Saudi Arabia. This resulted in widespread financial waste for years, and created a state of incompetence in government spending which is apparently what the NTP is working to eliminate through a set of specific objectives and operational initiatives.”
“I expect there will be a very close follow-up and monitoring by leading global banks, international investment companies and investors on the developments in Saudi Arabia. If the program succeeds in achieving 80 to 95 percent of its objectives, Saudi Arabia will witness an international investment boom that might reach $70 or $75 billion in the coming decade.”
Charles Barry, a specialist in investments in emerging economies, said that the NTP had done the right thing by focusing on increased investments, with a focus on improving the regulatory environment.
“There is no doubt the program has the remarkable ambition to boost foreign investments by 100 percent over the next four years, in addition to providing investment opportunities worth SR2 trillion.”
“Achieving this requires a radical revolution in the legislative, regulatory and procedural environment. It will also require a higher degree of transparency to defeat the bureaucracy in government agencies in the country which have missed so many opportunities because of their complexity, and poor administrative performance,” he said.
Banker William Randall said the transformation process would help Saudi Arabia’s integration into the global economy. The plan to reduce wages and salaries in the public budget from the current 45 percent to 40 percent by 2020 would help balance the budget and show that the country was committed to improving productivity.
Simon Kirby, a professor of comparative economics, said the NTP should not be judged solely on what it can achieve by 2020. “The philosophy of the program is similar in essence to all programs aimed at making radical shifts in society. This happened in Germany after reunification, in Brazil and Italy after World War II and even in Malaysia and Turkey to some extent. The idea is to jolt the economic structure, to shake out years of dust because of the Saudi dependence solely on oil.”