5 key Saudi developments you need to know today
News media has been flooded in the recent past by a series of developments from the Kingdom of Saudi Arabia, as the country embarks on a path of rigorous transformation in line with its ambitious Vision 2030, and diversification away from oil.
Saudi has implemented many initiatives and rolled out a series of royal decrees aimed at opening up the Kingdom to foreign investments, making it a more attractive destination for businesses and visitors, and moving it away from its erstwhile image of a conservative society.
Last month saw the lifting of the ban of video telephony via VOIP. Meanwhile, 100 per cent foreign ownership of Saudi-based companies is now common practice.
Recently, the government also announced that women will be allowed to drive from June 2018 and removed the requirement for male guardianship for women seeking certain services, including healthcare and education. Also, for the first time, women were allowed to attend the National Day celebrations at the King Fahd stadium in Riyadh on September 23.
And now, following these announcements, what are the five biggest developments in the Kingdom you need to be aware of?
GEA comes under attack
Amidst all the cheer surrounding the initiatives such as the decrees lifting the driving ban on women and removing the male guardianship requirement for women, the Saudi General Entertainment Authority (GEA) announced two days ago that it was hit by a cyber attack from outside the kingdom.
The reason behind the attack and the identity of the perpetrator(s) are as yet unknown, though the GEA announced on Twitter last Friday that it was working on preventing future attacks on its website.
“The source of the subversive attacks, which aim to harm the authority and its efforts, is being identified,” the tweet read.
Entertainment investment on the rise
On September 20, the Saudi Press Agency (SPA) announced that Saudi Arabia’s Public Investment Fund (PIF) is currently developing a new company that will invest in the country’s entertainment sector.
The PIF is expected to become the largest sovereign wealth fund in the world, with assets of $2 trillion.
The SPA said the company, which name is not yet revealed, will have an initial capitalisation of $2.67 billion (SAR10bn, AED9.79bn) and will have investments in various areas of the Saudi entertainment sector, seeking strategic partnerships along the way.
The announcement also revealed plans for an entertainment complex that will open by 2019 and aims to create 22,000 jobs and contribute SAR8bn (AED7.83bn) to the economy by 2030, while delivering a portfolio of projects that would serve at least 50 million visitors annually by 2030.
“The new company will seek to localise the large amount of spending on entertainment outside the Kingdom, in addition to promoting the entertainment sector’s role in diversifying revenue streams,” said the SPA statement.
The GEA, which was recently hacked, is one out of many institutions that are geared for this transformation
Saudi going to the movies?
In light of the recent devlopments in the entertainment sector, will going to the movies be next in line for Saudi Arabia?
Forbes magazine reports that there has been speculation the government might soon allow public cinemas to open in the Kingdom. The report indicated one mall operator – Arabian Centres – as saying it has space for ten cinemas at properties it is developing.
Vision 2030 does aim to increase household spending on cultural and entertainment within the kingdom from 2.9 per cent of GDP today to six per cent by 2030.
Saudi driving school for women
Following the announcement that the driving ban on Saudi women will be removed, Princess Nourah University, one of the kingdom’s biggest universities for women, which is securing tuitions from more than 60,000 female students, said it will open a driving school for women.
A statement from the university on Saturday said: “Princess Nourah University is preparing to set up a driving school in cooperation with the relevant authorities.”
Meanwhile, major car importers and potential future Saudi auto manufacturers have also expressed their excitement about the prospects of Saudi women drivers hitting the road.
NTP fiscal progress
The Bank of America Merrill Lynch (BofA-ML) GEMs Macro Monthly report, released recently, notes that there may a possible revision to the National Transformation Plan (NTP) agenda, quoting a Financial Times article.
“The NTP was mostly focused on the diversification agenda (rather than on fiscal reforms) and was challenging in terms of timeline. A delay would allow more time for ministries to meet their targets. Privatisation goals (outside of the oil sector and Saudi Aramco) could be pushed back, which could reflect in our view that more time is needed for execution and for preparing privatisation targets to float,” BofA-ML said in its report.
BofA-ML added that domestic energy price reforms, increase in non-oil government revenues and a new wage bill were moved out from the NTP and included in the government’s 2020 fiscal agenda.
“Saudi Arabia’s fiscal performance over 1H17 suggests spending discipline, as well as continued reliance on oil to boost revenues. The 2Q17 fiscal deficit stood at SAR46.5bn ($12.5bn, AED45.8bn), better than expected,” the report said.