Interview: Ajlan Abdulaziz Alajlan
In which sectors do you foresee both business and employment opportunities?
AJLAN ABDULAZIZ ALAJLAN: Supported by Vision 2030 and a proactive government, Saudi Arabia is currently seeing various policy reforms and is going through a fast-paced development phase across many sectors and industries. The country has a relatively small population. There are only 20m Saudi nationals, of whom 70% are under 30, and the whole population, both female and male, is being empowered to work and take a leading role in the country’s transformation. Many employment opportunities have already been created in a great variety of fields, catering to a sound and diversified economy. Indeed, the near- to medium-term future looks promising, as the private and public sectors are working hand-in-hand to improve business conditions and build an environment conducive to private investment.
As housing demand is still outstripping supply, bridging the housing gap and increasing the number of units is a top priority for both the private and public sectors. This represents a lot of business opportunities for local real estate developers and contractors. From retail furniture to building-material supply, it is believed 70 industries will be positively impacted by the current housing programmes. More jobs will be created, which means increased purchasing power, and therefore people will be spending more locally. It is at the same time a virtuous circle and snowball effect.
What role is the private sector set to play in Saudi Arabia’s economy in the long term?
ALAJLAN: As highlighted in Vision 2030, the private sector is set to play an increasingly prominent role in Saudi Arabia’s economy. It should be a catalyst for job creation. There will be sufficient business opportunities for all, from local small and medium-sized enterprises to large-scale Saudi multinationals. There are very largescale projects in the pipeline, such as NEOM, Qiddiya and the Red Sea Development project. This is sure to create opportunities for local companies, which have been mandated to be the main developers and contractors of those particular projects.
However, in the context of a fast-changing environment, challenges are also arising. In the past, the private sector benefitted from generous government subsidy programmes, through which, for instance, gasoline used to be cheaper than water. This is no longer the case. From a private sector perspective, new taxes such as the 5% value-added tax implementation and new energy tariffs have put additional pressure on a few sectors, directly impacting companies’ cash flow management.
Thanks to new energy tariffs and taxes, people are now more price-conscious, and this also contributes to improving the country’s overall carbon footprint. The population is more aware of questions of energy efficiency and optimising consumption, which makes a huge difference in terms of energy consumption.
How can the country capitalise on value-added products and leverage the transport network?
ALAJLAN: In geographical terms, Saudi Arabia is a vast country gifted with natural resources, particularly crude oil. There are high hopes for the untapped mining sector, and already steps are being taken to develop fast-track explorations. Saudi Arabia used to import almost everything, from foodstuffs to building materials. However, this is changing and manufacturing output is increasing year-on-year. We have good examples of successful companies such as SABIC manufacturing added-value products like petrochemicals, led by Saudi nationals. But more must be done to localise our industries and increase our manufacturing capabilities.
In terms of logistics, the current railway network – as well as its future developments – puts Saudi Arabia in a good position to export its goods. Access to neighbouring countries is becoming increasingly easy, and that is good news for locally made products. We are expecting an increase in intra-regional trade in the long term.