Interview: Muhammad Al Jasser
What do you believe is the single most important challenge facing the economy in the next decade and how should it be dealt with?
MUHAMMAD AL JASSER: A sustainable, prosperous and diversified economy requires a future dominated by high-skill, high-wage sectors, as opposed to the current low-skill, low-wage activities that make up many sectors of our economy today. To do this and maintain a competitive edge, we need a highly productive labour force with adequate education, training and information tools.
I am highly optimistic that we will reach those goals, for two important reasons. First, we currently face a “demographic window” of opportunity in which working-age members of society greatly outnumber the other demographic groups. In 2011, the working-age population (15-64 years old) was 60.9% of the total population, while those 65 and older made up 3.5%, and those under 15 amounted to 35.6%. This is the first time in our history that our working age population is the largest. This age structure has the potential to be either an impediment to growth or a driver of growth. But much like the US in the 1950s and 1960s, or China in the last two decades, Saudi Arabia is determined to capitalise on this potential demographic dividend.
Second, we are actually investing heavily in human resource development. Of the SR1.4trn ($385bn) allocated for the implementation of the current ninth development plan, over half, or SR731bn ($195bn), is intended for developing our human capital, including general education, higher education, technical and vocational training, and science, technology and innovation. I am confident that such heavy investment will help us move toward a knowledge-based economy.
How can small and medium-sized enterprises (SMEs) be supported to ensure that they play an important role in the Kingdom’s economic expansion?
AL JASSER: The role played by SMEs in economic development has long been recognised: they are the major employer in the private sector, and in many countries the major contributor to GDP; and their dynamism is one of the most important sources of economic growth.
Successive development plans in Saudi Arabia have recognised this fact and attempted to enact policies that accelerate the development of the SME sector. The ninth development plan, for example, stated two specific areas in trying to develop that sector: urging banks and financial institutions to expand SME financing; and removing administrative, organisational, technical and marketing obstacles facing these enterprises. A number of initiatives have been developed in support of these policies and we are looking into the idea of establishing a new entity for regulating SMEs.
We are currently undergoing an in-depth evaluation of our SME policies over the past decade in order to determine how effective they have been and how they could be improved. These lessons will be incorporated into the 10th development plan.
To what extent do you think that regional instability is affecting the pace of economic integration with the GCC and other Arab countries?
AL JASSER: There is no denying the fact that developments in our region over the past year have had a significant impact on the region’s economy as a whole. But in Saudi Arabia, we have been fortunate that the impact has been minimal. We have been blessed with a wise leadership, fully aware of the systemic importance of our economy both regionally and globally, which has been aggressive in helping to stabilise the world oil market and very prudent in its macroeconomic management. Analysts who, prior to 2008, criticised our prudent monetary policy as too cautious now envy the results of these policies both during and after the financial crisis. As a result, we have managed to pass the 2008 global financial and economic crises without the depression-like impact that both developed and some developing countries experienced. Similarly, the current regional turmoil does not appear to have had any negative impacts on the stability of our economy.
Read More from OBG
In Saudi Arabia
Highlights from The Report: Saudi Arabia 2023
Ongoing giga-projects such as NEOM and The Red Sea Project are supporting Saudi Arabia's twin goals of attracting investment and stimulating economic diversification. A rise in non-oil exports between 2017 and 2023 represents efforts to nurture growth engines beyond hydrocarbons, targeting strategic sectors such as entertainment and hospitality. Additionally, a balance between boosting oil production capacity and capitalising on an early-mover advantage in clean energy soluti…
Peru emerges as a strategic gateway for investment
In this Growth Perspectives video, OBG details how Peru has become an important investment gateway. Due to its favourable business environment and strategic location along South America’s Pacific coast, Peru has emerged as a key investment destination in Latin America. A low inflation rate, sustained growth, free trade agreements with 58 countries comprising 80% of global GDP and abundant natural resources are together helping make Peru an international centre of commerce.…
Focus Report: Exploring the role of women and youth in Africa's agriculture sector
En Français The last few years have seen marked developments in the dynamic landscape of African agriculture. The continent's cultivated land has expanded significantly since 2020, contributing to 52% of the global increase in cultivated area, with sub-Saharan Africa leading agricultural output growth. This report highlights the importance of transitioning to knowledge-based farming systems through initiatives from organisations seeking to achieve sustainable, inclusive and productive g…
“High-Level Discussions are Under Way to Identify How We Can Restructure Funding For Health Care Services”
Popular Sectors in Saudi Arabia
- Saudi Arabia Construction
- Saudi Arabia Energy
- Saudi Arabia ICT
- Saudi Arabia Industry
- Saudi Arabia Transport
Popular Countries in Economy
- Indonesia Economy
- Kuwait Economy
- Qatar Economy
- Saudi Arabia Economy
- UAE: Abu Dhabi Economy
- UAE: Dubai Economy
Recent Reports in Saudi Arabia