Economic Developments - May 2017

Saudi economic scenario: In an interview with Bloomberg, Saudi Arabia’s vice minister of economy and planning, Mohammed Al Tuwaijri made the following main points:

(i) Sale of international bonds: Al Tuwaijri said that the finance ministry’s debt management office may decide to tap the market in the fourth quarter this year. The size of the issuance will depend on market conditions and investor appetite but could potentially be as much as $10 billion. Saudi Arabia’s first dollar-denominated sukuk in April was expected to raise only $5 billion; in fact, the sale raised $9 billion because it had an "oversubscribed book with a lot of strategic investors who wanted more.”
Domestically, the government still plans to raise about 70 billion riyals ($ 18.6 billion) this year. 

(ii) Balancing the Budget: He expressed confidence that the budget would be balanced by 2020.

(iii) Four Privatizations to Start With: The government had surveyed the market to identify suitable targets and made a list of 16 entities that are prime for privatization, along with more than 100 public-private partnership opportunities. Four "low hanging fruits" will start the privatization process potentially this year: the Saline Water Conversion Corporation, a power generation company under Saudi Electricity Co., grain silos and sports clubs.

(iv) Spending on Infrastructure: He affirmed that the government was "very committed" to mega projects that would help achieve the objectives of Vision 2030, its blueprint for life after oil, particularly infrastructure projects. He cited Jeddah’s new airport and Riyadh’s metro system, under construction, as examples.

 

May 16, 2017

 

 

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About the Author

Ambassador Talmiz Ahmed

Former Ambassador of India to Saudia Arabia, Oman and UAE, monitors developments in the West Asian region.  

Ambassador Talmiz Ahmad joined the Indian Foreign Service in 1974. Early in his career, he was posted in a number of West Asian countries such as Kuwait, Iraq and Yemen and later, between 1987 and 1990, he was Consul General in Jeddah. He also held positions in the Indian missions in New York, London and Pretoria. He served as Indian Ambassador to Saudi Arabia (2000-03; 2010-11); Oman (2003-04), and the UAE (2007-10). He was also Additional Secretary for International Cooperation in the Ministry of Petroleum and Natural Gas in 2004-06. In July 2011, the Saudi Government conferred on him the King Abdul Aziz Medal First Class for his contribution to the promotion of Indo – Saudi relations. After retirement from the Foreign Service in 2011, he worked in the corporate sector in Dubai for three years. He is now a full-time academic and holds the Ram Sathe Chair for International Studies, Symbiosis International University. He has published three books: Reform in the Arab World: External Influences and Regional Debates (2005), Children of Abraham at War: the Clash of Messianic Militarisms (2010), and The Islamist Challenge in West Asia: Doctrinal and Political Competitions after the Arab Spring (2013). He writes and lectures frequently on Political Islam, the politics and economics of West Asia and the Indian Ocean and energy security issues.