UP & COMING

Saudi Arabia 2016 | ECONOMY | INTERVIEW

TBY talks to Abdul Rahman S. Al-Otaishan, Chairman of Asharqia Chamber, on working to support Vision 2030, upcoming investments in the Eastern Province, and measures to enhance growth of the private sector.

 Abdul Rahman S. Al-Otaishan
BIOGRAPHY
Abdul Rahman S. Al-Otaishan is the Chairman of Asharqia Chamber. He has 33 years of experience in the management of maintenance, construction, and transport projects, and sits on many councils and committees covering numerous economic sectors. He has a degree in business administration that he received while studying in the US, and is a certified member of the North Arabian Gulf Chapter of the International Association of Drilling Contractors.

What is your strategy to support the private sector in light of Vision 2030?

Vision 2030 was aimed at weaning the Kingdom off oil, putting the private sector in the driver's seat to play a bigger role in driving industrial growth in the country. The Eastern Province is the most important industrial area of Saudi Arabia, contributing 60% to GDP and representing around 90% of the country's oil and non-oil exports. Asharqia Chamber's first and foremost strategy is to work in line with the ambitious Vision 2030 to enhance the further growth of industries in the region. Vision 2030 focused on the important role of the private sector, which currently contributes around 40% to GDP. The government is set to open up new investment opportunities, facilitate investment, encourage innovation and competition, and remove all obstacles preventing the private sector from playing a greater role in the development of the country's economy. The Saudi leadership has also promised to continue to improve and reform regulations, paving the way for investors and enabling the private sector to undertake the responsibility of providing some key services in a wide range of sectors including healthcare, municipalities, housing, finance, and energy, which are currently provided by the public sector.

In 2017, Saudi Aramco is expected to expand and diversify operations. What impact will this have on the Eastern Province, the world's petrochemicals hub?

With the planned sale of 5% of Saudi Aramco through IPO, the oil giant is set to break into new areas of financing under Vision 2030. This sweeping reform will be conducive for Aramco to transform itself from an oil and gas firm into a global industrial conglomerate. The national company will now be involved in many sectors and services, using its vast financial resources to create jobs and help diversify the Saudi economy beyond oil. This will have a great impact on increased trade and business in the Eastern Province since the reform agenda includes a plan to set up a restructured public investment fund, worth $2 trillion, by including the proceeds from Saudi Aramco's IPO, other assets of $600 billion, and state-owned real estate and industrial assets estimated at $1 trillion. This huge fund will bode well for enormous new investments in the region's oil, gas, and petrochemical industries. Saudi Aramco has already established a large-scale petrochemical joint venture with Dow Chemical to produce over 3 million tons of petrochemical products in Jubail. With this huge complex and dozens of other new projects in the pipeline, total petrochemical products in the kingdom are expected to reach 115 million tons in the near future.

With the new government's plans, many investments are expected to flow into the country. What opportunities does this provide for the private sector?

In the wake of Vision 2030, which is focused on a diversified economy away from oil, the private sector is set to play a key role in industrial growth with prospects for huge investments. The government has planned a number of structural reforms, which include stimulating private-sector investments, building a comprehensive database of the country's resources, reviewing licensing procedures, and developing funding methods. The government will also form strategic international partnerships and raise the competitiveness and productivity of national companies. These measures will enhance the private sector's growth, as well as support the localization of knowledge and expertise. The government will further pursue public-private partnerships, continue to facilitate the flow of private investment, and improve competitiveness with a plan to review current regulations with the aim of improving the business environment. The government is to create special zones in exceptional and competitive locations, taking into account the comparative advantages of the Kingdom's different regions, assessing their feasibility for promising sectors such as logistics, tourism, industry, and finance. All these realistic steps will be supportive to the growth of private sector in line with government's plan to move the country's economy from its current position of 19th in the world to 15th by 2030.