Saudi Minister of Economy and Planning Mohammed Al-Tuwaijri: ‘The whole world is interested in Saudi Arabia’

Mohammed Al-Tuwaijri, Saudi minister of economy and planning. (Illustration by Luis Granena)
Updated 28 October 2018
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Saudi Minister of Economy and Planning Mohammed Al-Tuwaijri: ‘The whole world is interested in Saudi Arabia’

  • For an economy like Saudi Arabia, with its history of reliance on the public sector to spur economic growth, that is a big challenge
  • Saudi investors are ready for privatization

RIYADH: The “green room” at the Future Investment Initiative in Riyadh is an inappropriate name.
Like the rest of the King Abdulaziz International Conference Center, next to the five-star Ritz Carlton Hotel, the areas reserved for the elite speakers at the adjacent plenary hall is a melange of white marble, gold and the rich browns of teak and mahogany, with plenty of sparkling crystal in evidence too. Anything but green, really.
Last Thursday morning, Mohammed Al-Tuwaijri entered the room with weighty matters on his mind. The minister of economy and planning for Saudi Arabia was the top billing on a panel of luminaries from Jordan, Russia and Britain, considering the question: “Which model for privatization will prevail?”
Al-Tuwaijri, who got the top job in the Kingdom’s economic policy-making apparatus last year in a government reshuffle, is well able to give an expert view on that issue. A lifetime investment banker with experience at some of the biggest global banks in the world, he has been privy to many of the biggest corporate deals in the Middle East and elsewhere. Privatization is, and always has been, a subject on which the investment bankers have particular expertise.
In the green room, he was confident and composed, and declared himself willing to answer virtually any question on a subject crucial to the success of the Kingdom’s Vision 2030 strategy.
You might argue that privatization is at the heart of the strategy. The Vision’s architects recognized that the Kingdom’s essential challenge was to move away from dependence on the government-owned energy sector, and to increase the portion of the economy driven by the private sector. For an economy like Saudi Arabia, with its history of reliance on the public sector to spur economic growth, that is a big challenge.
As an economic policy, privatization has a fairly recent origin. The British prime minister Margaret Thatcher kicked off the modern version in the 1980s with a strategy to sell shares in government-owned companies, including the telecommunications, aviation and energy sectors, and found imitators around the world.
After the end of Communism in 1990, a tsunami of privatization washed over the former Soviet economies. The post-Soviet privatization model certainly ended state ownership of the economy, but also led to abuses and a concentration of economic power in a few hands — the beginning of the Russian “oligarchy.”
China, meanwhile, was undergoing a form of privatization that provided another possible model for encouragement of private enterprise, but all within the context of a centrally commanded structure that ultimately retained state control of business.
On the plenary stage, Al-Tuwaijri showed that he was acutely aware of the variety of models on offer for a would-be privatizer, but also conscious of the need to fit them to the Saudi context. “We look for our own model. We literally mapped the world, historically and geographically. So there is the good, the bad and the ugly experiences of the past.
“Ultimately we look at it from the point of view of what investors really want. They like to see a stable macro economy, growth, developing labor markets, accessible capital markets, transparency, firmness and quality assets. The government is committed to do these things, which are the big guidelines we are adopting here in Saudi Arabia. We also checked with all government entities and Vision 2030 programs, to make sure that in terms of execution and the time to come to market we are also aligned,” he added.
Alignment means ensuring that the interests of government, citizens and investors are synchronized and coordinated, he said, and gave the example of the housing industry, where Saudi Arabia has big plans to build more units for citizens under private auspices, but which also has implications for power and water generation businesses, as well as the financial investors in the projects. A “center of excellence” has been established in the Kingdom to co-ordinate these policies.
So, the broad principles of the privatization plan have been mapped out. But privatization means different things to different people, and can take a variety of forms.
It can occur in the form of the sale of shares to the general public and investing institutions via initial public offering (IPO) on stock markets; or via partnerships between the public sector and private enterprises on the provision of services previously run by the government, the so-called PPP option; or it can take the form of asset sales to private companies, domestic or foreign, by state-owned organizations.
These are complex concepts. Does Al-Tuwaijri believe that Saudi investors are capable of understanding the processes involved?
“A lot of effort has been dedicated to educating the people about privatization — what are the benefits, what it means, what are the processes, the levels of expectations and engagement. Generally, we agreed that the more governance, transparency and top advisers, the better,” he said.
“I think Saudi investors are ready for privatization. We have a history of privatizing state companies going back to the 1970s, in telecommunications, banking and mining. Our private sector is mature enough, strong enough, to understand privatization, but it is not just the domestic market we need to address. The whole world is interested in Saudi Arabia, and we have many potential investors from Asia and Europe interested in our privatizations,” he added.
Some international observers have expressed their frustration that the program of state sales has not yet got underway, more than two years after the Vision 2030 strategy was announced. Al-Tuwaijri was cautious in his response.
“We spoke about market conditions, and in Saudi Arabia we needed to bring the economy back into sustainable growth. That has been achieved now. There was also a need to have a legal structure for privatization, and to develop labor policies. Privatization has a great many implications for labor practices.
And of course the capital markets had to be ready, with the emerging markets status in prospect.
“Could we press a button on some of these assets today? The answer is yes. Are we being optimal if we pressed the button today? Maybe not,” he said.
Nonetheless, there is a shortlist of assets that are at the head of the pipeline for sale between now and the end of the first quarter of 2019. Al-Tuwaijri identified assets in the grain and silo business, in education, health care and in the desalinization industry that were all ready to come to market in that time frame.
Some time ago, Al-Tuwaijri gave an estimate of $200 billion of the total value of the Saudi privatization plan, excluding the $100 billion target from an IPO of Saudi Aramco. He said that was still achievable, depending on what is included in the sell-off portfolio and the state of global markets.
“You have to look at whether you include the Public Investment Fund assets within that or not. Do we include the ‘opportunity discovery,’ which is not today immediately in the program? We’re talking to some of the government entities, the payments systems in the Saudi Arabian Monetary Authority, some of the assets the Ministry of Finance hold. These are also ongoing opportunities that may be very attractive to the private sector,” he said.
So far in the panel discussion the biggest issue in the privatization universe had not been approached: The IPO of Saudi Aramco.
“The company (Aramco) is absolutely ready, in terms of financial statements, to the best global standards and requirements of global listing venues,” Al-Tuwaijri said, adding that the forthcoming acquisition of Saudi Basic Industries Corporation (SABIC) and “potentially other” deals would enhance the Aramco growth strategy.
“But it goes back to the question of alignment. The government has all the right in the world to time that IPO so that it is optimal in terms of value and shareholder benefit,” he said.


M&A deals in MENA up 7% as Saudi Arabia, UAE lead the way: EY

Updated 7 sec ago
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M&A deals in MENA up 7% as Saudi Arabia, UAE lead the way: EY

RIYADH: Saudi Arabia and the UAE helped drive merger and acquisition activities in 2024 up 7 percent across the Middle East and North Africa to reach $92.3 billion, according to an analysis. 

In its latest report, professional services network firm EY revealed that the MENA region witnessed 701 deals over the period, a 3 percent rise from the 679 deals seen in 2023. 

EY added that the UAE and Saudi Arabia together reported 318 deals in 2024 valued at $29.6 billion. These two nations were also among the top MENA bidders indicating their active participation in the merger and acquisition landscape. 

According to the analysis, this expansion was driven mainly by reforms in capital markets across the region, as well as strategic policy changes and strengthened efforts to attract international investments. 

Earlier this month, banking firm Morgan Stanley also echoed similar views and said that the MENA region will witness a significant “structural upswing” in transaction volume and value size in 2025 propelled by policy shifts and regulatory reforms. 

Commenting on the latest report, strategy and transactions leader at EY MENA Brad Watson said: “In 2024, the MENA region witnessed positive developments in the M&A space with a year on year increase in activity as well as overall deal value. With companies actively seeking opportunities to grow and diversify their operations, cross-border deals were the major driver in terms of volume and value.”

EY said that the Gulf Cooperation Council region accounted for the majority of deals within the MENA region at 580, accounting for 52 percent of the volume and 74 percent of the value. 

The report added that the UAE reported the largest M&A deal in 2024, with the acquisition of Truist Insurance by Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment for $12.4 billion. 

The second-biggest deal was made by Saudi Aramco, with the energy giant acquiring a 22.5 percent stake in Rabigh Refining and Petrochemical Co. from Tokyo-based Sumitomo Chemical for $8.9 billion. 

The third-largest deal was the acquisition of a 60 percent stake in the Chinese shopping mall company Zhuhai Wanda Commercial Management Group by PAG, Mubadala and Abu Dhabi Investment Authority for $8.3 billion. 

EY revealed that outbound deals contributed to the largest share of M&A transaction value in 2024, accounting for 61 percent of the total consolidated deal value, with 199 transactions amounting to $‌56.6‌ billion. 

In terms of sectors, technology and consumer products were the leading contributors to overall deal volume, each experiencing a 10 percent year-on-year increase.

The US was the largest acquiring country outside of the region by volume and value, with 48 transactions totaling $‌‌4.6‌billion. 

“The top five subsectors in the M&A landscape were insurance, asset management, real estate and hospitality, power and utilities, and technology  — indicating a real interest in the innovative solutions that the MENA region can provide,” said Watson. 

He added: “In addition, there is a focus on strengthening regional relationships with Asian and European countries, enabling MENA countries to gain access to larger and growing markets.”

According to the report, domestic M&As contributed to 48 percent of the total deal volume in 2024, with 339 deals valued at $24.4 billion. 

The technology and consumer products sectors together contributed 35 percent of the deal volume, driven by accelerated digital transformation in the region. 

“In 2024, technology remained the most attractive sector for investors, accounting for 23 percent of total inbound and domestic deal volume. We’re living through a productivity renaissance fueled by technology and AI, which will manifest in capital allocation and M&A,” said Anil Menon, head of M&A and equity capital markets leaders at EY MENA. 

The oil and gas sector topped the sectors in domestic M&A values at $9 billion, largely due to Saudi Aramco’s $8.9 billion acquisition of a stake in Rabigh Refining and Petrochemical Co.


Jordan monthly tourism revenues up 22.8% to $680.5m

Updated 35 min 56 sec ago
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Jordan monthly tourism revenues up 22.8% to $680.5m

RIYADH: Revenue generated by the tourism sector in Jordan reached $680.5 million in January, representing an annual rise of 22.8 percent.

Citing data from the Central Bank of Jordan, the country’s news agency, Petra, reported the boost was primarily driven by a 22.7 percent growth in spending from Jordanian expatriates, a 20.2 percent rise from non-Jordanian Arabs, and a 30.7 percent surge from non-Arab visitors.

Through the Jordan National Tourism Strategy 2021-2025, the country aims to attract international visitors with its archaeological and cultural heritage and natural landscapes. 

Tourism growth in Jordan also aligns with the regional trend, where countries like Saudi Arabia and the UAE are strengthening the sector as a part of their economic diversification agenda. 

The latest report also highlighted a significant increase in spending in outbound tourism, which reached $184.9 million in the first month of the year, marking an annual rise of 29.4 percent,

In January, another analysis released by Jordan’s central bank revealed that the country’s tourism revenues in 2024 amounted to $10.20 billion, representing a marginal year-on-year decline of 2.3 percent. 

CBJ added that this decrease in annual revenues was due to a 3.9 percent drop in the number of tourists visiting the country. 

In its 2024 annual report, the country’s tourism ministry said that the war on Gaza had a detrimental impact on the performance of tourism in Jordan, resulting in a decline in the number of visitors and spending. 

The data revealed that the country witnessed an increase in tourism revenue from Jordanian expatriates by 7.7 percent and from non-Jordanian Arab tourists by 12 percent in 2024. 

Conversely, tourism revenues from Europe declined by 54 percent, followed by an income drop from the Americas at 54 percent and 15.3 percent from other nationalities. 

However, the release added that the number of international visitors to Jordan in 2024 reached 6.10 million, exceeding the target of 5.36 million as outlined in the country’s Economic Modernization Vision. 


Saudi Aramco cuts propane, butane prices for March

Updated 27 February 2025
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Saudi Aramco cuts propane, butane prices for March

RIYADH: Saudi Aramco has slashed the official selling prices for propane and butane for March, according to a statement released on Thursday.

The new prices are set at $615 per tonne for propane and $605 per tonne for butane.

Both propane and butane are types of liquefied petroleum gas, commonly used for heating, vehicle fuel, and as feedstock in the petrochemical industry. Although similar, these gases have different boiling points, making them suitable for a range of specific applications.

Aramco’s OSPs for LPG serve as important benchmarks for contracts supplying these products from the Middle East to the Asia-Pacific region.

Propane demand typically peaks in the winter months, as it is a key source of home heating, and this seasonal increase often drives up prices.

The fluctuations in price are a direct reflection of supply and demand dynamics, with colder weather pushing prices higher in line with greater consumption.


Pakistan consumer inflation to remain stable in February — finance ministry

Updated 27 February 2025
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Pakistan consumer inflation to remain stable in February — finance ministry

  • Inflation anticipated to remain within range of 2.0-3.0% for February, prospects of a slight increase to 3.0-4.0% by March 
  • Inflation has eased since last year with CPI coming in at 2.4% in January compared to 24% in the same period last year

ISLAMABAD: Pakistan’s consumer inflation was expected to remain stable in February and maintain a downward trajectory compared to the previous year, the finance ministry said in its monthly economic outlook report on Thursday.

“Inflation is anticipated to remain within the range of 2.0-3.0% for February 2025, however, there are prospects of a slight increase to 3.0-4.0% by March 2025,” the report said.

Inflation has eased since last year with CPI coming in at 2.4% in January compared to 24% in the same period last year.

Authorities have credited the downward trend to economic stabilization under a $7 billion International Monetary Fund program secured last summer.

An IMF mission is due to arrive in Islamabad next week for the first review of the global lender’s facility.

“The primary surplus is expected to improve further in the coming months,” the ministry said, pointing to one of the benchmarks identified by the IMF.

The report also said that foreign remittances, a crucial lifeline for Pakistan’s economy, were expected to rise.

“Workers’ remittances recorded robust inflows of $20.8 billion during July-Jan FY2025, marking a 31.7% increase over $15.8 billion last year,” the ministry said.


Oil Updates — crude gains after Trump cancels Chevron’s Venezuela license

Updated 27 February 2025
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Oil Updates — crude gains after Trump cancels Chevron’s Venezuela license

TOKYO/SINGAPORE: Oil prices climbed for the first time in three days on Thursday, with supply worries resurfacing after US President Donald Trump announced a reversal of a license given to Chevron to operate in Venezuela.

Brent crude oil futures rose 24 cents or 0.33 percent to $72.77 a barrel by 6:28 a.m. Saudi time. US West Texas Intermediate crude oil futures were up 18 cents or 0.26 percent at $68.80 per barrel.

A day earlier, the contracts settled at their lowest since Dec. 10 due to a surprise build in US fuel inventories that hinted at weakening demand and hopes for a potential peace deal between Russia and Ukraine.

Both benchmarks have lost about 5 percent so far this month.

Trump on Wednesday said he was reversing a license given to Chevron to operate in Venezuela by his predecessor Joe Biden more than two years ago.

Chevron exports about 240,000 barrels per day of crude from its Venezuela operations, over a quarter of the country’s entire oil output. Ending the license means Chevron will no longer be able to export Venezuelan crude.

“The Venezuela news triggered unwinding after the recent sell-off amid Russian-Ukraine ceasefire talks,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

“Potential buying from the US Strategic Petroleum Reserve also supported the market since WTI was trading near its lowest level in over two months,” he said.

Last week, Trump said his administration would quickly fill up the SPR. He criticized Biden for tapping the SPR to bring down the price of gasoline.

Market participants remain focused on Trump’s Russian-Ukrainian peace talks. Trump said Volodymyr Zelensky would visit Washington on Friday to sign an agreement on rare earth minerals, while the Ukrainian leader said the success of the deal would hinge on those talks and continued US aid.

US crude oil stockpiles fell unexpectedly last week as refining activity ticked higher, while gasoline and distillate inventories posted surprising gains, the Energy Information Administration said on Wednesday.

“Since this is a seasonal off-peak period, with demand shifting from kerosene to gasoline, the sell-off driven by rising product inventories has likely run its course,” NS Trading’s Kikukawa said.

Separately, Goldman Sachs said in a note on Wednesday that the US administration’s dual goals of commodity dominance and affordability reinforce the bank’s Brent $70-85 range baseline, a range that is conducive to robust US supply growth.