Okaz newspaper

THE Vision 2030 was not just ink on paper or plans without reality or dreams that are difficult to achieve. On the other hand, it is becoming a reality on the ground. The Vision 2030 has been activated through supportive economic programs, which will contribute to increasing the country’s gross national product (GNP).

The privatization program has been implemented with a modern outlook overcoming all the negative aspects that have occurred in some countries. I would like to reiterate here that the privatization in Saudi Arabia would be different from other developing countries.

It’s the answer to the concerns expressed by officials in the departments and corporations that have been targeted for privatization. There were concerns that privatization would lead to many employees losing their jobs. Most citizens feared the privatization of health and education sectors would force them to pay charges for services at public hospitals and schools.

These concerns have nothing to do with the Kingdom’s privatization program, as treatment in government hospitals will remain free for citizens. The move will not only help citizens receive specialized and advanced health services but will also improve the performance, productivity and quality of service at public hospitals and healthcare centers.

The same applies to the public education system. While ensuring free education for all Saudi citizens, the privatization of schools would contribute to development of educational systems, modernization of curricula, enhancing capabilities and skills of teachers and creation of a suitable learning atmosphere for students by setting up model schools with modern devices and facilities and giving specialized private firms an opportunity for management and operation of schools and construction of public schools.

The government’s decision to privatize 10 sectors such as housing, health, education, transport, Haj & Umrah and telecom highlights its intent to develop these services for the benefit of citizens and eliminate losses caused by their mismanagement, which resulted in falling state revenues.

The main objective the privatization program is to reduce dependence on oil as a key source of revenue for the national budget. Indicators show that its contribution to the GDP would reach SR13.14 billion by 2020 while total government revenues from asset sales would reach around SR35 billion to SR40 billion. The state’s net savings from capital expenditure and operating expenses are estimated at SR25 billion to SR33 billion. The program is expected to create 10,000 to 12,000 jobs in the private sector by 2020.

These figures indicate that the privatization program has huge benefits not only in terms of revenues earned from asset sales but also long-term economic and social benefits. Privatization is no longer an option for Saudi Arabia but has become a necessity for improving the country’s investment climate and raising efficiency of public institutions. It’s essential to achieve greater social justice, accelerate economic growth and make Saudi economy compatible with global economy.

Privatization aims in general to redistribute roles between the public and private sectors and the state’s gradual withdrawal from some economic activities, making way for private initiatives by encouraging private investment. This will reduce financial burden on national budget, lead to rationalization of expenditure and improvement of services. It will also raise efficiency of management and operation, encourage competition, end monopoly and create appropriate investment climate and encourage domestic and foreign investment. The program will facilitate the Kingdom’s transition to the free market economy, play an important role in the fight against corruption, enhance transparency, activate monitoring regimes and keep up with technological advancement.

This means the private sector has to strengthen itself by restructuring its institutions and companies financially and technically, taking support of specialized firms of consultancy and expertise and making use of the experiences of developed countries to take up the new responsibility of privatization in which the private sector has a key role to play.

It’s the duty of the chambers of commerce and industry across the Kingdom to spread a culture of privatization in the Saudi business circles as they lack such an experience. This is required to prevent exploitation of the Saudi private sector to dominate on state assets by foreign investors. Efforts must also be made to protect the rights of employees to avoid their retrenchment and enhance their skills.

The Saudi Arabian General Investment Authority (SAGIA) must conduct workshops, seminars and conferences on privatization to educate Saudi and foreign investors on the program, teach them how to formulate leasing and management contracts. Monitoring authorities must be set up to check and punish violators of the law and prevent monopoly of companies and investors. An upper ceiling for foreign shares and capital must be fixed to prevent foreign companies and investors from controlling state assets, protect citizens from excessive prices and ensure quality and efficiency of services.