00:00One of the observations I've had is there is a huge technology presence this year at the conference,
00:07more so than in prior years.
00:08And I wonder whether that's also partially a reflection of how Saudi 2030 vision is also evolving as well,
00:16in the sense that there's been perhaps a pivot as of late away from some of the signature mega-sized projects
00:24and more towards a focus towards those new technologies of the future like smart manufacturing and artificial intelligence,
00:32some of the discussions that we're having here at the FII.
00:35Jamal, it's great to be here.
00:36I think what people have been describing as a pivot is actually us deep diving further into a component of the economy
00:44that will help us move from just being a resource-rich economy towards being a productivity-led economy.
00:50As you know, Vision 2030 has been put in place to get us less reliant on a single commodity price,
00:58less reliant on how big the government budget is,
01:01and more reliant on private sector dynamism and productivity on innovation.
01:05Technology plays a big role.
01:07We have priority sectors, health care, energy, technology and defense,
01:12but also artificial intelligence and general technology.
01:14That's very important for the kingdom's transformation.
01:17And in addition to that, plans are put to achieve certain outcomes.
01:22If with time the agility muscle tells us that there's room to improve the outcomes, plans can change.
01:30We're still steadfast in all of our projects that we have announced.
01:35Some have been deprioritized.
01:37Some have been schedule has changed,
01:40primarily because the reason they were put there have already been achieved.
01:44Tourism, culture, entertainment, and sports,
01:46these are sectors that required anchor projects that we announced that are starting to deliver today.
01:53Tourism is giving us the numbers we wanted.
01:56We had targets in 2030 achieved seven years in advance.
01:59And as such, because of that, and because of the private sector participation in these new sectors,
02:05there was room for wiser use of our capital towards doubling down on technology,
02:11especially as AI started evolving recently.
02:14Yeah.
02:15Let me just ask you about the sort of right-sizing or reprioritization of some of those mega projects.
02:22Are we going to get more color on what the priorities are,
02:25which of the projects that you're prioritizing?
02:27So every sector has its own objectives.
02:30These projects have been mapped towards the objectives and the priorities of the sectors.
02:35We mentioned these four sectors.
02:36If you look at Riyadh alone, very soon, in a matter of months, weeks,
02:42you'll see that Six Flags will open in the entertainment city of Ghiddiya.
02:46This is a large entertainment city.
02:48Six Flags is going to be one of the smallest components in it,
02:52and it will open at the end of December.
02:53A water park will open a few days later, a soft opening,
02:57and then in the summer the plan for now is to have the grand opening.
03:01And then more projects there.
03:02If you look at the Red Sea, five resorts followed by 11 resorts already open to the public and coming online.
03:09If you look at Dariya, also to the west of Riyadh, you look at Ula.
03:14These are all mega projects that are in delivery and some have been delivered.
03:18So it depends on what each sector wants from these projects and how it will contribute.
03:24But there's pretty good momentum in all these four sectors.
03:27Okay.
03:27So, you know, one of the concerns that the analyst community has looking out and projecting growth in Saudi Arabia
03:33is that this sort of reprioritization of projects is actually going to lead to a slowdown in growth of some sorts
03:42that's going to have an impact on the known oil part of the economy as well.
03:46Do you have any projections as to how that right sizing could impact GDP in future years?
03:52So, one of the most important things is that in our budget process, in our continuous planning process,
03:59we have multiple scenarios that make sure that we are ready for whatever scenario that plays out.
04:05Our forecast for 2025 and 2026, total economic activity, total GDP is between 4.8 and 5.1 for 2025 and 6.5 for 2026.
04:17Non-oil is 3.8 and for 26 is 3.6.
04:21That's healthy, sustainable, continuous growth, especially in the non-oil sector.
04:25Keep in mind, the non-oil activities today represents 56% of the total real GDP.
04:30So, higher than government activities on their own, higher than oil activities on their own,
04:34and higher than both of them combined for the first time in our history.
04:39It used to be 46%, now it's 56%.
04:42On top of that, the reliance of the total economy on the oil sector has dropped from 90%, a little north of that, at 2015.
04:51Towards 68% at 2024, and the plan is to take it even further down.
04:55Okay.
04:56This year, well, a month ago, Saudi Arabia published a deficit number that was wider than you had originally anticipated.
05:04Is there, would you say, a concerted effort to bring down the size of this budget deficit in future years, obviously?
05:11Long term.
05:11Our financial planning is medium term and long term.
05:15So, sometimes it's a priority for us to invest at the right time to achieve the right economic returns.
05:21If we keep thinking short term and keep going back to the annual budget process without the medium term planning and the framework without long term planning,
05:28we may lose ourselves the opportunity to enact structural reform that will bring about not only non-oil growth that is order of magnitudes higher than today,
05:39but with it, the non-oil revenue that comes with it.
05:41Yeah.
05:42But when you think of your long term planning, is there any level of debt to GDP, for example,
05:49that you would become uncomfortable with as Saudi Arabia takes on more and more debt?
05:53We have targets, and we're planning to be within these targets by 2030.
05:59Beyond 2030 is another story.
06:01We want to be a healthy fiscal profile like we've always been,
06:05and we want to make sure that we are one of the most attractive debt issuers with a healthy level of debt at the right cost.
06:13Today, by the way, the conversation is shifting from delivery at any cost to delivery at the right cost.
06:18So that means making sure we're cost competitive across everything we do.
06:22Yeah.
06:22One of the comments that his excellent C.L. Falah made earlier this week caught my attention.
06:27He was saying that there needs to be more room for private sector involvement.
06:32What sectors do you think are ripe for the private sector to get involved here in Saudi Arabia?
06:37What's showing the biggest promise?
06:39So if we look at the non-oil activities, we'll see that the source of these non-oil activities has shifted from the traditional contracting,
06:46logistics, construction, to entertainment, sports, communication, and much more.
06:53And we're seeing that with our better ability of capturing GDP and its sources of growth and activity,
07:00we'll be able to spot more sources of growth across subsectors as well.
07:06So our priority sectors are all open for the private sector.
07:10Clearly, there are some segments in some of our sectors that are government-led, state-led, PIF-led,
07:16such as oil exploration producing under Ramco.
07:19But the rest, the signal we want to send, is that this is open and fair competition as a general rule.
07:25And then, of course, there is room for PIF, PIF-owned, to compete as well fairly with the rest to create more private sector dynamism.
07:34I mentioned health care.
07:35Health care today is very important because we've spent hundreds of billions of dollars,
07:39and we'll continue to do that because we're a young population,
07:42and we're going to start the aging process in 18 to 20 years.
07:46Also, energy.
07:46All of our energy experience today is being translated from only being in the cleanest hydrocarbon energy globally at large scale
07:55to excellence in blue hydrogen, green hydrogen, nuclear, wind, solar, and in the energy transition solutions.
08:04We believe in the transition, but in a pragmatic form of it.
08:07And then, of course, technology like we mentioned.
08:09Does it help that the current U.S. administration enjoys such a good relationship with Saudi Arabia right now?
08:17Will that, you think, help with your economic growth plans in a few years, in the next few years?
08:22So the kingdom's always prioritized strong relations with its partners.
08:27Of course, we're playing a bigger role on the global scale than before,
08:31outside of just energy, diplomacy, foreign aid, and assistance.
08:35And the U.S. has been an ally and a partner for 90 years plus.
08:38We plan to continue this relationship and partnership and strengthening it in the future decades to come.
08:46And if you look closely at what the kingdom's been doing since Vision 2030,
08:51what the U.S. has been doing recently,
08:53you'll see that at the core of it is a focus on pragmatism and consequence.
09:00So that's a shared thing we have.
09:01And Saudi Arabia had been invited to join BRICS.
09:04Where do you stand on that right now?
09:06So we've been invited to join a multilateral platform that is large and that has various components to it.
09:14We have a process for any invitation,
09:16and we're still in the process of evaluating the invitation before making it.
09:22Is that a multi-month process or a multi-year process?
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