Is Saudi Arabia's Vision 2030 possible?

Saudi Arabia recently held the second edition of the Financial Sector Conference (FSC) 2023 from March 15th to 16th in its capital city, Riyadh. The event hosted over 3,000 visitors and an additional 60 speakers, with more than 70 corporate participants, 30-panel discussions, and 35 expert focus workshops.

The financial sector development program is only one of the subsets of Saudi Arabia's Vision 2030, with there being 13 programs in total.

International Business Times UK attended the FSC 2023, where we went to discover why now is the right time to invest in Riyadh, Saudi Arabia. The nation's GDP has reached a little over $1 trillion, with no plans to slow down. The Middle Eastern giant aims for its GDP to sit at $1.7 trillion by 2030. Ambitious? Perhaps. Nonetheless, it would seem that the country's leaders are optimistic about making their ambitions come true.

What was thoroughly expressed at the conference was Saudi Arabia's Vision 2030's ambitions being steadily on the right track - especially when it comes to women in the workforce. The nation aimed to have 30 per cent of women included in the workforce by 2030. However, they have already surpassed that, currently standing at 33 per cent - almost 7 years ahead of schedule.

"To be honest it feels so good," said Leena Abdullah Batarfi, the Legal Officer at AlBilad Investments, when asked about how it feels to be a woman in the financial sector in Saudi Arabia. "It feels so good to feel that you have a place in this sector. I don't feel strange or that this isn't my place. I feel like I have something to say and to share - like I have a chair to sit on at the table."

She went on to share her gratitude for Saudi Arabia's growth and progression, stating: "This is why I am so grateful for the huge development that has happened for women in the financial sector."

When speaking with the Chairman of Saudi National Bank, Mr Ammar Alkhudairy, he stated the "hard data" that we have today is nothing but impressive. He seemed rather enthusiastic about Saudi's future endeavours and visions, strongly believing that the nation can achieve Vision 2030.

Furthermore, Mr Alkhudairy spoke on taking pride in homeownership. He said: "We [Saudi National Bank] do a lot of the financing for mortgages in Saudi Arabia. The aspiration was to have 60 per cent homeownership inclusion by 2023 and 65 by 2025. We are already ahead of that. We are at 63 per cent as we speak.

"The [Saudi Arabia] leadership has not only shown that they are able to deliver on these targets, but they will aspire to beat these targets and set new targets. So now we have new targets for homeownership and new targets for women inclusions."
The Chairman believes "multiple books" will be written about Saudi Arabia, given that the nation was able to transform itself in such a deliberate and assertive manner within a short time frame.

Nonetheless, Mr Alkhudairy did admit that "I am not an economist" and couldn't give an honest prediction on when the country's economy will achieve $1.7 trillion. Although he said he was quite confident that they would get there. The when, on the other hand, is still an uncertainty.

South Africa's Minister of Finance, H.E. Enoch Godongwana spoke with us on the future of South Africa pushing forward to become a net-zero nation. When asked why now is the right time to invest in Saudi Arabia, he hinted at a possible collaboration with the country, saying: "They have the resources. They might not have, in some instances, the right technology - but they have the resources."

South Africa's Minister of Finance further went on to praise Saudi Arabia's use of their resources, complementing how the Middle Eastern giant has used their resources to develop their technology, and at the moment, they are now one of the leading "major countries in the hydrogen space."

He also touched on digitalisation and the major role it will play in the future, expressing that even in G20 it is one of the "key" elements and the global economy is moving towards that approach. H.E. Enoch Godongwana said: "South Africa has no other option but to take that direction in 2023." He further added that the public systems need to also drive in that path.

It would've been an impressive feat if Silicon Valley Bank's (SVB) collapse was not brought up during the conference. What was still impressive was how they were able to weave it around their panel discussions on such short notice. One thing the financial experts in Saudi Arabia did make clear was the little to almost "no exposure" or impact SVB's collapse had on the country's banks and financial structure.

According to Mr Alkhudairy, Saudi National Bank deals with the top five banks in the US, which are well-regulated and protected, and the only fears were the possibility of contagion, leading to other banks getting affected. Fortunately, the regulators in the US, the Federal Reserve System (FRS) and Federal Deposit Insurance Corporation (FDIC) did what was necessary to cut off the contagion effect and isolate the issue, untimely having very little impact on Saudi's banking system.

Rehan Zulqadar, Managing Director of the financial advising firm Wathiq, also spoke on SVB's collapse, saying SVB needed to "derisk their balance sheet." There was too much focus on startups and it was one of the biggest reasons for their failure, from his understanding. He believes they had to diversify their portfolio and not "put all their eggs in one basket."

Although talks of SVB's collapse were highly present in most of the conversations, that was not the only topic discussed. The subject of Bitcoin undoubtedly had to be brought up. Capital Market Authority Chairman H.E. Mohammed Elkuwaiz had an interesting view on the use of Bitcoin. During one of the guest panels, he told John Defterios, Professor of Business at NYU Abu Dhabi: "We are unlikely to look at Bitcoin as a means of payment but we might look at it as a store of value."

If there was something to take away from the FSC, it would have to be the faith banks supposedly have in Saudi Arabia's development. The Chairman and CEO of State Street, Ronald P. O'Hanley, believes we will see "a lot" of investments starting now and even in the future. It is unsure how much of these statements are nothing but empty promises. However, many industry experts seemed very certain of Saudi Arabia's ambitious future coming to pass.