Saudi News Roundup – 4th November 2016

Nov 4, 2016

Home > Snapshots > Saudi News Roundup – 4th November 2016

Changing of the Guard, Many Visitors and Stock Market Open for Investment

This week Saudi Arabia got a new finance minister. The old one, Dr Ibrahim Al Assaf, 67, was released of his duties after 20 years in office. He was one of the last of the old guard of Saudi ministers. Like many others who are not completely removed from the scene, he has been made minister of state and will remain a member of the Council of Ministers.

The new finance minister is Mohammed Al-Jadaan. A lawyer by profession, he is the founder of Al-Jadaan & Partners, the former associate of Clifford Chance. In 2015, he was appointed chairman of the Capital Market Authority (CMA). There he oversaw several reforms of the Saudi Stock Exchange (Tadawul), among them the opening up to direct foreign investment. He enjoys an excellent reputation in Saudi Arabia among fellow lawyers and businessmen, and is a good example of the renewal process, bringing young reformers into key positions to push through the economic transformation programme. A common feature of the new generation of Saudi leaders is that they are likely to have been educated abroad (as were many of the old guard). One asset is that they have a relatively open and business-friendly outlook.

Many experts believe that these steps are a continuation of the programme to create a team that’s fully supportive of the economic reform plans. While experience is important, it is good to have new blood and new ideas.

The royal decree also changed positions of ……

While Al Assaf’s release was not mourned as one would expect in Saudi social media, the resignation of the Secretary-General of the Organisation of Islamic Cooperation, Iyad Al-Madani, was. He resigned from his post on Monday due to health reasons, but the real reason was that he had made jokes about the Egyptian President Al Sissi. A few days later he had apologized about the jokes that they “were only based sense of humour and were by no means intended to be offensive to the Egyptian leadership represented by President Al Sissi.’’

The Egyptian government had, as it seems, a different opinion and said it will be “reviewing its position toward the secretariat of the organization.” Well, they did and a new secretary general was appointed. Saudi though.

Argentine Vice President Gabriela Michetti visited Saudi Arabia and held talks – with the usual suspects – on a range of issues. Talks focused on nuclear power, a diversification area for the Saudi economy.

In 2011, Saudi Arabia had signed a nuclear energy cooperation deal with nuclear desalination specialists in Argentina. Part of the program is that state-owned R&D companies from Argentina and Saudi Arabia have set up a joint venture company, Invania, to develop technology for Saudi Arabia’s nuclear power program and to leverage Argentina’s nuclear experience. The agreement is part of Saudi’s commitment to developing a competitive energy sector, localise industry hubs in order to foster economic diversification and job creation.

On trade and investment fronts, Al-Marai has acquired land in Argentina worth $87 million for the production of alfalfa to feed its dairy cows. The South American country exports large quantities of frozen chicken, fruit, vegetables, corn, petrochemicals, etc.

Another political lady visiting Saudi Arabia this week was the European Union High Representative for Foreign Affairs and Security Policy and Vice President of European Commission Federica Mogherini. Her short visit – 12 hours – to Saudi came after she had visited Tehran. During her meeting with King Salman, Syria and Yemen were obviously the main reason of the visit. It remains unclear what exactly has been discussed.

A day before her visit to Iran, the foreign ministers of Russia, Syria and Iran met in Moscow to discuss the Syrian crisis. Clearly it was about finding solutions on those two topics. Mogherini met there with President Hassan Rouhani and Foreign Minister Javad Zarif, and had discussions on regional problems.

Officially it was trying to solve the crisis.

On Wednesday King Salman received a copy of the 56th annual report of the General Auditing Bureau for the Hijri year 1436/1437.

This report gives financial results of the audits and performance controls, as well as recommendations. The bureau aims to identify errors, irregularities and abuses, works to achieve added value by enhancing the concept of controls and monitoring, instilling principles of transparency, and contributing to the modernization and development of financial and accounting systems.

The results are based on reports about audits and controls that were reported to the parties concerned, in accordance with the auditing standards adopted by the bureau, the International Organization of Supreme Audit Institutions and regulations in force.

It is important to keep in mind that in this phase of Saudi Arabia’s development everything is aimed at implementing Vision 2030. So, when reading this roundup always remember these news are focussed on 2030 and to make it happen.

Furthermore, Saudi Arabia is marketing its Vision 2030 at highest levels. Plans are underway to organize a forum in the Kingdom in collaboration with the World Economic Forum to highlight the Kingdom’s Vision 2030 and the National Transformation Program 2020. This was revealed following the meeting between Commerce and Investment Minister Majid Al-Qassabi and Philipp Rössler, board member of the World Economic Forum.

Done finally! Non-resident foreign investors are allowed to trade in the units of the Real Estate Investment Traded Funds on Tadawul. This step comes as a part of the CMA’s role in regulating and developing the capital market as well as introducing new investment legislation to help providing new financial instruments and diversifying investment opportunities. The CMA made it clear that the asset management industry is a key securities business activity because it contributes to providing many investment products, professional management to client assets and boosts professional practices and institutional conduct in the market much needed.

In its 23rd edition, the World Islamic Banking Conference report will emphasise the Saudi Arabian market and its development, as it is one of the most active and influential markets in the Islamic finance world. The keynote speech will be delivered by the Governor of the Saudi Arabian Monetary Agency (SAMA) Dr Ahmed Al-Kholifey with an insight into the opportunities available in this region as demand in Islamic finance products in the GCC is growing.The conference is taking place in Bahrain, 3.12 – 5.12.

Aramco is moving, expanding and developing

President and CEO Amin H. Nasser believes that the importance of the role of energy in global economic development and the environmental sustainability are undeniable.

In his keynote speech at the King Abdullah Petroleum Studies and Research Center’s (KAPSARC) energy dialogue conference, he said that the development of the renewables sector is part of a comprehensive carbon management strategy, focused on helping the country in its energy efficiency drive through expanding gas supplies, boosting research and development of technologies that could dispose of carbon while turning it into beneficial products.

Saudi Aramco plans to invest in renewables to support Saudi Arabia’s drive to diversify its energy mix and reduce its dependence of hydrocarbons, without elaborating on the size of the planned investments. Guess depends on oil prices.

While much debate is on whether King Abdullah City for Atomic and Renewable Energy (KA-Care) and the upcoming King Salman Renewable Energy Initiative can deliver on what is still an ambitious target, state utility Saudi Electricity Company (SEC) is so far leading the way with its two upcoming 50 MW solar projects at Al-Jouf and Rafha.

After the disappointing failure of the previous 54 GW renewable energy programme, which had been launched to great fanfare in 2012, the government has now set a much more obtainable target of 9.5 GW of renewable energy, with the first 3.5 GW planned to come online by 2020.

In this regard, feasibility studies on smart grid projects have shown $3.2 billion of investment will result in more than $3.0 billion of benefits, according to Abdullah al-Shehri, governor of Saudi Arabia’s Electricity & Cogeneration Regulatory Authority (Ecra), speaking at an Energy Reform event in Dubai. Demand is growing because of population growth and economic development.

In the process of pairing its facilities, Saudi Aramco and Nabors Industries signed an agreement to form a joint venture to operate onshore drilling rigs, equally owned by both companies. It is expected to be operational in the 2nd quarter of 2017. The JV will own, manage and operate the partners’ onshore drilling rigs. Aramco has already started introducing a clause into contracts with international oil services companies and suppliers in the country, giving them targets to hire Saudi nationals. Nabors has operations in Saudi Arabia, to focus on both existing and future onshore oil and gas fields.

More hiring of Saudis process came from US-based McDermott International which has opened a new office in Al-Khobar to enhance its engineering capacity. It will add another 300 staff to its existing workforce in Saudi Arabia.

The move is part of several initiatives McDermott is carrying out in the Saudi market to support Saudi Aramco’s In Kingdom Total Value Add (IKTVA) programme, a basic pillar of which is to create jobs for qualified Saudi nationals.


Oil prices are also affecting the industry as a whole. Non-oil exports went down by SR 1.8 billion, which reflects the decrease in prices of petrochemical exports as most of Saudi Arabia’s non-oil exports are petrochemicals. Also, imports went down by SR 17.473 billion, which surely is the result of the decrease in commodities prices globally in addition to lower buying power of local consumers as a result of government salaries being cut and a difficult local economic environment in general.

No good news on oil prices. OPEC said that the refreshment phase of the market has been going on for too long so far warning that more delay will be harmful. OPEC Secretary General Mohammed Yarkindi asked member states to enhance efforts to ensure the success for reaching an agreement in Algeria’s meeting this month to reduce production.

Bloomberg quoted Russian oil minister Alexander Novak saying that it is vital to balance oil production, after the Vienna meeting in which no agreement was reached. Note that if OPEC reaches an agreement this time it will be the first in 9 years. OPEC warned that internal fights should not be allowed to affect the long-awaited deal to refresh the oil market.

On the other hand, OPEC’s oil output is likely to set another record high in October, a Reuters survey has found, as Nigerian and Libyan output partially recovered from disruptions and Iraq boosted exports.

The rise in output could add to scepticism about OPEC’s ability to finalize a plan agreed in September to limit supplies. Oil, which rallied to a 2016 high near $54 a barrel following the decision, has since slipped toward $48.

Supply from the OPEC countries has risen to 33.82 million barrels per day (bpd) in October from a revised 33.69 million bpd in September, according to the survey based on shipping data and information from industry sources.

That would be 820,000 bpd above the top end of a target output range OPEC agreed to adopt at a September 28 meeting. According to analysts, production near 34 million bpd would prolong the supply surplus weighing on the market.

“With OPEC production creeping up toward 34 million barrels a day, a production freeze guarantees that the oil market will remain out of balance throughout 2017 and into 2018,” said David Hutton of oil broker PVM.

Supply has risen since OPEC in 2014 dropped its historic role of fixing output to prop up prices as Saudi Arabia, Iraq and Iran pumped more. Production has also climbed due to the return of Indonesia in 2015 and Gabon in July as members.

Output in Libya has increased since the reopening of some major terminals. Yet not to be compared to the 2011 rate.

Iraq exported more crude from its northern and southern ports, lifting supply to 4.58 million bpd in October from a revised 4.52 million bpd in September.

Saudi Arabia has kept supply steady to lower, but still within sight of the record high reached in the summer, sources in the survey said. One source said there were signs of a bigger drop in output.

The UAE and Kuwait both pumped slightly more.

In Iran, OPEC’s fastest source of production after the lifting of Western sanctions, has slowed down as output nears the pre-sanctions rate. Iran needs investment to boost supply further.

The biggest drop was in Angola because of planned maintenance on the crude stream which pushed exports to a 10-year low.

Gabon, OPEC’s smallest producer, pumped less because of a workers’ strike.

Water and electricity are crucial issues in the region made mainly of sand

GCC residents consume on average 65 per cent more water a year than the world average – 816 cubic metres per capita per annum (pcpa) compared with 500 cubic metres pcpa. And, despite spending about $7.6billion a year over the past decade on new desalination capacity, current projections indicate the region must increase its water supply capacity by a further 33 per cent by 2020, Saudi Arabia by 40 per cent. This will cost the GCC upwards of $36billion.

But it is when you add in the estimated $15 billion a year the GCC spends on subsidising water supply that the water bill really adds up. Together, GCC states spend about $22.6billion a year – close to 6 % of the annual budget – on water. This is a huge burden at a time when governments are looking to make savings. It is also unnecessary.

No one questions the vital importance of investing in water supply and security, but the region is wasting its money.

Cutting subsidies is the most vital step. As well as delivering direct savings, passing on the true cost of water to the user will quickly reduce demand. In Dubai, which introduced water tariffs in 2011, demand growth fell to 4 per cent a year from 10 per cent.

Reducing consumption significantly reduces demand projections, thereby cutting capital expenditure needs. Further savings can come from reducing leakages, increasing production efficiency and reducing agricultural demand.

None of these steps are easy and they will meet opposition. But they cannot be avoided if the region is to reposition itself to thrive in the era of low oil prices.


The existence of Daesh and its consequences has created tremendous religious awareness in Saudi Arabia, especially among Saudi youths.

At Taliban times the gap between pro and con was close, while with Daesh followers everyone agrees that they are not reflecting Islam and Muslims. Awareness is there within Saudi society about Daesh’s terrorist ideology is preventing citizens from joining the group. Saudi authorities are not ruling out a nexus between the terrorist groups in Yemen and Daesh which plotted to bomb the Al-Jawhara Stadium in Jeddah on Oct. 11. More time is needed to determine the nature of this link, Interior Ministry spokesman Maj. Gen. Mansour Al-Turki.

It is assumed a terror nexus because the targeting of the football stadium coincided with the launch of a ballistic missile from Yemeni territory.

He said the security forces foiled the plot to bomb the stadium during a World Cup qualifying match and dismantled two terrorist cells linked to Daesh.

Revealing more details about the plot, Maj. Gen. Attiya at the Interior Ministry’s Department of Investigation said that the stadium at King Abdullah Sports City is one of the crowning sporting achievements of Saudi Arabia. He said that an operational middleman in Syria identified the target to the cell members, giving them the type of car they would use — a vehicle with a capacity to carry an estimated 400 kg of explosives.

They had two options: Target the stands during the game which would have resulted in a partial structural collapse and the number of victims would have been higher, or to carry out the blast while spectators were exiting the stadium. The blast’s impact would have been felt up to 1,100 meters away, covering almost 800,000 square meters.

Social affairs

On the front for creating better Saudi skills, Minister of Labour and Social Development Minister Mufrej Al-Haqbani said in his keynote speech at the Eighth Social Dialogue Forum that the role of professional management in the private sector and its positive impact in the nationalization of jobs.

The principle of dialogue is being championed throughout the program which will enable all of the relevant sectors to work together under one umbrella and achieve.

Deputy Chairman of the Chamber of Commerce and Industry in Riyadh Al Mansour Al-Shathri said that the private sector has been doing its best to embrace the largest possible number of locals in the nationalization program. In the Arab region, the majority of private enterprises are SMEs tend to use of innovative solutions to apply modern methods in human resources as their resources are limited.

HRDF’s online portal maintains the biodata of more than 1.5 million job seekers, holds some 40,000 job opportunities, and 71,000 employers have registered to find suitable employees.

At the same time, the Replacement Administration in the Ministry of Civil Service has refused to renew the contracts of 478 expat medical professionals working at King Saud University (KSU). The university had requested the renewal of their contracts. But the ministry said these workers had spent a long period of time in the Kingdom and that there were qualified Saudis to replace them.

This came with several Saudi postgraduate degree holders seeking jobs in Saudi universities are demanding a review of the contracts of expatriate workers in universities.

They also called for the implementation of the Civil Service Ministry’s requirement that a contract worker’s period of service should not exceed 10 years in Saudi universities. This step came after millions of Saudis suffered lack of protection and fraud when requesting labour force from abroad.

The Ministry of Labour and Social Development has stopped the work of 126 requirement agencies for labours. A spokesman said that agencies that work illegally without licences are being chased and judged by law. So far 6 offices have not been renewed their contracts, while 7 other contracts have been cancelled asking clients not to deal with not licensed agencies and are on the ministry’s website, which gives customers clear overview on the guidelines of dealing for getting labourers.

More rights for women came this week from Majlis Al Shoula. First was a female member demanded that the right for children with Saudis married to foreigners should have been given the right to obtain Saudi nationality. The law which is 60 years old, was reviewed only twice in 2006 and 2008. This would be step to reduce discrimination d social pressure issues within the Saudi society.

The second right to be given is a law that will allow women to pray all day and night in Al Mosque in Al Medina, equally like men do. The entrance for women is far and makes it – specially for elderly women to enter and leave the mosque for prayer times.

In an unprecedented step, an imam was sentenced to 45 days in prison for defaming Saudi actor Nasser Al-Qassabi and claiming that he was an apostate. Al-Qassabi said that he is pleased with the judge’s sentence for the imam in Asir. He also said people in leading religious positions should not abuse their great influence to spew hatred and extreme ideologies.

Ubaid bin Kaaba Mosque Imam Saeed bin Farah had verbally attacked the Saudi actor Nasser Al-Qassabi during a Friday sermon last year.

The imam accused Al-Qassabi of being an apostate for an episode he acted in the television program Selfie that aired last Ramadan. The episode shows Al-Qassabi wearing a short dress and smashing musical instruments. In Islam defaming people is a sin. This is verdict signals a positive but perhaps not sufficient step in Saudi Arabia for limiting the rights given to the religious establishment.

For tourism purposes in Saudi Arabia, just in case, Al-Ahsa in east of Saudi Arabia was chosen by the UN as the most creative cities in the world on World Cities day.

And if you visit Riyad, Al Faisaliah Hotel has received the prestigious award for ‘Best Luxury City Hotel in Saudi Arabia’ at the 2016 Haute Grandeur Global Hotel Awards ceremony in Abu Dhabi.


Submit a Comment

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Suggested Articles

Understanding Saudi Law is made easier

Understanding Saudi Law is made easier

Until now, there were significant challenges in understanding how Islamic Law (Sharia) is applied in Saudi Arabia. One main issue was the tendency to interpret the law out of context or ignore relevant circumstances, leading to blind adherence without considering the specific situation. This is changing.

The History of Al Kiswa

The History of Al Kiswa

The annual replacement of the Kiswa, the covering of the Kaaba, is a significant event in the Islamic calendar which takes place during the month of Hajj. In this post, I will talk about history and details of this process.

From A Saudi Point Of View

From A Saudi Point Of View

I often get asked about the changes that have taken place in Saudi Arabia since 2016, both from a social and geopolitical perspective, and how people’s perceptions and lives have altered due to these changes.

Mecca’s Transformation: Adapting to Hajj Growth

Mecca’s Transformation: Adapting to Hajj Growth

The video showcases pervasive construction work in Mecca, particularly around Masjid al-Haram, the Grand Mosque. This ongoing development of the city has taken place over several years in stages, aiming to accommodate the growing number of pilgrims annually. The Saudi...

The Saudi Love For Music

The Saudi Love For Music

Saudi Arabia’s government is training kindergarten teachers for music instruction, marking a significant change in an education system that didn’t formerly include music. This shift, combined with a growing music scene, poses the question: Has this cultural shift affected Saudis’ music tastes, causing divergence from other cultures?

Taif, Saudi Arabia’s former Summer Capital

Taif, Saudi Arabia’s former Summer Capital

Located in the western Makkah Province of Saudi Arabia, Taif is known as the “City of Roses.” This nickname stems from its being the home of 700 farms where roses are grown, which are used in the production of rose water and rose oil.

Women moving forward in the Gulf

Women moving forward in the Gulf

I came across this article by Sinem Cengiz, on the journey of Gulf women in breaking into traditionally male-dominated sectors unfolds. From gradual progress to persistent challenges, she explores the current landscape, shedding light on the crucial role played by government initiatives in promoting their successful inclusion.

A science initiative for the next generation

A science initiative for the next generation

A new center for science and technology called ‘ilmi’ will be launched in Saudi Arabia to encourage scientific curiosity among youth as well as develop their skills, Saudi Press Agency reported on Saturday. This center is a great start, and other initiatives like this are needed to shape Saudi Arabia’s future.