Jordanian ambitions, Saudi funds: A look at Saudi investments in Jordan
In 2017, Saudi Arabia’s Public Investment Fund and a number of Jordanian banks established the Saudi-Jordanian Investment Fund to channel $3 billion into the Jordanian economy. Two SJIF projects provide relevant case studies of the challenges facing Jordan’s broader efforts to attract more FDI and drive economic development.
Pensions, sovereign wealth funds, and industrial policy in the Gulf: A look at fund consolidation
The last few years have seen a lot of consolidation in Gulf financial sectors. Not only do these mergers create economic benefits, the merged entities also become potent tools for economic development. The mega-funds and other major financial institutions are part of a trend where Gulf political elites sidestep ossified bureaucracies and instead centralize power in private entities over which they have even more control.
Balancing the books: A deep dive into fiscal policy and diversification in Oman
This policy brief provides a deep dive into the far-reaching and interrelated policies imposed by the government to reduce the country’s deficits, debts, and reliance on hydrocarbons.
How Saudi Arabia is forging ahead with its privatization drive
Saudi Arabia’s leviathan sovereign wealth fund, the Public Investment Fund (PIF), has recently sold a 5% stake in the Saudi Telecom Company (STC). The firm is the largest and most profitable in the regional telecoms sector. The 3.2B USD sale, completed in early Dec. 2021, is yet another step in Riyadh’s privatization drive as part of its Vision 2030 agenda, and highlights the growing role of the Kingdom’s domestic financial sector.
Mega-projects and Small Enterprises: Understanding Saudi Arabian Banks’ Role in Economic Development
Vision 2030 promises a transformation of Saudi Arabia’s economy, and the financial sector will be crucial to achieving this. The sector will facilitate private investment focusing on small and medium-sized enterprise (SME) financing, fund mega-projects, and be a driver for diversifying away from oil. As a result, banks’ role must go from being distributive and largely passive to developmental and active. This article will highlight how the role of the Saudi banking sector has been transformed in the last five years and how its composition is changing to cope.
While Western banks saw their valuations drop substantially during the first 18 months of the COVID pandemic — and have yet to recover — the declines among Saudi banks have been smaller and their valuations are now closer to, if not above, their pre-pandemic levels. Identifying the drivers of this seemingly contradictory trend helps us better understand the shifts within the Saudi banking sector and the growing impacts of policies related to Vision 2030, the country’s long-term economic development and diversification program.
