A study from Stanford identifies 6 recommendations to advance the Saudi investment trend
The Stanford study praised the progress made in reducing dependence on oil by developing non-oil revenues in Saudi Arabia (SPA)
A research study, conducted by international experts at a global university, provided 6 recommendations that would advance the current investment trend in Saudi Arabia, as it indicated the need for the Public Investment Fund to adopt an approach to accelerating innovation and attracting foreign direct investment, through external partnerships, and enhancing efficiency in managing... sovereign assets; To enhance the financial sustainability model that the Kingdom aims to achieve.
Stanford University in the United States, in cooperation with the Decision Support Center in Saudi Arabia, issued a research paper on the Kingdom’s Vision 2030, entitled: “Enhancing the Kingdom’s economic resilience - moving from the national transformation model to sustainability... increasing the capacity of the vision’s programs.” ) to adapt to future challenges,” and a number of international specialists participated in its preparation in various fields of global competitiveness, including the economy, investment, and new technology. They are: Saudi Dr. Khaled Al-Suwailem, a global expert in sovereign wealth funds and their relationship with the real economy, who previously served as chief advisor and general manager of investment at the Saudi Arabian Monetary Agency, Professor Michael Lebeck, Dr. Ashby Munk, and Dr. Malan Rietveld.
Model transition
The research paper, published by the Stanford Center for Sustainable Development and Global Competitiveness and the Stanford Long-Term Investment Initiative, pointed to the Kingdom’s Vision 2030 and its strengths, the transition from the national transformation model to the sustainability model, and the main role of the Public Investment Fund in Achieving its goals, focusing on providing solutions to current and future challenges, especially those related to government financing and diversifying the economy.
In light of the new direction in the work of global sovereign funds, the research paper explained the new model adopted by the “Public Investment Fund” in global institutional investment work as a global sovereign fund to diversify the economy, by shifting from focusing on investing surplus oil revenues abroad, to investing them in developing the economy. local and its diversification.
She pointed to the extent of progress made in reducing dependence on oil, developing non-oil revenues, issuing debt, increasing economic flexibility, the role of fiscal policy rules in stabilizing public spending, and creating a framework for rebuilding and sustaining the Kingdom’s foreign assets.
Recommendations
In the paper, the researchers came up with 6 strategic recommendations:
- The necessity of moving towards investment in the field of artificial intelligence technology and its emerging applications, on a purely commercial basis, with priority given to the cooperative-commercial investment model between the Public Investment Fund and potential partners.
- Focus on the Public Investment Fund’s joint investment with international companies and technology companies. To accelerate the innovation process in the Saudi economy; This makes it possible to shorten various stages of development and innovation, increase efficiency, adopt technology, and encourage the deepening of local capital markets.
- Focus on exploiting the Kingdom’s enormous renewable energy potential; Which allows a larger share of oil to be exported; Including solar energy and other renewable energy sources.
- Commitment to applying stable financial policy rules.
- The tendency to integrate foreign assets and investments owned by many government agencies and funds, and attract them to be under the management of the “Central Bank of Saudi Arabia (SAMA)”; This contributes to increasing the Central Bank’s foreign currency reserves, with strong management recognized by SAMA, and supports finding sources of financing for local investment opportunities in exchange for government bonds, which would alleviate the current pressures on local liquidity and the Ministry of Finance’s need for external borrowing. In line with the directions of the Kingdom’s Vision 2030.
- Maximizing the opportunity to benefit from partnerships between the Public Investment Fund and potential partners through tax policies.
