ºÚÁÏÉçÇø

The minister of finance and chairman of the board of directors of the National Center for Privatization Projects, Mohammed Al-Jadaan, indicated that ºÚÁÏÉçÇø has adopted a modern framework for privatizing government projects, which includes flexible partnerships between the public and private sectors based on international best practices.

The privatization program in ºÚÁÏÉçÇø is proceeding at an accelerated pace with investments exceeding $50 billion. Al-Jadaan indicated that investments are being made in 200 projects across 17 sectors. Work is underway to evaluate an additional 300 projects, making the Kingdom’s privatization program the largest in the Middle East, with 30 projects privatized during the past five years.

The privatization scheme is one of the key Vision 2030 programs of the Kingdom, launched in 2016, to identify government assets and services that can be privatized in several economic sectors.

The program seeks to develop the privatization system and its mechanisms, enhance the quality and efficiency of public services by reducing government costs, and contribute to economic development by raising the Kingdom’s private sector contribution to gross domestic product from 40 percent to 65 percent by 2030.

It will also encourage economic diversity and development by boosting competitiveness to face regional and international competition.

On the international front, the program seeks to attract foreign direct investment and improve the balance of payments.

I believe that gradual privatization and the implementation of proper regulations will mitigate such concerns, as it will create a healthy environment for successful privatization.

Previously, the program succeeded in developing general frameworks for the privatization system through the enactment of the privatization law and the establishment of the National Center for Privatization that aims to regulate privatization procedures, and enhance the participation of the private sector in a transparent and fair manner.

It also seeks to ensure the integrity of procedures related to contracts in order to provide an attractive regulatory and investment environment that stimulates private sector investment in the short and long term.

It is worth noting that the privatization program will continue focusing its efforts on building enablers and intensifying work to enhance the role of the private sector in providing public services. This will maximize the value gained from government assets, and raise the efficiency of spending.

Despite the several benefits of privatization, such as enabling companies to operate more efficiently and eliminating bureaucracy, there are, however, still some concerns in the minds of end-users, such as price increases of privatized services as well as the incentive to maximize profit.

I believe that gradual privatization and the implementation of proper regulations will mitigate such concerns, as it will create a healthy environment for successful privatization.

• Talat Zaki Hafiz is an economist and financial analyst. Twitter: @TalatHafiz

Ìý

Ìý