Saudi privatisation will privilege state interests

Subject

Riyadh’s privatisation plans.

Significance

Saudi capitalism has always centred on opportunities for the state, with a paternalistic, and arguably mercantilist, economic model. This remains true even in the unprecedented reform efforts outlined in the Vision 2030 plan and its execution guide, the National Transformation Program (NTP) 2020. Under the NTP, Riyadh has identified multiple projects for sale, in order to generate alternative government revenue streams. In most cases, there remains an element of partial state ownership.

Impacts

• The government’s economic growth strategy will rely on outwardly placed state investment, concentrated in international equity markets.
• Political conflicts within the GCC, notably the Qatar crisis, will increase regional risk and degrade the investment climate.
• Rising proxy conflict with Iran could derail privatisation efforts by directing government resources outwards, and deterring investors.