Governments must strengthen private sector partnerships to ensure their economies remain resilient against unexpected shocks as the world recovers from the Covid-19 pandemic, according to Khalid Al Falih, Minister of Investment of Saudi Arabia.
He was speaking today (October 22) during a headline interview at the inaugural Global Digital Summit Series. The new digital conference series is providing an international audience with an immersive program exploring the policies and strategies needed for inclusive recovery, building on the commitment made by G20 ministers to work together to strengthen trade and investment as a tool for global innovation, growth and job creation.
In conversation with Jacopo Dettoni, Editor of fDi Magazine, on the first day of the event, Khalid Al Falih emphasized the importance of mitigating risks to business environments when enabling foreign direct investment (FDI).
“A sense of safety and security for investors is important for governments to ensure. States need to make sure regulations are predictable, transparent and fair, have an honest conversation with the private sector, and keep the business environment healthy so investments can grow and investors can profit,” he said.
According to UNCTAD, FDI is forecast to decrease by nearly 40% in 2020, on top of long-term decline seen over the past five years. The G20 Trade and Investment Ministers addressed this directly in their most recent communiqué, recognizing that ongoing decline in global FDI flows would exacerbate the economic and social impact of the pandemic, especially in developing nations who already face significant barriers to attracting FDI.
The G20 has also reiterated its commitment to identifying gaps in investment promotion capabilities in markets facing barriers to inward investment.
Khalid Al Falih also outlined how FDI can help drive global economic recovery, stating that governments need to be strategic when attracting investment.
“Governments need to bring in FDI when it adds value. This is done by matching the capabilities of investors with market requirements and ensuring their business environment is a suitable platform for investors to address local needs, so that countries can be competitive and profitable in a sustainable way,” the Minister said.
Al Falih also revealed that the Kingdom’s Vision 2030 plan was already anticipating new global challenges and implementing business continuity policies for the private sector before the onset of Covid-19.
“Vision 2030 is already addressing the global mega trends we have seen having an impact on FDI before the pandemic - such as globalization, urbanization, rapid population growth and increased consumption. We are focusing on leveraging the Kingdom’s qualitative, competitive advantages and building sectors that are anchored in knowledge, research and innovation,” he explained.
According to the Minister, the key to achieving this objective is making sure Saudi Arabia’s youth have a seat at the table. He said: “We are empowering our most important resource: young Saudi men and women. They are in the driving seat of Vision 2030.”
Despite the unprecedented impact of Covid-19 and the decline in oil prices on the Saudi market at the beginning of the pandemic, Al Falih remains optimistic about the Kingdom’s ongoing economic transformation.
“Saudi Arabia’s economy is resilient - our credit rating has been maintained. We have proven to the private sector and our people that we can look after them first. With 27 reformed regulations currently being addressed by the government and a plan for Special Economic Zones in development, Saudi Arabia is on its way to recovery,” Khalid Al Falih concluded.
The Global Digital Summit Series is organized by the Financial Times Live and co-hosted by the Ministry of Investment of Saudi Arabia and G20 Saudi Secretariat as part of the G20’s International Conferences Program, honouring the Kingdom’s role as host of the G20 2020 Presidency.
Inspired by this year’s G20 theme, ‘Realizing Opportunities of the 21st Century for All’, the ‘A New Framework for Inclusive Growth’ series is taking place from October 21 to 29.
Across four days of diverse sessions and plenaries, the event is addressing some of the G20’s key priorities as it seeks to support the rebuilding of the global economy – including trade and investment, sustainable development, employment and the digital economy. – TradeArabia News Service