Saudi Arabia has been on a fast-paced cycle of reform for the past decade. In the past, Kuwait used to be the leader of the Gulf in everything. Fifteen years ago we envied the Emaratis for Dubai. Ten years ago it was Bahrain, five years ago it was Qatar, and now it is Saudi Arabia. King Abdullah of Saudi has been leading a major overhaul; an economic evolution.
Refer to the list below for the major achievements:
Today Kuwait is starting to move. There is hope. The government hadn’t formally presented to the Parliament a 5-year since 1986, but it did this year. There is a massive infrastructure budget that seems to be going the right way. A Capital Markets Authority law will be enacted. The government rejected appeals for loan forgiveness and was prudent enough not to splurge money at paper investment companies. I hope someone will be posting a 10 year reform chart as solid as Saudi’s for Kuwait in the near future.
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Loading ...Tags: Capital Markets Authority, Kuwait, Reform, Saudi Arabia, Saudi Reform
jaded optimism i say. since when does throwing money at a problem fix it? if you look at all the reform efforts you mentioned it took strong-willed leaders with a vision and i have not seen any genuine leadership here.
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Keynesian Reply:
March 2nd, 2010 at 7:22 pm
A Keynesian would say throwing money does solve problems. It saved the world from the great depression and saved us from Armageddon last year. Although I don’t think we’re completely out of the crisis, there is no doubt that we would’ve been in a different world if it weren’t for the massive fiscal stimuli.
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@ Kenysian:
KSA was playing catch up. it remains the most difficult country to do a buiness in, by far.
the problem w/ these changes is that they are always ad hoc. at the will of the top guy…no follow through…the next guy in line might just stall everything or spread the majority of the benifits to himself and his buddies…
anyways, “economic progress” go hand in hand in transperncy, civil society participation etc….. all rank extermly low in ALL GCC countries…….
As for Kuwait, I think too optimisitic….you ought to study the charactar of the one who is leading this “Plan”…….Ahmad Al Fahad is as unqualified and curropt as they ever come!!!…..just look at his long and sad track record
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Keynesian Reply:
March 2nd, 2010 at 7:42 pm
It is playing fast catch-up. I agree with both of your 2nd and 3rd paragraphs, but we have to start somewhere and the progress seen in the KSA is huge whether be it social, economic, or political.
As for Kuwait, I think there is progress. A lot of people focus on the character, but I think it is critical to focus on the “recent” acts.
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Fahad G Reply:
March 14th, 2010 at 10:47 am
bo6air
Who said KSA is the hardest place to do business. How did you come to that conclusion?
In 2009, KSA got over 12 billion dollars in foreign investment — to invest in sectors that Kuwait wouldn’t dream of opening up foreign capital to! How much did Kuwait get- 200 million dollars? KSA, are building at least 6 major cities each averaging over 30 billion dollars. The CMA in Saudi Arabia has awarded dozens of financial services licenses, attracting top investment banks (JP Morgan, Morgan Stanly, and Goldman Sachs) that are actively pursuing investment opportunities in KSA. What does Kuwait offer today, Please respond, by listing what Kuwait offers. KUWAIT has a protectionist economy, monopolized by certain families, and is very VERY difficult to do business in.
Secondly, please check your records. In 2009, The World Bank ranks Saudi Arabia 13th in “Ease of doing business” and 13th in “Starting your own business”…Kuwait? – 61st and 137th, respectively – right after Mongolia!
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Bo6air Reply:
March 14th, 2010 at 12:44 pm
1)I never said Kuwait is an easy place to do business.
2)KSA is open with the very right partner… perferablly a royal
3)the names you list are all large international names, it is only very natural to be able to setup shops there
4) KSA size and its huge pertrolem/gas sector makes it very natural to attract that $12B.
5)I highly doubt that Goldman Sachs, JP Morgan etc are really seeking any real investments in the infrastructure. it is just natural for them to be in country that has the size of KSA and its Oil wealth
6) The world bank’s rating is one rating that I don’t know how they made it. I am speaking from personal experince…an not a single one either. so frankly I don’t really care what the ranking says
7) again, I never said Kuwait was the most friendly. it might well be less than even Mongolia
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Fahad G Reply:
March 14th, 2010 at 1:15 pm
2. No, you don’t need royalty, just the right trading partner — just like any any place in the world.
3. Besides the large international names, everyone from Global, Markaz, Mazaya, Ayyan, Coast have all set up shop in KSA – most of them with the same shareholder structure as in Kuwait.
4. Not just in energy, key infrastructure projects, plus mining (precious minerals), health care, insurance have all witnessed foreign capital inflow. SAGIA has a full list of sectors that are open to foreign investments.
5. JP Morgan did over four large IPO’s in the last few year, including Zain KSA. Morgan Stanly was just recently awarded the privatization of Saudi Arabian Airlines. BNP Paribas did the privatization of both Saudi Arabian Cargo businesses. HSBC has done more than a dozen IPOs over the past few years…I can go on and on and on.
6. You can check the methodology used in compiling the stats, it’s online. Although you give more weight to your personal opinion, foreign firms don’t. I also speak of personal experience.
Bo6air Reply:
March 14th, 2010 at 3:23 pm
1) I said “Prefered”. I didn’t say the only. The right being one the dominant trading families there… so its really the same mentality as in Kuwait and else where in teh gulf. shaikh or a fat cat. not sraightfoward if you ask me
2)yes, they sure did. did I say that you can’t be in there. But whats their success like? Only Markaz has some reputation left in it to really see if they are really doing well or not. are they making profits?
how large is that part out of their profits?
3)Yes, yes and yes. But its all relative. we need to look at the breakdowns in these foreign capital inflows to really test that theory. again am not surprized at the $12B iflows. the sheer size and underdeveloped nature of the country (relativly speaking again) demands it…. as there major social pressures there
4)IPOs! yes sure they did. but that is not investment in teh country really. I tell you who makes money there, the big western money companies and the oil guys…the rest are just trickles and you must have a major partner to see anything coming your way if you are foreign. so much for openess
5)of corse i give more weight to personal experince. this has been the experience of multiple generations in my family…..its natural
it is the country where only the very few enjoy the wealth…….thank god Kuwait is not like that. even while being ranked much lower according to some “world” bank
[...] See the original post: Saudi Arabia's Reform Timeline « Alpha Dinar- talking GCC finance [...]
excellent timeline. thank you.
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for those discussing kuwait i offer this: can you build solid results without integrity on the part of those responsible?
i know that this is turning philosophical somewhat but the same would apply to the people that build your car or erect your house and anyone else you trust your life to. why should it be any different to those that build your country and your children’s future?
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Bo6air Reply:
March 4th, 2010 at 12:40 pm
@ peteyb:
You are 100% right my friend.
Character always comes before short term results……ALWAYS
unfortunatally too many people in Kuwait are obssesed in building rather than the builder…..and they name it “pragmatic” or “realistic” ……
The grand Enron was the best company to work for 6 years straight back in the 90’s as Fortune magazine told us…….yet their management end up in prison and they rob thousands of shareholders of their wealth…….
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And in Kuwait, do we all share the wealth? You’re looking at this from the view of an average Kuwaiti?
First off, speaking of relativity, you can start by comparing the population of Kuwait to that of Saudi Arabia. The only reason “many” enjoy wealth — as you put it- isn’t because of openness, or anything special about the Kuwaiti market, or because of the dynamics of our economy, it’s simply because of the socialist welfare system put in place that caters to pretty much all the populations’ needs. Qatar does the same; it really has nothing to do with openness. Saudi, which has 20 X the pop, and an aggressive expansionary fiscal policy doesn’t, and rightfully so.
As investment I mean, a suitable return on your capital. Whether its IPO, privatization or acquisitions, these companies, who are NOT required to be part of Saudi partnership are in KSA because of the underlying growth and the vast opportunities within the market.
I don’t know how your/generation experience has led you to believe what you believe, but I see KSA in a totally different light than you do.
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Carlyle Group Acquires 30% Of Saudi Lighting Manufacturer
Monday, Mar 29, 2010
DUBAI (Zawya Dow Jones)–U.S.-based private equity firm Carlyle Group said Monday it has acquired a 30% stake in Saudi Arabia’s largest lighting fixtures manufacturer and supplier.
Carlyle signed the deal with the firm, General Lighting Company, or GLC, on March 29., it said in an emailed statement.
Carlyle’s investment in the Saudi firm will facilitate plans for expansion and advancement of product offering, said Abdullah Al-Hobayb, chairman and co-owner of GLC.
This is Carlyle’s first investment in Saudi Arabia, said Walid Musallam, Carlyle managing director and head of Carlyle MENA.
Carlyle didn’t provide details regarding the value of the deal but said equity for this investment will come from Carlyle MENA Partners, a growth capital and buyout fund that closed in March 2009.
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attractive market. thats what got the PE mafias in.
you might know this, there many saudis (ruling family, big business families) have been invested w/ Carlyl.
the returns to the average saudi will be minimum or even negative.
dictatorship + open economy + large controlling families= Egypt’s future
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