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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
Francis Patalong - Senior Counsel - Corporate / Mergers and Acquisitions / Commercial / Mediation / Sustainability focused Corporate Governance / Sustainable Finance / Sustainable Business / Sustainable Sourcing / Climate Change & Energy Transition
This article looks at how those high-level goals cascade down through the recently published National Transformation Program and what opportunities and challenges there will be for foreign participants in an education sector which is by some margin the most significant in the GCC.
The Vision is about transitioning the Saudi economy away from an over-reliance on oil revenues to a more balanced, investment based model. It states:
Our goal is to attract and retain the finest Saudi and foreign minds, and provide them with all they need. Their presence in the Kingdom will contribute to economic development and attract additional foreign investment.
To this end, we will prepare a modern curriculum focused on rigorous standards in literacy, numeracy, skills and character development. We will track progress and publish a sophisticated range of education outcomes, showing year-on-year improvements. We will work closely with the private sector to ensure higher education outcomes are in line with the requirements of the job market [….].
We will continue to improve and reform our regulations, paving the way for investors and the private sector to acquire and deliver services – such as…education – that are currently provided by the public sector. We will seek to shift the government’s role from providing services to one that focuses on regulating and monitoring them and we will build the capability to monitor this transition.
This outward looking perspective sets the tone for much of the Vision. It is reflected in the strategic objectives of the NTP which include:
The last two points are perhaps the key strategic objectives, but what form this private sector participation may take and how it may be targeted to achieve national development goals remains to be seen, especially in the context of the recently updated Companies Law promulgated by the Ministry of Commerce and Investment which has broadened the potential for foreign ownership in Saudi corporates but does not address the education sector. That said, there are current Saudi Arabian General Investment Authority policies which:
In the short term the NTP sets out thirty-six specific initiatives with projected costs on a five year basis which are intended to be launched in 2016. Interestingly, the costs stated are expressed not to include the contribution of the private sector in a particular initiative – which is certainly consistent with the strategic objective relating to finance indicated above. It also indicates that some form of PPP structure is contemplated in a number of cases. Unlike some other GCC states, there is no specific PPP law in the Kingdom (although ministries can and do promulgate their own regulatory systems in this regard and similar projects of various types have been undertaken).
It is also clear that there is a high premium being placed on accountability within the Ministry of Education in terms of securing delivery of the plan. Education is a fundamental building block of the Vision as a whole and its progress is likely to be scrutinized carefully. Highlights include:
The scope of private sector involvement in the financing and construction of education infrastructure is clear; whether the same access will be given to the actual delivery of educational services is less so. However, the potential for joint ventures around items such as technical curriculum development and teacher training is significant. The franchise model, adjusted as necessary to accommodate the specific traditions of the Kingdom, also has potential to play a role.
The precise mix of measures adopted by the Ministry of Education remains to be seen, however we anticipate that the last quarter of 2016 should see a flurry of activity in the sector as initiatives are launched.
Learn how our Corporate / Mergers & Acquisitions practices offer law assistance for matters relating to foreign investment in Saudi Arabia.
Also read: Vision 2030 and the Opportunities it Represents in Healthcare in Saudi Arabia
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