Arab News – The private sector in the Group of 20 advanced and emerging economies has a strong role to play in development and poverty eradication, according to the leaders’ communique issued after the two-day summit in Antalya, Turkey.
Local economists believe that Saudi Arabia provides more investment opportunities in the country for the G-20 countries and providing profitable opportunities for G-20 investors to take advantage of the free zones planned to be established in Saudi Arabia.
“The transformation of the Saudi Arabian economy is one of the success stories of the past few decades. The path of its development has been a particularly unique one, which requires rigorous analysis to understand the current situation and the way forward to continue its prosperity,” commented John Sfakianakis, Middle East director at Ashmore Group.
In their Monday’s communique, the G-20 leaders stated: “Global economic growth is uneven and continues to fall short of our expectations, despite the positive outlook in some major economies. Risks and uncertainties in financial markets remain, and geopolitical challenges are increasingly becoming a global concern. In addition, a shortfall in global demand and structural problems continue to weigh on actual and potential growth.”
Commenting on G-20 goals, Akber R. Naqvi, executive director, Al-Masah Capital Management Limited, commented: “The G-20 economies have a responsibility to not only promote growth across the globe but also to coordinate policies that safeguard this growth and minimizes the risks to this growth. Therefore Saudi Arabia can be effective if it carries its share of this responsibility and offers support to the regional economy, generating growth for this region while safeguarding its future in times of uncertainty.”
Naqvi said: “Saudi Arabia also bears the responsibility of being the de-facto leader of the OPEC, coordinating the group’s mission and its impact on the global economy. This means that within the G-20, Saudi Arabia’s opinion and standing carry greater significance than most others. How Saudi uses this power and voice usually determines how effective its role is within the G-20.”
He added: “Out of the 20 economies, Saudi remains the only one that is classified as ‘developing’, even though its GDP per capita is higher than some others and it is certainly richer than most of the others. So while it may not be properly compared within the G-20 ranks, it can use that forum and its own strength and power to influence the future, regionally and globally.”
Basil Al-Ghalayini, CEO of BMG Financial Group, commented: “Obviously, the Paris attack and global terror have overshadowed G-20’s agenda this year. Unless the Syrian crisis is resolved, global terror will still negatively affect the economic growth targets. The G-20 nations, including Saudi Arabia, should also implement country-led strategies to attract long-term institutional investments, privatization, public-private-partnership (PPP) and financial access to SMEs. Furthermore, regulatory rules and legislations should be updated and improved to eliminate any future crisis.”
A regional analyst commented: “Saudi Arabia is a key energy producer and, one way or another, has a major role to play in shaping the future of the global energy markets. With investments in oil dropping precipitously, this role will likely grow in importance in the years ahead.”
He added: ”One of the world’s leading repositories of public and private capital which can potentially exert an influence far beyond its borders through decisions to mobilize that capital.”
The analyst said: “An increasingly important manufacturer in several areas, it will play a key role in meeting the growing Asian demand.”
He said: “Saudi Arabia is a highly strategically located economy, highlighting the general success of the GCC in channeling more traffic, trade, and tourism through its developing infrastructures. This has turned the peninsula into a key node on global trade routes.” He added: “As a key Middle Eastern economy, it has an important role in shaping the future of the regional economies.”
The analyst said that Saudi Arabia’s importance in G-20 does not come from its size or its population. In both regards, it is a relatively small country. However, its location, resource endowments, and economic dynamism give it an importance far greater than its size would suggest.
Meanwhile, the G-20 communiqué also stated: “We are committed to ensure that growth is inclusive, job-rich and benefits all segments of our societies. Rising inequalities in many countries may pose risks to social cohesion and the well-being of our citizens and can also have negative economic impact and hinder our objective to lift growth. A comprehensive and balanced set of economic, financial, labor, education and social policies will contribute to reducing inequalities. We endorse the Declaration of our Labour and Employment Ministers and commit to implementing its priorities to make labor markets more inclusive as outlined by the G20 Policy Priorities on Labor Income Share and Inequalities.
“We ask our Finance, and Labour and Employment Ministers to review our growth strategies and employment plans to strengthen our action against inequality and in support of inclusive growth. Recognizing that social dialogue is essential to advance our goals, we welcome the B20 and L20 joint statement on jobs, growth and decent work.”
It added: “ Unemployment, underemployment and informal jobs are significant sources of inequality in many countries and can undermine the future growth prospects of our economies. We are focused on promoting more and better quality jobs in line with our G20 Framework on Promoting Quality Jobs and on improving and investing in skills through our G-20 Skills Strategy. We are determined to support the better integration of our young people into the labour market including through the promotion of entrepreneurship. Building on our previous commitments and taking into account our national circumstances, we agree to the G-20 goal of reducing the share of young people who are most at risk of being permanently left behind in the labour market by 15 percent by 2025 in G-20 countries. We ask the OECD and the ILO to assist us in monitoring progress in achieving this goal. We will continue monitoring the implementation of our Employment Plans as well as our goals to reduce the gender participation gap and to foster safer and healthier workplaces also within sustainable global supply chains.”
The G-20 leaders added: “We will address current opportunities and challenges brought into the labour markets through such issues as international labour mobility and the ageing of populations. Domestic labor mobility is an important labour market issue in some G-20 countries. We recognize and will further explore the potential of a flourishing silver economy. We further ask our Labour and Employment Ministers to report to us on progress made in 2016.”
The statement said: “To provide a strong impetus to boost investment, particularly through private sector participation, we have developed ambitious country-specific investment strategies, which bring together concrete policies and actions to improve the investment ecosystem, foster efficient and quality infrastructure, including by the public sector, support small and medium sized enterprises (SMEs), and enhance knowledge sharing. Analysis by the OECD indicates that these strategies would contribute to lifting the aggregate G-20 investment to GDP ratio, by an estimated 1 percentage point by 2018.”