New opportunities seen in Saudi Arabia

Riyadh - Business leaders, however, anxious to see how kingdom will implement reforms

The appointment of Saudi Arabia's top economic reformer to crown prince has cheered business leaders who believe it will open up new opportunities.
However, they also worry about officials' ability to implement reforms and about geopolitical tensions in the region.
The Saudi stock market jumped seven per cent in the two days after Crown Prince Mohammed bin Salman, previously deputy crown prince, was appointed.
Part of the market's rise was due to a decision by index compiler MSCI to consider upgrading Riyadh to emerging market status. But much of the euphoria was political; shares in companies closely linked to Crown Prince Mohammed's reforms were the top performers.
National Commercial Bank, the biggest lender, which is expected to play a big role handling financial transactions related to the reforms, surged 15 per cent.
Miner Ma'aden soared 20 per cent; Crown Prince Mohammed has labelled mining a key sector in his drive to cut Saudi Arabia's reliance on oil exports.
Emaar the Economic City, builder of an industrial zone which he hopes to develop as an export industry base, gained 16 per cent. Business leaders said the promotion of Crown Prince Mohammed, 31, removed political uncertainty by confirming a smooth shift of power from an older generation of Saudi leaders to a young generation represented by the prince.
"The political transition was very smooth - we expect the reforms to continue," Muhammad Alagil, chairman of Jarir Marketing, a top retailing chain, told Reuters. He said Jarir, which has 47 stores, some 39 of which are in Saudi, would open at least six this year and a similar number next year, mostly inside Saudi Arabia.
To some in business, Crown Prince Mohammed represents fresh opportunity in the form of a $200 billion privatisation programme and state investment to help kick-start new industries such as shipbuilding, auto parts making and tourism. Some executives predicted the progress of these plans, which are still largely on the drawing board a year after Crown Prince Mohammed announced them, would accelerate after his appointment.
"I didn't see a risk of the reforms stalling or being reversed before, given the political backing behind them. But now the reforms can go ahead with more strength," said Hesham Abo Jamee, chief executive at Alistithmar Capital.
He added that social initiatives in the reforms would help the economy by stimulating consumer spending.
For example, developing an entertainment sector, in a conservative society which has so far shunned many forms of public entertainment, would create jobs. The government plans an entertainment zone south of Riyadh with sports, cultural and recreational facilities.
Increasing the role of women in the workforce would boost family incomes and could accelerate creation of small businesses such as restaurants, Abo Jamee said.
Prince Mohammed is also architect of austerity policies, including spending cuts and tax rises, that aims to abolish by 2020 a budget gap which totalled $79 billion in 2016.

• Saudi Arabia