Beth: The Financial Knowledge and Communication Center “Mutamem” hosted a virtual meeting entitled: “The targets of the 2021 budget and its impact on the Kingdom’s economy” Tuesday evening, 14 Jumada Al-Awal 1442 AH corresponding to December 29, 2020 AD, as part of its meetings concerned with knowledge enrichment in the economic and financial fields.

Abdullah Al-Fawzan, Chairman of the Board of Directors of KPMG Saudi Arabia, a member of the Board of Directors of the Saudi Financial Society, Mr. Abdullah Al-Rabdi, and a former advisor at the International Monetary Fund, Dr. Raja Al-Marzouki, participated in the virtual meeting, while the writer and economic analyst Mr. Talaat Hafez moderated it.

Budget goals and priorities

The meeting’s speakers discussed several main axes, the most prominent of which was the analytical axis of the financial indicators in the 2021 budget, in which the budget goals and priorities were presented, and the other axis in which the focus was highlighted on investment in government funds to be a driver for economic development and a catalyst for recovery, in addition to addressing the other artery in the economy. The Kingdom represented by the private sector and its spending plans in light of the 2021 budget, as the government is keen to be a primary engine for development, and a solid support for financial sustainability.

Dr. Abdullah Al-Fawzan referred to four mechanisms that the government has benefited from in the strategies of the Kingdom’s Vision 2030, the first of which is the governance framework in making government decision-making, which has become rapidly completed after it used to take months and years, and secondly, the non-oil revenue infrastructure, where the government was able to accelerate Its ability to create non-oil revenues has contributed to reducing the deficit and creating balance, and thirdly, the government’s handling of public debt has become more professional, and finally, the government’s focus on transforming the Kingdom into a sophisticated technical environment, which contributed to mitigating the effects of the pandemic.

Speaking about the goals of the 2021 budget, Al-Fawzan said that there is stability in spending priorities on the main sectors in 2021 with a different focus on their contents of education, health, security and defense, stressing at the same time the importance of continuing with the issue of financial sustainability through financial control and spending efficiency, In addition to the way the government will deal as a supporter of the internal economy and its growth during the next year.

The impact of reforms that began since the launch of Vision 2030

In his turn, a member of the Board of Directors of the Saudi Financial Society, Mr. Abdullah Al-Rabdi, confirmed that the reforms that began since the launch of Vision 2030 had a positive impact in 2020 in terms of increasing non-oil revenues, indicating that had it not been for the reform process in revenues, the deficit would have become larger in the 2020 budget. Cost control and price management of energy products had good results on the local economy.

He noted that the process of supporting the private sector and raising its participation in the economy is an important priority and is one of the goals of Vision 2030, through privatization programs and assigning projects to the private sector in partnership with the public sector.

Separation between changing oil revenues and the internal economy

For his part, the former advisor at the International Monetary Fund, Dr. Raja Al-Marzouki, stated that the most important issue for oil-producing countries is how to separate the change in oil revenues from the internal economy, indicating that the countries have adopted so-called financial rules that govern the government’s estimates of oil pricing in the budget as well as the proportion What is spent from oil revenues and a balance fund that enters the surplus so that it is balanced in the event of decline using this return, as it goes to the Generations Investment Fund and the Local Development Fund within the economy, which leads to stability in the economy.

Al-Marzouki explained that the sectors’ recovery depends on the precautionary conditions imposed to deal with the Corona pandemic (Covid-19), pointing out that technology has helped the various sectors to bridge the imbalance in the decline in productivity at the level of the entire economy.