Saudi Arabia introduces new tourism, sports, investment ministries
LONDON - Saudi Arabia announced the formation of three new ministries and merged other cabinet portfolios in a significant reshuffle that marked the return of former Energy Minister Khalid al-Falih to government.
Royal decrees February 25 from Saudi King Salman bin Abdulaziz Al Saud detailed the merging of the Ministry of Civil Service with the Ministry of Labour as the Ministry of Human Resources and Social Development, state news agency SPA reported.
The Ministry of Commerce and Investment was renamed the Ministry of Commerce; the General Sports Authority is to be known as the Ministry of Sports, which will be headed by Prince Abdulaziz bin Turki bin Faisal, son of the kingdom’s former intelligence chief. Prince Abdulaziz is considered a rising star within the government.
The most notable appointment involved the return of Falih as Saudi investment minister. Ibrahim bin Abdulrahman al-Omar was dismissed as governor of the General Investment Authority (SAGIA), which was transformed into a Ministry of Investment under Falih.
SAGIA was established 20 years ago before Saudi Arabia’s drive to liberalise its economy to generate private-sector domestic and foreign investment. It was responsible for issuing investment licences to foreign companies.
Economists said the elevation of SAGIA to ministry status signalled the importance the investment drive within the Vision 2030 plan for economic development and diversification. Vision 2030’s main objective is to wean the Saudi economy off its dependence on oil revenues and public-sector spending.
Falih was replaced as energy minister last September by Prince Abdulaziz bin Salman bin Abdulaziz, the first member of the royal family to lead the kingdom’s most important ministry.
The Financial Times reported that Falih had been removed because of “his inability to deliver a rapid overhaul of industrial strategy and a cautious approach to the stock market offering of Saudi Aramco.”
"Falih's return is a small surprise," Hasnain Malik, a managing director at Tellimer told Thomson Reuters. "More important is the upgrade of the General Investment Authority to a full ministry, which underlines the importance of private sector home-grown and foreign direct investment for the future of Saudi Arabia."
"The return of Falih, an experienced manager who was abruptly sidelined, could be an attempt by King Salman to rein in the investment authority and add more teeth to it," Ellen Wald, author of the book "Saudi Inc.", told Agence France-Presse.
"Under [Saudi Crown Prince Mohammed bin Salman bin Abdulaziz], the kingdom's vast Public Investment Fund has been widely portrayed as erratic in terms of its investment decisions."
It was not clear whether the restructuring would expand the investment entity's authority. As energy minister, Falih had one of the highest international profiles of any Saudi official.
“Falih will have his work cut out for him: in 2017, foreign direct investment plunged to the lowest since 2003, down 80% to $1.4 billion. It has recovered only partially since then, reaching an estimated $4.6 billion last year,” Bloomberg News reported.
“I think it’s good news to bring such an experienced person back into an outward-facing position,” Karen Young, a resident scholar at the American Enterprise Institute in Washington, told Bloomberg News. “A known expert in the major industry is a good move.”
In other moves, Turki al-Shabanah was dismissed after a short stint as minister of media with Minister of Commerce Majid bin Abdullah al-Qasabi, a close adviser to Crown Prince Mohammed, acting minister of media in addition to his other post. Minister of Housing Majid bin Abdullah bin Hamad al-Hoqail was also made acting minister of municipal and rural affairs.
The Saudi Tourism Commission was made a cabinet-level ministry with its chief, Ahmed bin Aqeel al-Khateeb, a royal adviser, retaining the top job just months after the kingdom started issuing tourist visas for the first time.