Saudi Arabia's shift from budget balancing to fiscal sustainability … – Arab News

RIYADH: Saudi Arabia’s total revenues amounted to SR258.54 billion ($68.92 billion) in the third quarter of 2023, the Ministry of Finance said in its quarterly budget performance report on Wednesday.
Data released by the ministry indicates that non-oil revenues surged by 53 percent in the three months to the end of September compared to the same quarter last year, reaching a total of SR111.53 billion.
Non-oil revenues accounted for 43 percent of the Kingdom’s total revenues over the period, marking a significant increase from the 24 percent recorded in the same timeframe the previous year.

Talat Zaki Hafez, Economic columnist and banking expert

“I believe that the budget for Q3 2023 reflects the economic and financial reforms that the Kingdom has adapted since the launch of its Vision 2030 in 2016,” Talat Zaki Hafez, economic columnist and banking expert said.
Hafez explained that the significant growth in non-oil revenues is one of the objectives that the Kingdom’s Vision 2030 sought to accomplish.
The share of oil revenues, previously the main component of Saudi Arabia’s income, declined from 76 percent in the third quarter of 2022 to 57 percent in the same period of this year.
I believe that the budget for Q3 2023 reflects the economic and financial reforms that the Kingdom has adapted since the launch of its Vision 2030 in 2016.
Talat Zaki Hafez, Economic columnist and banking expert
“One of the issues that has affected the oil revenue is the Kingdom’s voluntary reduction of oil production. It started with 500,000 bpd (barrels per day: and moved up to another 1 million since July which is a total reduction of 1.5 million bpd,” Hafez said.
Vision 2030 aimed to pivot towards non-oil activities due to the volatility of crude prices. Relying predominantly on oil revenues left the Saudi economy vulnerable to the unpredictable swings in global markets.
This strategic shift is set to enhance economic stability, create new opportunities for growth, and secure a more sustainable financial future for Saudi Arabia.
Conversely, total expenditures in the third quarter of 2023 rose by 2 percent compared to the same period of the previous year, reaching SR294.32 billion. The resulting budget deficit for this period amounted to SR35.77 billion.
Data released by the Ministry of Finance indicates that non-oil revenues surged by 53 percent in the three months to the end of September compared to the same quarter last year, reaching a total of SR111.53 billion.
Hafez explained: “The increase in expenses coupled with the significant decrease in oil revenues has reflected on the overall deficit that was shown in Q3 of 2023.
“That’s an issue? No that is is not an issue as long as the objective of the Vision 2030, in its economic and financial reforms, is to focus on two things: To grow the non-oil revenues, and that’s an important fact, and also to guarantee that you have financial sustainability regardless whether the budget shows a surplus or deficit.”
Taxes on goods and services emerged as the primary contributor to non-oil revenues, comprising 63 percent of the total and reaching SR70.26 billion in the three months to the end of September.
This category displayed remarkable growth, surging by 57 percent from SR44.9 billion in the same period of 2022.
Meanwhile, taxes on income, profits, and capital gains experienced the most significant growth among non-oil revenue streams, with a remarkable surge of 148 percent compared to the same quarter last year, amounting to SR8.2 billion.
Although this category represents a small portion of total non-oil revenues, accounting for 7 percent, it has shown significant progress from 5 percent in the equivalent quarter of 2022 when it amounted to SR3.32 billion.
On the expenditure front, employee compensation accounted for the largest portion of expenditures, representing 44 percent and reaching a total of SR130.6 billion. This marks a 3 percent increase from the third quarter of 2022.
Although comprising a smaller portion of the Kingdom’s total expenditures, it’s noteworthy that total grants experienced a substantial leap of 336 percent during this period, amounting to SR4.04 billion.
Analyzing the allocation of expenditures by sector for the three months to the end of September, the military sector accounted for 21 percent of the total expenditures, amounting to SR62.29 billion. This marks a 15 percent increase compared to the same period of the previous year.
The health and social development sector represented 20 percent of the expenditures, with a total of SR57.44 billion.
It’s noteworthy to mention that this particular category has already utilized 98 percent of the year’s allocations, reaching SR185 billion within the initial 9 months of this year. This sector was initially budgeted for SR189.34 billion for the fiscal year 2023.
“The beauty is that the Kingdom is still spending on education, health and all of the social related protection programs that have witnessed growth during this period, like the Citizen Account Program and the Social Security System,” said Hafez.
The Citizen Account Program was established to protect Saudi families from the expected direct and indirect impact of various economic reforms, which may cause additional burden on some segments of society.
Hafez explained that the primary goal is not solely to conclude any financial period, whether it’s on a quarterly, semi-annual, or annual basis, with either a deficit or surplus. “While surpluses are certainly welcomed, they are not the primary objective,” he said.
The economist added that the Kingdom’s objective has transitioned from simply balancing the budget. Back in 2016, with the inception of Vision 2030, the focus was shifted towards achieving financial sustainability where the government can consistently fulfill its financial commitments without interruption, irrespective of the fluctuating oil prices.
“The General Authority of Statistics has issued their GDP (gross domestic product) flash estimate for Q3 and it has clearly indicated that non-oil activity has increased by 3.6 percent and the government activity has increased by 1.9 percent on an annual basis,” Hafez said.
Total revenues for the initial 9 months of 2023 reached SR854.31 billion, accounting for 75.6 percent of the approved budget for fiscal year 2023.
During this period, non-oil revenues surged by 22 percent, totaling SR348.96 billion, and constituting 41 percent of the total revenues for this timeframe.
In contrast, oil revenues witnessed a 24 percent decrease, amounting to SR505.35 billion in the first 9 months of the year. Their percentage share declined from 70 percent in the same period last year to 59 percent by the end of the third quarter of 2023.
Expenditures in the initial three quarters of the year reached 81 percent of the allocated budget for fiscal year 2023, totaling SR898.26 billion during this period. Consequently, this led to a government deficit of SR43.95 billion within the same timeframe.
Total public debt stood at SR994.26 billion by the end of September, with SR628.6 billion categorized as domestic debt, while the remaining SR365.62 billion is classified as external debt.
Hafez said: “The public debt is less than 25 percent of GDP, which is one of the lowest if compared to advanced economies or G20 countries, and also the public debt is covered by ample, with government reserves standing at more than SR407 billion by Q3 2023,”
He added: “It means we have enough liquidity to cover our public debt, bearing in mind that the public debt is mostly domestic debt.”
TUNIS: Amid the global imperative for sustainable agriculture, Africa and the Middle East have embarked on a cooperative journey to address common issues such as water scarcity and climate change, with the aim of advancing sustainable farming practices.
Their collective objective is to pool knowledge and resources, with the ultimate aim of redefining the agricultural landscape.
Experts told Arab News that in light of escalating global agricultural demands, the synergy between Africa and the Middle East offers the potential for a more environmentally friendly future in farming, one where innovation and technology play a central role in enhancing agricultural cooperation.
The FAO Science and Innovation Forum 2023, held from Oct. 16-20, is a prime example of how countries from both regions can come together to explore scientific and innovative solutions to tackle global challenges, including hunger and climate change.
Peter Anaadumba, FAO South-South and Triangular Cooperation Officer, told Arab News: “Collaboration between these regions extends beyond the agricultural field, encompassing knowledge sharing, technology transfer, and financial investments, all aimed at maximizing agricultural productivity.”
This collaboration can serve as a bulwark against the looming challenge of food security that both regions confront. However, Africa’s agricultural potential is accompanied by its fair share of challenges.
Ndidi Nwuneli, Nigerian entrepreneur and expert on African agriculture and nutrition
As global agricultural demands continue to surge and climate change presents ever-greater challenges, the synergy between Africa and the Middle East could not be timelier. These regions, each with its unique strengths and challenges, are united by a common goal: to secure a greener, more sustainable future for farming.
Ndidi Nwuneli, a Nigerian entrepreneur and expert on African agriculture and nutrition, told Arab News: “Africa is naturally endowed for agricultural excellence.”
The statistics support her claim, as a staggering 86 percent of the world’s remaining arable land is in the continent.
Abundant rainfall and a rich array of indigenous crops provide fertile ground for agricultural innovation, uniquely positioned to support the Middle East’s agricultural needs.
Nwuneli envisions a partnership that transcends borders, founded on trade, innovation, and technology.
“This collaboration can serve as a bulwark against the looming challenge of food security that both regions confront. However, Africa’s agricultural potential is accompanied by its fair share of challenges,” she said..
Climate change, characterized by extreme weather events, poses a significant threat to Africa. In fact, seven out of the ten most climate-affected countries in the world are in this region. This grim reality underscores the urgency of finding solutions to adapt and thrive in the face of changing weather patterns.
In addition, barriers to trade and market access have long hindered the agricultural sector in both Africa and the Middle East.
Experts told Arab News that in light of escalating global agricultural demands, the synergy between Africa and the Middle East offers the potential for a more environmentally friendly future in farming, one where innovation and technology play a central role in enhancing agricultural cooperation.
“Strengthening intra-regional food supply chains is a key strategy to reduce food shortages and enhance food security,” Anaadumba said.
Joint investments in infrastructure, such as transportation networks and storage facilities, can also significantly improve the distribution of agricultural products within and between the regions.
“This not only reduces post-harvest losses but also enhances food accessibility. It’s a vital step in diversifying crops, making agricultural systems more resilient to pests, diseases, and market fluctuations,” Anaadumba stated.
Regional organizations play a pivotal role in fostering collaboration between Africa and the Middle East.
One notable example is the Islamic Development Bank, which operates across both regions.
IsDB has been at the forefront of efforts to enhance water access and management, train smallholder farmers and herders to address climate challenges, and ensure the inclusion of marginalized groups, including women and youth.
The bank’s initiatives are a testament to the power of cross-regional partnerships in addressing shared challenges.
Similarly, the Africa Export-Import Bank, based in Egypt, has been instrumental in bridging the financing gap for numerous agricultural and innovation projects.
Afreximbank’s initiatives are not just about financing; they are about fostering robust cooperation between African and Middle Eastern countries and supporting long-term infrastructure projects.
Investments from Saudi Arabia and the UAE in infrastructure, irrigation, road construction, and fertilizer production are just a glimpse of what is possible when regional institutions collaborate.
“Technology and innovation are at the heart of sustainable agriculture,” Nwuneli said, adding: “Both Africa and the Middle East recognize their transformative potential.”
 The entrepreneur went on to highlight the “cutting-edge solutions” being developed across the seeds and soil health sectors, which have led to productivity improvement and climate-smart approaches.
“These innovations are not only increasing the productivity of farmers but also enabling them to scale their operations, ensuring food security for their communities,” she added.
Logistics and infrastructure development are equally vital. Improving transportation networks and storage facilities can enhance the distribution of agricultural products within and between regions, reducing post-harvest losses and improving food accessibility.
There are already plenty of success stories of collaborative projects between Africa and the Middle East that offer valuable lessons. For instance, the UAE has supported initiatives in Liberia, Nigeria, and Zimbabwe, focusing on sustainable poultry and vegetable production, food security in conflict-affected areas, and horticulture value chains.
Qatar partnered with Somalia to improve water access and train smallholder farmers to tackle climate challenges, while Saudi Arabia has a history of supporting desert locust control in Africa, among other initiatives.
As a result, knowledge transfer between African countries and the Middle East has fostered growth and innovation, with regional institutions paving the way for collaborative research.
Nwuneli emphasizes that one common goal unites both regions: the need to leapfrog into self-sufficiency and resilience in the face of climate change.
“Achieving this ambition requires deeper collaboration, knowledge sharing, strategic partnerships, and substantial investments,” she stated.
Her views are echoed by Anaadumba who underlines the role of technology and innovation as essential drivers of this transformation.
“As seeds, soil health, productivity enhancement, and climate-smart approaches are unlocking the potential for increased agricultural productivity, research institutions on both sides of the partnership are actively collaborating to leverage indigenous crops and bridge supply chain gaps,” he said.
LONDON: Oil rose on Friday, as the US jobs market slowed more than expected last month, bolstering expectations of a pause in interest rate hikes in the world’s biggest consumer, but they remained on track for a weekly loss as supply concerns driven by Middle East tensions eased, according to Reuters.
Brent crude futures were up 81 cents, or 0.9 percent, to $87.66 a barrel at 3:43 p.m. Saudi time, while US West Texas Intermediate crude futures gained $1.01, or 1.2 percent, to $83.47 a barrel.
Both benchmarks gained more than $2 a barrel on Thursday, but were on track to lose up to 3 percent on the week.
US job growth slowed more than expected in October, official data showed on Friday, while wage inflation cooled, pointing to an easing in labor market conditions.
The data could bolster the view that the US Federal Reserve need not raise interest rates further.
The Fed held interest rates steady on Wednesday, while the Bank of England held rates at a 15-year peak. The stable policies kept oil prices supported as some risk appetite returned to markets.
Meanwhile, China’s manufacturing activity unexpectedly contracted in October. The official purchasing managers’ index fell to 49.5 in October from 50.2, dipping back below the 50-point level demarcating contraction from expansion, data from the National Bureau of Statistics showed on Wednesday.
On Friday, a private sector survey showed China’s services activity expanded at a slightly faster pace in October, but sales grew at the softest rate in 10 months and employment stagnated as business confidence waned.
Geopolitical concerns also remained in focus.
“The oil market will be watching for an escalation of tensions, particularly on the Lebanese border, as Hezbollah attacks increase,” City Index Fiona Cincotta said.
NEW YORK: FTX founder Sam Bankman-Fried was found guilty on Thursday of defrauding customers of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record, a verdict that cemented the 31-year-old former billionaire’s fall from grace.
A 12-member jury in Manhattan federal court convicted him on all seven counts he faced after a monthlong trial in which prosecutors made the case that he stole $8 billion from the exchange’s customers out of sheer greed. The verdict came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion personal fortune.
The jury reached the verdict after just over four hours of deliberations. Bankman-Fried stood and clasped his hands together as the verdict was read.
Bankman-Fried, a Massachusetts Institute of Technology graduate whose mother and father are both Stanford University law professors, had pleaded not guilty to two counts of fraud and five counts of conspiracy.
The conviction represented a victory for the US Justice Department and Damian Williams, the top federal prosecutor in Manhattan, who made rooting out corruption in financial markets one of his top priorities.
US District Judge Lewis Kaplan set Bankman-Fried’s sentencing for March 28, 2024.
His defense lawyers, who objected to several rulings by Kaplan before and during the trial, are expected to appeal the verdict.
Bankman-Fried is also set to go on trial on a second set of charges brought by prosecutors earlier this year, including for alleged foreign bribery and bank fraud conspiracies.
Once the darling of the crypto world, Bankman-Fried — who was known for his mop of unkempt curly hair and for wearing shorts and T-shirts rather than business attire — instead joins the likes of admitted Ponzi schemer Bernie Madoff, “Wolf of Wall Street” fraudster Jordan Belfort and insider trader Ivan Boesky as notable people convicted of major US financial crimes.
The jury began deliberations on Thursday after hearing the prosecution’s rebuttal to the defense closing arguments delivered a day earlier.
Prosecutors argued during the trial that Bankman-Fried siphoned money from FTX to his crypto-focused hedge fund, Alameda Research, despite proclaiming on social media and in television advertisements that the exchange prioritized the safety of customer funds.
Alameda used the money to pay its lenders and to make loans to Bankman-Fried and other executives — who in turn made speculative venture investments and donated upwards of $100 million to US political campaigns in a bid to promote cryptocurrency legislation the defendant viewed as favorable to his business, according to prosecutors.
Bankman-Fried took the calculated risk of testifying in his own defense over three days near the close of trial after three former members of his inner circle testified against him. He faced aggressive cross-examination by the prosecution, often avoiding direct answers to the most probing questions.
He testified that while he made mistakes running FTX, such as not formulating a risk-management team, he did not steal customer funds. He said he thought Alameda’s borrowing from FTX was allowed and did not realize how large its debts had grown until shortly before both companies collapsed.
“We thought that we might be able to build the best product on the market,” Bankman-Fried testified. “It turned out basically the opposite of that.”
Prosecutors had a different view.
“He didn’t bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits — billions and billions of dollars — to give himself money, power, influence. He thought the rules did not apply to him. He thought that he could get away with it,” prosecutor Danielle Sassoon told the jury on Thursday.
The jury heard 15 days of testimony. Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testifying for the prosecution after entering guilty pleas, said he directed them to commit crimes, including helping Alameda loot FTX and lying to lenders and investors about the companies’ finances.
The defense argued the three, who have not yet been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing. Prosecutors may ask Kaplan to take their cooperation into account in deciding their punishment.
Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he likely tampered with witnesses. Kaplan blocked Bankman-Fried from calling several proposed expert witnesses, and ruled he could not testify about the involvement of lawyers in FTX decisions at issue in the trial.
RIYADH: The landscape of cyberthreats is constantly evolving, posing an increasing risk to one of society’s most vulnerable groups: children. Today’s youth, often referred to as digital natives, have unfettered access to the internet, accompanying the exponential rise in cyberthreats.
The risks are manifold: cyberbullying, online predators, exposure to inappropriate content, and privacy breaches. The anonymity of the internet emboldens perpetrators, fostering an environment ripe for the exploitation of minors. Cybercrime is on a steep incline, anticipated to cost the world a colossal $8 trillion in 2023, making it the equivalent of the third-largest economy globally if it were a country, according to Cybersecurity Ventures.
These issues were tackled at the third Global Cybersecurity Forum that concluded in Riyadh on Thursday. Hosted by the National Cybersecurity Authority and the Saudi Information Technology Co., this year’s forum discussed some of the most pressing challenges in the realm of cyberspace.
Participants delved into the repercussions of these challenges across various sectors, with a special emphasis on supply chains and the rapidly evolving landscape of smart cities.
The GCF also aimed to encourage multi-stakeholder collaboration on an international scale, gathering industry experts, decision makers, CEOs, senior government and academic representatives  as well as international companies from over 120 countries.
Tech companies, empowered by advancements in AI, hold considerable responsibility within this ecosystem. They are tasked with the design of products featuring robust security and privacy controls and must be swift to counteract threats. These entities are pivotal in safeguarding young users and are well-placed to develop AI tools that can monitor and restrict harmful content and behaviors.
A key initiative is Security by Design, a crucial framework in technology development, particularly when it comes to protecting young users online. For child protection, this means technology is created with the highest default privacy settings, minimal data collection, and stringent content filtering to bar harmful material. This approach involves the use of AI for real-time content and behavior monitoring, transparent policies, and user data control. It requires tech companies to stay vigilant and responsive to ensure swift action on security threats.
When these practices are incorporated, they can substantially reduce the risks to young users. Prioritizing security from inception builds consumer trust and lays the groundwork for a safer digital environment, allowing children to learn, explore, and connect with minimal exposure to online threats. Moreover, a proactive security stance helps companies meet international regulations and prevent the high costs and reputational damage of security failures.
“I think over the past five years we’ve seen a great improvement in the levels of protections, safeguards that have been put in place,” said Iain Drennan, executive director of the WeProtect Alliance. However, Drennan notes a lack of consistent transparency across companies.
“There was a very good report that the OECD put out recently that shows that it’s only a minority of the major service providers that are being used by children that have a consistent level of that input,” he said.
AI has the potential to dramatically improve online safety, according to Drennan: “And I think with AI, you’ve got an ability to process huge volumes of information and flag up abnormal behaviors, you train it with the right data, you put main indicators, and that then can act as a support for human moderators.”
He advocates for multinational cooperation and knowledge sharing to combat this global crime that ignores borders.
The urgency of this issue is highlighted by the DQ Institute’s 2023 Child Online Safety Index, revealing nearly 70 percent of children and adolescents aged 8-18 worldwide have encountered at least one cyber risk in the past year — a figure that has stubbornly remained consistent since the Index’s inception in 2018. This is termed a “persistent cyber pandemic.”
Digital skills are essential, yet as Yuhyun Park, founder of the DQ Institute, explained to Arab News: “When people think about skills, digital skills, a lot of people think of it as a coding skill, which is important in computational thinking. But digital skills start with digital citizenship. So, before you know how to use and create technology, you need to be a good digital citizen who can use technology in a safe, responsible, and ethical way.”
Park likens digital citizenship to a passport necessary for ethical participation in the digital world.
The DQ Institute’s study, gathering data from over 350,000 children globally, aims to inform policymakers with a precise overview of child online safety measures worldwide. The UK, Germany, and China emerged as top performers in the study’s assessment.
Park noted that while cyberattacks have long been rising, it was not until the COVID-19 pandemic that the scale of immersion in digital spaces became fully apparent.
“So, what is actually quite important for children to understand is that they need to protect themselves at a very early age,” she said, highlighting the changed landscape that children now navigate compared to previous generations.
A comprehensive approach that includes regulatory frameworks, digital literacy education, technology design, international collaboration, and open dialogue is vital for creating a safe online space. Insights from the DQ Institute and similar organizations can significantly bolster global efforts to shield young netizens.
Saudi Arabia has made notable strides, as evidenced at the Global Cybersecurity Forum where the 2023 COSI was launched. The country has excelled in children’s safe use of technology and ICT company responsibilities.
The darker facets of online platforms, like gaming, social media, and chat rooms, are avenues for cyberbullying and grooming. Phishing and scams can deceive children into disclosing sensitive information, drawing them into criminal activities unwittingly.
Even toys and devices under the IoT umbrella are becoming conduits for risk.
“When we talk about cyber criminals and maybe specifically hackers, what we see is degrees of impulsive and compulsive behaviors,” Dr. Mary Aiken, a cyberpsychologist at Capitol Technology University, told Arab News.
“So, for the first time, we’re looking at a cybercrime scene and looking at the exploit that was used as a weapon of choice, but we’re now observing a new breed of criminals who are targeting children for commercial interests,” Aiken added.
She acknowledges the importance of regional best practices and the need for protective legislation.
“It’s only a matter of time before entities that profit from online platforms and services recognize a legal duty of care to protect children,” Aiken explained. With the EU Digital Services Act, she sees an opportunity for the development of similar culturally sensitive legislation in other regions.
The battle against cyberthreats to children demands a concerted effort from all sectors — technology firms, educators, governments, and international organizations. It is imperative to forge a united and active defense strategy to ensure the digital well-being of our youth in an increasingly connected world.
RIYADH: Saudi Arabia and Bahrain engaged in discussions to strengthen their collaboration in the development of methodologies and techniques for calculating vital indicators, particularly those pertaining to family income and expenditure surveys. 
High-ranking officials from both countries convened on the sidelines of the 9th International Conference for Statistical Data and Metadata Exchange in Manama, with the goal of facilitating economic growth and strengthening ties between the two nations. 
Fahad bin Abdullah Al-Dossari, president of the General Authority for Statistics, met with Mohammed bin Ali Al-Qaed, CEO of Bahrain’s Information and eGovernment Authority, during the global conference.  
Organized by Bahrain’s Information and e-Government Authority, the gathering brought together the international data community to exchange insights and updates on the latest and upcoming developments in the field. 
Al-Dossari, leading a Saudi statistical delegation, underscored the pivotal role played by Bahrain’s Information and e-Government Authority in inaugurating this event in the Middle East. 
Al-Dossari and Al-Qaed discussed strategies to strengthen collaboration within the sector and identify opportunities to enhance cooperation in matters of mutual interest. 
The 2023 event, co-organized with the support of ESCWA and Banca d’Italia, gathered a diverse assembly of official statistics compilers and users from national, regional, and international agencies, academia, and the private sector. 
The central theme of the 2023 program was “Empowering Data Communities,” with a focus on exploring how SDMX tools and technologies could be harnessed to enhance collaboration and facilitate knowledge sharing. 
The conference marked the first in-person gathering since 2019. 


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