Despite Saudi Arabia often being compared to neighbours such as the UAE, the Kingdom stands alone in the region in many respects – culturally and economically. But the winds of change blowing in from the rest of the Gulf are making their mark and, if the Kingdom can be compared to the likes of the UAE, it is because the ruling classes are embracing change as a necessity – albeit the speed and shape that such change is taking may be unique.
The headline differentiators are inherently contradictory: on the one hand, you have Saudi Arabian women being granted the right to drive amidst a swathe of liberalisations; while on the other hand, you have Skype and WhatsApp – both rapidly becoming key tools in the arsenal of businesses around the world – being banned in the Kingdom. But to focus on the areas where Saudi Arabia may be lagging behind some of its closest neighbours is to paint an incomplete picture of a country that, in actuality, is undertaking a rapid period of modernisation. At the centre of this transformation are the general counsel (both born locally and expatriated from abroad) who are finding ways to partake in the oncoming new era, which is providing opportunities to meaningfully affect the course of business in Saudi Arabia to a degree rarely seen in other jurisdictions.
Saudi Vision 2030
Like many other countries in the region, Saudi Arabia has been vocal about its plans to create and introduce the next era for the country. Unlike, say, the UAE’s Vision 2021, however, Saudi Arabia’s equivalent – Saudi Vision 2030 – is both much newer and operating on a longer time scale.
Introduced in 2016 by Crown Prince Mohammed bin Salman, the vision is intended to reduce the Kingdom’s dependence on oil, diversify its economy, and massively invest in public infrastructure across the country, with a focus on healthcare, education, recreation and tourism. This has created a flurry of development across the country, with a frenzy of economic activity vastly changing the physical and metaphorical landscape of Saudi Arabia.
‘Saudi Arabia has initiated five-year development plans since 1975, so that the recent 2030 vision plan of modernisation is built on the progress of its antecedents, so that each generation benefits from the progress of the past,’ explains Dr Saleh Al-Oufi, general counsel at Taqnia Holding.
‘Nevertheless, a new generation of leaders brings with them new challenges and impetus for development, such as the Crown Prince unveiled Vision 2030 – an ambitious programme of development for the Kingdom. The Crown Prince noted that “Our Vision is a strong, thriving, and stable Saudi Arabia that provides opportunity for all”.’
A key part of the diversification of the Saudi Arabian economy is the growth of the private sector, which is unusually small compared to the Kingdom’s substantial public sector. Saudi Arabia has fought to achieve this by reducing red tape, improving the efficiency of the courts, and lowering the barriers for foreign entities to enter the Saudi Arabian market. As the private sector does grow, so too does the chance for in-house counsel – both locally born lawyers looking to leave the public sector or foreign lawyers that have been lured to the country by increasing opportunities – to play a meaningful role in business within one of the region’s most exciting economies.
‘The region is so dynamic, with things constantly changing all around us. It’s not just social, not just economic and it’s not just political. There are so many aspects of change,’ says Shaun Johnson, director (legal) of Vision Invest (formerly ACWA Holding) in Riyadh.
‘Saudi is transforming into one of the world’s most competitive economies and attracts expat workers from around the globe,’ adds Farah Zafar, chief legal officer for the Public Investment Fund of Saudi Arabia.
‘As a result, the working environment is very multicultural and welcoming. The people of Saudi Arabia are just amazing – they’re hospitable, hardworking, focused and are looking to the future in so many ways. They are witnessing a transformative era in their history and the excitement and momentum is infectious. This results, therefore, in an opportunity to exchange cultures across people, ideas, and experiences, in order to learn and grow together – to achieve the unimaginable.’
Al-Oufi echoes this sentiment and is bullish on the opportunities enjoyed by in-house counsel thanks to Saudi Arabia’s ambition.
‘I see my role and the role of every legal professional increasing, as the Vision 2030 outlines economic development among several specific goals and initiatives for the Kingdom to achieve,’ he says.
‘In the economic sector, regulations have been streamlined to encourage foreign investment and that will lead to the emergence of key opportunities for partnership in a number of industries such as manufacturing, and technology transfer. These efforts will provide all Saudi legal professionals better opportunities to participate in the execution of Vision 2030 for the Kingdom of Saudi Arabia.’
Shaun Johnson began his career working in private practice on large infrastructure deals in Australia. Finding himself working in a similar industry in Saudi Arabia, Johnson is in a unique position not only to contrast the in-house role with that of his former life, but also to contrast Australia’s approach to infrastructure development with that of Saudi Arabia’s.
‘Working in the Middle East is a stark contrast to working in other jurisdictions and with other governments. In prior roles I’ve experienced situations where some objectives relating to infrastructure were good for the national interest, but those objectives would often get mired in political football. Of course many Middle Eastern countries are not ruled by elected parliaments, but the unimpeded political desire to want to do better is certainly present,’ he explains.
‘When we look at some of the ambitious development programmes in Saudi Arabia, what we’re basically asking is, is this supported from the top down? And I think what we’ve got here in this region, and in particular in Saudi Arabia, is that the top are saying, “We are ambitious because we want the world’s best practice. We want to achieve international standards. How can you help us make this become a reality?” So there is a strong desire and a willingness to make things happen. That is what Saudi Arabia set out in their Vision 2030 publication. The next step has to be how to implement it. I think public sector capacity building, privatisation and private sector corporatisation will allow both the public and private sectors to achieve the national goals. Of course that’s going to take a bit of time, but I see progress happening every day.’
The efficiency and drive from the top to transform Saudi infrastructure has manifested in a number of large-scale megaprojects, that not only would usually have been achievable under these timeframes, but perhaps not achievable at all. These giga-projects form a core part of Vision 2030 and include initiatives such as the planned Neom, a smart city powered entirely by renewable energy sources that is expected to cost in excess of USD$500bn, as well as an entertainment resort in Riyadh named Qiddiya, which is expected to cost USD$8bn. All are designed to effect Saudi 2030’s ambition of increasing spending across a diverse array of industries within the Kingdom.
Farah Zafar is chief legal officer for Amaala, a giga-project launched by the Public Investment Fund of Saudi Arabia. Set to play a key role in the delivery of Saudi Vision 2030, Amaala is intended to serve as an ‘uber-luxury’ tourism destination, ultimately covering 3,800km2 of land, mixing the natural (and largely unseen, globally speaking) beauty of the Kingdom with state-of-the-art construction.
‘Amaala will curate truly authentic end-to-end journeys for its visitors and transcend national boundaries, to conceptualise, build and operate an integrated destination that shall become a year-long, exclusive, by-invitation-only, global, purpose-driven community of connoisseurs, pioneers and thought leaders, all connected by a shared commitment to the practice of advancement of arts and culture, wellness and environmental preservation,’ she says.
Given the gargantuan size of these giga-projects and the average length of time to completion (Phase 1 of Amaala is set to open Q4 2020, with a final completion date set for 2028), the need for a steady hand is great. For Amaala, Zafar is that steady hand and, as with many in-house legal roles, the boundaries of Zafar’s responsibilities have long since expanded beyond a purely legal remit.
‘As chief legal officer for Amaala, I am responsible for creating and establishing the regulatory and governance framework required to deliver luxury resorts of this nature in the Kingdom, together with all legal, commercial, construction, infrastructure, development and investment matters thereof,’ explains Zafar.
The role is varied, to be sure, but Zafar brings a wealth of experience managing similar infrastructure projects in the region. This experience includes working directly for the Engineers Office of His Highness Sheikh Mohammed Bin Rashid Al Maktoum in Dubai, serving as the head of capital transactions for Dubai Holding – where Zafar was able to bring in AED 11.3bn worth of project capital to the city – and has acted on behalf of the governments of Dubai, Oman, the Emirate of Ajman and Qatar.
‘I feel as if my past experience has culminated in me being blessed with this role, as I see everything with the clarity required to make Amaala successful from a feasibility, investment, infrastructure, development and construction stand point, not just legal,’ she says.
‘I am therefore in a unique position to be able to support each and every work stream in Amaala, provide the platform of what they need to deliver,and, with this in mind, I actually drafted a comprehensive project plan which details 1177 deliverables and over 34 work streams to be delivered over the next 9-12 months. That is called clarity.”
Clarity is a word often associated with Saudi Arabia’s vision for the future, and so it is easy to understand why someone with Zafar’s background has been entrusted with a project so vital to that future.
Although there is plenty of drive from the top and a glut of talent on the ground able to give teeth to that change, there are still barriers standing between Saudi Arabia and its 2030 Vision.
While Saudi Vision 2030 is intended to ween the Kingdom off oil, the fact remains that it is the largest oil exporter in the world – being home to the second-largest petroleum reserves and fifth-largest natural gas reserves in the world. As such, the status of Vision 2030 is largely contingent on the stability of regularly fluctuating resource prices. Saudi Vision 2030 was announced at a time when oil prices were hitting troughs, and the need to diversify was both apparent and easily sold to the country at large. Oil prices have been steadily rising since that trough and, as such, initiatives aimed at curbing oil dependence (such as fuel tariffs and related price increases) are not as easy for Saudi society to digest.
There is also the purely logistical consideration of the capability of a relatively newly opened business sector to facilitate the kinds of changes envisioned by the Government.
‘There’s a strong desire there and there’s a willingness to make things happen – Saudi Arabia has set this out in its Vision 2030 mission statement – but the next step has to be how do you implement it correctly and efficiently,’ cautions Johnson.
‘I think the public sector is getting up to speed, but putting those processes in place to allow the private sector to come in and help the government achieve its goals will take a little bit of time – but it is happening.’
To many, Saudi Arabia might be most easily distinguished by its conservatism, which frames public life in a way that isn’t seen to the same degree elsewhere in the region. But this, as with the business sphere, is changing, according to Zafar.
‘The legal arena in Saudi Arabia is taking great strides towards increased diversity. I myself am a major champion of diversity in the workplace, having built a team consisting of women and men from all corners of the world, including the Middle East, Europe, Africa and South America,’ she explains.
‘I believe recruiting lawyers from different backgrounds and training provides for an excellent working environment, as there is rarely a legal issue that arises which one of us hasn’t come across or managed. It is great to also see the increase of women in the workplace in the Kingdom and the talented Saudi women that are big contributors, hardworking and incredibly professional across sectors.’
Dr Al-Oufi agrees, and sees this as an inevitable change in the coming years, as Saudi Arabia works towards its lofty Vision 2030 goals – a factor which will inevitably require the gradual opening of the Kingdom.
‘In general, Saudi Arabia will become a more open society, with more modern education and healthcare, which are the fundamentals of any society. In addition, employment opportunities for both male and female will expand, as society will become more open and accepting of a working environment in which females and males work side by side.’