Saudi reforms are enhancing the growth of small and medium enterprises sector to create jobs and boost the economy, as the Ministry of Labor launches 68 initiatives to stimulate private sector investment, according to several economy experts.
Accounting Professor at Taif University Salem Baajaja explained to Asharq al-Awsat that reforms have contained the job market’s need for young and innovative entrepreneurs and start-ups.
“The Ministry of Labor has announced 68 initiatives to stimulate the private sector engagement.”
Baajaja added that the Ministry of Labor expanded training services for Saudi men and women who have no experience, by turning the target centers into rehabilitation and employment centers and increasing its support for training programs.
He pointed out that the Ministry established a leadership academy, which will be an important guide in training young Saudi leaders to take leadership positions in the private sector.
These initiatives will have a direct positive impact on localization which will be revealed in three months of the program’s launch, according to Baajaja.
Economy expert Fadl al-Buainain stated that Vision 2030 aims at supporting SMEs and establishing a committee for that purpose. The committee will address SME’s problems and provide optimal support and encouragement.
Buainain told Asharq Al-Awsat that Saudi reforms seek to strengthen the role of small enterprises in the economy and increasing their contribution to GDP.
“It is expected that the government's efforts will achieve the required growth after dealing with some systems that hinder it.”
The expert suggested that small enterprises should have a certain percentage of industrial projects, particularly in important sectors such as oil and petrochemicals, in addition to government contracts to enhance their impact on the Saudi economy.
For his part, Mahmoud Makki highlighted the need for better cooperation between the public and private sectors to support small enterprises by distinguishing the requirements and the needs of different SMEs according to their classifications.
"Although fast-growing companies represent only 5 percent of the world's small and medium-sized enterprises, they can have a significant positive impact on the labor market and GDP of the country as a result of their high levels of productivity and innovation.”
Makki pointed out that the Saudi government is taking a series of measures to overcome the obstacles related to finance, talent development, enhancing access to customers, and encouraging banks to address their fears about providing loans to rapidly growing companies.
