The appointment of a new Saudi finance minister for the first time in 20 years would always be a big move, but the choice to replace Ibrahim Al-Assaf with Mohammed Al-Jadaan on Monday brings in a new generation, and a man with a different style.
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Finance minister |
His appointment is another sign of the change sweeping through the Kingdom, only a week after its first foray into the international bond markets, and as a new king has followed in the wake of collapsing oil prices.
Euromoney has known Al-Jadaan from when he was running his own law firm, formerly the Saudi affiliate of Clifford Chance, when he helped draft a new legislative framework to help spur the dormant mortgage market – though it took many years for it to be passed by the various organs of state.
As head of the Capital Markets Authority from 2015, he took steps to make sure the opening of its stock market to foreigners would be a success, loosening the rules on how to become a qualified foreign investor, and most recently laying the groundwork to invite foreigners into IPOs.
Confident
Al-Jadaan is not just internationally minded and energetic – and naturally a devout Muslim – he is also an open and confident, amiable person and a professional who strives to bring in the long-delayed reforms the country so desperately needs.
That all makes him a different man to the much older Al-Assaf, whose effusiveness towards the public could sometimes seem typical of the Saudi government, giving an impression not just of a lack of comfort in the spotlight but even of a deep-seated fear of the consequences of change.
The finance ministry’s challenges are huge. It is not just a case of implementing vital reforms such as the introduction of VAT and the establishment of a new sovereign wealth fund. The much bigger challenge is to shore up the government’s finances in an era of much lower oil prices, without unsettling the political balance – while realising this rare and extremely uncertain opportunity to shift the country’s sources of wealth away from oil.
With Al-Jadaan’s appointment, the chances of success might just have got a little better.
