Shake-ups in Saudi Arabia as reform continues

Saudi Arabia has changed the heads of its central bank and economic ministry under a reshuffle as the Arab world's biggest economy moves ahead with wide-ranging economic reforms.

The Saudi government has made significant moves to improve the lives of its citizens this year. Above, the Kingdom Tower in Riyadh. Ali Jarekji / Reuters

Saudi Arabia has replaced its central bank chief and economy minister as the Arab world's biggest economy moves ahead with wide-ranging reforms.

Finance:

Industry Insights Exclusives you can bank on from The National's premium content. Learn More

Fahad Al Mubarak was made the governor of the Saudi Arabian Monetary Agency (Sama), replacing Muhammad Al Jasser, an economist, who moved to become economy and planning minister, according to the official SPA news agency.

The move may be aimed at using Mr Al Jasser's experience outside finance to push through important job-creation and housing projects, say economists.

"I am tempted to think the move will in part give a greater role to the ministry of economy and planning as it is clear the kingdom faces a lot of challenges and opportunities going forward," said Jarmo Kotilaine, the chief economist of National Commercial Bank in Saudi Arabia. "Muhammad Al Jasser has a lot of experience speaking on topics beyond finance and monetary policy."

The government has made significant moves to improve the lives of its citizens this year. As much as 40 per cent of Saudi youth is estimated to be out of work, one of the highest unemployment rates in the Arab world. In addition, 70 per cent of existing housing projects in Riyadh, the capital, targets households in the top 10 per cent income bracket, according to Samba Financial Group.

Against a backdrop of unrest in the region, King Abdullah bin Abdulaziz Al Saud unveiled spending packages of US$129 billion (Dh473.85bn) in February and March, including funds for housing loans and handouts for the jobless.

Mr Al Jasser had a long association with Sama, having been governor since 2009 and before that the deputy governor.

He has also been a key figurehead in the planned GCC single-currency project. Last year he was named the first chairman of the Gulf Monetary Council, the body tasked with creating a united central bank and common currency.

Before his involvement with Sama, Mr Al Jasser worked for seven years at the IMF, including as Saudi Arabia's executive director at the organisation.

He succeeds Khalid bin Mohammad Al Gosaibi as economy minister.

Mr Al Mubarak, his replacement, brings experience from the private sector, having worked as managing director of Morgan Stanley Saudi Arabia.

Before working at the US bank, he managed Rana Investment, the first investment firm in Saudi Arabia. He was also a member of the team overseeing the privatisation of Saudi Telecom.

"The new central bank governor has the experience and knowledge needed and will ensure Sama is run well," said Turki Al Hugail, an economic analyst in Saudi Arabia.

Economists do not expect his appointment to mean a sudden change in monetary policy, such as the kingdom's fixed exchange rate to the US dollar.

In another move, Tawfiq bin Mohammed Al Rabiah was appointed as Saudi Arabia's minister of trade and industry, replacing Abdullah Alireza, according to the state news agency.

It is the latest reshuffle since the appointment in October of Prince Nayef bin Abdulaziz Al Saudas Crown Prince, the second-most senior position in the kingdom.

twitter: Follow and share our breaking business news. Follow us