Saudi Arabia is taking dramatic steps to improve corporate governance

Cabinet reshuffle, new anti-corruption committee are part of efforts to create environment conducive to foreign investment

Mohammed Al Tuwaijri is Saudi Arabia’s new minister of economy and planning. Karim Sahib / AFP

The news from Saudi Arabia in the past 48 hours shows just how strongly its leaders are pushing to tighten up governance structures in the kingdom.

The cabinet reshuffle announced on Saturday night resulted in economy minister Adel Fakeih being removed in favour of his deputy Mohammed Al Tuwaijri, and Khaled bin Ayyaf replacing Prince Miteb bin Abdullah as minister of the National Guard, according to a royal decree carried on state-run Saudi Press Agency.

Meanwhile, the creation of an anti-corruption committee, chaired by Crown Prince Mohammed bin Salman, is a bold step towards greater regulation of public finances as the kingdom continues its efforts to diversify revenues away from dependence on oil.

_________________

Read more:

_________________

Both measures were dramatic, but considered. First, the promotion of Mr Al Tuwaijri to the role of minister of economy and planning is significant, as the seasoned banker has been instrumental in shaping Saudi Arabia’s economic and fiscal reform policy.

Unafraid of the press, Mr Al Tuwaijri has become the public face of the kingdom’s fiscal reform agenda since his appointment to the government, regularly speaking to global media about plans to tap local and international debt markets, rationalise the country’s budget and privatise state-run institutions.

His banking credentials speak for themselves: he has served as deputy chairman and chief executive of HSBC Bank Middle East since 2013 and has more than 20 years’ banking experience under his belt.

Mr Al Tuwaijri's promotion is both a vote of confidence from Saudi's ruling elite in the progressive reforms on which he is leading, and a signal that further change is afoot. The kingdom is striving for improved economic performance as part of its Vision 2030 reform agenda, and greater scrutiny of governance structures is the next step.

The new anti-corruption committee will play a key role in this. According to the royal decree, the committee’s goal is to “preserve public money, punish corrupt people and those who exploit their positions”.

The committee will also be responsible for launching “investigations, issuing arrest warrants, travel bans, disclosing and freezing bank accounts and tracking funds”. In line with the strongly worded decree, the committee has already made its first detentions and pulled no punches.

Such centralised measures may be a pre-requisite to create a transparent business environment conducive to foreign investment.