In economic news, there are many words that sound nice on their own: diversifying income sources, spending efficiency, increasing productivity. But the value of these words only becomes apparent when we ask: What is the mechanism? And how do we move from 'policy design' to 'services that people feel'?

The news here discusses the National Privatization Strategy as part of the economic transformation associated with Vision 2030.

To simplify the picture: privatization means that the state does not abandon its role, but redefines it. Instead of being an 'operator of everything', it shifts more towards being a 'regulator' that sets the rules, monitors performance, and holds accountable for quality, while opening the door for the private sector to participate in operation, financing, and innovation.

Why is privatization linked to income diversification?

Diversifying income does not just mean adding new fees or revenues. Its deeper meaning is: reducing reliance on a single volatile source and building an economy with more than one growth engine. Here, privatization becomes a helpful tool because it can attract investments, create supply chains, and increase private sector activity, which raises the 'weight of the non-oil economy' in the GDP.

However, this outcome is not automatic. Privatization does not produce diversification by itself if it is merely a change in name or contracts; what makes the difference is that 'operation' is managed with clear performance standards, and that contracts are designed to reward real improvement, not just formal compliance.

Spending Efficiency: What Does It Mean Without Complication?

'Spending efficiency' simply means: every riyal spent should achieve a greater impact—less service time, higher quality, fewer breakdowns, or lower operating energy. Many government sectors face a natural challenge: the absence of competitive incentives that force the institution to continuously re-engineer its processes. Here, a partnership with the private sector—if designed correctly—can serve as a driver for rebuilding operations: digitization, proactive maintenance, better inventory management, or more precise performance measurement.

This is why there is much talk about 'maximizing returns': that is, we should not be satisfied with just executing the project, but that it operates efficiently throughout its operational life.

Productivity and Hidden Unemployment: The Side That Is Not Loudly Spoken

When it is mentioned that privatization reduces 'hidden unemployment', it does not mean accusing individuals, but rather describing an administrative flaw: jobs exist but the actual impact is less than the size of the human resources due to role duplication, weak measurement, or lack of training. 'Structural unemployment' is another type: jobs exist in the market but the required skills do not match those of job seekers.

Privatization—if accompanied by training and rehabilitation—can push institutions to precisely define skills, build career paths, and link wages to performance, which raises productivity. However, if this point is not managed with social and organizational sensitivity, the pressure may turn into a 'human cost' that weakens public acceptance of any reform.

The 'Very Small Numbers' That Reveal a Trend, Not Details

What is interesting about the strategy is not the number of projects, but the nature of what it targets: large infrastructure and operational services. For example: the talk about implementing 13 strategic storage facilities with a total capacity of nearly 43 million cubic meters indicates a mindset of 'operational security' rather than just construction. Similarly, the development of Abha Airport with a capacity of up to 10 million passengers annually by the end of 2027 reflects a bet on the growth of economic and logistical movement in the regions.

These numbers do not matter in themselves; they matter because they say: privatization here is being used as a tool to accelerate implementation and improve operations, provided that governance remains strict.

How Do We Read Privatization?

Read it with five questions before believing the promises or fearing them:

  1. What is the model? Operation? Public-private partnership? Long-term lease? Or partial sale?
  2. How will quality be measured? Clear indicators: service time, breakdowns, beneficiary satisfaction, operational safety.
  3. Who bears the risks? Financing? Demand? Operation? If all remain with the state, the impact is limited.
  4. Is there strong regulation and governance? Because a market without rules may raise prices and weaken quality.
  5. What about the people? Training and job transition plans are what turn reform into a success story rather than a shock.