Today, the world is witnessing many social, economic, and technical transformations, which affected various sectors and organizational entities, especially in the public sector, and the services they provide. In order to increase these entities’ role and contribution in various aspects of development. Many countries have sought and are still actively seeking to enhance the level of services they have at various levels, by transferring government projects and programs to the private sector, and this, in turn, enhances the role of the private sector and the quality of services provided by it and contributes to reducing their costs, as well as participating in economic diversification, enhancing aspects of economic development and increasing competitiveness to face various challenges, in addition to increasing regional and international competition encouraging foreign direct investment, and improving the balance of payments.
Privatization is defined as “the increased participation of the private sector in managing the ownership of activities and assets controlled or owned by the government (Abbawi, 13: 2007). The Supreme Court of the state from the public sector to the private sector (Abu Younis,2017: 20). It is also indicated that the beginning of privatization was in the United Kingdom at the beginning of the eighties (Abdullah and Al-Baili, 2016). A comprehensive economic change of ownership by partial or total sale or lease is only a means to achieve economic goals towards improving the efficiency of human performance and financial productivity (Al-Mutairi, 132: 1996). To achieve privatization, there are several methods, the most important of which are the complete or partial termination of state ownership, administrative contracts where the ownership of the project is retained and its various operations and activities transferred to the private sector, and the granting of a concession or obligation to achieve the rent and investment of specific resources in the project by the private sector, finally substitution through the private sector providing a variety of services instead of the government.
However the beginnings were, they came as a result of many development needs, which in turn are based on many social, economic, and technical variables. Such efforts emerged significantly at the end of the twentieth century. Where many countries have begun to search for modern administrative approaches, concepts, and practices that help them adapt to the various surrounding changes and the challenges of the twenty-first century.
Countries have to privatize many projects and programs in many directions, the most important of which is keeping pace with the social requirements of members of society, which the public sector is no longer able to meet due to the increasing number of those needs and their different diversity. There are many international experiences that are referred to in privatization, such as the British and New Zealand experience, which included the privatization of all economic sectors. The Malaysian experience, included the privatization of the sectors of transport, communications, electricity, post, and sanitation. Also, the Chilean experiment included all public services sectors. Such international experiences came as a result of the increased demand for these services and goods and the desire for their quality, accuracy, and speed of availability. In addition to the economic orientation that involves easing the burden on the public sector from the consequences of the economic aspect of the cost of management, operation, and maintenance, such as those
projects and programs, and strengthening what the private sector does not enjoy in terms of great flexibility and many capabilities and skills that help in managing and operating such projects, thus enhancing aspects of investment and profit, increasing job opportunities, reducing unemployment, and speed of performance from various private sector systems.
The motive to improve the level of performance and empower the private sector and its participation in carrying out various development activities that adhere to its role in the various segments of society is enhancing the role of the private sector and its participation, which leads to strengthening the practice of various economic, administrative and social activities and improving the standards of living and the achievement of social satisfactions among the members of society. In addition to increased monitoring of knowledge growth and strengthening aspects of discreet practical practices, which enriches the growth of capabilities and competencies, and contributes to achieving a distinguished national balance of qualified power in various sectors
The administrative orientation through the availability of many effective organizational entities has a role in promoting that shift towards the private sector and the regulations, instructions, and qualified human cadres it includes, which has led to strengthening the role of the private sector in Carrying out such projects and being assured of their presence in such regulatory environments, this, in turn, leads to raising free competition between the various private sector systems to carry out such government projects, and thus this role is reflected in the level of services for those projects. This in turn, contributes to the process of organizational reform in general and the associated organizational and administrative structures and regulations related to the various activities of public productive institutions (Al-Nafi’i, 2019: 262)
The financial determinants of countries and the growth and decline associated with them, depending on the productive resources in those countries, especially those economic countries that may depend on one economic tributary, play a major role in the trend towards the transformation of projects from public ownership to the private sector. This requires diversifying the various sources of income by reducing the burden on the public sector, and this, in turn, encouraged greatly to privatize of many projects in the public sector, in order to alleviate such financial burdens in the present and in the foreseeable future and to find sources of income diversification as well as diversifying and strengthening those services. Perhaps alleviating this financial burden is one of the most important basic trends towards privatization, as it involves relieving governments, especially in some basic services such as education, and other public services (Al Shawara, 104: 2019)
The Kingdom of Saudi Arabia has kept pace with such trends in order to overcome various social, economic, and technical factors, and enhance the contribution of the private sector, as the Kingdom’s efforts began since the issuance of Cabinet Resolution No. (23/1) on 3/23/1423 AH approved the privatization strategy in the Kingdom. . Since the adoption of the privatization strategy, a number of sectors in the Kingdom have enjoyed the transformation process, and the most important of these sectors is the Saline Water Conversion Corporation, the General Corporation for Silos and Flour Mills, the Saudi Electricity Company, the General Ports Corporation, Saudi Arabian Airlines, the Saudi Post Corporation, the General Corporation for Railways (Al-Badi, 2008.)
With the initiation of the privatization program in 2018, which is one of the thirteenth major programs of the Kingdom’s Vision 2030, which launched its journey in the year 2016, seeking to identify many private government assets and services in a number of sectors, developing the privatization system and mechanisms, and defining partnership frameworks between the public and private sectors to enhance the quality and efficiency of public services, and support the contribution to economic development. The privatization program aims to enhance the role of the private sector in providing services and making government assets available to it, which improves the quality of services provided and contributes to reducing their costs. It also stimulates economic diversification, enhances economic development, and increases competitiveness to face challenges and regional and international competition. Foreign direct investment improves the balance of payments.
The program is based on three main pillars: enhancing the quality and efficiency of public services, supporting the contribution to economic development, and enabling the system of privatization and partnership between the public and private sectors. The privatization program document indicated that the privatization system in the Kingdom is working on (17) targets and (176) initiatives, of which (32) have been launched, and (18) initiatives have been awarded so far. The document also indicated that the privatization system in the Kingdom, during the year 2019, achieved a total of (68.12) billion riyals, that is the value of investments for the public-private partnership in the Kingdom, and a total of (470) million riyals, and that is the proceeds from the sale of assets. In the year 2020, a total of (75.2) billion riyals were achieved, as returns from asset sales. The program in the previous stage set the general frameworks for the privatization system through the issuance of the privatization system-related projects and the establishment of the National Center for Privatization, which aims to organize the system’s procedures and enhance the participation of the private sector in accordance with regulatory procedures in a transparent and fair manner, and to ensure motivating integrity of the private sector. In order to provide an attractive regulatory, investment environment and to activate the investment committees in the short and long term.
The program also contributed to the eastern sectors to reinforce the strategic direction, the privatization system was issued in the Kingdom of Saudi Arabia by Royal Decree No. (M/63) dated 5 Shaban 1442 AH, as well as Cabinet Resolution No. (436) dated 3 Shaban 1442 AH. The third article of the system included what the government seeks to achieve through the privatization projects. To achieve several goals, namely, to help achieve the strategic goals of government agencies, rationalize public spending, increase state revenues, raise the efficiency of the national economy, and increase its competitiveness to meet the challenges and regional and international competition related to privatization projects, as well as raise the comprehensiveness and quality of services and their provision. Relevancy, indicating the appropriate time and cost, raising the efficiency of the allocation, and improving the level of its management. As well as working on preparing and restructuring the sectors, devices, assets and public services to be allocated, and motivating the local and foreign private sectors to invest and actively participate in the national economy through projects that achieve the developmental feasibility of the government, the economic feasibility of the public and private sectors and an increase in the national economy, as well as the private sector’s share in the GDP. In order to achieve growth, work on expanding the participation of citizens in the ownership of government assets, increasing job opportunities, and optimizing the employment of the national workforce.
As the Kingdom of Saudi Arabia is concerned with aspects of comprehensive and sustainable development in the strategic direction towards the privatization of many projects and programs in the Kingdom, a prominent strategy, which in itself represents a trend to reduce the burden on the public sector and increase the participation of the private sector in the development field in the Kingdom. This, in turn, will guide many of the operational expenses and direct many services towards providing them in a better manner in accordance with the best practices of modern administrative and organizational practices. It will also place Saudi Arabia among the leading countries in meeting all development needs according to the best international standards and indicators. Since the private sector is one of the cornerstones of a country, the Kingdom of Saudi Arabia has realized the importance of that role and the importance of promoting and encouraging it, as privatization has played a prominent and vital role in supporting the aspects of the national economy since the beginning of the King’s five-year development plans since its first year. Evidently, 1390 AH, corresponding to 1970 CE, with the vision of the Kingdom ending in 2030, and its basic pillars being a vibrant society, a prosperous economy, and an ambitious nation. Overcoming modern social, economic, and technical factors and changes.
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