Saudi Arabia Opens Education Sector to Private and Non-Profit Investment

Ministry of Education building in Riyadh (SPA)
Ministry of Education building in Riyadh (SPA)
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Saudi Arabia Opens Education Sector to Private and Non-Profit Investment

Ministry of Education building in Riyadh (SPA)
Ministry of Education building in Riyadh (SPA)

Saudi Arabia is moving to reshape the public education market by creating greater scope for participation by the private and non-profit sectors under a new system that establishes a clearer regulatory framework for sector governance and service delivery. The move is expected to expand investment opportunities and improve the efficiency of the education system.

The system comes as Saudi Arabia’s education sector gradually expands its investor and listed-company base, alongside growing interest in commercial opportunities in education, training and support services, in line with the objectives of Vision 2030.

A royal decree approving the General Education System was issued last month. The system aims to strengthen the governance framework for public education, provide the necessary enablers to achieve its objectives, improve the quality of the educational environment and its outcomes, and regulate the role of the private and non-profit sectors in line with the goals of Vision 2030.

The system defines the roles of the Ministry of Education, the General Education Affairs Council and relevant entities, supporting the alignment of education policies, plans and programmes, improving decision-making efficiency, and enabling the ministry to develop regulatory, monitoring and supervisory tools for the public education sector.

It also seeks to support investment in education by regulating the participation of the private and non-profit sectors in providing educational services and enhancing the attractiveness of investment and partnerships under clear rules. The aim is to improve service quality, expand educational options and support the sustainable development of public and private educational institutions.

Experts say the significance of the system extends beyond increasing investment volumes, arguing that it could change the nature of the market itself by clarifying regulatory roles, expanding public-private partnership models and strengthening governance. These factors could help reduce risks for both domestic and foreign investors.

In this context, Dr Abdullah Al-Salloum, professor of finance and investment at Imam Muhammad ibn Saud Islamic University, said Saudi Arabia’s public budgets have traditionally placed education among the government’s largest expenditure items. He noted that around 200 billion riyals ($53.3 billion) was allocated to education in the latest budget, representing roughly 18 percent of total government spending.

He added that education spending is estimated at between 5 and 7 percent of gross domestic product, a level that puts Saudi Arabia above the global average for education spending and among the highest in the G20.

Foreign Investment Expands

On investment, Al-Salloum said foreign direct investment stocks in the education sector reached 3.43 billion riyals ($914.7 million) at the end of 2024, more than 13 times their level a decade earlier.

He said the figure remains limited compared with some other economic sectors, but the compound annual growth rate of foreign direct investment, according to the data he cited, was close to 130 percent. This reflects a significant increase in the sector’s attractiveness to foreign investors over the past decade.

From this perspective, Al-Salloum expects the new system to help strengthen this trend by expanding investment options and providing a clearer and more flexible regulatory framework for private-sector and foreign-investor participation.

He noted that the scale of the impact will remain dependent on the effectiveness of implementing regulations and the extent to which investors respond to the opportunities.

8 Listed Companies

Al-Salloum also pointed to the recent listing of education companies on the Saudi market, saying the trend has become increasingly notable. He said the Saudi stock market currently has eight listed companies operating in education and training.

According to Al-Salloum, these companies generated revenues of about 3.4 billion riyals ($906.7 million) in 2025, representing annual growth of around 12 percent.

He said the figures show that the sector is not only one of the largest in terms of government spending, but also has a gradually expanding investment and commercial base. This could support continued growth in the coming years as the new regulatory framework is completed.

Sharing Roles and Improving Market Efficiency

Al-Salloum does not expect the system’s impact to be limited to increasing investment volumes. Rather, he sees its more important effect as changing the nature of the market. Clear regulations, expanded public-private partnership models and stronger governance could all contribute to reducing investment risks.

He stressed that reducing investment risk is “the most important factor for both domestic and foreign investors when deciding to enter any market.”

The system also affirms the protection of human rights in education and the rights of students and teachers, while providing a safe and stimulating educational environment to support the quality of the education process and improve the experience of male and female students. It also reinforces the role of families in supporting students’ educational journeys.

It supports the quality of care and education in early childhood, reflecting the importance of the early years in developing children’s personalities and skills. It also contributes to providing educational and support services better suited to the needs of students with disabilities within educational institutions, while supporting the care and development of gifted students.

During the next phase, the Ministry of Education, in coordination with relevant entities, will complete the implementing and regulatory provisions to ensure that the system is applied through a clear methodology and supports the objectives of developing public education and improving its outcomes.

The General Education System includes a number of provisions governing education stages, the General Education Affairs Council, educational institutions, education pathways, e-learning, continuing education, the educational environment, and the rights of students and teachers.



Norway's Sovereign Fund Proposes Deep Cuts to US Treasury Holdings

A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
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Norway's Sovereign Fund Proposes Deep Cuts to US Treasury Holdings

A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche

The manager of Norway's $2.3 trillion sovereign wealth fund has proposed significantly cutting its exposure to US Treasuries as part of a wider shake-up of its bond investments to improve returns, according to a letter published this week.

Norges Bank Investment Management has recommended reducing its weighting to government bonds within its benchmark bond index to 50% from 70%, with US Treasuries, the biggest holding, getting the biggest cut, according to the letter.

The changes would mean cutting nearly $80 billion from the fund's current holdings of about $215 billion of US Treasuries as of the end of June, according to Reuters calculations.

Government bond markets have been under pressure recently, with long-term borrowing costs soaring as rising inflation and government debt levels spooked investors.

Norway's sovereign wealth fund, the world's largest, owns on average 1.5% of ⁠all listed companies ⁠globally. Its scale means that portfolio decisions can influence broader market flows. Any cuts to its bond holdings are unlikely to be implemented until several months into 2027 at the earliest.

The letter containing the fund's proposals was sent in response to questions from Norway's finance ministry about the wealth fund's investment strategy for bonds.

Norges Bank IM said it would await the ministry's response, and any changes would be done gradually to limit market impact and transaction costs.

The proposals will form part of recommendations to the ministry in January.

They will be discussed ⁠as part of the fund's annual white paper process next spring, after which the ministry will make a final recommendation to parliament which will then hold a hearing, a Norges Bank IM spokesperson said.

"We recommend that the government subindex of the bond index be reduced from 70% to 50%," Ida Wolden Bache, governor of Norges Bank, and Norges Bank IM CEO Nicolai Tangen wrote in the letter.

"A government share of 50% will be sufficient to cover the liquidity needs, including in periods of turbulence in financial markets."

The fund also proposed considering an increase in investments in unlisted assets in a separate letter, in part as a way to reduce concentration risks that have grown in its equity portfolio amid the boom in the share prices of a handful of US tech companies.

Under its current mandate the fund can own unlisted real estate and renewable energy assets, but it has a lower share of unlisted investments ⁠than comparable funds.

Norges Bank IM said the biggest change to its bond index would be investing in more non-government debt, including mortgage-backed securities, to give it better diversification and exposure to risk premiums.

The spokesperson said total US dollar exposure would remain around 50%, adding: "What changes is the mix inside the dollar market: less US government debt, correspondingly more US mortgage and government-related bonds."

Under the proposals, the bond index weighting to US government bonds would reduce from 34.1% to 21.9%, according to the letter, with the allocation to euro area debt falling more modestly from 16.8% to 14.1%.

The allocation to Japanese government bonds would increase from 4.6% to 7.4%, while the UK allocation would remain unchanged at 4.2%. The fund said the changes would align the index more closely with the broader market weightings.

While US Treasuries exposure would fall, the proposed allocation to US non-government debt would jump from 16.2% to 27.6%, meaning that the overall bond index's weighting to the US dollar would fall only slightly, from 52.9% to 52.5%.

Europe's biggest pension fund, Dutch fund ABP, cut the value of its own US Treasury holdings in the first quarter of this year, Reuters previously reported.


J.P. Morgan, BNP Paribas Forecast December ECB Rate Hike

FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
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J.P. Morgan, BNP Paribas Forecast December ECB Rate Hike

FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo

J.P. Morgan and BNP Paribas said on Thursday they expect the European Central Bank to deliver another 25-basis-point rate hike in December, as persistent inflation risks and elevated energy prices strengthen the case for further tightening.

Both brokerages had previously expected the ECB's tightening cycle to end without a December rate increase.

The revised outlooks suggest borrowing costs in the euro zone will remain elevated for longer than previously anticipated, reflecting resilient regional economic ⁠growth and ongoing energy ⁠supply concerns.

"We think the persistence of the energy shock and the resilience of the economy make second-round effects more likely to materialize," said analysts at BNP Paribas in a note.

Markets have almost fully priced in ⁠a 25-basis-point interest rate hike by the European Central Bank at its September 10 policy meeting, indicating a 99.2% probability, according to data compiled by LSEG.

Oil prices eased but remained above $95 a barrel. At the same time, eurozone bond yields retreated from multiyear highs, following recent market pressure as the escalating conflict in Iran boosted energy prices, stoking fears of persistent inflation and ⁠tighter ⁠monetary policy.

According to Reuters, J.P. Morgan said "an interaction between more persistent energy price pressures, solid growth, sticky core inflation and a neutral rate that the ECB sees edging higher" would be the reason for a further rate hike in December.

BNP Paribas expects the ECB to hike interest rates by 25 bps at its meeting next week while leaving the door wide open to delivering more if evidence of second-round effects builds.


US Sanctions Turkish Bank Golden Global Over Alleged Iran Links

ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)
ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)
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US Sanctions Turkish Bank Golden Global Over Alleged Iran Links

ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)
ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)

The US Treasury Department on Friday imposed sanctions on a Turkish bank over its alleged ties to Iran's Revolutionary Guard Corps (IRGC), as Washington pushes to economically isolate Tehran six months into their war. 

The latest action targets Golden Global Bank and its subsidiaries, which the US Treasury said "facilitated tens of millions of dollars' worth of transactions" for the IRGC. 

They were also said to have provided Tehran with "key correspondent banking access that allows it to move its funds internationally." 

The bank denied the accusations, saying it "has not concluded any banking transactions that could substantiate" the claims by the US government. 

The institution, which describes itself as "the first investment bank in Türkiye that observes the principles of interest-free banking in all its operations," said it respects "all applicable local and international banking regulations, practices and compliance requirements." 

Last week, Washington took a step towards cutting a major Egyptian bank's United Arab Emirates operations from the US financial system. 

"Financial institutions continue to find out the hard way that we are serious about Operation Economic Outcast," said US Treasury Secretary Scott Bessent in a statement. 

"While we hope no more banks will need to be sanctioned, that ultimately depends on how quickly the international community comes to its senses and ceases support of the murderous Iranian regime," he added. 

Bessent had said Tuesday that Washington would likely announce a bank sanction this week and one next week, as it tries to choke off Tehran economically. 

He was speaking on the sidelines of a Group of 20 finance leaders' gathering in Asheville, North Carolina, where he also sought to rally support from partners to put pressure on Iran. 

Iran has been at war since late February, when the United States and Israel launched a surprise bombing campaign that killed its supreme leader. 

Bessent recently vowed that the United States was declaring an "economic D-Day" on Iran, and warned of harsh consequences for countries that do not join the campaign.