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Saudi-Indonesian Business Forum Discusses Boosting Joint Business Opportunities

Saudi Minister of Investment Khalid al-Falih with Indonesian officials during the Saudi-Indonesian Business Forum. (Asharq Al-Awsat)
Saudi Minister of Investment Khalid al-Falih with Indonesian officials during the Saudi-Indonesian Business Forum. (Asharq Al-Awsat)
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Saudi-Indonesian Business Forum Discusses Boosting Joint Business Opportunities

Saudi Minister of Investment Khalid al-Falih with Indonesian officials during the Saudi-Indonesian Business Forum. (Asharq Al-Awsat)
Saudi Minister of Investment Khalid al-Falih with Indonesian officials during the Saudi-Indonesian Business Forum. (Asharq Al-Awsat)

Saudi Minister of Investment Khalid al-Falih asserted that Saudi Arabia continues to support and diversify its national economy within the framework of Vision 2030.

Speaking at the Saudi-Indonesian Business Forum, Falih said that improving the business environment and legislation, liberalizing the market and increasing the foreign investments had created many opportunities and improved foreign direct investment (FDI) by 12 percent.

The forum was organized by the Saudi Union of Chambers and attended by Indonesian Coordinating Minister for Maritime and Investments Affairs Luhut Binsar Pandjaitan, Minister of State-Owned Enterprises Erick Thohir, and the Chairman of the Saudi Chambers' Council Ajlan bin Abdulaziz al-Ajlan.

The Saudi minister said it is important to exploit the capabilities of both countries through joint projects, stressing the need to enhance the role of the business sector.

Falih called on the business sectors to translate this partnership into joint business and investments.

The two countries, as influential economic forces of the G20, faced the challenges of the coronavirus pandemic and were able to enhance recovery through various measures and initiatives, stated the minister.

He called for boosting export exchange, in light of the great opportunities provided by the Saudi and Indonesian economies, the promising programs and strong infrastructure.

For his part, Pandjaitan discussed his country's economic, investment and natural potential, saying there were huge investment opportunities in the digital economy, including online shopping and banking.

He explained that his country has made great efforts to recover from the repercussions of the pandemic by supporting the economy and providing financial incentives to support the GDP.

The Minister called on Saudi investors to seize the promising opportunities in Indonesia, especially in transformative industries, hydroelectricity and the digital economy sectors.

Ajlan called for strengthening and activating the efforts of the joint Saudi-Indonesian Business Council.

He said the volume of bilateral trade exchange amounted to $5.4 billion dollars, including non-oil commodities, noting that he looks forward to completing the trade talks with Indonesian counterparts and their participation in the programs and projects of Vision 2030.

During the forum, the Ministry of Investment highlighted its role in serving investors, along with the efforts to boost the investment environment in Saudi Arabia and increase domestic and foreign investments.

It also addressed Vision 2030 and its objectives to boost the contributions of various sectors, such as the small and medium enterprises (SMEs), the private sector, oil and gas, and foreign direct investment.

The presentation also mentioned the incentives to choose Saudi Arabia as an investment destination, such as the innovative reforms brought about by Vision 2030, the encouraging business environment, the strategic location and innovative real estate solutions.

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.