By Angus McDowall
RIYADH, Feb 25 – A former food executive and mayor of Jeddah with a reputation for pushing through politically sensitive reforms has become the ruling family’s point man for a wide-ranging revamp of Saudi Arabia’s economy to cope with an era of low oil prices.
Economy and Planning Minister Adel Fakieh faced down strong opposition from the business community as Labour Minister in 2010-15 when he established quotas on the number of foreign workers companies could hire to boost local employment, the kingdom’s biggest economic reforms in years.
With his troubleshooting reputation established, Fakieh was made acting health minister in 2014 to handle a major public health crisis when Middle East Respiratory Syndrome broke out.
Now he is being asked by Deputy Crown Prince Mohammed bin Salman to develop reforms aimed at ending the kingdom’s vulnerability to an unpredictable oil market.
Saudi Arabia’s future stability, and the continued rule of the Al Saud family, rest upon its ability to transition away from the economy’s almost total reliance upon income from crude exports, something that has eluded previous reform efforts.
A supercommittee on the economy led by Prince Mohammed is working with Fakieh’s Economy and Planning Ministry to develop a national transformation plan that may face opposition from business and bureaucracy when it is released, probably in May.
Fakieh’s track record of effecting change in seemingly moribund situations and his skill as a communicator are widely admired by people who have worked with him, both in government and from his private sector days.
“He is very very good socially and at getting people to agree. He’s witty. He’s also quite sharp. He gets things done to an extent,” said a person who worked with him and asked not to be named because he had signed a non-disclosure agreement. “He’s curious. He reads about behavioural economics, about international policy research.”
He also makes extensive use of Western consulting firms, including McKinsey & Co, Boston Consulting Group, Oliver Wyman and Bain & Co, several people who have been involved in economic planning under the new administration said.
Unlike in past administrations, when reforms were decided by a clutch of Al Saud members and enacted by the finance ministry and central bank, Prince Mohammed now sets policy in his supercommittee, the Council for Economic and Development Affairs.
The Economy and Planning Ministry, once regarded as the junior partner in government policymaking, works under Fakieh like a secretariat to the council, taking its ideas and fleshing them out into complex proposals.
So central has Fakieh become since King Salman, Prince Mohammed’s father, took power in January 2015 that his department drew up significant parts of this year’s budget, a responsibility that has always belonged to the Finance Ministry.
When the 2016 budget was unveiled to media on a glitzy television stage decorated with pictures of Riyadh’s modern skyline in December, it was Fakieh, rather than Finance Minister Ibrahim Alassaf, who presented the macro-economic figures.
The budget included a general policy statement pledging large-scale reforms including privatisation, the reduction of dependence on oil and subsidy reform. That night, petrol prices were raised for the first time in years.
A performance management body to ensure government departments are implementing policy goals was announced in October and key performance indicators to monitor government departments are being developed, both orchestrated by Fakieh at the prince’s request.
The Economy and Planning Ministry did not immediately respond to requests for an interview with the minister or members of his team.
The Fakiehs owned a Mecca trading house and married into the al-Sulaiman family, whose patriarch Abdullah, Riyadh’s first finance minister, built its bureaucracy in an age when national reserves were kept in a locked chest under the king’s bed.
Fakieh was born in 1959, Asharq al-Awsat newspaper, owned by the Al Saud, reported when he was made labour minister in 2010.
His wife, Maha Fitaihi, is a prominent businesswoman in her own right and founder of the kingdom’s Girl Guides, a mark of Fakieh’s membership of a business elite that has often pushed socially progressive policies while backing the Al Saud.
The Fakieh Group owns subsidiaries including a major poultry business, a nationwide restaurant chain, Jeddah hotels and tourist attractions, private schools and a land development in Mecca.
It was as an executive for other companies that the economy and planning minister made his name during the 1990s, first at Bank Al Jazirah and then at Savola, the kingdom’s biggest food company.
As labour minister he introduced the Nitaqat programme, taking an ineffective and toothless quota system and refining it to take account of different sectors and company sizes. He was also given more scope to punish delinquent firms with fines.
Companies hated it, complaining of increased costs and lower productivity. An accompanying crackdown on the black market in foreign labour in 2013 led to over a million people leaving the country. Central bank data showed the number of Saudis with private sector jobs more than doubled to 1.54 million from 2010-14.
Critics say he failed to institute deep-set change in either the labour ministry or health ministry, however, preferring the quick fix of setting up alternative departments.
“He starts too many things at once and promises too many things to people. He’s delivered a lot of things at the labour ministry, but hasn’t fixed it. It’s still a bit of a mess,” said the person who worked with him.
While the long-term success of reforms will probably ultimately hinge on Saudi Arabia’s ability to improve the quality of its bureaucracy, the leadership may be betting that getting change started is the more urgent priority.
“He is seen by the top leadership as a doer,” said John Sfakianakis, a Riyadh-based economist.
“Whether you think he was right or wrong on the labour reforms, he delivered. Of the group of senior ministers at that time, he was the only one who was delivering.”