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As home to the world’s most important Islamic sites – including the Masjid Al Haram, or Grand Mosque, which houses the Kaaba – the holy cities of Makkah and Medina are at the centre of religious life for the world’s 1.2bn-strong Muslim population. Located near Jeddah, in western Saudi Arabia, each year the two cities attract millions of religious visitors performing the annual pilgrimages of Hajj and Umrah. In an attempt to cope with the ever-expanding resident population as well as the rising influx of yearly visitors, the government has rolled out a series of overlapping, comprehensive strategies in recent years aimed at updating and expanding the Makkah and Medina regions’ transport networks, housing stock, utilities systems and related facilities. This chapter contains an interview with Osama Al-Bar, Mayor of Makkah.

Collectively, the Saudi Arabian insurance industry has seen five years of double-digit growth in both revenue and net profit. However, the positive performance of a few of the Kingdom’s largest insurers masks more modest results from many of its smaller firms, some of which have accumulated debts over many years. Although industry experts believe the overall outlook is positive for a country with a low insurance penetration by regional standards, conditions for some companies are expected to remain challenging in a crowded marketplace dominated by medical and motor coverage. Clearly defined and supervised insurance activity is in its second decade in the Kingdom and so is relatively new to Saudi Arabia, but the government has recognised that the industry can be a cornerstone of the financial services sector by promoting long-term savings and allowing policyholder funds to be channelled into investment opportunities. This chapter contains an interview with Raeed Al Tamimi, CEO, Tawuniya.

While Saudi Arabia is a regional leader in mutual fund activity and has led the recent GCC expansion of the segment in terms of both fund classes and volumes, growth has been less brisk in areas such as private equity and venture capital. Recent years, however, have seen momentum build, driven by increased private sector interest and the government’s determination to nurture alternative sources of funding for expanding businesses in the Kingdom.

While subdued oil prices have had a ripple effect on exchanges across the region, the Saudi Stock Exchange (Tadawul) has forged ahead with a bold strategy of reform. Having opened the door to direct foreign participation for the first time in 2015, in 2016 the exchange authorities and the market regulator are preparing for a new stage of development, which will see the Tadawul integrate further with global capital flows. The inclusion of the exchange on leading emerging market indices is not without obstacles, but the reforms made necessary by the process should leave the Kingdom’s market more transparent and investor-friendly. This chapter contains interviews with Mohammed Al Jadaan, Chairman, Capital Market Authority; and Khalid Al Hussan, CEO, Saudi Stock Exchange.

Saudi Arabia’s banking sector is one of the largest and most vibrant in the Middle East, with three of its domestically licensed institutions in the regional top 10 by net assets. Historically the sector has thrived on the rise of high-value lending derived from the government’s infrastructure programmes, but recent years have seen local lenders pursue a growing number of opportunities in the consumer and small and medium-sized enterprise segments. More recently, low oil prices have raised questions about the domestic industry’s ability to maintain its healthy margins, and the sector will likely enter 2017 facing one of the most difficult operating environments in recent times. However, a history of prudent regulation means that the industry has sufficient buffers to ride out this part of the cycle, albeit with a modest softening of performance indicators. This chapter contains a viewpoint from Ahmed Alkholifey, Governor, Saudi Arabian Monetary Agency; and interviews with Bernd van Linder, CEO, Saudi Hollandi Bank; Abdulaziz A Al Helaissi, CEO, Gulf International Bank; and Steve Bertamini, CEO, Al Rajhi Bank.

Historically the Kingdom has benefitted greatly from its ability to ship its hydrocarbons resources to consumers across the world, while its strong economic growth in recent decades has made it a significant importer of goods and services. Meanwhile, the country’s transport links, large consumer market and a relatively high per capita income combine to make it an attractive destination for investment capital. However, recent years have revealed a range of challenges facing the future growth of trade and investment: levels of foreign direct investment declined for seven consecutive years until 2015, and the fall in oil prices that began in the second half of 2014 has all but erased its once-comfortable trade surplus. It is unsurprising, therefore, that trade and investment are treated as key priorities in the Vision 2030 strategy. With the government’s eye on these important facets of economic life, the coming months and years are likely to bring some interesting developments with regards to the Kingdom’s global connections. This chapter contains interviews with Prince Saud bin Khalid Al Faisal, Acting Governor, Saudi Arabian General Investment Authority; and Abdulrahman Al Zamil, Chairman, Council of Saudi Chambers of Commerce and Industry.