What do you think is the biggest risk factor for the emerging economy right now? How was your experience in India so far? Where does India sit in the emerging market economy as promised?
The impact of Covid-19 on the global economy is unparalleled. However, it remains the most diverse and most uncertain of emerging economies. The first risk faced by emerging economies is the successful rollout of vaccination programs, it sets the time with economic stimulus that is a ‘return to comfort’ and not a stop-start experience that delays growth and lowers business and investor confidence. Second, the impact of Covid-19 on government budgets / deficits and indirectly on currency valuations continues and is also a key risk.
Like other BRICS countries, India seeks to invest in ways to stimulate growth out of the cobweb-induced recession. The ability of other emerging markets to do so and the ability to sustain investment varies considerably. In India, a 137% increase in spending, infrastructure and communications, as well as the government’s focus on investing in healthcare such as the construction of 13,000 km of road and rail networks, symbolizes a wise national investment agenda that will boost productivity by stimulating long-term growth. Another challenge in the surrounding coveted environment is to maintain the pace of investment in the face of financial concerns.
Attracting foreign investment is the main reason for these concerns, but there is also a long-term acceleration in development. We see a lot of promise in India, especially with its innovative start-ups, the potential of the Indian digital economy and its growing infrastructure. We see the potential of the future in traditional theatrical infrastructure that will bring together and integrate a growing population and talent through better connectivity and economic stimulus around new transportation and supplies. Over the past year, PIF has continued to invest in emerging markets, both in terms of its overall strategy and the opportunistic investment implemented as a result of the crisis.
As a long-term investor, the market fundamentals of many emerging economies like India remain relatively unchanged. Our attitude towards India is very positive. To date, through our partners, PIF has directly or indirectly invested in a variety of Indian sectors, including financial services, real estate, healthcare, pharmaceuticals, manufacturing and telecommunications – many of which, we believe, will benefit Focus and which, instead, Saudi The Kingdom of Arabia can and should provide additional best practices to catalyze growth.
Epidemic and PIF exposure in which region was like in India? Do you see any post-epidemic changes?
We see significant potential in the recovery of North Kovid in India and will continue to look for investments in several sectors of the country. In June 2020, we invested about প্রায় 1.5 billion in Indian technology company Geo Platforms, which gives us access to the exciting Indian digital economy. As of November 2020, we have invested $ 1.3 billion in Reliance Retail in India. We are pleased to be able to further our trusted partnership with Reliance Industries Ltd., one of the leading players in several exciting sectors in India. The transaction is one of many that demonstrates PIF’s long-term investment commitment and partnerships with innovative businesses in India and around the world that lead and transform their sector.
What are the prospects for investment in India’s infrastructure sector?
Infrastructure is an important component of the emerging economy, and we see a lot of potential in India’s infrastructure sector, especially its digital infrastructure. We have recently invested $ 500 million in Digital Fiber Infrastructure Trust (DFIT), an infrastructural investment trust trust platform that contains Reliance Jio’s telecom fiber assets provide a great opportunity to support the growth of our Indian digital economy. In Saudi Arabia, we similarly focus on stimulus activities by creating economic or growth corridors. These enable connectivity, creating new employment opportunities, including manufacturing and logistics. In addition to our partners, we would like to identify similar investments within India that can coordinate broadly with our own efforts while generating attractive long-term returns.
Given the epidemic and current economic realities, what factors would you consider when looking at investments?
The Kovid-19 epidemic has changed the world’s investment priorities, highlighting the importance of new sectors, highlighting the growing need for improved digital infrastructure and rejecting the world in key priorities such as sustainability and healthcare. As a result, we believe we have an important role and opportunity to actively support markets, industries and businesses by deploying significant capital within the long-term horizon.
In 2020, for example, we have identified opportunities created by the epidemic and invested in multiple government agencies and Exchange Trade Funds (ETFs) in sectors we believe will help lead the global economic recovery. As a patient and long-term investor, we believe we have been able to invest and raise capital in companies and sectors that are precisely located to lead the global economic recovery. These investments will generate long-term financial returns that will help keep the Saudi economy away from oil – which the PIF is running as part of its mandate – while sustainable skills, investment and future job localization for Saudi citizens.
Has the epidemic provided any new territory with any investment potential?
The epidemic has affected all countries, industries and sectors. It has shown the importance of diversity in ensuring stability and raising sustainable growth. PIF is looking to invest in businesses and sectors with potential for local, regional and global growth. Globally, there are several industries that will lead the economic recovery in a post-Covid world. These “fields of the future” include infrastructure including medicine, renewables, technology, agriculture, and digital infrastructure. It is also true that the epidemic is accelerating existing trends – significantly changing how technology works and how people live. As it turns out, significant levels of capital invested on a long-term basis will play an important role in enabling this transformation.
Crown Prince Mohammed bin Salman Neom has announced the project. This really ambitious idea combines the smart city and zero emission ideas. Can you share some details on how this will work?
The line will be a 170-kilometer belt of hyper-connected future communities in Neom, without cars and roads and built around walking ability and nature. It is a direct response to some of the most challenging challenges facing humanity, such as heritage infrastructure, pollution, traffic and human traffic jams. Through its implementation, the line will set new global standards for livelihoods and urban development. Everyday necessities such as schools, medical clinics, recreational facilities and green spaces, will be within a five minute walk. Representing this anthropocentric approach, for the first time modern cities were designed for people, not cars.
The line will rely on complete clean energy, including zero carbon emissions and zero environment, noise and spectacular pollution. All in all, the line takes the Smart City concept to the next level – with advanced technology, including artificial intelligence and robotics, enabling communities to learn for free and predict ways to make life easier for residents and businesses. NEOM is a substantial project; This is not a real estate project, but a complex economic and social ecosystem that needs to be nurtured. The role of PIF is to facilitate the development of NOOM as well as to ensure that it provides the capital it needs when needed and the financial muscle and influence to attract other investors. The line will look to realize the world’s top various innovations, all focusing on developing the most efficient urban in the world.