Saudi Arabia is moving at its fastest pace in years to overhaul the economy, and this time there isn't even the crunch of lower oil prices. Last year's effort to tackle unemployment, and a recent and long-expected mortgage law designed to help solve the housing problem, should help shore up stability in the absolute monarchy. These are tentative steps so far. But they go in the right direction.
Change, at least by design, is always slow in the kingdom. But his week's surprise approval of the first mortgage law, a sharia-compliant piece of legislation debated for over a decade, seems to confirm a trend. One year ago, Saudi tightened its labour laws in a bid to address the problem of the massive unemployment of nationals. In the peculiar time zone that is Saudi Arabia, this amounts to the beginning of reform.
Home loans amount to 60 to 70 percent of GDP in developed economies but no more than 2 percent in the kingdom. That proportion could rise to more than a third if the mortgage law, as expected, lowers borrowing costs and protects lenders better.
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