The Indo-Arab Chamber of Commerce and Industries has offered support to young Saudi businessmen and engineers to set up small and medium enterprises (SMEs) by providing them with training and technology.
“During our roadshow here, I met 27 Saudi engineering students who want to do business with India and get training to start their own SMEs in Kingdom. I was really impressed by their innovative ideas,” Sunanda Rajendran, the chamber’s executive director told Arab News.
“Our chamber is ready to invite these young Saudi men and women to India to provide them with training in areas where they want to open enterprises,” Rajendran said while urging more Saudi businessmen and businesswomen to invest in her country.
She described Saudi Arabia as a fastest growing economy in the Middle East, with greater potential than any other country in the region. She also highlighted the growing Saudi-Indian economic and trade relations.
“Trade exchanges between the two countries are expected to hit $50 billion shortly. We are now seeking more Saudi investment, especially in education, healthcare, energy and power and tourism,” she said.
Saudi Arabia is the fourth largest trading partner of India, Rajendran said. “We have identified 133 Indian companies to register with Saudi Arabian General Investment Authority (SAGIA) and hope at least half of that number from Saudi companies to invest in India,” she said.
Speaking about the roadshow, she said the chamber has brought 20 companies specialized in areas urgently required by Saudi Arabia to offer their technology and services to their Saudi counterparts, especially in the areas of energy, education, vocational training, security systems and IT applications.
She disclosed plans to hold Indian trade and cultural festivals in Jeddah, Riyadh and Dammam in September with the support of the two governments and their embassies. The festival will include exhibitions, seminars and cultural programs.
“It will showcase India’s products and capabilities including handicrafts and textiles and we are hopeful it would attract a large number of Saudis. We intend to have pavilions of different states like Maharashtra, Rajasthan and Kerala so that Saudis can see the cultural variety of India and this will help attract more Saudi tourists to our country,” she said.
“We have not yet finalized its dates and programs. We need sufficient time to do marketing and get visas.” Rajendran wanted to organize the festival on a large-scale to get an international exposure.
The IACCI executive director highlighted the incentives offered by the Indian government to foreign investors. “It is easy to get licenses and investors are assured of full protection and 100 percent repatriation of profits in addition to tax benefits one-shop services. We have publicized a book called Doing Business in India.”
Rajendran stressed that Indian companies dealing with Saudi businessmen should use the assistance of an interpreter to overcome the language barrier. “If they cannot afford or find one we are ready to help them,” she said.
She said her chamber was not facing any problem to get Saudi business visas. “I have been receiving one-year multiple entry visas for the last 10 years. I have been receiving this visa without any letter from the Indian Embassy or consulate,” she pointed out. “We have to follow the Kingdom’s rules and regulations, which are made for our own security and safety. If you suffer even after following the law, then your complaint is justified.” She advised Indian companies to try to get visas through their Saudi counterparts rather than agents.
India offers help for Saudi entrepreneurs to set up SMEs
India offers help for Saudi entrepreneurs to set up SMEs
Expat remittances from Saudi Arabia hit $3.2 billion in March
- The upswing is the highest since June 2022, SAMA data shows
RIYADH: Remittances by expatriates in Saudi Arabia grew 28 percent in March as compared to the preceding month to reach SR11.96 billion ($3.2 billion), the highest since 2022, official data showed.
The launching of new development projects in the Kingdom has led to an increase in the expatriate population, as they actively contribute to the growth of business activities. This, in turn, may have influenced their remittance patterns.
This growth in remittances is also exemplified by the Regional Headquarters Program, which has successfully attracted over 200 companies from across the globe to obtain licenses to set up their regional bases in Saudi Arabia.
These entities are driven by the prospect of securing lucrative government contracts. Additionally, the ongoing structural reforms to enhance foreign direct investment have further stimulated business growth in the Kingdom.
Alongside regulatory reform, Saudi Arabia has undergone modernization in its legal governance and enforcement practices such as digitization of employment contracts, virtual court hearings, and provision of online government services. These initiatives are integral components of a broader set of reforms aimed at positioning the Kingdom as one of the leading nations in terms of ease of doing business.
However, on a quarterly basis, there was a 0.34 percent decrease in expat remittances compared to the same period last year. This trend can be attributed to Saudi Arabia’s evolving economic landscape, particularly the implementation of financial sector reforms, which are increasingly enticing residents to invest a portion of their earnings within the Kingdom.
In February of this year, a report by Jadwa Investment noted that workers’ remittances were unexpectedly low despite the influx of expatriates.
This phenomenon according to their report may suggest that some expatriates opted to capitalize on the high savings rates in the Kingdom instead of remitting funds home.
The Saudi Central Bank, also known as SAMA, has raised key policy rates multiple times in 2022 and 2023, given that the Saudi currency is pegged to the dollar. This move aligns with the actions taken by the US Federal Reserve, which has been gradually increasing interest rates as part of its strategy to address inflationary pressures.
Conversely, remittances from Saudis saw a 9 percent monthly increase, totaling SR5.11 billion, yet experienced a quarterly decline of 0.53 percent.
The occurrence of Ramadan in March this year likely influenced the increase in Saudi remittances for this month. During this holy month, individuals often engage in increased charity, support their families, and fulfill religious obligations, such as zakat.
Egypt aims to attract Apple, pushing to solidify position as manufacturing hub
RIYADH: Egypt is making strides to become a manufacturing hub, with four of the top five mobile phone manufacturers — Samsung, Vivo, Oppo, and Xiaomi — agreeing to establish factories in the country.
Prime Minister Mostafa Madbouly emphasized these strategic initiatives during a tour of the 10th of Ramadan, the country’s largest industrial zone. The aim is to attract the fifth tech giant, Apple, to further bolster Egypt’s position in regional manufacturing.
Madbouly’s visit included several factories, including one specializing in producing sanitary devices at the highest standards for various international brands.
This stopover underscores the Egyptian government’s commitment, which President Abdel El-Sisi reinforced, to expanding and strengthening the industrial sector.
The prime minister noted the government’s efforts to attract significant global companies to Egypt, aiming to create high local value-added goods and foster a conducive environment for foreign investment.
He emphasized the state’s strategy to enhance communication with international investors and manufacturers, offering the necessary support to help them realize their expansion plans within the Egyptian market, particularly those targeting export activities.
This aggressive push to diversify Egypt’s industrial base and enhance its export potential is a key component of the nation’s broader economic strategy, aiming to secure a more prominent position in the global financial landscape.
The government is actively pursuing an increase in its investment attraction status as it aims to lower its import bill to reduce liquidity and foreign reserve pressures.
Earlier in May, global ratings agency Fitch revised Egypt’s outlook to positive from stable.
The agency affirmed Egypt’s rating at “B-,” citing reduced external financing risks and stronger foreign direct investment.
Since the country announced the International Monetary Fund loan program, foreign investors have poured billions of dollars into Egyptian treasury bills. After the investment in the country’s foreign portfolio and the support from the UAE, Egypt’s net foreign assets deficit shrank by $17.8 billion in March.
Fitch said that initial steps to contain off-budget spending should help to reduce public debt sustainability risks.
The country straddles North Africa and West Asia and has been grappling with an ongoing economic crisis linked to persistent foreign currency shortages. In the fourth quarter of 2023, its foreign debt climbed by $3.5 billion to $168.0 billion.
Meanwhile, Moody’s also revised its outlook on Egypt to “positive” in early March while affirming its ratings due to the high government debt ratio and weaker debt affordability compared to its peers.
Saudi delegation visits London to boost digital economy ties with UK
RIYADH: The digital economy ties between Saudi Arabia and the UK are poised to advance following the official visit of the Kingdom’s delegation to London.
Governor of the Digital Government Authority, Ahmed Al-Suwaiyan, engaged with leaders and officials from the UK’s public and private sectors, focusing on strengthening cooperation between nations in the digital economy and learning from shared global experiences.
During the visit, Al-Suwaiyan, also chairman of the executive committee of the Digital Cooperation Organization, took part in the Annual 21st Middle East and North Africa Conference. He delivered a keynote speech showcasing Saudi Arabia’s leading model in digital transformation, highlighting the country’s best practices and success stories in the digital government division, the Saudi Press Agency reported.
Al-Suwaiyan also met with key figures, including Alex Burghart, the parliamentary secretary for the British Cabinet Office; Julia Lopez, minister for data and digital infrastructure and Saqib Bhatti, minister for technology and the digital economy.
The meetings, attended by officials from governmental bodies and CEOs of major companies, focused on expanding the strategic partnership between the two countries in digital government.
Furthermore, the Saudi Ambassador to the UK, Prince Khalid bin Bandar bin Sultan, hosted Al-Suwaiyan and the accompanying delegation at the embassy. During the meeting, they reviewed DGA’s efforts in developing digital government services and discussed opportunities for enhancing cooperation.
Additionally, the governor met with Amal bint Jameel Fatani, a Saudi cultural attaché to the UK, the SPA added.
He also convened with a selected cohort of Saudi scholarship students at the Saudi Cultural Mission in London. During this interaction, he delved into key initiatives in digital transformation and outlined strategic directions for digital government.
Moreover, the DGA governor engaged with the students to understand their perspectives, addressing the specific challenges they encounter in navigating digital government services. This initiative aimed to enhance their digital experience, providing services aligned with their aspirations and ensuring their satisfaction.
The visit exemplifies the DGA’s commitment to fostering partnerships and strengthening its global presence. It underscores the organization’s proactive role in spearheading international initiatives aimed at achieving a sustainable digital economy. These efforts closely align with the objectives outlined in Saudi Vision 2030.
Fitch affirms Jordan’s BB- rating with stable outlook
RIYADH: Jordan’s macroeconomic stability has led to Fitch Ratings affirming its long-term foreign currency issuer default ratings at BB- with a stable outlook.
This confirmation highlights the country’s progress in fiscal and economic reforms, alongside resilient financing supported by its liquid banking sector, public pension fund, and international assistance, as outlined in a press release.
However, the country’s ratings are constrained by high government debt, weak growth, and risks in domestic and regional politics.
“Jordan has preserved economic and political stability despite significant external shocks, including social instability in the region (Arab Spring) and wars in neighboring countries (Iraq and Syria), but these shocks have led to lower growth and significant government debt build-up,” stated Fitch in the report.
It further noted: “A prolonged or expanded Gaza conflict, even if it does not involve Jordan directly, could weaken growth prospects and increase the challenges for debt reduction.”
The analysis also pointed out that current account deficits and net external debt higher than rating peers have negatively impacted Jordan’s position.
According to the US-based agency, a BB- rating signifies an elevated vulnerability to default risk, particularly in the event of adverse business or economic changes.
This rating also indicates that there is business or financial flexibility in the country that supports the servicing of financial commitments.
Fitch further noted that Jordan’s government maintains its commitment to advancing its three pillars: economic, public administration, and political reform agenda despite the external challenges.
The report added that Jordan’s economy expanded by 2.6 percent in 2023. However, the rate of growth is expected to contract to 2.3 percent this year, driven by lower tourism inflows, weaker external trade performance, and continued regional political uncertainty.
Fitch noted that if geopolitical risks ease, the country’s economy is expected to grow by 2.8 percent in 2025.
The credit rating agency also highlighted that Jordan’s general government deficit increased to 3 percent of gross domestic production in 2023. This reflects a wider central government deficit, which stood at 5.2 percent of GDP.
“We project that the deficit will ease to 2.6 percent and 2.4 percent in 2024 and 2025, respectively, as expenditure restraint will balance lower-than-budgeted revenue growth and higher interest payments,” added Fitch.
Saudi Arabia woos investors with lucrative business environment
- Vision 2030 aims to reduce the nation’s dependence on oil, diversify its economy, and build a vibrant society
RIYADH: With an average growth rate of 4 percent over the past seven years and an upward trajectory buoyed by a pro-business environment, Saudi Arabia has demonstrated remarkable resilience amid global economic challenges.
Given its strategic location, robust economy, and ambitious Vision 2030, it’s hardly surprising that the Kingdom stands as a beacon of progress and growth in the region.
A key to this has been attracting foreign direct investment, as well as working on agreements with neighboring countries to ensure Saudi Arabia is seen as being open for business.
Economist and policy adviser Mahmoud Khairy told Arab News that the Kingdom has “enhanced trade relations and reduced barriers” in this regard as it seeks to put its Vision 2030 strategy into action.
That plan aims to reduce the nation’s dependence on oil, diversify its economy, and build a vibrant society.
Khairy added: “The Kingdom has already started to take serious steps to capitalize on its exceptional location through the establishment of logistics and free trade zones, coupled with efforts to diversify the economy under Vision 2030, attracts foreign investment and fosters trade partnerships.”
Khairy emphasized that investments in digital infrastructure and e-commerce platforms have further modernized the Kingdom’s trade ecosystem, enhancing its connectivity with global markets.
Furthermore, he said, tremendous efforts have been made to advance the financial ecosystem, with new measures planned to improve the ease of doing business and develop the investment environment further.
Khairy’s analysis was echoed by Saudi-based economist Talat Hafiz, who told Arab News: “One of the main pillars of Saudi Vision 2030 is to create a business environment that supports economic growth in the Kingdom and attract FDI as well as diversify the Kingdom’s economy. The only way to reach such a goal is through facilitating doing business and trade.”
Gateway to global trade
Situated at the crossroads of Europe, Asia, and Africa, Saudi Arabia boasts a strategic geographical location that makes it a natural hub for international trade, giving it a unique advantage when it comes to Asia-Europe commerce channels and distributing goods through the Arabian Peninsula.
With access to over 424 million consumers within a three-hour flight radius, the nation serves as an efficient gateway to markets spanning three continents.
The Saudi freight and logistics industry, supported by state-led investments in infrastructure, is a vital component of the Kingdom’s economic landscape.
Saudi Arabia has undertaken extensive expansion and modernization efforts at its ports, such as the King Abdulaziz Port in Dammam and the King Abdullah Port in Jeddah, incorporating cutting-edge technology for efficient cargo handling.
Khairy said that the development of such modern ports “increases the country’s capacity to handle large volumes of cargo, thereby improving efficiency and reducing transit times for goods entering and leaving the region.”
When compared to many Western countries, Saudi Arabia’s corporate tax rates are notably lower, with certain industries and regions even benefiting from tax exemptions or reduced rates.
Mahmoud Khairy, Economist and policy adviser
Hafiz added: “With a combined total of 290 berths, Saudi Arabia’s ports comprise the Middle East’s largest seaport network that not only contributes a great deal to national growth but also showcases the Kingdom’s formidable regional and international standing.”
He went on to emphasize that the country’s ports are capable of accommodating any form of vessel, which is what drove the Saudi Port Authority, also known as Mawani, to provide specialized terminals for various types of loads.
Furthermore, substantial investments are being made in expanding rail and road networks to enhance connectivity and streamline the transportation of goods domestically.
According to Khairy, the expansion and improvement of transportation networks, including roads, railways, and airports, enhance connectivity both domestically and internationally.
“This seamless connectivity facilitates the movement of goods and people, supporting supply chain efficiency and enabling businesses to access global markets more effectively,” he added.
Saudi Arabia’s well-established logistics infrastructure offers unparalleled opportunities for logistics companies and manufacturers looking to capitalize on its strategic advantages.
Business-friendly environment
The Kingdom offers a business-friendly environment characterized by stable economic policies, government incentives, and a youthful, tech-savvy population.
Hafiz noted that Saudi Arabia “jumped significant places in the World Bank’s Ease of Doing Business index and IMD, making the Kingdom among the world’s top improvers.”
Ease of Doing Business index ranked economies from 1 to 190, with the Kingdom standing at number 62 in the final report issued in 2020.
Saudi Arabia ranked 30 in 2023’s IMD World Digital Competitiveness Ranking, which assesses the capacity and readiness of an economy to adopt and explore digital technologies as a key driver for economic transformation in business, government, and wider society.
The government, through Saudi Arabia’s General Investment Authority, also known as SAGIA, offers various incentives to attract foreign investors. These incentives comprise low corporate tax rates, streamlined business regulations, and robust infrastructure development.
“When compared to many Western countries, Saudi Arabia’s corporate tax rates are notably lower, with certain industries and regions even benefiting from tax exemptions or reduced rates,” Khairy pointed out.
He went on to say that “the digitalization of bureaucratic processes makes it easier for investors to navigate the business environment and set up operations in the country.”
The incentives play a significant role in investor decisions by enhancing the attractiveness of Saudi Arabia as an investment destination.
Businesses are drawn to markets with favorable tax regimes and simplified regulatory frameworks, as they contribute to higher profitability and operational efficiency, according to Khairy.
Hafiz added: “These developments, which are aligned with Saudi Arabia’s Vision 2030, will hopefully increase FDI’s contribution to the Kingdom’s gross domestic product from 3.8 percent in 2016 to 5.7 percent by 2030.”
With this, Saudi Arabia presents lucrative opportunities for foreign investors and entrepreneurs seeking to establish their presence in the region.
Furthermore, initiatives such as the establishment of special economic zones and the growth of the venture capital sector underscore the country’s commitment to fostering innovation and entrepreneurship.
The VC sector has over 80 active firms, with more entering the market, highlighting the commitment to nurturing innovative startups.
Adding to this, the continuous infrastructure development initiatives like NEOM and Red Sea Global underscore the dedication to establishing top-tier business environments and fostering opportunities across diverse industries.
Over 200 international firms, including Northern Trust, PepsiCo from the US, IHG Hotels and Resorts, PwC, and Deloitte from the UK, have opened their regional headquarters in Riyadh.
The Kingdom had previously announced that it would not award any deals to any foreign company or commercial entity with a Middle Eastern base outside Saudi Arabia starting from January 1, 2024.
Driving innovation through technology
Embracing the transformative power of artificial intelligence and machine learning, Saudi Arabia is spearheading initiatives to harness these technologies for economic growth.
Under the leadership of Crown Prince Mohammed bin Salman, the nation is investing in AI research, education, and infrastructure to propel its industries into the digital age.
According to Khairy, collaboration between academia, industry, and government can harness AI’s potential to enhance productivity and competitiveness across sectors.
AI adoption can lead to new products, services, and business models, optimizing operations and decision-making, he explained.
Generative AI, a cutting-edge technology, holds immense potential for revolutionizing supply chain and procurement operations in Saudi Arabia.
The National Strategy for Data and AI, initiated in 2019, outlines the country’s commitment to advancing AI capabilities and data-driven decision-making.
Generative AI, powered by large language models like OpenAI’s ChatGPT and Google’s BERT, stands out as a transformative technology with the potential to revolutionize supply chain and procurement operations.
Within the context of Vision 2030, generative AI aligns with goals of economic diversification, localization, and sustainability, positioning Saudi Arabia as a key player in international supply chain management.
“The new National Industrial Strategy of the Kingdom not only focuses on raising the number of factories in Saudi Arabia to 36,000 but also improves its technological capabilities,” according to Hafiz.
A visionary path forward
As Saudi Arabia continues its journey towards economic diversification and innovation, it remains poised to emerge as a global leader in business and technology.
“I believe that the sky is the limit when it comes to business opportunities in Saudi Arabia, especially in economic sectors that could add value to the Kingdom’s economy such as advanced technologies: AI, digital economy, internet of things and other sectors, especially advanced renewable energies,” Hafiz said.
Saudi Arabia’s youth population, combined with its dedication to education and technological advancement, positions it as a powerhouse of talent and innovation.
In the era of supply chain diversification, Saudi Arabia has emerged as a compelling rival in the global logistics market. The Kingdom presents an attractive proposition for businesses seeking to optimize their supply chains and expand their global footprint.
As Saudi Arabia continues on its path to becoming a global supply chain hub and a leader in AI and machine learning, it is prioritizing programs that equip its youth with the skills and knowledge required for these transformative job opportunities.
By all accounts, Saudi Arabia can leverage generative AI to not only enhance its supply chain and procurement processes but also empower its youth to thrive in the workforce of the future.
“The technology sector is experiencing rapid growth, driven by government initiatives and increasing investment in areas such as digital transformation and artificial intelligence,” Khairy said.
