Experts differ about state of Saudi investments in Egypt

Fahd bin Juma, an economist, stressed the vulnerability of Saudi investments in Egypt in the current climate, pointing out that these investments are spread over a large number of companies and most are physical assets.
"When any country experiences political turmoil, it reflects negatively on the economy because it reduces the market value of physical assets of any kind," he said.
He said the negative impact on Saudi investments in Egypt will continue until the political and economic situation stabilises, and he expected Saudi investors in Egypt to return to Saudi Arabia.
"With the change in the business environment, Saudi investors are concerned about what would happen in the case of a tax increase," Bin Juma said. "After what happened in Egypt politically and economically, it will take several years before stability returns, and the climate returns to being attractive for investments."
Saudi businesswoman Wedad al-Said said, "The current situation in Egypt worries all investors whether they are from Saudi Arabia or elsewhere. We look forward to the end of this crisis and for life to return to normal with the knowledge that some of the hotels in the capital have begun to operate again. The rate of sales and marketing of Saudi projects [in Egypt] has decreased, and some projects have been halted because of the crisis."

High fuel consumption in the Kingdom of 7% annually for the lack of public transport

Warned a specialist in the oil sector and the energy of the growing proportion of domestic consumption of fuel, which comes at the expense of the outside after the rise in export production capacity of refineries to Saudi Arabia 2.1 million barrels in January 1, 2011, up nearly 7% annually.The economic importance of the specialist counter growing domestic consumption made a strategic decision to establish a network of public transport within and outside the cities and then balance the fuel prices to the point of balance between income and consumption and help to encourage citizens to use transportation and avoid negative effects such as congestion and pollution.He told "Al-Riyadh" Member of the Association of Energy Economics International, Dr. Fahad Bin Juma: the Saudis in the fourth place in the world after America and China and Russia, where consume 2.8 million barrels a day, an annual increase of about 7%, raising the consumption in 2010 increased by 78% compared with 2000.He said I combined to Government support for fuel price cut the price in May 2006 by up to more than 30 percent and diesel by 32% to price ranges liter between 45 and 60 halalas while its price in the Kingdom of Bahrain 1.01 Real, Kuwait 0.85 halalas, Oman 1.16 riyals, and UAE 1.80 Real, and in Qatar 0.83 SR.He said I Gomaa said restructuring of fuel prices and raising prices is not a solution to the problem, useful to have participated in the study raise the prices of gasoline to 120 SR in 1997 to be close to the prices of the Gulf States where they were refused the study, because higher prices are not a solution because it is a pressure on the people with the low income which limits the social well-being and freedom of movement in the absence of public transport specifications commensurate with the level of living of the citizens.And has shown that raising prices to high levels will limit the jam the roads and environmental pollution and waste of economic fortunes, but must be accompanied by the provision of trains between the cities and metro within the city with a bus specification developed, stressing the need for a strategic decision to create a public transportation network within and outside the cities and then raise prices to the extent that balance between income and consumption and encourage citizens to use transportation and avoid negative effects such as congestion and pollution.

Saudis spent millions abroad, while pilgrims boosted the kingdom’s income

Wednesday, 09 November 2011

The number of Saudi citizens choosing Dubai as a tourist destination increased by 45 percent this year. (File photo)

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By Al Arabiya
Dubai

Fahad bin Juma’a, a Saudi author and economic expert, said that Saudi spending during Eid al-Adha was up by six percent in comparison to the same period last year, totaling 3.33 billion riyals ($89 million).

Salary increases are among the reasons that pushed Saudis to spend more.
Saudi citizens choosing Dubai as a tourist destination increased by 45 percent in comparison to the same period last year, mainly because of the political events unraveling in Syria, Egypt and Lebanon, formerly popular destinations, said bin Juma’a.

Asked if this spending was within the “normal” range, the economist said that income is the determining factor making individuals capable of such travels.
He said that the increased spending on tourism by Saudis did not mean that they got more value out of their travel, citing highly inflated air ticket prices among other expenditures.

“They spent more but got less in comparison to earlier years,” he said.
Dr. Abid al-Abdally, a professor of Islamic economics at Umm al-Qura University in the kingdom, said that the money spent by pilgrims on buying gifts and other memorabilia reached 3.6 billion riyals (approximately $1 billion).

Dr. Abdally said that most pilgrims buy gifts when they visit Saudi Arabia.
“Unfortunately, a big portion of the material [used to manufacture gifts] are imported from outside and are made for Saudi Arabia especially for religious events; this is despite calls to develop the sector locally, which would spur local investment, especially after polls surveying pilgrims suggesting that the pilgrims prefer local manufacturing."

Businessmen seek ministry’s clarity on new zones system

 

RIYADH: Businessmen here are still unclear about the proposed new zones system introduced by Adel Fakieh, Minister of Labor, to be implemented on June 8. The system is an attempt to deal with foreign recruitment and unemployment in the country.
Saad Al-Mogil, Deputy Chairman of the Chamber of Commerce and Industry in Riyadh, said their meeting with Fakieh failed to answer questions they had about the new system.
He said businessmen are eagerly awaiting the application of the new system so that they can see its merits and demerits and determine its practicality.
Al-Mogil called on the ministry to apply the new system in stages. “Unemployment is a big national problem and can only be solved in reconciling the private and government sectors. It should be understood that the unemployment problem is a common national concern.”
He emphasized that businessmen should cooperate fully with the ministry to solve this critical problem. He said businessmen will not hesitate to approach the minister to inform him about difficulties they face with the new system. “The ministry should not be too demanding and companies and establishments should work in good faith to achieve this national goal.”
He hoped that the plan would help increase training for Saudi jobseekers because this will make it easier for them to be employed.
Dr. Fahd Bin Juma, a prominent Saudi economist, was critical of the system, saying it will never serve the Saudi economy or reduce unemployment.
“The system will result in several companies shutting down and pulling out of the market. It will increase inflation and unemployment. Saudis won’t accept jobs like tea boys, plumbers, carpenters and drivers. Therefore, the industrial and government sector should be developed further because most Saudi jobseekers eye these sectors.”
He said small- and medium- sized businesses are weak and their contribution to Gross National Product is not more than 28 percent.
According to reports, the zones or “Nitaqat” system, will see private companies and establishments classified into three colors – green, yellow and red – according to the number of Saudis they employ.
The green companies will be given a number of advantages, including recruitment of manpower from foreign countries and the transfer of employees in the yellow and red categories without their companies’ consent.
The ministry expects the system to completely wipe out black market in visas where foreigners run businesses using Saudis. Companies in the yellow category that do not fulfill Saudization conditions, should correct their status in order to get the iqamas of their workers renewed.
The iqamas of those foreign workers in red category companies will not be renewed at all, irrespective of the years they have spent in the Kingdom.
The new Nitaqat system allows for the renewal of iqamas without any condition for expatriates who work in companies in the green and excellent category. The new measure would not apply to house servants as their iqamas would be renewed automatically.
– Okaz/Saudi Gazette __