Female workers help Saudi Arabia jobless rate hit five-year low

Time: 03 July 2021

The decline in the unemployment rate was helped by an increase in female participation in the workforce. (Supplied)

Economic and social reforms, pandemic response praised as experts hail rapid jobs growth
RIYADH: A rapid Saudi government response to the coronavirus pandemic, women’s active participation in the workforce and Vision 2030 economic reforms have been cited by experts as major factors in the Kingdom’s unemployment rate falling to its lowest level in almost five years.

The decline in the jobless rate comes as the Saudi economy begins to rebound from the pandemic and women join the workforce in record numbers.

The overall Saudi unemployment rate fell to 11.7 percent in the first quarter of 2021 compared with 12.6 percent in the last quarter of 2020, the General Authority for Statistics (GASTAT) said on Wednesday.

According to GASTAT, the joblessness figure is the lowest since an 11.6 percent rate in the second quarter of 2016.

The decline in the unemployment rate was helped by an increase in female participation in the workforce, which rose to 33.6 percent from 32.1 percent in the previous quarter.

The Kingdom is benefiting from a surge in investment as Crown Prince Mohammed bin Salman seeks to diversify the economy under the Vision 2030 reform plan.

Economic reforms since 2016 have created millions of jobs, with plans to reduce unemployment to 7 percent by 2030.

Speaking to Arab News, economist Talat Zaki Hafiz said that unemployment in Saudi Arabia has fallen to its lowest level in almost five years for many reasons, including rigorous efforts by the government to Saudize most of the commercial sectors in private businesses.

HIGHLIGHT
The overall Saudi unemployment rate fell to 11.7 percent in the first quarter of 2021 compared with 12.6 percent in the last quarter of 2020, GASTAT said.

“Empowering women in the labor market and offering them a wider chance to work and participate more actively has reflected positively in unemployment sliding in the Kingdom,” he said.

“Today we have more and better Saudis to work in the private sector from the point of view of qualification or even willingness to accept the kind of jobs that were not appealing to them.”

Hafiz said that he was confident the Kingdom will reach its Saudi Vision 2030 target of 7 percent unemployment.

Dr. Osama Ghanem Al-Obaidy, adviser and law professor at the Institute of Public Administration in Riyadh, said: “Saudi Vision 2030 highlights the importance of raising the employment levels of Saudis. Despite the challenges posed by the pandemic, Saudi Arabia managed to lower its unemployment rate, while other countries suffered huge job losses.

“Policies implemented by the government were effective in avoiding an increase in unemployment rates,” he said.

Al-Obaidy said that employment programs and initiatives for young Saudis, especially women, and investments by the Saudi Public Investment Fund as well as economic reforms undertaken by the Saudi government have led to a lowering of the unemployment rate.

This is in addition to the support and incentive packages that the government provided to businesses and business owners to help avoid mass job losses, he said.

“The lowering of the unemployment rate in the Kingdom is a testament to the strength and resilience of the Saudi economy and its labor market,” Al-Obaidy added.

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Saudi non-oil business activity expands at quickest pace since Dec. 2017

Time: 03 June 2021

Saudi Arabia’s General Authority for Statistics reported a Y0Y increase in the non-oil economy in Q1. (Argaam)

Export orders increased at the fastest rate since 2015
Hiring was largely flat in May

RIYADH: Saudi Arabian non-oil business activity expanded at its fastest rate since December 2017, as new business and export orders increased, according to a survey released on Thursday.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) rose for the second month in a row, from 55.2 in April to 56.4 in May. A score above 50 indicates expansion, while below 50 points to contraction.

While activity is recovering from the pandemic slump, the impact has not yet been felt in recruitment; hiring increased for the second month in a row, but the pace slowed.

As pandemic restrictions begin to loosen, 30 percent of companies said they had seen an increase in business activity, and export orders increased at the fastest rate since 2015.“Most firms continued to operate with unchanged workforce numbers, suggesting a focus on boosting productivity back to pre-COVID levels,” said David Owen, an economist at IHS Markit. “On the plus side, inventories were increased at the quickest pace in a year-and-a-half as firms prepare for a further recovery in demand over the coming months.”

Last month, a “flash estimate” from the Kingdom’s General Authority for Statistics (GAS) showed that the non-oil economy grew by 3.3 percent year-on-year in the first quarter, its first positive outcome on an annualized basis since last March.

Despite the robust performance from the non-oil sector, real gross domestic product was 3.3 percent down year-on-year.

“The year-on-year change was the result of the sharp decrease in the oil activities of minus 12 percent due to ongoing crude oil production cuts agreed by OPEC+ since May 2020,” GAS said.

In addition to cuts agreed by OPEC+, the oil producers’ alliance led by Saudi Arabia and Russia, the Kingdom decided on an extra voluntary cut of one million barrels of oil per day last February.

Jason Tuvey, analyst at London-based Capital Economics, said: “With oil output cuts now being eased and the vaccination program gathering pace, the economic recovery should get back on track over the rest of this year.”

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Saudi industrial sector undergoing ‘fundamental’ changes: Alkhorayef

Time: 23 December 2020

Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef. (SPA)
  • Work is underway to improve the industrial sector’s environment

Saudi Arabia’s industrial sector is remarkably undergoing ‘fundamental’ changes and currently seeing its historic ‘golden age’, Saudi Press Agency reported, citing Bandar Alkhorayef, Minister of Industry and Mineral Resources.

Work is underway to improve the industrial sector’s environment, with the aim of achieving the aspirations and objectives of Vision 2030, which include more participation by women in the development process, as well as creating more opportunities in such a vital sector, said Alkhorayef, who also chairs the Saudi Authority for Industrial Cities and Technology Zones (MODON).

The minister also indicated that the factories of the present and the future are different from those of the past, as they are now more open for creative work rather than routine, especially amid the expanding role of technology that continues to take over more businesses.

The statements came during the two-day virtual conference organized by MODON, under the title “Women in Industry 2020,” on Dec. 21-22.

The conference is part of the Kingdom’s drive towards supporting and enabling Saudi women in the industrial sector, in line with the objectives of Vision 2030 and the National Transformation Program 2020.

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Saudi Arabia, UN member states urge global plan of action to ensure sustainable growth

Time: 01 September 2020

JEDDAH:  Saudi Arabia and other UN member states have called for joint global action to ensure sustainable growth for a better and secure future for generations to come.

To mark its 75th anniversary, the UN launched a global dialogue initiative UN75 earlier this year. It aims to increase international cooperation through dialogue and to come up with innovative ideas for sustainable development.

As part of the initiative, the Saudi Green Building Forum (SGBF) organized a discussion under the auspices of the King Abdulaziz Center for National Dialogue (KACND) and the UN.

Speakers at the forum called for global efforts to fight the ongoing coronavirus disease (COVID-19) pandemic and to take measures to boost the global economy.

They were of the view that fighting these challenges is not possible for a single entity; it needs concerted efforts of all stakeholders.

Honorary guests included Dr. Mohammed Al-Issa, secretary-general of the Muslim World League.
Highlighting the Saudi efforts against COVID-19, he said: “Calamities and disasters impact everyone but societies that are more vulnerable must be at the center of global attention and care.”

He stressed the need for local, regional, and international cooperation to ensure a secure future and growth.

Al-Issa said the Kingdom not only took effective measures to fight COVID-19 at the local level but it also generously contributed to the World Health Organization’s global efforts to check the spread of the virus and help people in need around the world.

Faisal Al-Fadl, the SGBF founder, said this global dialogue hopes to motivate decision-makers and young entrepreneurs to localize recommendations and propositions presented by experts.

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Saudi economy to grow at faster rate next year

Time: 22 July 2020

Low public debt and a strong credit rating have given the Kingdom a cushion against external shocks. (Shutterstock)
  • Moody’s expects growth to be at double the 2015-2019 rate

RIYADH: Saudi Arabia’s low debt and robust balance sheet are among its key credit strengths according to a report from Moody’s, the credit ratings agency.

A large stock of proved hydrocarbon reserves with low extraction costs and prudent financial system regulation also support the sovereign credit profile, it said.

But significant challenges remain for the country that has been hit by the double blow of the pandemic at a time of weak oil prices.

“The Saudi government has made some initial progress in its ambitious and comprehensive reform plans to diversify fiscal revenue streams and the economy away from hydrocarbons,” said Alexander Perjessy, a Moody’s vice president. “However, their full implementation will be challenging and their positive impact will only be felt over the longer term.”

Still, the economy is expected to grow at an average rate of around 3 percent during 2021-24, which is nearly double the average during 2015-19 (1.6 percent) but lower than the 4.1 percent growth rate recorded during 2005-14.

Moody’s expects real GDP to decline by 4.5 percent in 2020 and higher fiscal deficits in the coming years that will increase government debt above 35 percent of GDP from 22.8 percent at the end of 2019.

The swift introduction of stimulus measures have helped the Saudi financial sector respond to the coronavirus pandemic, Oxford Business Group (OBG) and Riyad Bank said in a separate report published on Tuesday.

Long-term investments in health infrastructure in the Kingdom, combined with favorable demographics and firm economic foundations, have also positioned Saudi Arabia well to tackle the challenges presented by the pandemic according to the report.

“Low public debt, a strong credit rating and high foreign exchange reserves provided the Kingdom with a cushion against external shocks, including the decline in global demand for oil and other commodities,” said OBG CEO Andrew Jeffreys.

“While the authorities have had to accommodate these temporary internal shortfalls in revenue, the country’s outlook for recovery is bright, supported by the competitive cost of oil production and an abundance of reserves.”

Riyad Bank’s CEO Tareq Alsadhan, said that banks in the Kingdom had faced the pandemic from an advantageous position, pushed by consecutive years of solid performances.

“Looking ahead, industry is expected to play its part by adopting a prudent approach that balances risk with the need to support the economy,” he said.

Sandeep Srivastava, a partner at PricewaterhouseCoopers (PwC), said that the Saudi economy in 2020 is expected to contract less than other major G20 economies.

While a full economic recovery is still faltering in many countries a recent survey PwC survey found that 72 percent of chief financial officers in the Middle East expect it will take three months or more for businesses to return to “business as usual.”

“As organizations have increasingly realized the effects of COVID-19, we have seen a consistent lengthening in expected recovery timelines,” he said.

“While the contraction (this year) is likely short term in nature, it is important to recognize there has been a significant impact on the economy, businesses, and people.”

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Saudi Arabia spends more than $57 billion on coronavirus stimulus

09/07/20

People working for affected businesses also benefited from the initiatives. (AFP)

  • SAMA announced a SR50 billion package to support the private sector on March 14.

RIYADH: Saudi Arabia spent more than SR214 billion ($57 billion) on 142 initiatives to tackle the impact of the coronavirus in the Kingdom, the Saudi Press Agency reported.

Initial measures undertaken by the government to provide a buffer were followed up by a royal decree this month to extend the support to the public and private sectors and to investors.

They included the suspension of some labor-related fines, wage protection measures and the postponement of the collection of customs duties on imports.

More than 650,000 people directly benefited from the package of measures aimed at individuals, according to the Ministry of Finance’s Communications and Financial Knowledge Center.

Businesses also received help in the form of extra time to file tax and zakat returns, while families on low incomes were given support in sectors that were hard hit such as ride-hailing transport services. About SR9 billion was allocated to more than 1.2 million citizens working for businesses affected by the pandemic.

In its Policy Responses to COVID-19 Tracker, the International Monetary Fund notes that Saudi Arabia has been hit by two shocks — “the spread of COVID-19 and the sharp decline in oil prices. Government policy is responding to both these developments.”

The Kingdom also implemented a number of fiscal measures with the Saudi Arabian Monetary Authority (SAMA) reducing its policy rates twice in March. SAMA announced a SR50 billion package to support the private sector on March 14, aimed particularly at SME’s by boosting banking sector liquidity.

The regulator instructed banks to delay repayment of loans for all Saudi employees by three months without extra fees and to provide finance to customers who lost their jobs.

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Saudi Arabia’s non-oil economy grows at fastest pace in six years

02/03/20

Gulf oil exporting economies have started 2020 with an uncertain outlook. (File/AFP)
  • Most of the increase in output was driven by the retail, hotel and financial sectors
  • GDP growth to 0.3 percent according to data released on Sunday by Saudi Arabia’s General Authority for Statistics

LONDON: Saudi Arabia’s non-oil economy grew by 3.3 percent last year, its fastest rate since 2014, even as the energy sector contracted and slowed overall growth.

Most of the increase in output was driven by the retail, hotel and financial sectors, which are attracting increased investment as the Kingdom moves away from dependence on oil revenues. The oil sector declined by 3.6 percent in 2019 dragging overall GDP growth to 0.3 percent according to data released on Sunday by Saudi Arabia’s General Authority for Statistics.

“The weakness in the real headline GDP growth was due to the construction in the oil sector,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, told Arab News.

“Positively, non-oil activity expanded at the fastest pace since 2014 thanks to a strengthening in non-oil growth. We believe that higher investment growth will remain a key support factor for non-oil activity in 2020 with greater progress with key projects.”

FASTFACT

SR2.97

Saudi GDP at current prices amounted to SR2.974 trillion in 2019.

Saudi GDP at current prices amounted to SR2.974 trillion in 2019 – up by about 0.8 percent from a year earlier.

Crude petroleum and natural gas accounted for some 27.4 percent of the Kingdom’s economic output, followed by government services at 19.4 percent. Wholesale and retail trade, restaurants and hotels made up the third largest contributor to GDP, accounting for a 10 percent share.

Weaker oil demand globally hit the Kingdom’s exports in 2019 which were down by about 10.4 percent in value over the year to about SR1.05 trillion.

Gulf oil exporting economies have started 2020 with an uncertain outlook as oil markets again come under pressure from the spread of the coronavirus beyond China – hitting demand for crude oil and aviation fuel as people stay at home and factories reduce production.

Still, Saudi Arabia is hoping its plans to boost gas production in the Kingdom could help offset the impact from lower oil prices.

The country expects the recently disclosed Jafurah field to be a major contributor to GDP growth over the coming decades.

Holding an estimated 200 trillion cubic feet of wet gas, it could generate $8.6 billion a year in income and contribute $20 billion a year to the Kingdom’s GDP.

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Saudi Aramco announces regulatory approval of Al-Jafurah gas field

Time: 22 February, 2020

Saudi Aramco on Saturday announced the regulatory approval of the development of the Al-Jafurah unconventional gas field in the Eastern Province. (Saudi Aramco)
  • Aramco expects field’s production to commence early 2024
  • Also expect field to produce 550,000 barrels per day

RIYADH: Saudi Aramco on Saturday announced the regulatory approval of the development of the Al-Jafurah unconventional gas field in the Eastern Province, the largest non-associated gas field in the Kingdom of Saudi Arabia to date.

A statement from the company said the field development plan was subject to usual governance process.

On the occasion, the chairman of Saudi Aramco’s board of directors, Yasser bin Othman Al-Rumayyan, expressed his thanks to Crown Prince Mohammad bin Salman.

Al-Rumayyan said the development of Al-Jafurah is expected to enhance the company’s position in the global energy sector, and help achieve its goal of being the world’s pre-eminent integrated energy and chemicals company.

Saudi Aramco president and CEO, Amin H. Nasser, also expressed his gratitude and thanks to the crown prince and to Prince Abdulaziz bin Salman bin Abdulaziz, Minister of Energy for their support.

Al-Jafurah has a length of 170km and a width of 100km, and the volume of gas resources in the field is estimated at 200 trillion cubic feet of rich raw gas, which will provide the petrochemical and metallic industries.

Aramco expects the field’s production, which will commence early 2024, to reach approximately 2.2 billion standard cubic feet per day of sales gas by 2036, with an associated approximately 425 million standard cubic feet per day of ethane, representing about 40 percent of current production. Aramco also expects the field to produce approximately 550 thousand barrels per day of gas, both liquid and condensate.

The company also plans to develop Al-Jafurah in accordance with the highest environmental standards and expects it will have a positive financial impact in the long term, which will start to show on the company’s financial results in phases concurrent to the field’s development.

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Saudi Arabia reaps $53bn dividend from emerging market status

21/02/20

Saudi Arabia and the broader GCC region are tapping into emerging markets in more ways than one. (Shutterstock)

The country finalized its entry into the JP Morgan suite of emerging market (EM) indices
In September 2019, Saudi Arabia reached an important milestone in its Saudi Vision 2030 reform plan, which aims to diversify the Kingdom’s economy away from its petrochemical revenue base.
The country finalized its entry into the JP Morgan suite of emerging market (EM) indices. It was the finale in a series of announcements by the major indexes, including MSCI, S&P and FTSE, confirming that Saudi Arabia met their inclusion criteria.
This is a testimony to the work of The Capital Markets Authority and Saudi Arabia’s stock exchange, Tadawul, which have driven the effort to modernize the Kingdom’s capital markets infrastructure and make it more investor friendly.
Saudi’s inclusion as an EM allows its entry to ETF’s, opening the country to billions of dollars-worth of outside investment, which would be otherwise closed to it.
An example, $1.9 trillion tracks the MSCI EM Index alone of which 80 percent is active and 20 percent passive. Given this, Saudi Arabia’s 2.8 percent country weighting represents an additional $53 billion in foreign capital flows to the country.
Looking into 2020, there are several considerations investors should bear in mind. Foremost among these are oil prices and a concurrent slowdown in growth, regional geopolitical tensions and — a potential boon for investors — the rise of fintech in the region.
Oil prices have swung between $55 and $75 a barrel this year against a backdrop of slowing global growth, trade tensions and geopolitical risks. Steep oil production cuts — undertaken in a bid to push up prices — have acted as a further drag on growth, in addition to weak external demand.
As a result, Saudi gross domestic product (GDP) growth is forecast to slow from 2.4% percent in 2018 to 0.2 percent this year. Across the GCC as a whole, GDP is expected to decelerate to 0.7 percent from 2 percent in 2018.
The region’s volatile geopolitics was highlighted in September when drone attacks targeted Saudi Arabia’s oil industry. Indeed, a recent “Future of Wealth” report by UBS, which canvassed investor opinion from around the world found that 83 percent of investors in the UAE), one of the GCC’s six members, think geopolitics is driving markets more than business fundamentals.
Despite the challenging geopolitical backdrop, globally, investors in the UAE are most optimistic about returns in the next decade: 85 percent versus 69 percent in the US, 65 percent in Asia and 72 percent in EMEA.
A potential bright spot for GCC investors heading into 2020 is the rise of the technology sector. Global groups, including Amazon, which chose Bahrain to launch its first data hub in the region, are flocking to service the region’s youthful, tech-savvy populations.
The development of a financial technology ecosystem is also a significant component of Saudi Arabia’s Vision 2030 economic diversification strategy. It is seen as essential for broadening the country’s investment base and a transition toward a cashless digital economy. To this end, the Saudi Arabian Monetary Authority launched Fintech Saudi in April 2018 to catalyze the development of the industry.
The GCC is also at the forefront of innovation in the digital assets space. Earlier this year, the Abu Dhabi Securities Exchange approved a digital currency trading platform, and the country’s sovereign wealth fund has invested in the venture.
Saudi Arabia and the broader GCC region are tapping into emerging markets in more ways than one. The Kingdom has a very ancient past — the prehistory of the country shows some of the earliest traces of human activity in the world — but its society and business infrastructure are undergoing rapid transformation. From welcoming in outside capital to being an eager adopter in the digital assets and fintech space, whatever lies beyond 2020 for the Kingdom and the region, it promises to be innovative, fast-moving and creative. However, it is vital for the long-term
health of the profession that the innovation and transformative energy in such obvious evidence are underpinned by sound professional standards.
We have a vital role to play in the development of the region’s capital markets via the provision of such standards, and crucially, education. The Kingdom is one of the fastest growing markets in MENA and we welcome its commitment to greater transparency and putting the interests of investors first. We also encourage more countries in the region to promote fairness, transparency and ethics in the investment profession.

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Saudi Arabia now employing 2m people in booming retail sector, says labor minister

Time: 12 February, 2020

Minister of Labor and Social Development Ahmad Al-Rajhi speaks at Retail Leaders Circle MENA Summit in Riyadh. (Photo/ Invest Saudi Twitter page)
  • The Saudi government had given the retail sector considerable attention through numerous economic reforms aimed at supporting the sector

RIYADH: Saudi Arabia was gearing up to meet the future challenges of the booming retail sector which currently employs more than 2 million people in the Kingdom, the country’s labor minister revealed on Tuesday.

Speaking at a major international conference of top retailers, being held in Riyadh, Saudi Minister of Labor and Social Development Ahmad Al-Rajhi said the number of people working in the sector represented a quarter of the total workforce in the country’s private sector.

In his opening keynote speech on the second day of the Retail Leaders Circle (RLC) MENA Summit, the minister said: “The Kingdom currently employs more than 2 million males and females in the retail sector, and they constitute more than 25 percent of the total workforce in the private sector in Saudi Arabia.

“This number of workers has been increasing due to the country’s strong purchasing power and growing consumption rate.”

He added that the Saudi government had given the retail sector considerable attention through numerous economic reforms aimed at supporting the sector and creating an environment that appealed to investors.

Al-Rajhi told delegates that the retail sector faced many challenges in the form of rapid technological advances, digital transformation, and the trend to optimize consumption and provide convenience to customers through e-commerce and smartphone apps.

However, the challenges also presented opportunities for the creation of new jobs, he said, and it was important that the workforce was reskilled or upskilled accordingly to take advantage.

“The ministry is working to develop the necessary legislation for new business patterns and to empower employers and employees to keep pace with technological changes which will be reflected in enabling the retail sector to keep pace with its future requirements to become more effective in achieving the aspirations of the Saudi Vision 2030,” Al-Rajhi added.

He noted that the ministry had established a new state-owned firm, the Future Work Co., to support the developments and make the Kingdom a pioneer in the manufacturing of innovative, unconventional, yet sustainable future business patterns.

“We are working on enabling and developing human capital with the skills and technological advances related to the retail sector to ease their participation in the labor market and have launched apprenticeship programs to bridge the gap between business owners and job seekers.”

The ministry supported the retail sector through a range of initiatives, he said. One example was Qiwa, which had involved the automation and simplification of ministry services provided to the private sector through a unified platform, allowing Qiwa enterprises to issue instant work visas.

Addressing the summit, the minister pointed out that one of the main principles of Vision 2030 was to increase the participation of women in the labor market and qualify them for leadership positions.

The share of women in the labor market had risen to 25 percent in the third quarter of 2019, which was higher than the target of 24 percent expected to be achieved by 2020, he added.

Speaking on the disruptive role of financial technology (fintech) in today’s instant, digital world, Ahmad Alanazi, chief executive officer of STC Pay, said: “In the past, we were innovation takers and adapters, but today we are becoming innovation creators and distributors.”

Praising Vision 2030, Renuka Jagtiani, chairperson of multinational consumer conglomerate Landmark Group, said: “I think 2030 as a vision is amazing and to be a part of it is very exciting.

“As a footprint, we are really proud that we have over 7,000 Saudi co-workers in our business, and 70 percent of them are women.”

Saudi Arabian General Investment Authority (SAGIA) Gov. Ibrahim Al-Omar, in his closing remarks to the summit, said: “Hosting RLC MENA 2020 comes at a time of great change for Saudi Arabia. Our growing economy is unlocking remarkable potential across many sectors and creating jobs within the Kingdom.”

The sixth edition of the summit, which unites powerful industry leaders, innovators and decision-makers to share global insights and best practice, was hosted for the first time in Saudi Arabia and concluded on Tuesday.

Previously held in Dubai, this year’s conference included more than 50 speakers who highlighted ways to shape the future of the retail industry. Day two of the summit took an in-depth look at consumer behavior and explored how retailers could meet customer expectations.

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