Saudi economy diversifies due to declining oil prices
Saudi Economy has long been a dependent on fossil fuels. The Kingdom, which borders the more popular tourist destinations of the UAE and Egypt, has historically failed to attract large amounts of inward investment for almost anything other than oil and downstream petrochemical products. Is this about to change?
Saudi stock market welcomes foreign investors
In 2015 Saudi Arabia allowed Qualified Foreign Investors to access its stock market, the Tadawul. Previously foreign investors could access the market through instruments such as funds and swaps, but not trade directly. Global market sentiment has prevented the index booming as a result, but volumes have certainly increased and the framework is now in place for more finance to enter the Saudi Economy.
Saudi arabian investment authority permits 100% foreign ownership
In addition to this, the Saudi Arabian General Investment Authority (SAGIA), recently permitted 100% foreign ownership of wholesale and retail businesses for the first time. While 100% foreign ownership is not new in other parts of the Gulf, it remains restricted to certain industries or certain locations (free zones) in most countries. The proposed relaxation within Saudi Arabia only applies to the wholesale and retail sector, but these businesses have the potential to expand quickly, employ large numbers and are in many ways the lifeblood of Saudi economy.
Saudi Arabia has been seeking to diversify its economy (with ambitious plans to expand the manufacturing sector dating back to the 1970’s). The recent decline in oil prices has however placed increased emphasis and provided a new impetus to this objective. The economic diversification story is important as Saudi economy is by far the largest in the region and the only Middle Eastern country with a seat at the global G20 economic and political summits.
Could Saudi Economy be at the dawn of a new age, with the lower oil price benefiting the long term economic development and diversification of the Kingdom?
Jamil has over 12 years of experience in Saudi Arabia with an emphasis, primarily in Capital markets & Land Transactions, real estate business development and investment. Previously, he held senior executive positions with Ewaan Global Residential Company looking after strategy and business development as well as real estate finance. A Saudi national, Jamil holds BSc in Business Administration from the American Intercontinental University in Los Angeles and a MSC in Accountancy from California State University Fullerton. Mr Ghaznawi is a Certified Public Accountant (CPA) from the state of California.