No more delays: Riyadh pledges to pay remaining dues to private sector

Saudi Finance Minister Mohammed Al-Jadaan shows documents during a press conference to unveil the country's national budget for 2017 on Dec. 22, 2016 in Riyadh. (AFP / FAYEZ NURELDINE)
Updated 24 December 2016

No more delays: Riyadh pledges to pay remaining dues to private sector

JEDDAH: Saudi Arabia plans to settle all dues owed to the private sector within two months, after a period of financial turmoil that left many business unpaid, forcing some to lay off staff.
The crash in oil prices from mid-2014 forced the government to slash projects and delay payments to some private sector companies.
But the government has been working to clear the outstanding payments, Saudi Finance Minister Mohammed Al-Jadaan told reporters in Riyadh on Thursday.
The minister said that the all dues to the private sector had been paid up until the beginning of December. Any documents submitted in the last three weeks will be paid within two months, he added.
During the past two months, the state has spent more than SR100 billion accrued to the private sector, especially the construction sector, the minister said.
The government promised several months ago to pay private sector entitlements and has fulfilled this promise, the minister added.
The ministry is now studying the rest of applications, which will be paid over the next two months.

Enabling private sector growth
The government’s “Fiscal Balance Program – Balanced Budget 2020” document details how Saudi Arabia plans to support and enable the private sector to grow in line with its Vision 2030 reform plan.
It identified four main headwinds faced by the economy at large: slower economic growth — particularly in the utilities, construction, non-oil manufacturing, wholesale and retail sectors — a worsening balance of payments, declining confidence in the economy, and a drop in private sector employment.
The Kingdom established the Local Content & Private Sector Development Unit to help address three key objectives for unlocking the full potential of the Saudi economy. These are: To grow the non-oil private sector, to become less dependent on oil; to develop local content and build up a competitive local industry; and to improve the balance of payments supported by higher non-oil exports.
The country plans to launch a private sector stimulus packages, with a proposed size of SR200 billion, to help boost economic growth.
It also plans “high impact structural reform” to further boost the private sector, in areas like encouraging the ease of doing business, attracting more foreign direct investment, increasing labor market efficiency, reducing barriers to growth in areas like tourism, and cutting bureaucracy.

India looks to Saudi crown prince for historic $1bn pledge

The crown prince arrived in the Indian capital on Tuesday. (AFP)
Updated 8 min 31 sec ago

India looks to Saudi crown prince for historic $1bn pledge

  • India is hoping the crown prince will announce an investment in its National Investment Infrastructure Fund

 NEW DELHI: Saudi Arabia’s Crown Prince Mohammed bin Salman is expected to announce a $1 billion investment in India’s infrastructure and farming sectors during his first visit to the South Asian nation, experts said.

The crown prince arrived in New Delhi on Tuesday to a warm reception.

India is hoping the crown prince will announce an investment in its National Investment Infrastructure Fund (NIIF), a sovereign wealth fund that includes private companies and foreign investors. The fund focuses on upgrading India’s infrastructure, including railways and highways.

“We can expect a commitment of around $1 billion,” said Dr. Muddassir Quamar, an associate fellow at the Institute for Defense Studies and Analyses, a New Delhi-based think tank.

India and Saudi Arabia have traditionally had friendly relations which Prime Minister Narendra Modi has sought to strengthen in recent years in a bid to improve ties with major Muslim nations.  

The Kingdom is India’s top energy supplier and home to more than 3.5 million Indian expatriates. Much of bilateral trade between New Delhi and Riyadh has been based on energy, but both countries are now seeking to broaden ties. 

Earlier this week, the Saudi Press Agency said the Kingdom was considering an investment deal in NIIF. Meanwhile, India announced that its Cabinet had approved an agreement between the two countries on investment in infrastructure.

However, Talmiz Ahmad, a former Indian ambassador to Saudi Arabia, said it is up to New Delhi to take advantage of the opportunity and make sure it gets the investment.

“There is plenty of room for investment in infrastructure, but the perception across the region is that India is not business friendly,” Ahmad said. “We need to improve things like acquisition of land, the tax regime and to speed up approvals.”

Apart from investments in energy, India also expects to see deals in agriculture. 

India already exports cereals and agricultural products to the Kingdom, and can be an additional source of Saudi food security, Quamar said. 

“We talk a lot about promoting joint ventures,” said Ahmad. “But none of them has any meaning if the region is mired in terrorism.”