Foreign investment in KSA doubles in vote of confidence for reforms

Economy and planning minister Mohammed Al-Tuwaijri at a forum in Riyadh a day after the 2019 budget was announced. (SPA)
Updated 20 December 2018
0

Foreign investment in KSA doubles in vote of confidence for reforms

  • Five sectors of the economy are prepared for privatisation in the first quarter of 2019
  • Ministers attend forum a day after the 2019 budget was announced

RIYADH: Foreign investment in Saudi Arabia more than doubled in 2018 to reach $3.5 billion, the economy and planning minister said on Wednesday.

Mohammed Al-Tuwaijri said the value of investments rose 110 percent from the previous year. 

The minister was speaking a day after the 2019 budget was announced, in which the government said it would boost spending by 7 percent to spur economic growth.

Attracting foreign investment is a key part of the Vision 2030 plan to diversify the economy away from oil revenues. Sending a message of reassurance to private-sector firms looking for business in the Kingdom, Al-Tuwaijri said that historical overdue payments owed by the government to contractors would be settled “within months.”

The crash in oil prices from mid-2014 forced the government to slash some projects and delay payments, while disputes have held up some other settlements.

The vast majority of claims have now been addressed, and Al-Tuwaijri said the rest of the settlements would be made imminently.

“The commitment is there, funding is there, the policymakers are saying ‘please do, please pay, get this out of the way.’ And I think it’s a matter of months before we achieve all of that,” Al-Tuwaijri told Arab News.

Finance Minister Mohammed Al-Jadaan said at the same conference that the government issued more than 700 licenses for foreign investments this year, double the number in 2017.

Al-Jadaan said that Saudi Arabia has no intention of changing its policy on expatriate worker fees — which could prove a stumbling block to attracting foreign companies.

The levies are due to rise next year as part of a policy to encourage the hiring of Saudi nationals.

The ministers were speaking at a post-budget forum, after Saudi officials unveiled a plan to increase state spending to $295 billion.

Some analysts expressed reservations about the budget’s revenue numbers, and claimed that they were based on over-optimistic forecasts for oil prices. 

Al-Jadaan declined to specify what oil price the Saudi budget is based upon. But he told Arab News that the projections laid out were attainable. “We stress-tested various scenarios on the oil price under the budget, and what we have put is actually a reasonable projection,” Al-Jadaan said. “It is a very realistic budget.”


US calling European cars a threat is ‘frightening’: Germany

Updated 10 min 7 sec ago
0

US calling European cars a threat is ‘frightening’: Germany

  • ‘If these cars ... suddenly spell a threat to US national security, then that is frightening to us’

MUNICH, Germany: German Chancellor Angela Merkel on Saturday labelled as “frightening” tough US trade rhetoric planning to declare European car imports a national security threat.

“If these cars... suddenly spell a threat to US national security, then that is frightening to us,” she said.

Merkel pointed out that the biggest car plant of German luxury brand BMW was not in Bavaria but in South Carolina, from where it exports vehicles to China.

“All I can say is it would be good if we could resume proper talks with one another,” she said at the Munich Security Conference.

“Then we will find a solution.”

A US Commerce Department report has concluded that auto imports threaten national security, setting the stage for possible tariffs by the White House, two people familiar with the matter said Thursday.

The investigation, ordered by President Donald Trump in May, is “positive” with respect to the central question of whether the imports “impair” US national security, said a European auto industry source.

“It’s going to say that auto imports are a threat to national security,” said an official with another auto company.

The report, which is expected to be delivered to the White House by a Sunday deadline, has been seen as a major risk for foreign automakers.

Trump has threatened to slap 25 percent duties on European autos, especially targeting Germany, which he says has harmed the American car industry.

After receiving the report, the US president will have 90 days to decide whether to move ahead with tariffs.

Trump in July reached a trade truce with European Commission President Jean-Claude Juncker, with the two pledging no new tariffs while the negotiations continued.

Brussels has already drawn up a list of €20 billion ($22.6 billion) in US exports for retaliatory tariffs should Washington press ahead, the commission’s Director-General for Trade Jean-Luc Demarty told the European Parliament last month.

The White House has used the national security argument — saying that undermining the American manufacturing base impairs military readiness, among other claims — to impose steep tariffs on steel and aluminum imports, drawing instant retaliation from the EU, Canada, Mexico and China.

Trading partners have sometimes reacted with outrage at the suggestion their exports posed a threat to US national security.