Levy difference ‘diverts gold trade to Dubai’

Levy difference ‘diverts gold trade to Dubai’
Updated 14 February 2014

Levy difference ‘diverts gold trade to Dubai’

Levy difference ‘diverts gold trade to Dubai’

Disparity in customs duties on imported gold works has diverted gold trade from Saudi Arabia to Dubai despite the existence of a unified GCC customs duties system, a key jewel expert in Jeddah told local media.
In Saudi Arabia, gold traders have to pay 5 percent of the value of gold works imported into the Kingdom whereas traders in Dubai are paying 0.5 percent of that value on the ground that Dubai is a wholesale and re-export market, former head of gold and jewelry committee at Jeddah Chamber of Commerce and Industry (JCCI) Jamil Farsi said.
Earlier, wholesale gold traders from Sudan, Egypt, Libya, Morocco and other countries used to purchase gold from Saudi markets. Naturally, gold traders abstained from buying gold from the Saudi market and opted to Dubai due to increased excise duties in Saudi markets, he said.
This unfair competition has gravely hit gold trade in the Kingdom and shifted gold trade center from Saudi Arabia to Dubai, he noted.
The jewel expert counted a number of reasons, which contributed to the shift of gold trade to Dubai, including ease of visa procedures and non-existence of intermediaries in Dubai where (Indian) traders used to showcase products in Dubai markets, which brought positive results for the business there.
He said India had earlier invited Saudi traders to purchase gold from the country instead of Dubai, which could have minimized fees of brokers and automatically led to price reductions.
India has weighed Saudi Arabia as the most important and biggest gold market globally, he said.
For his part, former member of gold and jewelry committee at JCCI Mohamed Azouz said certain obstacles, including visa formalities, existing in Saudi markets had either compelled traders to go to Dubai or fully stopped business in the market.
If the concerned authorities did not find appropriate solutions to difficulties facing the Kingdom's gold industry, the industry would be vulnerable to “disappear,” Azouz warned.


IMF chief sees ‘high degree of uncertainty’ in global outlook

IMF chief sees ‘high degree of uncertainty’ in global outlook
Updated 34 min 30 sec ago

IMF chief sees ‘high degree of uncertainty’ in global outlook

IMF chief sees ‘high degree of uncertainty’ in global outlook
  • IMF had rapidly increased concessional financing to emerging market and developing economies

WASHINGTON: The head of the International Monetary Fund on Monday said the global lender needed more resources to help heavily indebted countries, citing a highly uncertain global economic outlook and a growing divergence between rich and poor countries.
IMF Managing Director Kristalina Georgieva, who has long advocated a new allocation of the IMF’s own currency, Special Drawing Rights (SDRs), said doing so now would give more funds to use address both the health and economic crisis, and accelerate moves to a digital and green economy.
Under outgoing President Donald Trump, the United States, the IMF’s largest shareholder, has blocked such a new SDR allocation, a move akin to a central bank printing money, since it would provide more resources to richer countries since the allocation would be proportionate to their shareholding.
Swedish Finance Minister Magdalena Andersson, the new chair of the IMF’s steering committee speaking at an online news conference with Georgieva, said it was clear the need for liquidity remained great, and she would consult with member countries on options for expanding liquidity.
Andersson, the first European to head the International Monetary and Financial Committee in more than 12 years and the first women, started her three-year term in the role on Monday.
Georgieva said the IMF had rapidly increased concessional financing to emerging market and developing economies, including through donations by member countries of some $20 billion in existing SDRs. That would continue to play an important role, but further steps were needed, she said.
“It will continue to be so important, even more important, for us to be able to expand our capacity to support countries that have fallen behind,” Georgieva said.
She said a new SDR allocation had never been taken off the table by IMF members, she said, adding that some members continued to discuss it as a possible move. A possible sale of gold from the IMF’s reserves would have “some opportunity costs” for the IMF, but would be up to members, she said.
She said she expected the Group of 20 major economies to extend the current moratorium in official debt service payments by the poorest countries, now slated to end in June, but much would depend on the pace of vaccinations in coming months.