Saudi Arabia on course in big Maldives investment program

An areal view shows the Maldives capital Male, pictured on Dec. 14, 2009. (Reuters)
Updated 24 September 2017

Saudi Arabia on course in big Maldives investment program

NEW YORK: Speaking on the sidelines of the UN General Assembly in New York last week, Mohamed Shainee said that relations between the Republic of Maldives and Saudi Arabia are “at their best for a very long time” — and he should know.
Shainee is the Maldives minister for fisheries and agriculture, two important parts of the economy of the string of 1,100 islands and atolls that make up Asia’s smallest country.
But he is also charged with a special responsibility for matters relating to Saudi Arabia, he said, and has accompanied the Maldives President Abdulla Yameen on several official visits to the Kingdom.
“King Salman visited our country when he was still crown prince in 2013, and there has been a close relationship ever since that. We have some things in common — we are two of the most predominantly Islamic countries in the world, with very high proportions of Muslims in the population. Since he came, there has been a very good exchange of ideas and understandings,” Shainee said.
Saudis are attracted by the Maldives’ balmy tropical climate and its beaches, considered among the finest in the world and a lure for tourists of every nationality. But the relationship has also blossomed into a stronger economic partnership, with Saudi Arabia increasingly playing the part of investor in and developer of the Maldives’ economy.
The Kingdom has been a benefactor to the Maldives for some time, putting money into the building of an airport in the 1970s, along with other development work like sewage and water supply, and helping meet the bill for reconstruction of the islands’ infrastructure after the devastation caused by the 2004 tsunami, in which Shainee was very personally involved.
Official figures show that assistance from Saudi Arabia totalled nearly SR300 million ($80 million) up to 2010, but this has accelerated since, with SR722 million pledged since for hospitals and other development.
By far the biggest chunk will go on the planned upgrade to Velana International Airport, where a $357 million contract has been awarded to the Saudi Binladin contracting group.
The airport upgrade is vital for the Maldives’ future because, regardless of the importance of fisheries and agriculture sectors in Shainee’s portfolio, tourism is by far the biggest part of the islands’ economy, accounting for about 30 percent of gross domestic product (GDP) and 60 percent of foreign exchange earnings.
Work begins on the project later this year, and when it is completed it will allow the airport to cater for up to 7 million people a year, compared with 1.5 million now. By comparison, the native population of the islands is about 350,000 people.
The airport development is a central part of an economic strategy that also envisages the creation — with Saudi support — of special economic zones, to encourage businesses like shipping and finance, that have not previously been a feature of economic life there. Tourism-related activities in these zones will be kept to a maximum of 20 percent.
Chinese investors have also been active in the islands, leading some commentators to claim there is a “race” between Saudi Arabia and China to develop the Maldives’ economy and have influence in the affairs of the strategically important islands, in the Indian Ocean between India and Africa.
Shainee said the country’s investment authorities would choose on the basis of whichever was best for the country. “Maldivans are very nationalistic,” he said.
There were allegations of protectionist motives on the part of some Maldivans earlier this year, when a $10 billion Saudi project to develop the Faafu Atoll was put on hold. The opposition said that the atoll had been “sold” to Saudi Arabia, but Shainee pointed out that the land would have remained under Maldives’ laws and sovereignty, and would have been developed with social, medical and educational facilities, for the benefit of the country.
Business people from the Arabian Gulf are already active in the Maldives’ hotel industry, with luxury property owned or run by the Four Seasons, Jumeirah and One & Only groups, in conjunction with local partners.
Apart from development, the other vital issue, in which Shainee also has a special interest, is the environment. The islands are among the lowest inhabited places on earth, with an average height of only 1.5 meters above sea level, and the inhabitants of the populated 187 islands face constant threat from rising sea levels.
The Maldives was among the first countries to bring the issue of rising sea levels to world attention in the 1980s, but Shainee is optimistic that solutions to the seemingly intractable problem are at hand.
“Climate change is of course a very serious issue, but I do not think we can worry too much about rising sea levels. It is true that we are very low lying, but look at the Netherlands. There a lot of the country is below sea level, but it has survived,” Shainee said.
He is hoping that the Maldives can promote its own kind of solution to environmental problems from the international stage. The country has been on the UN human rights and climate change councils in the past, and is currently lobbying to join the powerful UN Security Council. The country also chairs the international Alliance of Small Island States (AOSIS).
Shainee believes that there are other things that can be done to alleviate the effect of rising sea levels. “It is essential to promote healthy oceans and sustainable fisheries, which gives the coral and sea life a change to adapt to the new environment,” he added.
He was speaking from the heart. He is the son and grandson of fishermen, and began his career as a fisherman before entering government service. Shainee retains a close affinity with the oceanic world, and is proud of his postgraduate work in Norway and Canada in new techniques for fisheries protection. The Maldives is a leading member of the UN coalition to save shark species, and has declared the islands a no-fishing zone for endangered sharks.
In the aftermath of the 2004 tsunami, when 80 percent of the islands had been underwater and 60 percent of the economy was affected, Shainee was charged with distributing financial aid to parts of the far-flung islands by boat and sea-plane, with a suitcase full of currency handcuffed to his wrist.
“The islands were very badly affected, but there was a comparatively low loss of life. We are a seafaring people and we knew instinctively what to do,” he said.

Automechanika Riyadh opens, featuring leading global suppliers

Updated 11 min 42 sec ago

Automechanika Riyadh opens, featuring leading global suppliers

  • Saudi auto deals grew 40 percent last year with influx of female buyers

RIYADH: Leading names in the global auto services industry are out in force at Automechanika Riyadh — which opened on Monday at Al Faisaliah Hotel — vying to increase their share of a growing market expected to reach a value of $10.15 billion by 2023.

Automechanika Riyadh is the regional arm of the world’s largest trade fair, congress and event organizer, Messe Frankfurt, which has licensed the Automechanika brand to event organizer Al Harithy Company for Exhibitions (ACE) Group.

Mansour Abdullah Al-Shathri, vice chairman of the Riyadh Chamber of Commerce, inaugurated the trade event, which will run from Feb. 24-26.

It was revealed that Saudi auto deals grew approximately 40 percent last year, with female buyers accounting for between 10-15 percent of sales after the landmark decision to allow women to drive in the Kingdom for the first time.  

“International suppliers are stepping up their marketing for the resurgence in Saudi’s market, and this impacts the entire supply chain,” said Mahmut Gazi Bilikozen, show director for Automechanika Riyadh.

“While there is growth potential in the market, it is becoming a more competitive landscape and one which will also have to contend with evolving customer preferences. The conditions are ripe for new business relationships for those wishing to succeed in this transformative environment,” he added.

Zahoor Siddique, vice president of ACE, said: “Future vehicles will become more complex and challenging for the aftermarket industry. It is therefore imperative for manufacturers, local garages, technicians and mechanics to upskill and remain above the curve. 

 “Automechanika Riyadh is one such platform that can enable us to share and learn what the industry needs to unleash its potential.”

Two major US players — disc pad producer Giant Manufacturing and United Motors Mopar, the Kingdom’s sole distributor of Chrysler, Dodge, Jeep and Fiat cars — forecast a bullish market over the next few years.

Giant’s vice president, Eli Youssian, said he believed car sales in the Kingdom would grow by 9 percent annually until 2025, while United Motors District CEO Hassan Elshamarani expected another three million female drivers to be on the Kingdom’s roads by the end of the year.

Both Giant and United Motors launched new products at the show, with the former rolling out its new German-engineered Euro Premium Metallic Disc brake pads, and the latter introducing its Magneti Marelli spare parts.

The high potential of the new-look Saudi automotive landscape has also struck a major chord with South Korean suppliers.

The show’s Korean pavilion is hosting new-to-market entrants and existing suppliers all looking for business partners. With products from wiper blades to filters and air-conditioning parts to brake pads, the Korean contingent was positive about the Kingdom’s prospects.

One exhibitor, D Only Automotive, is looking to ring fence 10 percent of the Saudi brake market. “With more vehicles on the road, demand for brakes will increase, (so) we believe this is possible,” said President Jeon JaeWon.

Global research and analytics firm Aranca — Automechanika’s knowledge partner — has forecast that Saudi Arabia’s automotive spare parts and service market will grow at approximately 6 percent over the next five years to reach a value of $10.15 billion by 2023.

“The spare parts and service market for passenger cars alone is expected to eclipse $6.9 billion by 2023,” said Vishal Sanghavi, Aranca’s automotive practice head.