Cash boost for Saudi jobs, homes and health

Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed. (Reuters)
Updated 10 December 2019

Cash boost for Saudi jobs, homes and health

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: The Saudi budget announced by King Salman this week emphasizes the importance of financial sustainability and the need to increase state revenues, according to Finance Minister Mohammed Al-Jadaan. He said that the main goal is to improve the number and quality of services and ensure all infrastructure projects are completed.
Al-Jadaan was speaking at the 2020 Budget Meeting Sessions in Riyadh, which also featured a number of other ministers and officials.
The Ministry of Finance has made public expenditure more efficient and reduced public spending without compromising quality of services, Al-Jadaan said.
“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” he said.
The Kingdom achieved some remarkable successes this year and will continue to build on them, he said. For example, the private sector cooperated in numerous projects, contributing to the reduction in public spending and creating a large number of job opportunities, he noted. The Kingdom will work to further empower the private sector as a key partner in development, said Al-Jadaan, who hopes to see more growth next year.
Ahmed Al-Kholifey, governor of the Saudi Arabian Monetary Agency (SAMA), said that figures from October reveal a 5 percent increase in liquidity, and loans to small and medium-size enterprises grew by 8 percent. SAMA has prepared an ambitious strategy to enhance financial inclusion, to boost and support the financial sector and enhance sustainable economic growth.
“The strategy ensures that all segments of society have access to the official financial system and the number of people having bank accounts rises,” Al-Kholifey said. SAMA is also developing initiatives to fuel the move to a cashless society, he added.
Mohammed Al-Tuwaijri, the minister of economy and planning, said 2019 was an important year for his ministry because it built “an enormous database that should help enhance the process of decision-making.” There was also a major transformation in the balance of payments, he noted, one of the key instruments for economic diversification.
The 2020 budget is designed to create job opportunities and support local services, while improving spending efficiency, he said, and economic-diversification policies are beginning to show results.
The government places great importance on reducing unemployment, Al-Tuwaijri said, and his ministry is working with the Ministry of Labor and Social Development to achieve this. Unemployment now stands at 12.3 percent, down from 12.9 percent last year, and he expects it to drop further by the end of the year. There are plans to create jobs in sectors such as tourism, culture, entertainment and hospitality as part of Vision 2030.
Bandar Al-Khorayef, the minister of industry and mineral resources, said his ministry works to improve and preserve gains in the industrial and mining sectors and create catalysts for investment and sustainable growth. An export bank will be launched soon, he added, noting that the financing of export operations reached SR 5 billion ($1.3 billion) this year.
“The industry and mining sector require major capital and a long-run investment lookout,” he said. “Investment in the sector involves many risks and the ministry must take this into consideration when it passes legislation, to ensure the sector and investors make profits.”
Saleh Al-Rasheed, governor of General Authority of Small and Medium Enterprises, said the organization works to create a competitive environment that encourages new businesses, by providing innovative financing solutions and investment opportunities. As of October, he noted, there were 550,725 SMEs in the Kingdom, contributing 28 percent of GDP.
Princess Haifa Muhammad, deputy chairwoman of the Saudi Commission for Tourism and National Heritage, said the tourism sector received a major boost from the increase in entertainment events. The special “Seasons” launched across the country created 50,000 jobs for young Saudis, and spending in the sector increased by 12 percent, she said.
The Kingdom has welcomed 115,000 since tourist visas were launched, she revealed, adding that the sector is growing at a rate of 3.9 percent, outpacing the global economy which is growing at 3.5 percent.
Justice Minister Walid Al-Samaani said the achievements of his ministry in the past few years have contributed greatly to improving the efficiency of the judicial system.
“We work to establish effective procedural governance and achieve sought-after digital transformation,” he said, adding that 15 electronic services were launched this year to expedite the processing of legal cases.
Housing Minister Majid Al-Hogail said the ministry served 300,000 families this year, providing them with housing and financing options. Of those, 165,000 received housing loans worth SR78 billion, 106,000 moved into homes and 90,000 received a land grant.
He highlighted the importance of enhancing partnerships with the private sector, which so far have helped provide 125,000 housing units in 70 projects with a total value of SR62 billion. In 2020, the ministry plans to build 100,000 housing units worth SR 65 billion.
Ahmed Al-Rajhi, the minister of labor and social development, said the ministry aims to create 1.5 million jobs by 2030. He added that the value of social financing offered to more than 60,000 citizens reached SR3.5 billion this year, and 2,462 small and medium-size enterprises benefited from SR526 million. In addition, 2843 non-profit organizations were founded, a 26 percent increase on last year.
The proportion of women in the workforce reached 25.3 percent this year, he added, and more than 175,500 jobs were Saudized.
Minister of Health Dr. Tawfiq Al-Rabeeah said the ministry plans to open 10 hospitals next year and ban the use of hydrogenated fats. It will continue to focus on public health initiatives to reduce chronic diseases and conditions such as obesity and smoking, and plans to improve health care options. This year, he added, the waiting list for outpatient departments at public hospitals fell from 59 to 24 days.
 


Startup sets the pace in Middle East’s virtual-currencies business

Updated 25 May 2020

Startup sets the pace in Middle East’s virtual-currencies business

  • Rain facilitates trade and exchange of digital currencies for conventional money
  • Over 2,000 virtual currencies exist outside the realm of traditional financial organizations

DUBAI: One of the hardest things after starting a company is to gain clients. But before Yehia Badawy and his three business partners could get down to it, they had a bigger hurdle to clear: Convincing financial regulators to endorse a new type of business in a non-existent industry.
Their idea was Rain, the first licensed cryptocurrency exchange in the Middle East. Launched in 2017, the venture fills a gap in the region’s digital assets market by facilitating the trade and exchange of digital currencies for conventional money.
Cryptocurrencies are a late-stage digital tender. Neither backed by physical assets nor guaranteed by central banks, they are nearly impossible to counterfeit.
More than 2,000 decentralized virtual currencies exist today, largely outside the sphere of influence of traditional financial organizations.
“Many people believe the internet should have its own currency,” said Badawy, 33, an Egyptian national. “Why should the euro or the US dollar or any other fiat currency be the default way to buy and sell goods and services online? That said, these transactions need to be safe, secure and properly regulated.”

The most famous cryptocurrency is bitcoin. Created in 2008, it caught the public’s attention in late 2017 when investors drove the value of one unit to nearly $20,000, before sending it back down to around $3,000. Subsequently, bitcoin stabilized at around $10,000.
Other cryptocurrencies have gone along similar trajectories. The fluctuations raised awareness of this fledgling business sector, while underscoring the importance of taking adequate safeguards.
“The industry has (now) reached the next level of maturity,” said Badawy. “There’s definitely a change in tone following a better understanding of cryptocurrency trading and how it works.”
This was not the case when he founded Rain with 29-year-old Abdullah Almoaiqel of Saudi Arabia and US nationals Joseph Dallago, 28, and A. J. Nelson, 27.

Rain, the first licensed cryptocurrency exchange in the Middle East, and launched in 2017.

With a shared enthusiasm for digital currencies, the four met online via social networks Twitter and Meetup.
At the time, the Middle East was the only region without a licensed cryptocurrency exchange, and local interest in this domain was scant.
“Despite our concerted efforts, regulators either didn’t understand cryptocurrencies or weren’t willing to engage with us,” Badawy said.

FASTFACT

Bitcoin

Investors drove the value of one unit of bitcoin to nearly $20,000 in 2017, before sending it back down to around $3,000

Regulatory approval was important to widen the buyer base for cryptocurrencies in what was then an untapped market.
“We could’ve started in an offshore jurisdiction with a white-label solution,” said Badawy. “But we knew that for crypto to really become a key piece of daily life, it needed to be
governed in a way that satisfies innovation but also existing regulation. That was the main driver.”

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READ MORE: A Middle East online tutoring startup eyes Saudi Arabia’s market

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When the Central Bank of Bahrain agreed to a cryptocurrency trial in 2017, Rain joined its sandbox program for new financial technology solutions.
Two years later, the venture became the Middle East’s first company to be licensed by an onshore regulator, joining an exclusive international group.
Last July, Rain closed a $2.5 million round of seed funding. Thousands of customers from over 50 countries now use its platform to buy, sell or store crypto assets and fiat currencies in an ecosystem with bank-grade security.
Badawy drew parallels between Rain and early internet service providers (ISPs) such as America Online.
“We look at ourselves as the ISPs of the crypto industry. This is where we are providing the initial liquidity to the region, as the ISPs did for the internet,” he said.

“In the future, there will be other companies — and we hope this happens — that come and build on top of this foundation layer.”
Entrepreneurs hoping to establish such new-wave financial institutions need more than deep pockets, according to Badawy.
While these are essential, all startups also require discipline, perseverance and hard work. As Rain has shown, a good idea and persistence can help a new industry take root.
“Anyone starting a business today should come to terms with the fact that unless they take steps that are beyond the average, they shouldn’t expect above-average results,” said Badawy.
“That said, the startup ecosystem in the region has matured so much over the last few
years that anyone with a good idea and the ambition to go after it won’t be struggling.”

  • This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.