Saudi Arabia leading the way when it comes to getting women into work

Saudi Arabia leading the way when it comes to getting women into work
The country director for the Gulf Cooperation Council at the World Bank attributed the rise to factors within the Vision 2030 initiative aimed at diversifying the Saudi economy away from oil. (SPA)
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Updated 26 November 2023
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Saudi Arabia leading the way when it comes to getting women into work

Saudi Arabia leading the way when it comes to getting women into work
  • World Bank exec says Kingdom’s female workforce now stands at 36 percent – up from just over 17 percent in 2017

RIYADH: No country in the world has been able to keep up with Saudi Arabia’s remarkable strides in female labor force participation, a top executive at the World Bank has claimed.

Speaking to Arab News, Safaa El-Kogali flagged that the share of women in the Kingdom’s workforce now stands at 36 percent – up from just over 17 percent in 2017.

The country director for the Gulf Cooperation Council at the World Bank attributed the rise to factors within the Vision 2030 initiative aimed at diversifying the Saudi economy away from oil.

“No country was able to achieve growth in female labor force participation at this rate,” El-Kogali said.

“I think the train has already left the station when it comes to women’s labor market participation in the Kingdom of Saudi Arabia. I think the changes that were done are structural and the reforms that were put in place, whether they’re legal reforms, or policies, are there now,” she added.

El-Kogali also emphasized that there have been legal code reforms that remove specific challenges for women.

These legal reforms contributed to a broader shift in societal perceptions and norms regarding the significance of female participation in the labor market.

According to a World Bank report released on Nov. 22 that focused on women’s labor force participation in the Gulf region, the impact of the COVID-19 pandemic on Saudi Arabia “created a positive demand shock” which “accelerated” the number of women in work. 

“For the rest of the GCC and MENA (Middle East and North Africa) region, important lessons can be drawn on advancing female labor force participation,” the report said.

El-Kogali pointed out the important role education is playing in ensuring women are able to meet the demand in the Kingdom’s fast developing economy.

“When I say the train has left the station, I see the shift in social norms and perceptions. I used to come to Saudi Arabia a few years ago and coming now I see the changes just visibly as I walk around Riyadh,” she continued.

Overall, the private sector workforce in Saudi Arabia has experienced consistent growth, reaching 2.6 million in the early months of 2023, according to the World Bank report.

This expansion aligns with broader trends of increased participation in the labor force, a higher employment-to-population ratio, and a reduction in unemployment rates.

The structural changes introduced through Vision 2030 include policy reforms removing challenges for women, providing increased workplace protection, and the introduction of programs supporting females in their careers.

“Many impediments for women to work were removed. At the same time, new protections, like the right to equal pay, and many new programs to support women in the workforce were implemented including, labor law reforms to eliminate discrimination in employment, sexual harassment in the workplace,” El-Kogali commented. 

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Safaa El-Kogali also emphasized the legal code reforms that removed specific challenges for women, contributing to a broader shift in societal perceptions and norms regarding the significance of female participation in the labor market.

She added: “Together with a change in social norms about women working, which was very much facilitated by government communication and awareness campaigns, these changes resulted in this extraordinary expansion of female labor force participation among Saudi women.”

The World Bank also revealed trajectories regarding the GCC’s economic growth, forecasting it to grow by 3.6 percent in 2024 and 3.7 percent in 2025.

This will come after a 1 percent growth in 2023, with the weaker performance driven primarily by lower oil sector activities reflecting successive production cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, and the global economic slowdown.

According to the report, the Kingdom’s overall gross domestic product will show a contraction of 0.5 percent in 2023 before reporting a recovery of 4.1 percent in 2024 to reflect expansions of the oil and non-oil sectors.

“The region performed strongly in 2022 with an average growth that surpassed 7 percent, led mostly by Saudi Arabia, which is the biggest economy in the GCC and it’s also globally the fastest growing large economy,” El-Kogali said.

“This growth is not just due to buoyant hydrocarbon prices, but also a continued growth of the non-oil sectors, and the latter was the result of persistent structural reforms undertaken by several of the GCC countries, of course, including Saudi Arabia,” she continued.

El-Kogali was clear that the transformations observed in recent years, particularly in the willingness of Saudi women to engage in employment, are not temporary but enduring.

“The change is visible across all age groups – it is not only young Saudi women who are now more willing to take up work, but also their mothers,” she said.

She added: “Important lessons for other MENA countries can be drawn, and we as the World Bank will share the Kingdom’s experience in this important area with other countries who are trying to implement similar reforms.”


Saudi Arabia advances COP16 plans with first meeting at UN General Assembly

Saudi Arabia advances COP16 plans with first meeting at UN General Assembly
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Saudi Arabia advances COP16 plans with first meeting at UN General Assembly

Saudi Arabia advances COP16 plans with first meeting at UN General Assembly

JEDDAH: Saudi Arabia is ramping up its preparations for the UN Convention to Combat Desertification’s COP16, hosting its first Advisory Council meeting during the UN General Assembly in New York.  

The session was chaired by the Kingdom’s Minister of Environment, Water, and Agriculture Abdulrahman Abdulmohsen Al-Fadley. 

Scheduled for Dec. 2 to 13 at Boulevard Riyadh City, COP16 will feature a green zone aimed at fostering collaboration among public and private stakeholders. The gathering brought together experts and policymakers focused on combating land degradation, drought, and desertification. 

Saudi Arabia has launched several key initiatives, including the Saudi Green and Middle East Green Initiatives, aimed at enhancing the value of natural resources for economic and ecological sustainability.  

Announced by Crown Prince Mohammed bin Salman, these initiatives include plans to cut regional carbon emissions by 60 percent and plant 50 billion trees in what is set to become the world’s largest afforestation project. 

The initiatives also aim to increase protected land coverage to over 30 percent, surpassing the global target of 17 percent, while reducing global carbon emissions by more than 4 percent through renewable energy projects set to account for 50 percent of the Kingdom’s energy mix by 2030.  

During the meeting, council members highlighted the critical role of land in supporting both human and planetary health. They discussed strategies to raise awareness of the severe impacts of land degradation, desertification, and drought.  

Ibrahim Thiaw, executive secretary of the UN Convention to Combat Desertification, provided key insights to council members, including former presidents Tarja Halonen of Finland, Iván Duque Márquez of Colombia, and Carlos Alvarado Quesada of Costa Rica.  

Other notable participants included Chadian environmental activist Hindou Oumarou Ibrahim and Nasser Baker Al-Kahtani, executive director of the Arab Gulf Program for Development. 

Saudi Arabia’s delegation featured Adel Al-Jubeir, minister of state for foreign affairs and climate affairs envoy, and Osama Ibrahim Faqeeha, deputy minister of environment and adviser to the president of UNCCD COP16.  

The Riyadh event will be the first UNCCD COP to feature a green zone, offering a platform for the public, businesses, financial institutions, NGOs, media, and affected communities to collaborate on solutions to land degradation, desertification, and drought. 


Saudi Arabia, UAE drive expansion of GCC retail sector in GCC: industry report 

Saudi Arabia, UAE drive expansion of GCC retail sector in GCC: industry report 
Updated 26 September 2024
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Saudi Arabia, UAE drive expansion of GCC retail sector in GCC: industry report 

Saudi Arabia, UAE drive expansion of GCC retail sector in GCC: industry report 

RIYADH: The retail sector in the Gulf Cooperation Council is projected to grow at an annual rate of 4.6 percent between 2023 and 2028, primarily fueled by the UAE and Saudi markets, according to a recent analysis by investment banking advisory firm Alpen Capital.

Retail sales in the GCC are expected to rise from $309.6 billion in 2023 to $386.9 billion by 2028.

The UAE and Saudi Arabia are set to see expansions of 5.4 percent and 5.1 percent, respectively, reaching $161.4 billion and $139.1 billion during this period. This growth is attributed to factors such as population increases, rising per capita income, and heightened tourism activities. Strengthening the retail sector is essential for Saudi Arabia as it seeks to position itself as a leading business and tourist destination, aligning with the economic diversification goals outlined in Vision 2030.

In February, Majid Al-Hogail, Saudi Arabia’s minister of municipal and rural affairs and housing, noted that the retail sector contributes 23 percent to the non-oil economy and aims to surpass $122.6 billion by the end of 2024.

“The long-term prospects of the GCC retail industry continue to remain positive owing to economic growth, favorable demographics, relaxation of visa rules, and liberalization policies,” said Sameena Ahmad, managing director of Alpen Capital.

She added that ambitious government agendas for economic diversification are leading to significant advancements in infrastructure and tourism, further enhancing the region’s appeal.

Emerging trends such as “buy now, pay later” options and evolving consumer preferences are also reshaping market dynamics. The report projects that retail sales in Kuwait and Bahrain will grow at a compound annual growth rate of 3.1 percent each from 2023 to 2028, while Qatar and Oman are expected to grow at rates of 2.2 percent and 1 percent, respectively.

Alpen Capital emphasizes that the rising population, particularly with a concentration of expatriates and high-net-worth individuals, is a key driver of GCC retail growth.

“Anticipated pick up in the economic activity and improvement in per capita income is expected to further advance the appetite for global brands and luxury items. Amid expanding infrastructure developments, the GCC economies are establishing themselves as a hub for global business, entertainment, and sporting events,” the report said.

Additionally, religious and cultural tourism significantly contributes to sector growth, attracting many tourists during pilgrimages and festivals. However, the analysis also identifies risks that could hinder growth, such as geopolitical tensions. Vulnerabilities in hydrocarbon revenues, rising geopolitical concerns, and global macroeconomic challenges may pressure the industry. “The region is sensitive to supply-side shocks, which could lead to inflationary pressures and affect consumer spending power,” added Alpen Capital.


Saudi Arabia starts process on 4,500 MW-renewable energy projects

Saudi Arabia starts process on 4,500 MW-renewable energy projects
Updated 26 September 2024
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Saudi Arabia starts process on 4,500 MW-renewable energy projects

Saudi Arabia starts process on 4,500 MW-renewable energy projects

JEDDAH: Saudi Arabia will add 4,500 megawatts of renewable energy to its grid after its procurement agency issued a request for qualifications for the sixth round of solar and wind projects. 

The Saudi Power Procurement Co. outlined the key projects, including the 1,500-MW Dawadmi wind project in the Riyadh region, the 1,400-MW Najran solar project, and two solar initiatives in Jazan — Samtah and Al-Darb — each boasting a capacity of 600 MW. Additionally, the Sufun solar project in Hail will contribute 400 MW to the grid. 

This initiative is part of the National Renewable Energy Program, which is overseen by the Ministry of Energy and aligns with Saudi Arabia’s Vision 2030 and the King Salman Renewable Energy Initiative.  

The NREP serves as a strategic framework to diversify the Kingdom’s energy sources, stimulate economic development, and promote sustainable stability. By 2030, the program aims for renewable energy to account for nearly 50 percent of the energy mix used for electricity generation.   

It aims to establish a robust renewable energy industry and advance this vital sector while upholding the Kingdom’s commitment to reducing carbon dioxide emissions. 

The SPPC is tasked with conducting preliminary studies, tendering, and procuring electricity generated from energy projects within the Kingdom. So far, projects totaling over 19 gigawatts have been awarded under the NREP. 

In another move earlier this year, the SPPC finalized power purchase agreements valued at SR12.3 billion ($3.3 billion) for three solar photovoltaic projects with ACWA Power Co., Water & Electricity Holding Co., known as Badeel, and Aramco Power.

These solar projects include the Haden Solar PV and Al-Muwaih Solar PV in the Makkah region, each with a capacity of 2,000 MW, alongside the Al-Khushaybi PV project in Qassim Province, which will add 1,500 MW to the grid. 

In February, the SPPC also announced qualified bidders for its fifth round of renewable energy projects, set to add 3,700 MW to the grid. 

A total of 23 companies, including Abu Dhabi Future Energy Co. or Masdar, GEK Terna, and EDF Renewables, were selected for key roles in these initiatives, which further underline the Kingdom’s commitment to expanding its renewable energy landscape. 


UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion

UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion
Updated 26 September 2024
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UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion

UAE’s central bank raises 2024 GDP growth forecast to 4% amid oil sector expansion

RIYADH: The UAE’s central bank has revised up its forecast for the country’s GDP growth in 2024 by 0.1 percentage points in light of expected improvements in the oil sector.

The institution had originally slated 3.9 percent growth for the 12-month period, but is now projecting an expansion of 4 percent.

In its second-quarter economic report, the bank maintained its 2025 growth forecast at 6 percent.

The analysis predicted that the non-hydrocarbon sector will grow by 5.2 percent in 2024, rising to 5.3 percent in 2025, while the hydrocarbon division is expected to see a modest 0.7 percent growth this year, increasing to 7.7 percent in 2025.

The report said: “Growth forecasts continue to be driven by tourism, transportation, financial and insurance services, construction and real estate, and communications sectors; while the current levels of oil production during 2024 partially moderate the overall growth.”

The central bank anticipated strong momentum in the hydrocarbon sector in 2025, with significant production increases. Additionally, it underlined that a rapid decline in interest rates in major advanced economies could boost global demand and encourage capital flows into emerging markets, including the UAE.

The report also revealed that non-hydrocarbon GDP growth stood at 4 percent year-on-year in the first quarter of 2024, down from 6.7 percent in the previous quarter, mainly due to a slowdown in financial and insurance services, real estate activities, construction and manufacturing.

However, the report said that “non-hydrocarbon GDP growth is expected to remain strong at 5.2 percent in 2024 and 5.3 percent in 2025,” mainly driven by strategic plans and policies that the government has undertaken to attract foreign investments and the ongoing structural reforms.

The fiscal balance for the first quarter of the year remained positive at 23.5 billion Emirati dirhams ($6.39 billion), or 4.9 percent of GDP, compared to 23.2 billion dirhams, or 5.1 percent of GDP, in the first quarter of 2023.

The UAE’s consolidated budget revenues grew by 4.3 percent year-on-year in the first quarter to 120.6 billion dirhams, or 24.9 percent of GDP, driven primarily by a 32.5 percent annual increase in tax revenues.

The central bank highlighted that the UAE’s fiscal stability is improving, with tax revenues making up an increasing share of total revenues — rising from 45.8 percent in the first quarter of 2022 to 70 percent in the first quarter of 2024 — mainly due to the recent introduction of corporate taxes.

The report also detailed government spending in the first quarter, saying: “Government expenditure in the first quarter of 2024 totaled 97.1 billion dirhams, or 20 percent of GDP, reflecting a 5 percent year-on-year increase.”

Key spending categories, including employee compensation, goods and services, and social benefits, rose by 6.3 percent, 15.2 percent, and 3.4 percent, respectively. Capital expenditures also saw a significant rise, increasing more than sevenfold to 5.6 billion dirhams.

The Central Bank of the UAE pointed to signs of expansion in the private non-oil sector, with the country’s purchasing managers’ index reaching 53.7 in July, reflecting sustained business confidence. 

Employment data showed that the number of workers covered by the Wage Protection System remained stable year-on-year in June, while average monthly wages increased by 4.8 percent. 

“The 16 non-oil sectors continued their robust growth pattern in Q2 2024, albeit at a more moderate rate,” the report added.

Wholesale and retail trade, manufacturing, and construction remained key pillars of non-oil sector expansion. 

Various comprehensive economic partnership agreements and visa-related initiatives have boosted trade volumes and transactions, while the manufacturing sector “continued to attract greater levels of FDI (foreign direct investment), expanding in line with Operation 300 billion.”

The construction sector also advanced, with numerous new infrastructure projects underway, including Etihad Rail and the Port of Dubai Creek.


Saudi Arabia’s economy set for 5.3% growth in 2025, driven by reforms: S&P Global

Saudi Arabia’s economy set for 5.3% growth in 2025, driven by reforms: S&P Global
Updated 26 September 2024
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Saudi Arabia’s economy set for 5.3% growth in 2025, driven by reforms: S&P Global

Saudi Arabia’s economy set for 5.3% growth in 2025, driven by reforms: S&P Global

RIYADH: Saudi Arabia’s gross domestic product is projected to grow by 1.4 percent in 2024, with an acceleration to 5.3 percent in 2025, according to S&P Global’s latest analysis of emerging markets.

The US-based credit rating agency noted that anticipated rate cuts by the US Federal Reserve will likely benefit emerging markets like Saudi Arabia, which has strong growth fundamentals and increased capital inflows.

Earlier this month, S&P Global emphasized that Saudi Arabia’s economic growth will be supported by its diversification strategy aimed at strengthening the non-oil private sector and reducing dependence on crude revenues.

“Saudi Arabia’s economic transformation is underway. The country is going through an unprecedented period of social, economic, and political reforms, designed to diversify its economy away from hydrocarbons,” the report stated. It further added, “In the next couple of years, these reforms will continue to raise domestic demand indicators, particularly those related to household spending, tourism, and construction.”

The agency forecasts economic growth of 4 percent in 2026, followed by a slight decline to 3.6 percent in 2027. Additionally, S&P Global anticipates an inflation rate averaging 1.8 percent in 2024 and 1.6 percent in 2025. The unemployment rate is projected to reach 4.7 percent this year and 4.4 percent next year.

Emerging markets outlook

S&P Global also predicts strong growth for India, with GDP expansions of 6.8 percent in 2024 and 6.9 percent in 2025. The agency noted that lower oil prices will benefit most emerging markets globally by improving external accounts and lowering inflation.

“While oil revenue provides fiscal benefits for some EMs through state-owned oil companies, most major EMs are net energy importers. Sustained lower oil prices could further accelerate monetary policy normalization across EMs. However, the potential escalation of the conflict in the Middle East could drive oil prices back up in the coming months,” S&P Global warned.

Southeast Asian economies are well-positioned among emerging markets to attract capital inflows, with Malaysia and Vietnam benefiting from electronics exports and foreign direct investment. The report indicated that industrial production in this region is outperforming that of other global areas.

“In Vietnam, manufacturing output grew about 10 percent year over year in the first half of 2024. The sector can be cyclical, however, and momentum may swing if global demand weakens,” it stated.

In Turkiye, the economy is expected to grow by 3.1 percent in 2024 and 2.3 percent in 2025, hindered by high interest rates limiting fixed investment.

S&P Global noted that real GDP growth forecasts for emerging markets, excluding China, remain at 3.9 percent in 2024 and 4.3 percent in 2025.

Potential risks for emerging markets growth

The report highlighted several risks facing emerging markets, including uncertainty surrounding the upcoming US election and its potential effects on trade and fiscal policy.

“More protectionist trade policies could lower trade volumes, raise inflation, and consequently put upward pressure on interest rates, thereby discouraging capital flows to emerging markets,” S&P Global cautioned. It also noted that expansive US fiscal policy could increase inflation and long-term Treasury yields, tightening financial conditions for emerging markets.

The report expressed concern over the high degree of uncertainty regarding the Chinese economy, which poses downside risks for growth in Asia. Escalation of the conflict in the Middle East could lead to increased energy and shipping costs, adversely affecting activity in that region.

OECD’s economic growth projections for Saudi Arabia

In a separate report, the Organization for Economic Cooperation and Development forecasted Saudi Arabia’s economic growth at 1 percent in 2024 and 3.7 percent in 2025. The OECD projected that the global economy will expand by 3.2 percent in both years, a slight increase from 3.1 percent in 2023.

“The global economy is starting to turn the corner, with declining inflation and robust trade growth. At 3.2 percent, we expect global growth to remain resilient both in 2024 and 2025,” stated OECD Secretary-General Mathias Cormann.

The report also predicted that headline inflation in G20 economies will ease to 5.4 percent in 2024 and 3.3 percent in 2025, down from 6.1 percent in 2023. Core inflation in G20 advanced economies is expected to decrease to 2.7 percent in 2024 and 2.1 percent in 2025.

“Declining inflation provides room for an easing of interest rates, though monetary policy should remain prudent until inflation has returned to central bank targets,” Cormann advised. He stressed the need for decisive policy actions to improve spending efficiency and optimize tax revenues.

The OECD indicated that ongoing geopolitical tensions could dampen economic growth by reducing investments and raising import prices. It called for decisive fiscal actions to ensure debt sustainability and create resources for future spending pressures.

“Stronger efforts to contain spending and enhance revenues, set within credible medium-term adjustment paths, are key to ensuring that debt burdens stabilize. Reinvigorating product market reforms that promote open markets with healthy competitive dynamics is essential for fostering stronger, sustained economic growth and alleviating long-term fiscal pressures,” the OECD concluded.