Foreign investment in Saudi more than doubled in 2018

Foreign investment in Saudi Arabia more than doubled in 2018 to SAR13bn ($3.5bn), its economy and planning minister said on Wednesday, despite a global furore following the murder of journalist Jamal Khashoggi in October.

Economy and planning minister Mohammed al-Tuwaijri made no mention of the Khashoggi murder.

He said foreign investment in 2018 rose 110 per cent from the previous year. He was speaking at a news conference a day after Riyadh unveiled plans to increase state spending by 7 per cent next year to bolster growth crimped by low oil prices.

#SaudiBudget2019 | The Largest Budget in the History of #KSA in Numbers ?? pic.twitter.com/ArCZL4DwJa

— Foreign Ministry ?? (@KSAmofaEN) December 18, 2018

Foreigners sold billions of riyals in Saudi stocks in October, one of the biggest selloffs since the market opened to direct foreign buying in mid-2015. But the outflow has since eased.

The government has made attracting greater foreign investment a cornerstone of its Vision 2030 plan to diversify the economy of the world’s top oil exporter away from a reliance on crude revenues.

Five sectors of the economy are prepared for privatisation in the first quarter of 2019, said Tuwaijri.

In April, the government said it aimed to generate SAR35bn to SAR40bn in non-oil revenues from its privatisation program by 2020 and create up to 12,000 jobs. Crown Prince Mohammed bin Salman has also insisted that the stalled plan to sell shares in oil giant Saudi Aramco will go ahead.

Saudi officials include public-private partnerships to build and operate infrastructure as well as asset sales in their definition of privatisation.

UNEMPLOYMENT

Tuwaijri said unemployment is expected to decline starting in 2019 from the current level of 12.9 per cent, which is the highest in the kingdom’s history.

“The number is 12.9… we expect it start to decline starting 2019,” he said.

There are 300,000 to 400,000 new entrants to the job market each year, he said, adding that Saudi nationals’ participation in the labour market is currently 42 per cent.

Saudi Arabia has no intention of changing its policy on expatriate fees, finance minister Mohammed al-Jadaan said at the same conference.

The government charges fees for hiring foreign workers and obtaining visas for their dependents. The levies are due to rise next year as part of a policy to encourage hiring of local citizens. The private sector has lobbied for the fee rises to be delayed.

A budget document showed that the levies are expected to generate revenue of SAR56.4bn in 2019, up from SAR28bn this year.

Fuel prices are reviewed regularly but there is no intention to increase other energy prices in 2019, Jadaan added without elaborating. Under previously announced policy, domestic prices of fuels including gasoline, diesel and kerosene may be raised in 2019.