Saudi Government Subsidies in Default September 11, 2008
Posted by mylastresort in analysis, saudi arabia.Tags: commodities, inflation, Okaz, Ramadan, Rice, SAR, saudi arabia, Subsidy
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The Saudi Arabian government decided to subsidize rice at SAR 1000 per ton. Rice importers in the country have been waiting for payment from the government for the past 5 months. The companies are complaining publicly through the press due to the government authorities lack of importance in this matter. While these companies must pay salaries and bills the government is seeking new excuses. Any future decision of the government to interfere in the private sector has been hampered by its bureaucracy (or corruption, or both) in this situation.
HSBC advises on King Abdullah Economic City September 2, 2008
Posted by mylastresort in analysis, saudi arabia.Tags: HSBC, investment, King Abdullah City, saudi arabia
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HSBC has won a contract to advise on the infrastucture projects at the King Abdullah Economic
City, a project worth $15 bil. The project looks very promising but like most Gulf countries projects:
I will believe it when I see it
Ramadan starts inflation surges… September 1, 2008
Posted by mylastresort in analysis, qatar, saudi arabia.Tags: Food, Gulf, inflation, Islamic, qatar, Ramadan, saudi arabia
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In Saudi Arabia a report stating that personal loans rose 25% ahead of the start of Ramadan (Islamic month of fasting) due to the rise in food prices. Another report in Qatar reveals that the prices of fruits and vegetables have risen 30% to 45% ahead of the start of the holy month. It is clear that businesses are exploiting the religious month and deliberately hiking prices of necessary products. It is also apparent that the prices are being fixed so that competition cannot discount such items. It is clear that no government intervention via subsidies, control, or import fees will take place since some powerful individuals tend to benefit the most from the lower class burdens.
Cheering rain in zel am see August 27, 2008
Posted by mylastresort in analysis.Tags: Arabs, Austria, Dubai, kuwait, Leo Bauernberger, Salzburg, saudi arabia, Tourism, uae, Zel Am See
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A small tucked away Austrian town in Salburg by the name of Zel Am See is home to approximatley 10,000 inhabitants. The small town has apparently emerged as Austrias second hottest spot for Arab tourists behind Vienna. Locals are amused by the behaviour of their Arab guests.
“When it starts raining, they run outside and cheer…”
-Leo Bauernberger, managing director of the local tourism authority
Atleast 1/3 of the 73,000 Arab tourists travelling to Austria per year visit Zel Am See. The visitors are mostly from Kuwait, Saudi Arabia, & United Arab Emirates. During the high season Arabian guests account for atleast 15% of the tourism, to the extent that several restaurants now offer halal food and the tourist information office recently hired 2 Arabic speaking staff.
“There must be some word-of-mouth recommendation in Arab countries that says one has to visit Zell am See at least once in a lifetime”
- Hans Wallner, Zel Am See hospitality Manager
A List of Major Gulf Projects June 5, 2008
Posted by mylastresort in analysis, bahrain, qatar, saudi arabia.Tags: Abu Dhabi, Al-Uqair Tourism Development Project, Aldar - Yas Island Project, construction, Culture Village Project, Dubai, Duqm New Town Project, Forecast, King Abdullah Financial District Project, kuwait, Masdar City Project, Mohammed bin Rashid Gardens Project, oman, Outlook, Projects, Sama Dubai-The Lagoons Project, saudi arabia, Tatweer Badawi Project, uae, United Arab Emirates
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Here is a list of major projects currently underway in the Gulf:
Kuwait
Silk City Project, Value $77 billion
Planned completion: Q4 2030
Current stage: Planning
100% Tax on Luxury Goods June 4, 2008
Posted by mylastresort in analysis.Tags: analysis, bahrain, Doha, Dubai, gcc, Gulf Cooperation Council, kuwait, Markets, oman, qatar, saudi arabia, Tax, taxation, uae, Value added tax, VAT
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The Gulf Cooperation Council (GCC) is planning to introduce up to 100% tax on ‘harmful products’ & luxury goods likely to include cigarettes, luxury cars, private planes, & yachts, among others. A team has been commissioned to list items that could be liable to the new tax from 2012. The GCC team looking into the proposed taxes would next meet in October. The GCC has already set 2012 as the deadline for implementing a new value added tax system.
Each of the Gulf countries suffers from lack of productivity and sophisticated staff, including a very bureaucratic environment in the public sector. The GCC is just that multiplied by 6, therefore I doubt any decision will be made anytime in the next 20 years regarding taxation (if anything useful).
Some notes to consider:
The rich - are the powerful - therefore taxing their latest toys will not make them very happy buying in their own countries and will therefore register items across borders. A good example would be to buy the yacht and register it in Yemen, for instance, and then take it to Dubai marina. This is a simple way to avoid taxes. This will move the companies to areas where the wealthy will pay a more reasonable rate than the 100%.
There will be an increase of ‘wastas’ (quanxi) at the ports and customs to avoid paying the tax. We are already bombarded by having to payoff officials to get the latest DVD, book or game in to the country just imagine bribing one of them to bring in a Ferrari, this will take things to a new extreme.
The Governments DO NOT need any extra income. The future plans and growth in Dubai, Bahrain, and Qatar all involve a marketing plan that clearly states ‘a tax free’ incentive for company’s & employees to relocate. Although everyone knows the slow pace of government policies any threats such as this will deter future companys/individuals from relocating.
‘Research and Markets’ reports on Saudi Arabian Homeland Security May 29, 2008
Posted by mylastresort in analysis.Tags: Homeland Security, research, Research and Markets, saudi arabia, Spending, Terrorism, United States
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I found this report to be very interesting… Reported by Research and Markets Ltd.
Research and Markets has announced the addition of Saudi Arabia Homeland Security Market Outlook – 2009-2018 to their offering. With a cumulative 2007-2018 Homeland Security (HLS) market of $115 billion, Saudi Arabia is the 2nd largest HLS market in the world after the U.S.
Saudi Arabia’s Homeland Security market is unlike any other market in the world. It is the only country whose very survival is threatened by terrorism resulting from both internal (homegrown infiltration of Al Qaeda and the Shia minority) and external forces (e.g. the threatof a nuclear Iran, an annual Hajj pilgrimage of millions, the security of 24% of the world’s oil reserves threats). With nearly unlimited monetary resources resulting from the soaring price of oil, the Kingdom created a complex maze of 24 redundant HLS-HLD organizations numbering more than 250,000 people. Actively spending its resources on state-of-the-art technologies and services, Saudi Arabia is creating globally unparalleled business opportunities.
This landmark report represents several researcher years, dozens of interviews, and in-depth analysis of thousands of documents; the resulting produce is a comprehensive roadmap of this huge and intriguing Homeland Security market.
Some highlights include
- Detailed deciphering of the complex multi-tier, inter-dependent, Saudi organizations, employing over 250,000 people, and devoted exclusively to HLS – making major procurement decisions
- 18 HLS sub-segment market forecasts and analysis (e.g. Aviation Security, Counter-terror Intel, Maritime, Saudi Oil & Gas security, Ministry of Interior, Private Sector security, IT)
- Dozens of Saudi Arabian market business opportunities segmented by HLS industry (e.g. Intel, Cyber-security, Perimeter Protection)
For more information visit http://www.researchandmarkets.com/reports/c93096
Fitch rating on Saudi banking sector May 20, 2008
Posted by mylastresort in analysis, saudi arabia.Tags: banking, Fitch, investment, Outlook, Saudi, saudi arabia, Sector
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Fitch ratings has just released a special report detailing the Saudi banking sector outlook in 2008. It states that the Saudi banking boom briefly stalled in 2007 due to lower sector profitability. Future outlook for the sector remains promising due to expanding private sector credit volumes and sustainable revenue growth.
Some interesting facts:
- Economic risk remains moderate
- Rising inflation could have negative implications on consumer spending, private sector investment, asset growth, loan repayments
- Sector challenges include the Saudi Arabian Monetary Agency’s restrictions on consumer loans and the increasing competition from foreign entrants
- Saudi banks are delaying new debt issues, this has not caused any funding pressure
- Higher cost of funding and pressure on margins are major concerns
Global food crisis April 14, 2008
Posted by mylastresort in analysis, saudi arabia.Tags: commodities, Crops, Economic, Egypt, Food, Political, Prices, saudi arabia, Shortage
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A recent statement by the world’s economic ministers declared that shortages and skyrocketing prices for food posed a potentially greater threat to economic and political stability than the turmoil in capital markets. The sharp sudden rise in prices in the middle east have sparked waves of protests by angry civilians frustrated with the governments efforts to uphold economic policies beneficial to the nation. Some crops in Egypt and Saudi Arabia have increased 15-20% on a monthly basis since the start of the year doubling prices from some basic necessities. Governments have increased subsidies on skyrocketing prices with no apparent direct intervention on the farming communities.
