Saudi Arabia will keep its policy of imposing fees on foreign workers despite complaints from businesses but is open to reconsidering them if there’s an economic need, Economy and Planning Minister Mohammed Al Tuwaijri said.
“We got mixed feedback so far on the expat fees,” Tuwaijri said in an interview with Bloomberg TV in Riyadh. “The position today is business as usual - we are sticking to our position.”
The expatriate levies were introduced last year as part of an effort to generate non-oil revenue and encourage companies to hire Saudi nationals, both key goals of Crown Prince Mohammed bin Salman’s plan to overhaul the largest Arab economy and prepare it for a time after oil.
But the charges proved painful for a private sector already struggling to adapt to rapid policy changes and have yet to make a dent in Saudi unemployment, which is at its highest level in more than a decade.
Tuwaijri said the government was “willing to look at some of these fees” if there’s a specific sector or industry that would benefit from a change and it would help meet broader goals, such as promoting the balance of payments or creating jobs for Saudis.
The world’s largest crude exporter is trying to strike a balance between boosting a lackluster economy and implementing fiscal and economic reforms. After contracting 0.9 percent in 2017, the economy is expected to grow 2.3 percent this year and 2.6 percent next, according to the government, which announced an expansionary budget on Tuesday.
The kingdom is planning a stimulus package next year that is both “financial and regulatory,” Tuwaijri said. It’s also pushing ahead with a privatization drive after plans to sell stakes in state assets got off to a slow start.
The kingdom expects to privatize seven companies in the first quarter of 2019 and 19 in total next year, Tuwaijri said,
“We have identified five sectors where we studied the private sector appetite for those and it’s there,” he said.
Saudi Arabia unveiled a major privatization program in 2016. Tuwaijri has previously said the government expected to raise some $200 billion in the next few years through the sales. The minister did not say which companies would be first in line.
Foreign direct investment is expected to reach 13 billion riyals this year, a 110 percent increase on 2017, when numbers plummeted, according to a presentation at a budget conference.
“Our focus is on the local private sector because we think we have a huge potential to grow regionally, and some of them even globally,” Tuwaijri said. “But we also have determined strategic partnership criteria for some nations, and we’re in active dialogue with those nations to bring in their private sector.”
Saudi Arabia remains attractive, he said, despite the global outcry that followed the murder of journalist Jamal Khashoggi by Saudi agents at the kingdom’s consulate in Istanbul in October.
“If you look the opportunities themselves in Saudi Arabia, they’re still valid, very competitive and appealing,” Tuwaijri said.
Asked about delays in government payments to private sector contractors, which companies have continued to complain about, Tuwaijri said the finance ministry had paid more than 99 percent of its dues on time this year.
“We do realize we are dealing with residuals from the past,” he said, adding that other delays are due to disputes. “We are pushing for everybody to be paid and move on.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.