By Anees Dayoub
KSA's Chambers of Commerce has complained over economic reforms leading to higher costs
Saudi Arabia’s private sector has called on the kingdom’s government to introduce incentives to support companies that are facing rising costs amid new reforms.
The rising operational costs of businesses in the GCC countries during the past few years has weakened the attractive edge of the business environment the region enjoyed for years.
In Saudi Arabia, managers of the ten biggest chambers of commerce and industry in the kingdom have, through a letter signed and forwarded to the Saudi Crown Prince, asked the government to consider introducing new incentives to boost industry.
The Chambers of Commerce have called upon the government to support national exports by reducing fees on production inputs and manpower, nationalisation of maintenance and operation contracts, especially for military and security equipment, and training for Saudis in line with the Saudisation policy.
The letter said the latest economic reforms have led to the rise of operational cost of companies and factories. Businessmen also lamented that the new economic programme that Saudi Arabia recently implemented has led to a decline in purchasing power.
The industrial sector is equally suffering due to the rise in prices of power and fuel, the letter said.
In a visit to the Saudi Crown Prince, the businessmen also stressed on the challenges and obstacles faced by the private sector due to the latest government policies and procedures that have led to a slowdown in the performance of companies listed in the stock market.
According to the document submitted by the Saudi chambers of commerce and industry, the private sector recorded losses in all industries, except for those in petrochemicals, insurance, power and telecom sectors. Over a third (37 percent) of private sector companies incurred losses since the reforms were introduced, with 46 percent of firms seeing their profits declining during the same period, against 17 percent who reported increased profits.