Saudi weekend: The cost of doing business in Saudi Arabia for multinational companies could be cut as much as half by the kingdom's weekend change, estimates an economist in the country.
Cost of doing business in Saudi Arabia expected to be reduced
The cost of doing business in Saudi Arabia for multinational companies could be cut as much as half by the kingdom's weekend change, estimates an economist in the country.
Companies with operations outside the kingdom will save money by not having to employ staff on a Saturday, the former start of the working week in the kingdom but part of the weekend elsewhere in the world.
"With the new working days, staff will be working regular hours rather than overtime on Thursdays to be aligned with international markets.
"This is especially the case for regional and international companies operating in the kingdom," said Fahad Alturki, the chief economist and head of research at Jadwa Investment, the Saudi Arabia-based investment bank.
"Some companies may still have to employ staff on Saturdays, but not for the purpose of aligning the Saudi working week with the rest of the world." Saudi Arabia will now follow much of the rest of the Middle East region, by starting its working week on Sunday and finishing on Thursday evening. When announcing the weekend switch, King Abdullah emphasised the "lost economic opportunities" of having a weekend that was out of sync. Officials hope the reform will give them a lift in the various global surveys, assessing the competitiveness of the kingdom.
Currently, it takes an average of 13 days to export from Saudi Arabia internationally, compared with an average of 10 days for Organisation for Economic Co-operation and Development countries, according to the World Bank's 2013 Doing Business report. The number of days required to import is also higher at 17, compared with 10 amongOECD members. The kingdom ranked 22nd in the overall global index.
The weekend switch should also enable other savings for companies. "For many companies, the change would facilitate communication and coordination between Saudi Arabia and the rest of the world," said John Sfakianakis, the chief investment strategist of the Riyadh-based investment firm, Masic.
"It would also provide the advantage of having additional working days that match the working days of the rest of the region and the world." Overall, the move showed the kingdom was "committed to change", he said. There have been a trickles of reforms to make life easier for businesses in recent years. The kingdom announced in late 2011 that it would allow new airlines to operate in the country, after making similar announcements in previous years to open up the telecoms and finance sectors.