x Abu Dhabi, UAEMonday 24 July 2017

Saudi Arabia takes another step to boost non-oil wealth

Non-oil exports, such as building materials, food and technology, in 2012 totalled 191 billion Saudi riyals, or 13 to 14 per cent of the kingdom’s output.

Saudi Arabia’s export agency hopes to streamline the process for small and medium enterprises to access global markets by the end of the year.

The Saudi Export Development Authority (Seda), an agency launched eight months ago to boost non-oil exports, is crafting an “eco-system” that will shrink the time SMEs currently spend getting export permissions from multiple government bodies ranging from customs to the ministry of trade. Officials likened it to creating an online portal for passport applications.

Non-oil exports, such as building materials, food and technology, in 2012 totalled 191 billion Saudi riyals (Dh187.01bn), or 13 to 14 per cent of the kingdom’s output, according to Seda.

“Our target is to increase that as much as possible,” said Ahmed Alhakbani, the secretary general of Seda, who was in Dubai for the Gulfood conference yesterday. “It’s very important to have an efficient system.”

Saudi Arabia’s drive to diversify its exports comes as its petrochemicals industry faces the prospect of rising competition from North America, thanks to shale gas and oil.

At ArabPlast, a plastics exhibition scheduled for next January in Dubai, the number of Saudi companies would rise to more than 100 from 12 the year before, said Satish Khanna, the general manager of Al Fajer Information and Services, the organiser of the event.

Many of the new arrivals, which Seda helps by hiring them the exhibition space and shipping materials, are small-time traders that ply the raw materials produced by the likes of Sabic, and Saudi Aramco – which is due to produce an extra 3 million tonnes of petrochemicals once it completes a US$19bn plant at Jubail in 2016.

Saudi petrochemical exports are forecast to reach 100 million tonnes by 2016, according to Al Fajer.

The Bali Package, a free trade agreement that aims to cut the cost of trade by 15 per cent, will help to boost GCC petrochemical exports by a couple billion dollars once it is signed in July, according to the Gulf Petrochemicals and Chemicals Associations, an industry group based in Dubai.

The trade agreement, adopted at the ninth ministerial conference of the World Trade Organization in Bali, Indonesia, in December, includes provisions for lowering import tariffs and agricultural subsidies, with the intention of making it easier for developing countries to trade with the developed world in global markets. Another important target is reforming customs bureaucracies and formalities to facilitate trade.

“The Bali agreement looks at removing obstacles,” said Mr Alhakbani. “We’re super excited about the potential of increasing Saudi exports.”

ayee@thenational.ae

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