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Saudi businessmen complain about rising costs due to economic reform

March 6, 2017 at 9:19 am

Saudi Arabia’s private sector has said that economic reforms have led to increasing operating costs for companies and factories and reduced people’s purchasing power.

According to a document signed by the heads of the ten largest chambers of commerce and industry in the country on Saturday, the businessmen said industries are losing their competitive advantage due to the high cost of energy and fuel and rising foreign labour costs.

The businessmen stressed during a visit to Saudi Deputy Crown Prince Mohammed Bin Salman last week that the private sector faces a range of challenges and obstacles, due to some of the government policies that have led to a decline in the performance of Stock Market companies last year.

According to the document a majority of sectors – 37 per cent of companies – incurred losses last year except petrochemical, insurance, energy and telecommunications, while 46 per cent of the companies suffered from decreased profile. The profits of only 17 per cent of the companies grew last year.

The companies called to support national exports by relaxing fees on production inputs and labour and to nationalise maintenance and operation contracts especially in the military and security sectors. The businessmen have also called to train Saudi youth to prepare them for the job market.

Saudi Arabia, the largest oil exporter in the world, has suffered from a sharp decline in financial revenues resulting from the decline in crude oil prices.

Last year, the Saudi government announced a series of measures to reduce dependence on oil revenues including increasing energy prices gradually to reach the global average by 2020 as well as increasing fees on foreign labour starting from July.