Entrepreneurship in the Kingdom of Saudi Arabia

Home » News » Special agency sought to clean up Saudi Arabia’s economy

Special agency sought to clean up Saudi Arabia’s economy


SAMA Gov. Muhammad Al-Jasser

By ARAB NEWS

Published: Jul 26, 2011 20:48 Updated: Jul 27, 2011 00:22

RIYADH: Saudi economists have called for the establishment of a special authority to combat the so-called SR326 billion shadow economy that accounts for about a fifth of the Kingdom’s GDP according to World Bank estimates.

The economists called for increased monitoring mechanisms so that each commercial establishment could be checked and followed up by the authority to root out any violations, according to Al-Riyadh newspaper.

They said foreigners should not be allowed to renew their iqamas or given exit/re-entry visas unless they produce bank statements showing their money transfers outside.

The economists noted that concerned authorities were making efforts to prevent the remittances through illegal channels. They were referring to the new regulations issued by the Finance Ministry to organize the selling and buying of hard currency, travelers’ checks, bank checks and remittances within the Kingdom and abroad.

Economic consultant Fahd bin Juma said during 2009-2010, annual remittances from foreigners increased to SR100 billion. He warned that the size of foreign manpower was posing a threat to the local labor market and impeding the employment of Saudi nationals.

Juma quoted a report by the Saudi Arabian Monetary Authority (SAMA), which said the transfers made by foreigners during the last quarter of 2010 amounted to SR27.6 billion, an increase of 18 percent over the three first quarters.

“This raises questions over whether the transfers were actually just salaries or end-of-service benefits, otherwise it would not have increased to this level,” he said.

Juma said the transfers cited in SAMA’s report included those made through legal channels. “There were other channels being used by the foreigners to transfer their funds outside,” he said.

He noted that the establishment of an authority to combat the shadow economy would provide the exact figures of foreign remittances.

Juma called for the opening of bank accounts for each foreigner clearly stipulating his monthly salary so that they would not use illegal channels for making remittances back home.

He also said supervisory bodies should control all ports in the Kingdom to make sure that foreigners were not carrying with them more than SR10,000. “Jewels and valuables carried by foreigners traveling abroad should also be checked,” he added.

Tawfiq Al-Suwailam, another Saudi economist, said there were more than 800,000 commercial licenses in Saudi Arabia, but they were being used to conduct all sorts of illegal commercial and economic activities.

“Foreigners account for the majority of these activities through undercover enterprises,” he said.

Al-Suwailam called for qualifying local cadres to replace foreigners and said the Saudization process should not be a hasty one otherwise it might fail. “Saudis should gradually replace foreigners. This should not be done all of a sudden otherwise it might have negative results,” he warned.

Al-Suwailam also called for more support to small and medium enterprises (SMEs) to boost the national economy. He said SMEs represented about 78 percent of all businesses in Japan. “The monopoly of foreigners in some businesses should be dismantled for the welfare of citizens,” he said.

http://arabnews.com/saudiarabia/article478456.ece


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: