Saudi economy to grow by 3.9% in 2024 as inflation stabilizes: OECD

scion industrial engineering

Affirming Saudi Arabia’s strong growth prospects in the near term, the Organization for Economic Co-operation and Development revealed that the Kingdom’s gross domestic product is expected to rise by 3.9 percent in 2024.

The OECD revealed that Saudi Arabia’s inflation rate is expected to average 2.1 in 2024, a sign that the Kingdom is successfully combating price pressures.

Earlier this month, the International Monetary Fund echoed similar views and noted that Saudi Arabia has succeeded in maintaining its average consumer price index despite inflationary pressures faced by several countries across the globe.

The report noted that Saudi Arabia will be among the few countries with economic growth above 3 percent in 2024.

The OECD projected that the US and the UK could grow by 0.8 percent and 1.3 percent in 2024.

On the other hand, the Australian economy could witness an economic growth of 1.3 percent and Brazil 1.7 percent.

The OECD projected Japan’s economic growth at 1.8 percent in 2023 and 1 percent in 2024.

China and India are some of the countries that are expected to surpass Saudi economic growth, expanding by 4.6 percent and 6 percent, respectively.

The report added that the Saudi economy will grow by 1.9 percent in 2023 while the inflation rate will remain stable at 2.5 percent.

In its report, the OECD revealed that the world economy is expected to grow by 3 percent and 2.7 percent in 2023 and 2024, respectively, while the inflation rate is expected to moderate.

“Inflation is projected to moderate gradually over 2023 and 2024 but to remain above central bank objectives in most economies,” the OECD said in its report.

“Headline inflation is declining, but core inflation remains persistent in many economies, held up by cost pressures and high margins in some sectors,” the report added.

The European Central Bank had raised a key interest rate to a record high last week but hinted this might be its last hike. On the other hand, the US Federal Reserve is expected to pause its tightening campaign on Wednesday.

Source:https://arab.news/c9f38

Saudi Arabia revises budget estimates for 2023 on ‘expansionary spending’ policies

Lowering its growth forecast for 2023, Saudi Arabia expects to post a budget deficit this year rather than an earlier projected surplus, mainly due to “expansionary” spending policies and “conservative revenue estimates.”

Saudi Arabia will continue its fiscal and structural reforms as the Kingdom is steadily embarking on its economic diversification journey in line with the goals outlined in Vision 2030, said Finance Minister Mohammed Al-Jadaan.

He said that continuous implementation of the ambitious plan is necessary for the Kingdom to catalyze its economic growth and maintain fiscal sustainability.

A preliminary budget statement issued on Saturday showed that the largest Arab economy expects real gross domestic product to grow by 0.03 percent this year compared with a previous forecast for growth of 3.1 percent.

The document also projected the government would post a budget deficit of 1.9 percent of the gross domestic project in 2024, 1.6 percent of GDP in 2025, and 2.3 percent of GDP in 2026. It said “limited budget deficits” would continue in the medium term.

Meanwhile, total expenditure is seen rising to SR1.262 billion in 2023, from an earlier estimate of SR1.114 billion, before slowing down marginally to SR1.251 billion in 2024.

However, the Kingdom’s debt-to-GDP ratio is expected to remain below 27 percent due to a gradual decrease in the deficit over the coming years, Mazen Al-Sudairi, head of research at Al Rajhi Capital told Arab News.

“The (budget) deficit is expected to decrease gradually over the coming years, keeping the debt-to-GDP ratio below 27 percent, well below the government’s target of 30 percent,” the analyst said.

Borrowing plan

Al-Sudairi said most of the deficit would be funded through borrowing, demonstrating prudent fiscal management.

According to the ministry, the government is now expecting an SR82 billion ($21.8 billion) deficit for 2023 instead of an SR16 billion surplus projected earlier.

For 2024, the government expects total revenues at SR1.172 trillion and total spending of SR1.251 trillion.

Commenting on the budget statement, Al-Jadaan said the government program will help Saudi Arabia develop promising economic sectors, enhance investment attractions, stimulate industrial growth, raise the percentage of local content, and promote non-oil exports.

The ministry currently expects budget deficits to last through 2026, the statement said.

Saudi Arabia is working to prepare an annual borrowing plan in accordance with a medium-term debt strategy and “access global debt markets to enhance the Kingdom’s position in international markets,” the Finance Ministry said.

Non-oil GDP

The budget statement touted growth in non-oil sectors, whose revenue jumped by 11 percent in the first half of the year.

Commenting on the non-oil sector, Al-Sudairi stressed the importance of focusing on the non-oil GDP, which is expected to grow by 5.9 percent in 2023 and over 4 percent in the following year.

“This growth above 4 percent is very healthy and will help diversify the non-oil economy, creating new sectors and segments inside the economy.”

The expert also highlighted the significance of cities and service-based industries in the Saudi economy.

He stated: “The Vision 2030 concentrates on cities. With the global economy becoming more service-based, cities become much more important as service industries thrive.”

Source:https://arab.news/bd6vz

Iraqi central bank chief meets with Jordanian PM, counterpart

https://ssrdind.com/

Ali Mohsen Al-Alaq, governor of the Central Bank of Iraq, met with Jordan’s Prime Minister Bishr Khasawneh on Sunday, Jordan News Agency reported.

Khasawneh stressed his commitment to expanding collaboration, notably in the economic and banking sectors.

Speaking about his visit to Baghdad in July, Khasawneh said the two countries had agreed to strengthen cooperation in several fields, whether through bilateral efforts or as part of the tripartite cooperation mechanism between Jordan, Iraq, and Egypt.

Earlier, Al-Alaq also met with his Jordanian counterpart Adel Sharkas to discuss ways to boost banking and financial ties.

The two addressed banking issues of mutual interest, developments in central bank work, and trends in global monetary policies. They also examined inflationary pressures that have led many central banks around the world to maintain tight monetary policies.

Sharkas and Al-Alaq signed an agreement that provides for cooperation and knowledge exchange in electronic payment systems and services, financial technology, cybersecurity, staff training, and combating money laundering and terrorist financing.

Sharkas emphasized the significance of the agreement at a time when economic relations between the two countries are advancing steadily.

He noted that Jordanian banks are looking to create a foothold in the Iraqi market, pointing to four Jordanian branches that have secured licenses to operate in Iraq, with two branches already active.

Al-Alaq praised the historical Jordanian-Iraqi ties, emphasizing the CBI’s desire to benefit from Jordanian experience in digitalization, financial innovations, and payment systems.

Source:https://www.arabnews.com/node/2383731

Egypt celebrates success of house, road-building programs

scion Industrial engineering

Egypt has spent millions of dollars on new urban communities over the past nine years, its housing minister said on Sunday.

Speaking at the “Story of a Homeland” conference in the New Administrative Capital, Housing and Urban Communities Minister Assem El-Gazzar said: “In the past nine years we have built 1.5 million housing units.

“We have worked to eliminate 357 unsafe areas by building more than 300,000 housing units at a construction cost exceeding 300 billion (Egyptian) pounds.”

El-Gazzar said 24 new cities that could accommodate 32 million people had been developed in the period.

The country’s Decent Life Initiative had been a major contributor to the increased urbanization, which in turn had had a significant impact on economic development, he added.

The three-day conference was attended by President Abdel Fattah El-Sisi and representatives from across Egyptian society.

It comprised several discussion sessions, at which the participants highlighted the government’s achievements and addressed the challenges that lie ahead.

The conference also provided a platform for political leaders to respond to citizens’ queries about political, social and economic issues.

Transport Minister Kamel Al-Wazir said that under the Decent Life Initiative 7,000 km of new roads had been built over the past nine years.

The national road network now spanned 30,000 km and served agricultural and industrial areas across the country, he said.

He added that on completion of the development plan, Egypt’s ports would have capacity for 400 million tons of goods and 40 million containers, and be able to handle 30,000 giant ships a year.

El-Sisi thanked the ministers for their efforts and said the success of the development program was testimony to their efforts and the will of the state to serve the people.

Source:https://www.arabnews.com/node/2383741

No tourist exodus from Lebanon despite Gulf nations’ warnings about violence, industry experts say

Scion Industrial Engineering

Lebanon’s interior minister, Bassam Mawlawi, said on Monday that the recent deadly violence at a Palestinian refugee camp had abated, as officials attempted to ease concerns after Gulf states warned their citizens against traveling to the country.

“The situation in Ain Al-Helweh camp has now calmed down,” he said, referring to the restive camp in southern Lebanon, the largest of its kind in the country, where armed clashes broke out between members of Fatah and extremist organizations on July 29.

“We maintain the security of Arab nationals and communicate with Arab embassies to confirm that.”

The minister’s reassurance came as Fadi Al-Hassan, the director general of Lebanon’s Civil Aviation Authority denied suggestions spreading on social media that large numbers of people are fleeing the country on flights from Rafic Hariri International Airport in Beirut. Arrivals and departures are operating as usual and passenger levels are normal for the time of year, he said.

“Things are still the same,” Al-Hassan added, noting that the airport is extremely busy with people arriving in the country for summer vacations.

Officials from organizations related to the tourism, travel and hotel sectors similarly reported no sign of a tourist exodus from Lebanon.

The reassurances came after Arab and other countries advised their nationals in Lebanon to take precautions by avoiding the areas around Ain Al-Hilweh refugee camp, or to leave the country.

An observer at the airport in Beirut said the number of arrivals last month increased by 12 percent to 924,000, compared with July 2022. The observer said that most of those who arrived were Lebanese expatriates who plan to spend between one and two months in the country and will begin to leave around mid-August for work or to enroll their children in schools overseas.

The airport has recorded the arrival of about 16,000 passengers and the departure of 15,000 since the start of August.

Sources said a number of music festivals have taken place in Lebanon this year, which has helped to boost reservations at hotels and guest houses, with knock-on effects for restaurants and nightclubs.

Official statistics for air travel, travel agencies and hotel bookings suggest that about a million tourists have arrived in Lebanon so far during the summer season.

Jean Abboud, head of the Association of Travel and Tourist Agents in the country, said the tourism sector does not appear to have experienced any repercussions following the warnings about the recent violence from nations in the Gulf and Europe. There have been no reports of canceled reservations, he added, and expatriates continue to arrive.

The number of arrivals at Rafic Hariri International Airport currently averages between 20,000 and 21,000 a day, Abboud said, and the number of daily flights exceeds 100. This pace is expected to continue until the end of August, he added.

The arrivals include growing numbers visitors from countries that are not traditionally big sources of tourism for Lebanon, he said, which shows the success of efforts by tourism businesses and agencies in the private sector to market Lebanon internationally and put it back on the global tourism map, particularly in Europe, which is helping to support the beleaguered national economy.

Meanwhile, Interior Minister Mawlawi said that Lebanese authorities will not tolerate any criminal activities and security operations are continuing to identify and detain those responsible for the violence in Ain Al-Hilweh camp. There was no indication that the situation had escalated or spread to other camps, he added.

“Lebanon is not a mailbox and we will not allow it to be a theater for sending messages,” he said.

The minister was speaking after presiding over a meeting of the country’s Central Security Council that included representatives of the security, military and judicial services. It was called after the warnings from all GCC embassies to their nationals.

“We appreciate the measures taken by the army to prevent the situation in Ain Al-Hilweh from breaking loose,” Mawlawi added.

He said the atmosphere had been calmed and “what is required is the absence of any armed men on Lebanese soil, and we do not implement anyone’s agendas.”

He added: “There are armed groups in the camps. The matter is in the hands of the army, which acted with precision and wisdom, and the army leadership is prudent and knows how to deal with the circumstances.”

Source:https://arab.news/jtxm3

In Lebanon, manufacturers mull stark choices to stay in business

Scion Industrial Engineering

On a recent afternoon at the Oriental Paper Products factory just outside of Beirut, more than a dozen workers were busy on the factory floor, grateful for their jobs producing notebooks, papers, and office supplies.

But one level up, in CEO Ziad Bekdache’s office, the mood was far grimmer. Not for the first time, the industrialist found himself adjusting his employees’ salaries to compensate for yet another fall in the Lebanese pound.

The numbers shuffling pushed him more step closer to a reckoning he’s managed to put off since the country first plunged into economic crisis more than two years ago.

“We have a problem,” Bekdache told Al Jazeera. “We industrialists are rooted here in Lebanon, but when you have a noose around your neck, you can either try to struggle or decide to leave.”

Oriental Paper Products opened its factory in 1955. During the decades, it has exported products to countries across Europe, the Middle East and North Africa. But maintaining its foothold in Lebanon has become increasingly untenable.

The Lebanese pound has lost more than 90 percent of its value since October 2019. The country’s eye-watering inflation is currently among the highest in the world, even topping Venezuela and Zimbabwe’s in the latter half of this year . Three-quarters of the population live in poverty, and hundreds of thousands of families are in desperate need of aid just to keep food on the table.

Bekdache, who is also the vice president of the Association of Lebanese Industrialists, says Lebanon’s current crisis did not happen overnight but was the product of decades of poor economic planning that saw successive governments prioritise tourism and banking over manufacturers.

“This is what bankrupted the country, the government wasted public resources and neglected productive sectors,” he said. “After they bankrupted the country, they’re all of a sudden talking about promoting the productive sectors. Well, they’re 25 years late.”

Last month, Bakdache and his fellow manufacturers were dealt yet another devastating blow when a diplomatic dispute led Saudi Arabia to declare an all-out ban on products imported from Lebanon.

“Many industrialists are now looking for a plan B,” said Bekdache “They have a few options, like closing here and moving elsewhere, opening a second factory abroad to be their hub for exports, or downsizing to cut costs.”

Bekdache is especially loath to let staff go. “I have about 70 workers and employees here, most who have worked for over 20 years,” he said. “We work closely, we know about our ups and downs – can I just walk up to them and say, ‘Thank you, goodbye, and good luck?’”

Shrinking lines of credit
Prices of raw materials have spiked around the world this year thanks to supply chain snarls and shortages stemming from pandemic disruptions. But in Lebanon, the sharp depreciation of the pound and a growing scarcity of foreign exchange has only exacerbated those price pressures.

Bekdache and some of his fellow manufacturers have managed to weather that storm thanks to a 2020 financing scheme spearheaded by Lebanese expatriates called the Cedar Oxygen Fund – a private initiative that has also garnered support from Lebanon’s central bank.

But Bekdache said a longer-term solution is needed. “The Central Bank put $550m into the initiative and we’re thankful, but this is not an alternative for the future.”

With the country’s financial sector over a barrel, lines of credit firms normally depend on to fund day-to-day operations and invest in new equipment have also dried up.

“We’re now working in a cash-based economy that has both its pros and cons. We’re able to secure our primary materials, but we don’t have that extra money to invest in machinery,” Bekdache explained as he inspected the factory. “And you know, in industry, if you don’t upgrade your machinery, you might as well close for good.”

Compounding the problem – revenue from domestic customers has evaporated during the crisis.

“When local consumption shrunk, we turned to exports to generate revenue,” Bekdache said.

But most of his new business abroad centred on Saudi Arabia and Gulf countries, with the kingdom accounting for roughly half of Oriental Paper Products’ exports.

Bekdache said several shipments that were en route to Saudi Arabia are now stuck in transit and he fears his clients in the kingdom will simply turn to another supplier if trade ties are not restored soon.

He and other industrialists have estimated that exports to Saudi Arabia were to double in 2022 before the ban.

‘Dark tunnel’
There is no sign of relief on the horizon for Lebanon’s manufacturers. The diplomatic argument with Gulf states led by Saudi Arabia remains unresolved. Meanwhile, the Lebanese government under billionaire Prime Minister Najib Mikati has not met in more than two months, thanks to partisan political squabbling about the lead investigator of the Beirut Port blast.

Lebanon has yet to mount a credible financial reform blueprint that it needs to secure a bailout from the International Monetary Fund and put the economy on the road to recovery.

The recently appointed government hopes to reach a preliminary agreement with the fund by the new year. But Central Bank Governor Riad Salameh said on Tuesday that discussions about financial losses and other numbers are still ongoing and that Lebanon has not presented an economic recovery plan to the international organisation yet.

With more than two years of policy inaction, Bekdache said that Lebanon is stuck in a “dark tunnel”.

“We don’t know where this tunnel ends, and there is no light,” he said.

And in that void, he said, is a failed economy that is rife with smuggling, tax evasion, and endemic corruption, and in which manufacturers like him are now targeted by opportunists trying to profit from a broken system.

Bekdache recalled the tale of a colleague who received a call from someone at the port of Beirut offering to let him bypass $20,000 in customs and fees on the goods he had imported if he were willing to pay the person $5,000 under the table – a slippery deal Bekdache said his fellow manufacturer rejected.

“The man at the port then said, ‘You’re jackasses, and will always be jackasses,’ and simply hung up,” Bekdache said.

The episode, he said, demonstrated that persistence can only keep Lebanon’s industrialists viable for so long.

Source:https://www.aljazeera.com/economy/2021/12/23/in-lebanon-manufacturers-mull-stark-choices-to-stay-in-business

Lebanon’s industry carries falling national economy on its shoulders

Scion Industrial Engineering

The industrial sector in Lebanon, despite the falling national economy, continues to solider on in order to revive the market and create new business opportunities especially with the increasing demands for Lebanese products.

The sector was one of the few offering hard foreign currency in Lebanon, which is still suffering from the decrease in the value of the national currency in times when the US Dollar was in high demand.

Speaking to KUNA on the issue, Lebanon’s Industry Minister George Boujikian stressed that the steadfastness of the industrial sector was one of the main factors in helping the national economy to “stay afloat”.

The sector is witnessing increasing investments, issuing of permits, and market expansion, which led to the exporting of products to some 110 countries worldwide, added the minister.

The Lebanese industry includes 21 sectors with the manufacturing of food products and furniture leading the way, he revealed.

Boujikian stressed the importance of keeping Lebanese products up to standards to succeed both locally and internationally.

On the Ministry’s plans, the minister indicated that there was a focus on developing three sectors namely the use of Artificial Intelligence, recycling, and cinema production.

Similarly, Vice President of the Association of Lebanese Industrialists Ziad Bekdache affirmed that the era of the Lebanese industrial sector had arrived; revealing that numbers currently exceeded those in 2019 prior to the Lebanese economic crisis.

Locally produced products now were rivaling those products abroad, he claimed, pointing out that factories had increased by 20 to 25 percent with clothing and an assortment of other products exported.

Bekdache said that the prices of locally made products and export ones varied between 30 to 60 percent, noting that due to the high quality of Lebanese products, local consumption had jumped by 60 percent.

The Lebanese Industry exported $4 billion worth of products and produced around $10 million worth of commodities for the local market.

Providing further input, Dr. Marwan Barakat, assistant general manager at Bank Audi, said that the decrease in value for the national currency contributed to the lowering of manufacturing costs especially for industrial and agricultural exports.

Increasing the customs dollar at a rate of Lebanese Pound 15,000 per US dollar had protected the Lebanese industry and encouraged competitiveness against foreign products, he said. — KUNA

Source:https://saudigazette.com.sa/article/629422/World/Mena/Officials-Lebanons-industry-carries-falling-national-economy-on-its-shoulders

Saudi National Housing Co. joins Cityscape Global as founding partner

Saudi Arabia’s National Housing Co. has partnered with the Cityscape Global real estate exhibition in a bid to boost property activity in the Kingdom.

The event, scheduled from Sept. 10 to 13 at the Riyadh Exhibition and Convention Center in Mulham, will be held under the patronage of the Ministry of Municipal and Rural Affairs and Housing, the Saudi Press Agency reported.

This partnership highlights the National Housing Co.’s commitment to the growth and development of the real estate sector in Saudi Arabia.

The company will occupy the largest pavilion in the exhibition, covering an area of 2,000 sq. meters, showcasing key projects that have contributed to increasing the real estate supply in the Kingdom. These include the Khuzam suburb and the Al-Fursan suburb.

The pavilion will also provide access to investment opportunities and the latest regulatory technical solutions through advanced technical systems.

Real estate development partners of the National Housing Co. will also participate in the exhibition, the SPA report added.

The event will bring together exhibitors from the real estate industry, and is set to attract those seeking investment opportunities in the sector.

It will feature projects related to Saudi Vision 2030 and host panel discussions on urban transformations, real estate opportunities, and innovations in architecture, design, and city planning.

Additionally, the exhibition will include major developments shaping the Kingdom’s real estate future, attracting thousands of potential real estate buyers, sector experts, and over 2,000 investors.

There will also be over 350 exhibitors and more than 250 international and local speakers who will share their views and experiences within the sector.

Saudi Arabia’s housing demand is expected to increase by more than 50 percent by 2030, reaching 153,000 houses, up from 99,600 houses in 2021.

Source:https://www.arabnews.com/node/2367196

Share of digital payments in Saudi Arabia hits 62%, says SAMA official

https://ssrdind.com/

Egyptian presidential spokesman Ahmad Fahmi has said that Italian energy major Eni is planning to invest $7.7 billion in the country.

The announcement was made after Egyptian President Abdel Fattah El-Sisi met with Eni’s CEO Claudio Descalzi, where he lauded the firm’s activities in his country.

The meeting was also attended by Egypt’s Minister of Petroleum and Mineral Resources Tarek El-Molla and senior Eni officials.

In August, El-Sisi revealed that Egypt will receive a $3.5 billion investment from UK multinational oil and gas company BP over the next three years.

During the meeting with BP CEO Bernard Looney, the president highlighted Egypt’s desire to strengthen cooperation with the company, including in emissions reduction, energy transition and green hydrogen production.

In August, a report from Knight Frank had suggested that sovereign wealth funds in the Middle East region could inject as much as $120 billion into Egypt over the next few years.

In its report, Knight Frank noted that major global powers including Saudi Arabia, the US, the UK, the UAE, South Korea, and China have renewed their investment interests in the African continent, especially after the recovery from the pandemic.

Acquisition

Affirming Egypt’s potential as a prospective investment destination, the UAE’s Global Investment Holding Co. has agreed to buy a 30 percent stake in tobacco manufacturer Eastern Co. for $625 million.

According to a statement from Egypt’s Cabinet published on Facebook, Global Investment Holding will also provide Eastern Co. with $150 million for the purchase of raw materials for manufacturing.

It is not clear whether this $150 million was an additional amount or was included in the $625 million purchase price.

The Cabinet statement added that this deal is a part of the government’s efforts to increase private investments in various sectors.

The Egyptian government had previously promised the International Monetary Fund that it would roll back the state’s involvement in the economy and allow private companies a much greater role as part of a $3 billion, 46-month financial support package, signed in December.

Wheat deal

Egypt’s state grains buyer bought about a half-a-million tons of Russian wheat in a private deal, four traders told Reuters, succeeding in negotiating lower prices than those offered in the more traditional tenders.

One of the world’s biggest importers of wheat, Egypt last year started shifting toward direct purchases instead of tenders after the war in Ukraine disrupted its buying.

The General Authority for Supply Commodities bought about 480,000 tons of Russian wheat from trading firm Solaris on Friday, at a price of about $270 a ton on a cost and freight basis, the traders said.

GASC was not immediately available for comment.

Traders have told Reuters the price could possibly be below an unofficial floor set by Russia’s government to control domestic wheat prices.

Other Russian wheat suppliers submitted offers on Friday at a free-on-board price of $265 per ton, believing it to be the set price floor, and a C&F price that exceeded $270 per ton.

Source:https://arab.news/8phj7

How Saudi Arabia is boosting food security by pursuing agricultural self-sufficiency

scion

Considering some 90 percent of Saudi Arabia’s territory is largely desert and ill-suited for farming, few might expect the Kingdom to be the site of a new agricultural boom designed to boost domestic crop production and reduce dependence on imported foodstuffs.

As large swathes of the Arab world struggle with food insecurity and supply-chain disruptions, the Kingdom’s initiatives, investments and technological innovations are redefining what it means to achieve self-sufficiency in many food items across one of the world’s most arid regions.

Today, Saudi Arabia has achieved complete self-sufficiency in the production of dates, fresh dairy products and table eggs, according to figures from the General Authority for Statistics’ Agricultural Statistics Publication.

These figures also show that Saudi Arabia produces more than enough of these three food items to meet local demand — 124, 118, and 117 percent, respectively — meaning it has excess capacity for export.

The Kingdom has also made progress in growing potatoes, meeting 80 percent of local demand. Domestic poultry comprises 68 percent, tomatoes 67 percent, red meat 60 percent, carrots 50 percent, fish 48 percent and onions 44 percent.

Improving food self-sufficiency has required the Kingdom to navigate the twin obstacles posed by climate change, bringing with it new record temperatures and soil degradation, and water scarcity, amid depleted rainfall and limited natural freshwater reserves.

Jamal Al-Saadoun, CEO and vice chairman of the Red Sea Farms Cooperative, or Tamala, an initiative aimed at developing agriculture in the Red Sea region, told Arab News the Kingdom reached its level of food self-sufficiency “through planning and over a long period.”

Saudi Arabia’s journey to food self-sufficiency started in the 1980s. During that decade, Riyadh “began developing agricultural plans and focusing on important sectors and products such as dairy, dates, poultry and table eggs,” said Al-Saadoun.

It was supported by investors, assisted by consultations and boosted by a good domestic market for homegrown products. Some of these goods were even exported to the Kingdom’s neighbors, demonstrating the oil-rich country’s potential to become an exporter of foodstuffs rather than a mere importer and consumer.

Now Saudi agri-businesses and investors have adopted modern technologies to improve quality and yields, learning and exchanging best practices with counterparts in the industry around the world.

“The presence of many technical companies inside the Kingdom and regular participation in international exhibitions by the Ministry of Agriculture” are giving Saudis in the agricultural sector opportunities to meet specialists and learn about the latest technologies in their field, said Al-Saadoun.

Several economists have sought to emphasize the importance of food self-sufficiency in the face of chronic food insecurity, especially in countries that rely heavily on imports for domestic consumption.

As the global food system becomes more interconnected, the risk of food insecurity is on the rise. In this century alone, the importance of food self-sufficiency became evident during the 2007-08 world food price crisis.

More recently, destabilizing events such as the COVID-19 pandemic and the Russia-Ukraine conflict have again underlined the importance of food security and the need for many countries to pursue self-sufficiency to avoid price inflation and shortages.

Driven by the need to achieve self-sufficiency in keeping with its food-security strategy, the Saudi government has invested in modern desalination technologies and advanced irrigation techniques.

Such investments enable it to utilize its water reserves more effectively and avoid unnecessary wastage, particularly given its limited natural freshwater resources, especially groundwater.

Across most of the Arabian Peninsula, there is precious little rainfall and much of what there is runs off into desert sand or quickly evaporates.

An area covering more than 1,000,000 square miles contains almost no perennial rivers or streams, and the Kingdom’s southern section is covered by one of the largest deserts in the world.

Saudi Arabia occupies about 80 percent of the Arabian Peninsula and is one of its driest countries. Water resources are scarce and climate conditions severe. The conditions cause groundwater salinization, which is a common problem affecting the Kingdom’s agricultural sector.

As part of its investment in desalination technologies, Saudi Arabia has built plants along its coastlines that convert sea water into freshwater, which is then used for irrigation and other agricultural needs.

In addition to reducing the use of its freshwater reserves, this process has made it possible to cultivate crops in drier, water-scarce regions, potentially giving the Kingdom more arable land for agriculture.

To prevent the exploitation of aquifers, Riyadh has also imposed strict regulations against groundwater extraction. By taking these proactive measures, Saudi Arabia is working to sustain and preserve this vital resource.

The Kingdom has achieved notable self-sufficiency in various crops, especially those requiring modern technologies, largely thanks to its integrated water management system. This approach has noticeably reduced the water consumption needed for agriculture from 86 percent to 70 percent.

Saudi authorities are also exploring the option of localized vertical-farming technologies and hydroponics — the science of growing plants without soil and with limited amounts of water.

These innovations boost the domestic cultivation of essential crops, such as wheat, barley and dates, and simultaneously reduce reliance on foreign sources for these staples.

Despite these successes, the Kingdom still relies heavily on imports for much of the food consumed by the Saudi public. However, authorities recognize that the Kingdom cannot achieve complete food self-sufficiency by remaining dependent on the international market.

Consequently, over the summer, the Kingdom’s Agricultural Development Fund approved funding for small farmers in greenhouse vegetable production, fish and shrimp farming, and poultry breeding. Under this scheme, farmers were loaned $400 million in funding to support what many call “local-for-local” goods.

Al-Saadoun of Tamala highlighted the government’s support for agricultural cooperatives and initiatives to develop agriculture and livestock farming with a view to employ modern technologies, sustainable irrigation systems and organic farming practices.

Such initiatives include developing agricultural and livestock farming in the Red Sea region. In recent years, multiple centers for agricultural development have emerged throughout the coastal area, with small local farms adopting more advanced practices to boost yields.

Companies and associations like Tamala are playing a crucial role in helping such farmers transition to modern and sustainable farming methods. They aim to facilitate the development of high-quality produce while conserving vital resources.

Although Saudi Arabia is boosting local production, this does not mean it is turning its back on foreign imports. Rather, the Kingdom is diversifying its sources of food to guard against future systemic shocks.

Indeed, in a 2017 paper, “Food self-sufficiency: Making sense of it, and when it makes sense,” published by the journal Food Policy, the author argues that “policy choice on this issue is far from a straightforward binary choice between the extremes of relying solely on homegrown food and a fully open trade policy for foodstuffs.”

Saudi Arabia’s experience is a striking example of a country vigorously pursuing its goal of achieving food self-sufficiency and tackling food insecurity in an unpredictable and uncertain world.

Source:https://www.arabnews.com/node/2367371/saudi-arabia