SAUDI SEIZES OPPORTUNITIES TO STRENGTHEN TRADE LINKS

Saudi Arabia continues to bolster ties with a number of regional countries in a bid to boost its non-oil sector and strengthen trade flows that may have dried up.

Crown Prince Mohammed bin Salman visited the burgeoning markets of China, India and Pakistan in the first quarter of theyear to boost trade ties and expand co-operation in the areas of energy, petrochemicals, logistics, tourism, education, and security.

In April, the kingdom has continued in a similar vein with a visit by key Saudi government officials to Iraq to upgrade bilateral relations to new horizons in various fields including economy, development, security, investment, tourism, culture and media. An Iraqi-Saudi Economic Forum in Baghdad featuring 80 Saudi and Iraqi businessmen discussed prospects for co-operation and co-ordination in the fields of trade and investment.

Dr. Majid bin Abdullah Al-Qasabi, the kingdom’s minister of commerce and investment and head of the Saudi side of the Saudi-Iraqi Coordination Council, pointed out that “Jadidat Arar Border Crossing will be opened after six months from now and will constitute a major step in the way of enhancing trade relations and raising the level of trade exchange between the two countries.”

The two sides signed 13 agreements and memorandums of understanding, which are in their final stages and will have a significant impact on raising the level of co-operation between the two countries to achieve the aspirations of their leaders and peoples.

In the past month, Saudi delegations have visited Uzbekistan, Tunisia , Azerbaijan, Ireland and Bulgaria as part of a wider effort to boost trade and investment ties.

The kingdom also hosted the 2nd Saudi Maritime Congress 2019 in March, in its bid to position itself as a logistics and trade conduit for global and regional trade. The event featured 36 countries, compared to 17 in the first edition, with exhibition booth area doubling in size.

The conference discussed major developments in the maritime and logistics sectors in the kingdom, major market developments and exchange ideas, and experiences that will accelerate the growth and prosperity of the maritime sector to reach SAR 18 billion in line with the Saudi Vision 2030.

In its latest report, the World Trade Organization noted that global trade has lost momentum amid rising trade disputes and raising of tariffs in parts of the world. The preliminary estimate of 3% for world trade growth in 2018 is below the WTO’s most recent forecast of 3.9% issued last September.

The WTO stated that trade growth in 2018 was weighed down by several factors, including new tariffs and retaliatory measures affecting widely traded goods, weaker global economic growth, volatility in financial markets and tighter monetary conditions in developed countries.

“World merchandise trade volume is forecast to grow 2.6% in 2019, accompanied by GDP growth of 2.6%,” WTO estimated.

Amid the global backdrop, Saudi trade flows managed to eke out a 0.1% growth in January to reach SAR 84.55 billion, compared to SAR 84.49 billion in the same period last year, according to the General Authority for Statistics.

The growth was led by oil exports, which expanded 0.5% in January, compared to the same period last year, to reach SAR 66.19 billion. Compared to the previous month (December 2018), the value of oil exports decreased by SAR 3.46 billion, or 4.9% in January 2019.

Non-oil exports fell 1.4% in January to SAR 18.04 billion from SAR 18.29 billion during the same period in 2018.

However, there were bright spots, with plastics and rubber, the biggest non-oil export items, surging 13.1% in January compared to the same period last year.

Machinery and mechanical appliances also grow 45.7% during the month year on year, while foodstuff exports rose 9.1%. Meanwhile, chemicals, vehicles and live animal exports registered double-digit declines.

Another bright spot was non-oil exports to Asian economies, which, as a group, grew 3.8% to SAR 6.38 billion in January, GSTAT data shows. China, the largest non-oil export destination saw a 15.9% jump during the month. Meanwhile, Saudi exports to the European Union surged 9.3%.

Saudi imports expanded 0.7% in January to SAR 41.61 billion, compared to the same period last year. Key drivers of imports were vehicles, foodstuff and textiles.

Imports from China – the largest source market – grew 33.6%, while from the USA, the second largest import market, contracted nearly 20%.

Despite the slightly higher imports, the trade surplus hit a five-month high of SAR 42.88 billion in January.