Saudi women driving could add $90bn to economy by 2030

Allowing Saudi women to drive could help the kingdom reap as much income as selling shares in Saudi Aramco.

The move, which went into effect on Sunday, could add as much as $90bn to economic output by 2030, with the benefits extending beyond that date, according to Bloomberg Economics. Selling as much as 5% stake in Saudi Arabian Oil Company at the most optimistic valuation could generate about $100 billion

Saudi Arabia ended its status as the last country on earth to prohibit women from taking to the wheel. A handful of women drove through the still-packed streets of the capital early Sunday while others drove in convoys around Riyadh neighborhoods in celebration of the ban’s end.

The decision would enable women to work without having to incur the cost of a driver or taxis.

“Lifting the ban on driving is likely to increase the number of women seeking jobs, boosting the size of the workforce and lifting overall incomes and output,” according to Ziad Daoud, Dubai-based chief Middle East economist for Bloomberg Economics.

“But it’ll take time before these gains are realised as the economy adapts to absorbing growing number of women seeking work.”

Ending the ban is one of the most socially-consequential reforms implemented by Saudi Arabia’s Crown Prince Mohammed bin Salman. It’s also a key part of his plan to veer the economy from its reliance on oil.

Zainab Fattah, Jun 24 2018
https://www.fin24.com

‘I pulled the car over and cried … It’s a dream,’ Careem’s first ‘captinah’

70% of Careem’s customers in Saudi Arabia are women, according to company statistics, a figure largely attributable to the kingdom’s now-obsolete ban on women driving

Reem Farahat waited for a ride request. Her phone pinged. “I’ve already cried twice,” she said, heading out to work as one of Saudi Arabia’s first female drivers for Careem.

The Dubai-based ride-hailing app, along with global behemoth Uber, reacted to Saudi King Salman’s September announcement of an end to the kingdom’s ban on female motorists by saying it would hire women in the conservative kingdom.

“This morning, when I got in the car, I felt the tears coming,” Reem said as she stocked her car with chilled water bottles for her riders.

“I pulled the car over and cried. I could not believe that we now drive… It’s a dream. I thought it would be totally normal, I’d just get in the car and go. I was surprised by my own reaction.”

She took a long pause.

‘I pulled the car over and cried … It’s a dream,’ Careem’s first ‘captinah’
70% of Careem’s customers in Saudi Arabia are women, according to company statistics, a figure largely attributable to the kingdom’s now-obsolete ban on women driving

Saudi national and newly licensed Reem Farahat an employee of Careem a chauffeur car booking service prepares for a customer shuttle using her car in the Saudi capital of Riyadh on June 24 2018 Photo: FAYEZ NURELDINE/AFP/Getty Images.
Reem Farahat waited for a ride request. Her phone pinged. “I’ve already cried twice,” she said, heading out to work as one of Saudi Arabia’s first female drivers for Careem.

The Dubai-based ride-hailing app, along with global behemoth Uber, reacted to Saudi King Salman’s September announcement of an end to the kingdom’s ban on female motorists by saying it would hire women in the conservative kingdom.

Saudi national and newly licensed Reem Farahat, an employee of Careem, a chauffeur car booking service, prepares for a customer shuttle using her car in the Saudi capital of Riyadh.
On Sunday, when the king’s decree took effect, nearly a dozen Careem “captainahs” – all Saudi women – were ready to pick up riders.

“This morning, when I got in the car, I felt the tears coming,” Reem said as she stocked her car with chilled water bottles for her riders.

“I pulled the car over and cried. I could not believe that we now drive… It’s a dream. I thought it would be totally normal, I’d just get in the car and go. I was surprised by my own reaction.”

She took a long pause.

“I didn’t expect it,” she said. “I’m doing this because I can. Because someone has to start.”

‘It’s you’
Seventy percent of Careem’s customers in Saudi Arabia are women, according to company statistics, a figure largely attributable to the kingdom’s now-obsolete ban on women driving.

Uber puts its equivalent figure closer to 80 percent.

At Careem’s offices on Sunday, staff gathered to celebrate the women’s first day on the job.

Farahat’s first ride request came just hours after the ban was officially lifted.

“This is my first ride. I’m excited. I’m excited to know who I’m picking up, what their reaction is going to be,” she said.

The driver – who also works with her father as a quality control consultant, is training in life coaching, and scuba dives with her sister off the Red Sea city of Jeddah – picked up Leila Ashry from a local cafe.

Walking towards the car, Leila spotted Reem, did a little jump of joy on the sidewalk, and was already chatting as she opened the door.

“Oh my god I can’t believe it’s you. I can’t believe you’re here. I can’t believe I’m here,” Leila said.

“I’ve been tweeting to my friends that my ride is coming and it’s a woman! And you’re so pretty! And I can sit in the front now – wait, can I actually sit in the front next to you?”

‘We automatically understand’
Some 2,000 women have signed up to get their Careem licenses since September, said Abdulla Elyas, co-founder and CPO – “chief people officer” – of the ride-hailing app. They are all Saudi women, from their 20s to their 50s.

Uber also plans to introduce women drivers to their service this autumn.

“They come from completely different backgrounds,” Elyas said.

“We have women who have degrees, a master’s degree. We have women who have no degree at all. We have women who want to do this full time. We have women who want to do this part time (for) an additional income, who are already working.”

Most of those who had been licensed by Sunday, like Reem, had permits from foreign countries, enabling them to skip driving courses and take the final exam for a Saudi license.

The “captainahs” can pick up any customer, man or woman.

Both the driver and rider have the right to end the ride at any point.

Leila, a young medical student with a pixie cut and bright smile, says she would still choose a woman.

“This automatically feels a lot safer… being a female and dealing with sexism on a day-to-day basis. There’s just something about it that feels wonderful. But it’s not only that. It’s also women joining the workforce,” she said.

Sitting in the front passenger seat, she recalled previous rides with male drivers.

“Before, sometimes they would stare at me from the mirror,” she said.

“It’s just like that thing we share with women, where we just automatically understand what it’s like to be in that position where you feel their eyes on you but you can’t say anything, you can’t do anything against it.”

She turned to chat to Reem, and sang a riff from a West Side Story tune before saying: “If you can do it, then I can do it.”

“See? That’s what I was talking about,” Reem said. “It’s that ripple effect.”

By AFP, 25 Jun 2018
http://www.arabianbusiness.com

Bahrain foreign direct investment grew 114% in 2017

Inflows of foreign direct investment (FDI) to Bahrain rose 114 percent in 2017, the fastest growth rate in the GCC, according to new data from the United Nations Conference on Trade and Development (UNCTAD).

The growth of FDI in Bahrain came even as global FDI fell 23 percent.

In a report, UNCTAD noted that the growth of investment in Bahrain was bolstered by a number of economic reforms, including amendments to the kingdom’s commercial properties law to allow 100 percent foreign ownership in certain sectors.

“Foreign direct investment creates jobs, diversifies the economy and fuels growth, so we are delighted to see such strong momentum, even against a challenging global backdrop,” said Khalid Al Rumaihi, the CEO of the Bahrain Economic Development Board (EDB).

“This proves the growing interest in the GCC opportunity is translating into investment.”

Al Rumaihi added that Bahrain has “undertaken a number of significant initiatives in the first half of this year to build on this success and we expect to announce a number of further measures in the coming months, helping investors to access the GCC opportunity.”

Among the recent developments in Bahrain were the launch of Bahrain FinTech Bay, the largest fintech hub in the MENA region, as well as the establishment of a $100 million ‘Fund of Funds’ to help start-ups across the Middle East.

Additionally, the country launched the $1 billion Bahrain Energy Fund, the first of its kind in the GCC which will provide institutional investors access to local energy assets.

By Bernd Debusmann Jr, 22 Jun 2018
http://www.arabianbusiness.com/politics

Saudi economy returns to growth on back of oil price rises

Capital Economics says Saudi economy grew by 1.5% in the first quarter, after having contracted by 0.7% in 2017

Saudi economy returns to growth on back of oil price rises
Capital Economics says Saudi economy grew by 1.5% in the first quarter, after having contracted by 0.7% in 2017

The Saudi economy pulled out of recession in the first quarter of 2018 thanks to oil price rises, a think-tank said Tuesday.

Capital Economics said the oil-dependent Saudi economy grew by 1.5 percent in the first quarter, after having contracted by 0.7 percent in 2017.

“The oil sector was the main driver of the recovery,” the London-based group said.

Oil prices surged to around $80 a barrel last month from under $30 a barrel in early 2016 after OPEC and non-OPEC producers struck a deal to cut output.

As a result of the crash in prices, the economy dipped into negative territory last year for the first time since 2009, a year after the global financial crisis.

The OPEC kingpin has posted a budget deficit in the past four years, and it has borrowed from domestic and international markets and hiked fuel and power prices to finance the shortfall.

Saudi economy returns to growth on back of oil price rises
Capital Economics says Saudi economy grew by 1.5% in the first quarter, after having contracted by 0.7% in 2017

The Saudi economy pulled out of recession in the first quarter of 2018 thanks to oil price rises, a think-tank said Tuesday.

Capital Economics said the oil-dependent Saudi economy grew by 1.5 percent in the first quarter, after having contracted by 0.7 percent in 2017.

“The oil sector was the main driver of the recovery,” the London-based group said.

Oil prices surged to around $80 a barrel last month from under $30 a barrel in early 2016 after OPEC and non-OPEC producers struck a deal to cut output.

As a result of the crash in prices, the economy dipped into negative territory last year for the first time since 2009, a year after the global financial crisis.

The OPEC kingpin has posted a budget deficit in the past four years, and it has borrowed from domestic and international markets and hiked fuel and power prices to finance the shortfall.

It also introduced a five-percent value-added tax from the start of 2018.

The world’s top crude exporter has seen a key boost in its revenues after the recovery in oil prices.

Riyadh-based Jadwa Investment said Monday that Saudi fiscal reserves rose by $13.2 billion in April, marking its largest monthly increase since October 2013.

The reserves stood at $506.6 billion in April, down from $732 billion at the end of 2014.

Since 2014, Saudi budget deficits have totalled $260 billion and the government is projecting a 2018 shortfall of $52 billion.

By AFP, 05 Jun 2018
http://www.arabianbusiness.com

Dubai property market expects mid-term rebound

In mid-April the Dubai Land Department (DLD) issued its quarterly report on real estate transactions, which showed there had been 13,759 sales, mortgage agreements or other deals conducted in the first three months of the year.

The total value of the transactions reached Dh58bn ($15.8bn), with the bulk of that figure – Dh30.6bn ($8.3bn), or 3717 agreements – comprised of mortgages. A further Dh19bn ($5.2bn) was posted in direct sales, with just over 950 transactions recorded, while other transfers accounted for Dh8.4bn ($2.3bn).

The first-quarter results fell short of those posted for the same period in 2017, when some 20,000 transactions were conducted, worth a combined Dh77bn ($21bn).
Nonetheless, foreign interest in the property market remained reasonably strong, with overseas investors accounting for more than 5000 transactions, well over one-third of the quarterly total.

Despite a slower first-quarter year-on-year, an increase in activity is expected later in 2018, according to Sultan Butti bin Mejren, director general at the DLD.
“Achieving almost Dh58bn ($15.8bn) in transactions shows strong momentum in the real estate sector for the first quarter, and we expect this to raise the second-quarter transaction index and continue to rally before the end of the year,” he told media.

Muted forecasts for growth in property transactions

While first-quarter figures suggest market activity will need to accelerate if year-end 2018 results are to match those of last year, when 69,000 transactions worth a total value of Dh285bn ($77.6bn) were registered, some analysts have challenged recovery forecasts.

Ratings agency and financial services firm S&P, for example, suggests the Dubai property market could remain flat or lose ground this year, pointing to falling prices and rising supply as a challenging combination.

Rents and sales prices in the residential and retail segments were likely to ease further in 2018, after falling by between 5% and 10% last year, the agency said in a report issued in February.

Residential supply levels expanded by an estimated 3800 units in the first quarter, according to data from property consultancy Cavendish Maxwell, with new retail land office space also being rolled out in the opening months of 2018.

Mortgage changes to raise investment interest

Increasing supply across all real estate sectors in Dubai is affording occupiers a widening choice of location and quality. This choice has caused some landlords to reduce their pricing in order to remain competitive. “The market is very sensitive to pricing and in spite of a significant increase in transaction volumes in 2017, I expect values to decline during 2018 as landlords and tenants try find a new level of pricing to reflect new and forthcoming supply levels,” Nicholas MacLean, CEO of real estate consultancy CBRE, told OBG.

To help address the imbalance, the authorities are introducing measures to facilitate real estate transactions. In late April the DLD announced plans to develop a new mortgage and finance law designed to attract further investment to the sector. The legislation is expected to allow specialised funds, such as real estate investment trusts, to enter the Dubai market more easily.

VAT relief supports investor confidence

Prospects for expanded financing opportunities under the upcoming mortgage law came fast on the heels of another move designed to stoke investor confidence.

In late March the DLD and the Federal Tax Authority stated that all real estate transactions will be exempt from the newly imposed 5% value-added tax (VAT), with the exception of sales of vacant commercial properties and commercial property leases. Furthermore, leased commercial property will not be considered a supply during its sale by the taxable person and will therefore not be taxable.

The statement added that up to 85% of all elements of the Dubai real estate sector would not be subject to the new levy.

There had been concerns in the lead up to the introduction of the broad-based goods and services tax that most, if not all, real estate transactions would have the 5% VAT applied.

The general exemption of most components of the property market could boost confidence in the sector and encourage further investments.

By Staff Writer, Oxford Business Group
31 MAY, 2018
© Oxford Business Group 2018