Saudi Arabia’s economic growth for the year 2018 has been remarkable 2.21% as per the reuters.com and considering its growth this year, things are shaping up for better. When World’s real GDP is expected to grow by 0.1% i.e. from 3.1% to 3.2% within the year 2018-2019 this sizable growth is considered as the global economic situation being stable or showing a slight improvement from what was anticipated by IMF.
This could be because of the new windows opened and explored further in the eastern countries. As the trade diversification among eastern countries and the focus from Saudi Arabia has started making an impact on the global trade. As Abdul Latif Jameel states in their report that the Gulf Cooperation Council has started to develop more and more links with eastern countries in various sectors of the trade especially the auto market. We see many changes post the policy restructuring in the trade between the US market and the Middle East and aftermarket auto accessories. In the recent visit from the Saudi Prince Mohammad bin Salman, he has made agreements with India, Pakistan, and China which focused on developing alternate energy, his Vision 2030 aims to reduce unemployment, growth in private sector, develop industrial, tourism and entertainment hubs in the coming decades, states CNN in their report. The Gulf and Asia together have the immense potential to reshape the geopolitical patterns and relationships, China is a major player in the trade of aftermarket auto parts, aftermarket auto accessories, Toyota and Lexus have been a part of the retail wing of Abdul Latif Jameel motors in China. It is a two-way trade as Saudi Arabia is the biggest market for the exports to China, there are equally strong links between Saudi Arabia and Singapore in the most recent times. Saudi Arabia offers the benefit of providing duty-free access to the members of the GCC thus making it a major destination for foreign direct investment. As GCC has signed up major trade links with South Korea, Singapore and Indonesia and has their companies set up businesses in Saudi Arabia considering the financial benefits they get including the absence of the income tax, sales tax and property tax. Foreign investors are facilitated with just 20% corporate tax on total profits. The BRI initiative from China including the eastern countries focuses on the connectivity of the 70 nations across Asia, Africa and Europe which plans to have new railroads and shipping lines. The HK Convention and Exhibition Centre had representatives from 51 countries which covered government officials and business delegates for the Belt and Road (BRI) Summit in June 2018, completing its 3 rd year, this clearly shows how every country is been associated and looking forward to an increase in its global trade. Japan isn’t far behind in its association with Saudi Arabia with its Saudi Japan Vision 2030, it focuses on the growth in the Middle East with its Global electronics giant Sony. The auto industry and aftermarket auto part makers from Europe make their substantial presence felt with the Volkswagen group Saudi Arabia. The Saudi prince focuses on his foreign policies that help international investors, which equally works in favor of Saudi Arabia as it supports macroeconomic stability, builds human capital and promotes international trade.
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September 2016
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