Dubai: 23 NRIs lose passports in New Year fire; get exit papers

Riyadh, Jul 1: Saudis braced Wednesday for a tripling in value added tax, another unpopular austerity measure after the twin shocks of coronavirus and an oil price slump triggered the kingdom's worst economic decline in decades.

Retailers in the country reported a sharp uptick in sales this week of everything from gold and electronics to cars and building materials, as shoppers sought to stock up before VAT is raised to 15 percent.

The hike could stir public resentment as it weighs on household incomes, pushing up inflation and depressing consumer spending as the kingdom emerges from a three-month coronavirus lockdown.

"Cuts, cuts, cuts everywhere," a Saudi teacher in Riyadh told AFP, bemoaning vanishing subsidies as salaries remain stagnant.

"Air conditioner, television, electronic items," he said, rattling off a list of items he bought last week ahead of the VAT hike.

"I can't afford these things from Wednesday."

With its vast oil wealth funding the Arab world's biggest economy, the kingdom had for decades been able to fund massive spending with no taxes at all.

It only introduced VAT in 2018, as part of a push to reduce its dependence on crude revenues.

Then, seeking to shore up state finances battered by sliding oil prices and the coronavirus crisis, it announced in May that it would triple VAT and halt a cost-of-living monthly allowance to citizens.

The austerity push underscores how Saudi Arabia's once-lavish spending is becoming a thing of the past, with the erosion of the welfare system leaving a mostly young population to cope with reduced incomes and a lifestyle downgrade.

That could pile strain on a decades-old social contract whereby citizens were given generous subsidies and handouts in exchange for loyalty to the absolute monarchy.

The rising cost of living may prompt many to ask why state funds are being lavished on multi-billion-dollar projects and overseas assets, including the proposed purchase of English football club Newcastle United.

Shopping malls in the kingdom have drawn large crowds in recent days as retailers offered "pre-VAT sales" and discounts before the hike kicks in.

A gold shop in Riyadh told AFP it saw a 70 percent jump in sales in recent weeks, while a car dealership saw them tick up by 15 percent.

Once the new rate is in place, businesses are predicting depressed sales of everything from cars to cosmetics and home appliances.

Capital Economics forecast inflation will jump up to six percent year-on-year in July, from 1.1 percent in May, as a result.

"The government ended the country's lockdown (in June) and there are signs that economic activity has started to recover," Capital Economics said in a report.

"Nonetheless, we expect the recovery to be slow-going as fiscal austerity measures bite."

The kingdom also risks losing its edge against other Gulf states, including its principal ally the United Arab Emirates, which introduced VAT at the same time but has so far refrained from raising it beyond five percent.

"Saudi Arabia is taking massive risks with contractionary fiscal policies," said Tarek Fadlallah, chief executive officer of the Middle East unit of Nomura Asset Management.

But the kingdom has few choices as oil revenue declines.

Its finances have taken another blow as authorities massively scaled back this year's hajj pilgrimage, from 2.5 million pilgrims last year to around a thousand already inside the country, and suspended the lesser umrah because of coronavirus.

Together the rites rake in some $12 billion annually.

The International Monetary Fund warned the kingdom's GDP will shrink by 6.8 percent this year -- its worst performance since the 1980s oil glut.

The austerity drive would boost state coffers by 100 billion riyals ($26.6 billion), according to state media.

But the measures are unlikely to plug the kingdom's huge budget deficit.

The Saudi Jadwa Investment group forecasts the shortfall will rise to a record $112 billion this year.

Jeddah, May 1: The government of India and its diplomatic missions in the Gulf Cooperation Council (GCC) States have begun elaborate preparations for the massive evacuation of their nationals stranded or needing to return once the lockdown travel restrictions are lifted.

The Indian missions in Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Bahrain, Oman and Qatar have started registration for the return of their nationals. The move coincides with the directive of New Delhi to the Indian Air Force and Navy to get their big engines ready to bring back citizens stuck in the GCC states.

India’s External Affairs Minister S. Jaishankar has stated that the Indian missions in the GCC states have been liaising with local authorities for repatriation of Indians. More than eight millions Indians work and live in the Gulf countries.

The Indian Embassy in Saudi Arabia said that it has issued directives to their nationals who seek repatriation to India to fill an application form so as to facilitate their travel when the authorities lift the travel restrictions. Similar advisories have also been issued by the embassies in other Gulf States.

The Riyadh Embassy said in a press statement that the purpose is only to collect data and no decision has been taken yet regarding resumption of flights to India.

The Embassy will make an announcement with regard to repatriation of Indian nationals when the government of India takes a decision in this regard, the statement said, adding that separate forms have to be filled for each individual, including Indian worker or his or her family members.

The Embassy is in the process of working out the modalities of evacuation of stranded Indians in line with the directions of the government of India, the statement pointed out.

The Embassy and the Consulate General in Jeddah are closely monitoring the situation and are taking all the required measures to ensure the welfare of Indian citizens.

The missions have taken all the necessary measures for the supply of food, medicines and other emergency assistance to Indians in need and that is in coordination and cooperation with volunteers of major community organizations across the Kingdom.

These initiatives have been accelerated following the interactions of Ambassador Dr. Ausaf Sayeed with community volunteers and social workers from all parts of the Kingdom. The Embassy has also been in touch with all major companies in the Kingdom that employed Indian workers to carry out regular monitoring of the workers’ health, especially in labor camps, and take all other precautionary and preventive measures to ensure their health and safety.

According to the plan drawn up by the government of India, the first commercial flights from the Gulf could start after May 3, if the nationwide lockdown restrictions are not extended.

INS Jalashwa, an amphibious assault ship, and two Magar class tank-landing ships are being readied for the evacuation purposes, India’s IANS reported.

These ships, which have a total capacity of 2,000 people, have started making arrangements as per the standard protocols laid out to deal with suspected coronavirus cases like social distancing and sanitization.

The Indian Air Force has been evacuating citizens from coronavirus hit countries such as China, Japan, Iran, Italy and Kuwait since January. The force has stated that it has kept C-17 Globemaster and C-130s on standby which can be used whenever they are required.

Apart from them, Air India flights are also being kept on standby to pick up stranded Indians from the GCC countries.

15 Indian fatalities in western region

Speaking to Saudi Gazette, Indian Consul General Mohammed Noor Rahman Sheikh said that as of Thursday a total of 15 Indian coronavirus fatalities were reported in the western region.

These included seven cases in Makkah, six in Madinah and two in Jeddah. Around 140 Indians have tested positive in the region where most of the coronavirus cases in the Kingdom have been reported.

He said that permission was not accorded from the Ministry of Haj and Umrah to use the Indian Haj mission facility in Makkah as the center to assist the community members with regard to the coronavirus related cases.

“Our medical in charge is in Makkah and with the support of some other staffers, he has been actively involved in lending a helping hand to those Indian nationals who are in distress,” he said.

“We are in regular contact with the Ministry of Health officials in ensuring quick medical assistance to those who are tested positive.” He said preparations are under way for repatriation of Indians once permission is ready to take them home. “We are maintaining a database of all those who contacted the consulate with a request for their repatriation,” he added.

Meanwhile, the bodies of two Indians from the southern state of Kerala who succumbed to the pandemic were buried in Makkah. Naletil Muhammad from Ancharakkandi of Kannoor district, a restaurant worker in Makkah, gave samples at King Faisal Hospital a few days ago after developing symptoms of the disease.

When the hospital authorities advised him to remain in medical isolation, he reportedly preferred to remain in isolation at his residence where he succumbed to the pandemic after a few days.

Muhammad’s two sons, who are working in Riyadh, alerted his colleagues when they failed to contact him over phone. They found him dead at his residence on Monday. Eventually, Ministry of Health officials sent all his six colleagues to medical isolation.

Kottuwala Ippu Musliyar from Thennala, Vengara in Malappuram district, was a well-known social worker in Makkah. He died of coronavirus at Hira Hospital on Wednesday after undergoing treatment for a couple of days.

Mujeeb Pukkottoor, a prominent Indian social worker and general secretary of Makkah chapter of Kerala Muslim Cultural Center, was authorized by their spouses to carry out their burial procedures.

Accordingly Muhammad was buried on Wednesday and Ippu Musliyar on Thursday at the designated area for the coronavirus deceased persons at Sharaie Cemetery in Makkah.

Jeddah, Mar 21: Saudi government ministers on Friday announced a war chest of more than SR120 billion ($32 billion) to fight the “unprecedented” health and economic challenges facing the country as a result of the killer coronavirus pandemic.

During a press conference in Riyadh, finance minister and acting minister of economy and planning, Mohammed Al-Jadaan, unveiled a SR70 billion stimulus package to support the private sector, especially small- and medium-sized enterprises (SMEs) and businesses worst-hit by the virus outbreak.

And the Saudi Arabian Monetary Authority (SAMA) has also sidelined SR50 billion to help the Kingdom’s banking sector, financial institutions and SMEs.

Al-Jadaan said the government had introduced tough measures to protect the country’s citizens while immediately putting in place a financial safety net. He added that the Kingdom was moving decisively to address the global COVID-19 disease crisis and cushion the financial and economic impact of the outbreak on the country.

The SR70 billion package of initiatives revealed by the minister will include exemptions and postponement of some government dues to help provide liquidity for private-sector companies.

Minister of Health Dr. Tawfig Al-Rabiah noted the raft of precautionary measures that had been introduced by the Kingdom in cooperation with the private sector and government agencies to combat the spread of the coronavirus, highlighting the important contribution of the data communication services sector.

He reassured the Saudi public that the Kingdom would continue to do whatever was required to tackle the crisis.

“This pandemic has a lot of challenges. It’s difficult to make presumptions at this moment as we’ve seen; many developed countries did not expect the rate of transmission of this virus.

“We see that the reality of the situation is different from what many expected. The virus is still being studied and though we know the means of transmission, it is transmitted at a very fast rate, having spread to many countries faster than expected.

“We see that many countries have not taken the strong precautionary measures from the beginning of the crisis which led to the vast spread of the virus in these countries,” Al-Rabiah said.

He pointed out that social distancing would help slow the spread.

Al-Jadaan said the Saudi government had the financial and economic capacity to deal with the situation. “We have large reserves and large investments, but we do not want to withdraw from the reserves more than what was already announced in the budget. We do not want to liquidate any of the government’s investments so we will borrow.

“We have approval from the government after the finance committee raised its recommendations to increase the proportion of the domestic product borrowing from 30 percent to 50 percent. We do not expect to exceed 50 percent from now until the end of 2022,” he added.

The government would use all the tools available to it to finance the private sector, especially SMEs, and ensure its ongoing stability.

The finance minister said that at this stage it was difficult to predict the economic impact of the pandemic on the private sector, but he emphasized that international coordination, most notably through G20 countries and health organizations, was ongoing.

On recorded cases of the COVID-19 disease in the Kingdom, Al-Rabiah said: “Many of the confirmed cases are without symptoms, this is due to the precautionary measures being considered.

“As soon as a case is confirmed, we contact and examine anyone who was in direct contact with the patient. This epidemiological investigation, is conducted on a large scale to investigate any case that was in contact with the patient.”

Al-Jadaan also announced the formation of a committee made up of the ministers of finance, economy and planning, commerce, and industry and mineral resources, along with the vice chairman of the board of the Saudi National Development Fund, and its governor.

The committee will be responsible for identifying and reviewing incentives, facilities, and other initiatives led by the fund.

Committees had also been established, said Al-Jadaan, to study the impact and repercussions of the coronavirus crisis on all sectors and regions, and look at ways of overcoming them through subsidies or stimulus packages.