According to CDSI’s (Central Department of Statistics and Information) preliminary estimates, the Kingdom's non-oil exports registered an increase of 16.4 percent to Rls 121.6 billion in 2008 (Table 10.1). The
Annual Change%
2008**
2007*
2006 2005
————–
———––
———–
———––
————605,881 705,811 769,935 1,053,732 36.9 Oil Exports
38.6 926,613
668,564 607,509
513,939 Crude oil
25.4 127,119
101,371 98,302
91,942 Refined products
16.4 121,622
104,468 85,528
71,263 Non-oil Exports
16.0 62,464
53,847 45,936
42,055 Petrochemicals
17.6 12,679
10,778 7,908
6,154 Construction materials
19.3 8,875
7,442 5,228
4,361 Agricultural, animal and food
products
16.1 37,604
32,401 26,456
18,693 Other goods***
34.4 1,175,354
874,403 791,339
677,144 Total
*** Including re-exports.
Source: Central Department of Statistics and Information, Ministry of Economy and Planning.
Table 10.1: SAUDI MERCHANDISE EXPORTS
* Revised figures. ** Preliminary data.
(Million Riyals)
Saudi Non-oil Exports Development
The Kingdom seeks, through diversifying the economic base, to reduce reliance on oil exports as a main income source. Non-oil exports are among the areas that the Kingdom aims to develop. To this end, the Kingdom has taken a number of measures including creation of a number of entities that aim to develop Saudi non-oil exports which are as follows:
1. Saudi Exports Program
The Saudi Exports Program of the Saudi Fund for Development (SFD) was established in 1420H (1999) to provide finance and insurance necessary for the development of national non-oil exports to diversify the sources of national income. The program became a member of the International Union of Credit and Investment Insurers (Bern Union) in October 2003 after enjoying an observer status for 3 years since 2000. In June 2003, the Saudi Exports Program started to execute insurance of credit for non-oil exports. It aims at helping exporters to overcome difficulties of receiving export proceeds due to commercial reasons stemming from an importer’s failure to pay his due amounts or because of political reasons related to the importer's country hindering him from payment. The export finance insurance policy is a comprehensive policy for all Saudi exports, covering up to 90 percent of non-payment risks resulting from commercial or political reasons.
Under the program, a range of various export finance and credit insurance operations amounting to Rls 4.4 billion were executed during 2008, rising by 178.3 percent from the preceding year (Table 10.2). A breakdown of its export finance and credit insurance transactions indicates that Rls 3.5 billion went to insuring non-oil exports and Rls 838.8 million went to financing Saudi non-oil exports. Transactions of financing and insuring exports of chemical and plastic products amounted to Rls 3.7 billion, with Rls 3.2 billion for insuring and Rls 483.8 million for financing.
increase was mainly due to a number of factors, including a rise in the value of exports of agriculture, animal and food products by 19.3 percent to Rls 8.9 billion. The value of construction materials by 17.6 percent to Rls 12.7 billion against Rls 10.8 billion in the preceding year.
Exports of other goods (including re-exports) rose by 16.1 percent to Rls 37.6 billion in 2008 from Rls 32.4 billion in the preceding year. Petrochemical exports recorded a rise of 16.0 percent during 2008. Chart 10.1 shows the development of non-oil exports during the period 2004-2008. Non-oil exports reached their highest level in 2008, rising by 112.7 percent as compared with 2004.
Guarantee Finance
Guarantee Finance
Guarantee Finance
Goods and Products
—————
————— ——–—
————— ——–—
——–—
————————
1.90 231.25
5.66 3.15
3.90 Manufactured metal products, machines and 0.00
equipment
3,222.12 483.75
936.55 110.47
464.52 140.35
Chemical and plastic products
23.19 0.00
15.73 40.88
4.73 167.00
Capital projects
0.00 123.75
0.00 277.50
0.00 1,215.25
Credit lines
278.24 0.00
178.05 0.00
78.20 202.50
Other
3,525.45 838.75
1,135.99 432.00
551.35 1,725.10
Total
(Million Riyals) Table 10.2: FINANCE AND GUARANTEE OF SAUDI EXPORTS
2006 2007 2008
Source: Saudi Fund for Development.
————————— ————————— —————————
Chart 10.1
Components of Saudi Non-Oil Exports
0 25 50 75 100 125
2004 2005 2006 2007 2008
Billion Riyals
Total Non-O il Exports Petrochemicals
O ther Goods (Including Re-Exports) Construction Materials
Agricultural, Animal and Food Products Saudi Oil Exports
0 200 400 600 800 1000
2000 2002 2004 2006 2008
Billion Riyals
Crude Oil Refined Products
Transactions of financing and insuring exports of manufactured metal products, electric appliances, and equipment amounted to Rls 233.2 million, with Rls 231.3 million for financing and Rls 1.9 million for insuring. As for capital projects, transactions of insuring such projects amounted to Rls 23.2 million during 2008. The program provided credit lines of Rls 123.8 million during 2008. Transactions of financing and insuring exports of other products amounted to Rls 278.2 million, all of which was for financing.
The Saudi Export Program has played an important role in enhancing national exports, as non-oil exports rose by 16.4 percent during 2008.
2. Saudi Export Development Center (SEDC)
In accordance with the recommendation of the Second Annual Conference of Saudi Businessmen, the Saudi Export Development Center (SEDC) was founded on 28, Safar, 1406H (11th November, 1985) under the aegis of the Council of Saudi Chambers of Commerce and Industry. It is financially supported by the Chambers of Commerce and Industry in Riyadh, Jeddah and the Eastern Region. The Center is a non-profit service body which aims at developing non-oil Saudi exports. The main reason behind establishing SEDC is to promote and develop the exports of non-oil products and services. The Center’s jurisdiction covers the following functions:
1. Making proposals that help the government draw up the general policy for exports in the Kingdom, participating in the preparation of studies on export incentives and systems, and cooperating with service organs engaged in exports to provide proper services to exporters.
2. Conducting necessary research and analyses to estimate export potentials in the Kingdom, preparing studies on actual conditions of external markets and their absorption capacity and commodities competitive to Saudi products, and acquainting exporters therewith.
3. Setting proper marketing plans to achieve competition in international markets in goods and services where the Kingdom has comparative advantages, and contributing to improving and developing the designs of national products to fit the needs of targeted markets, in addition to the ways of packaging and display that suit the tastes in those markets.
4. Setting export plans for exporting institutions, companies and factories upon their request, providing domestic exporters with consultative services in the field of external trade, and preparing
and executing training programs in a number of export-related areas for exporters.
5. Identifying the problems, difficulties and obstacles of exports both internally and externally, and working in cooperation with national and international, government and private institutions on solving them.
6. Publishing periodicals, books, and bulletins on the subjects related to exports, and carrying out advertisement and promotion activities for Saudi products, for example:
a) Forming trade delegations to external markets, and offering necessary facilities and arrangements for businessmen during trade discussions and negotiations.
b) Organizing and holding internal and external exhibitions to promote national products and services; taking part in international exhibitions and encouraging exporters to participate therein.
c) Advertising in domestic and foreign newspapers, magazines, periodicals and bulletins.
d) Organizing invitations for importers’
missions and commercial attachés at different embassies in the Kingdom to visit production and marketing sites.
e) Organizing marketing and export symposia and conferences internally and externally.
7. Participating in joint committees between the Kingdom and some Arab, Islamic and friendly countries to offer technical advice regarding lists of national exportable goods and products.
The SEDC offers many valuable services and benefits in the field of external trade to all classes of companies and factories affiliated to its membership, mainly to support Saudi companies and factories in their area of exports. These services include offering export consultative services, information, studies, and economic reports needed by Saudi businessmen and exporters. They also include providing import and export regulations in external markets, training and acquainting exporters with the sources of export finance and credit, and other activities in exchange for an annual fee. The factory affiliated to the Center’s membership is given a certificate that entitles it to benefit from the Center’s services according to its class.
3. Saudi Exports Development Authority
The Saudi Exports Development Authority was established under the Council of Ministers’ Resolution No. (59) dated 15/2/1428H (5/3/2007) with the objective of developing Saudi non-oil exports. The
Authority’s board of directors is appointed under a resolution by the Council of Ministers. According to the Resolution, the Authority’s sphere covers the following functions:
1. Participating in setting the State’s policies of developing non-oil exports.
2. Preparing plans and programs for developing exports and increasing their competitive capacity.
3. Continuously developing policies and legislation that ensure the achievement of the objectives of the programs and plans of exports development.
4. Improving the exportation environment by setting programs, providing incentives to exporters and protecting investments.
5. Closely cooperating with trade representatives abroad and with chambers of industry and commerce to identify the best ways of exporting products, creating new opportunities for exporters and improving the exportation environment.
6. Providing administrative, technical and consultative assistance and incentives for exporters to market exports and attract foreign investors.
7. Preparing studies on export opportunities and potential foreign markets.
8. Preparing plans and programs for promoting and developing products and services.
9. Qualifying Saudi cadres and spreading culture of exporting necessary for international marketing and exporting, in cooperation with local and international training organs in exchange for fees charged by the Authority on private companies and institutions.
10. Organizing symposia and conferences, preparing internal and external commercial exhibitions, participating in international and regional commercial exhibitions to apprise of Saudi exports and increase their competitive capacity.
11. Assisting local companies to enter into joint investments with foreign companies, and linking investment with export.
Imports
Preliminary data show that the Kingdom's imports of goods (CIF) in 2008 increased by 27.7 percent to Rls 431.8 billion against Rls 338.1 billion in the preceding year, recording the highest level ever.
(Table 10.3).
According to detailed data on the value of the Kingdom’s imports in 2008 (Chart 10.2), imports of machinery, electric appliances and equipments (Rls 117.3 billion) occupied the first position with a relative share of 27.2 percent and a rise of 17.6 percent over the preceding year. Imports of transport equipment (Rls 77.6 billion) ranked second, constituting 18.0 percent of total imports, rising by 30.6 percent over the preceding year. The improvements in these two categories indicate increased investment activity as those imports mainly include capital goods. Imports of ordinary metals and their products occupied the third position (Rls 66.0 billion) with a relative share of 15.3 percent and a rise of 29.9 percent. Imports of foodstuffs (Rls 62.2 billion) ranked fourth, with a relative share of 14.4 percent and a rise of 38.8 percent from the preceding year. Imports of chemical and metal products (Rls 53.0 billion) came in the fifth position, with a relative share of 12.3 percent and an increase of 32.7 percent. In the sixth position were imports of other goods (Rls 33.3 billion) with a relative share of 7.7 percent and a rise of 30.1 percent. Imports of textile and clothing (Rls 13.9 billion) came in the seventh position with a relative share of 3.2 percent and an increase of 19.2 percent.
Imports of wood and jewelry (Rls 8.4 billion) held the
Annual
———67,302 99,740 117,318 25.7 29.5 27.2 17.6
Machines, appliances and equipment
38.8 Chemical and metal products
19.2 Textiles and clothing
29.9 Metals and their products
38.8 Wood and jewelry
30.6
Source: Central Department of Statistics and Information, Ministry of Economy and Planning.
Table 10.3: THE KINGDOM’S IMPORTS (CIF) BY MAIN COMPONENTS
—————————————Share % Million Riyals
—————————————
last position, accounting for 1.9 percent of total imports and increasing by 38.8 percent from the preceding year.
Imports by Origin
The Kingdom’s imports by origin are divided into four groups. The first group includes the largest sixteen exporting countries to the Kingdom other than GCC and Arab countries; the second group comprises the GCC countries; the third group includes Arab countries excluding GCC countries; and the fourth group covers the rest of the world (Table 10.4).
Data on the Kingdom’s imports by origin show that imports from the largest sixteen exporting countries to the Kingdom increased by 28.0 percent to Rls 312.2 billion during 2008. Moreover, their relative share in the Kingdom’s total imports went up to 72.3 percent from 72.1 percent in the preceding year. Imports from the USA (Rls 59.1 billion) came first with a relative share of 13.7 percent of the Kingdom’s total imports, increasing by 28.9 percent over the preceding year.
Imports from China came second (Rls 47.5 billion) with a relative share of 11 percent, increasing by 45.5 percent. Actually, imports from China grew consistently over recent years due to improved quality and variety of Chinese goods and their competitive prices. Imports from Japan ranked third (Rls 35.3 billion) with a relative share of 8.2 percent, increasing by 19.2 percent. Imports from Germany came in the fourth position (Rls 32.0 billion) with a relative share of 7.4 percent, increasing by 6.7 percent. Imports from South Korea ranked fifth (Rls 19.2 billion) with a relative share of 4.5 percent, rising by 26.8 percent from the preceding year, followed by imports from India (Rls 18.0 billion) with a relative share of 4.2 percent, increasing by 56.2 percent over the preceding
year. Imports from Italy came seventh (Rls 17.3 billion) with a relative share of 4.0 percent, rising by 12.4 percent, followed by imports from France (Rls 15.2 billion) with a relative share of 3.5 percent, increasing by 32.6 percent over the preceding year.
Imports from the United Kingdom ranked ninth (Rls 15.2 billion) with a relative share of 3.5 percent, rising by 15.6 percent, followed by imports from Brazil (Rls 10.9 billion) with a relative share of 2.5 percent and a rise of 65.3 percent from the preceding year. The positions from eleven to sixteen were occupied by Australia , Thailand, Switzerland, Turkey, Sweden, and Finland, with 2.1 percent, 1.8 percent, 1.8 percent, 1.7 percent, 1.4 percent and 1.0 percent respectively of the Kingdom’s total imports.
Imports from the GCC countries rose by 20.2 percent to Rls 47.2 billion during 2008, and accounted for 10.9 percent of the Kingdom’s total imports. Imports from other Arab countries group increased by 29.5 percent to Rls 13.4 billion, accounting for 3.1 percent of the Kingdom’s total imports. The Kingdom’s imports from the rest of the world rose by 31.8 percent to Rls 59.0 billion in 2008. Chart 10.3 shows the Kingdom’s imports by origin in 2008 compared to 2000. Its imports from China rose by 960.0 percent (Rls 4,485 million) during 2008 as compared to 2000.
Private Sector Exports Financed through Commercial Banks
Private sector exports financed through commercial banks (settled letters of credit) increased by 35.6 percent to Rls 41.8 billion during 2008 as compared to Rls 30.8 billion in 2007. The share of private sector’s exports in total non-oil exports financed through Chart 10.2: Share of Saudi Imports (CIF)
by Main Components
0 5 10 15 20 25 30 35
2004 2005 2006 2007 2008
Percent
Machinery, Appliances and Electrical Equipment Foodstuffs
Mineral and chemical Products Textiles and Clothing Base Metals and Metal Articles Leather, Wood, and Jewellry
Transport Equipment Other Commodities
Annual South Korea
56.2