Saudi Arabias ranking on global indexes improves

“In recognition of the progress made in its investment and business climate, Saudi Arabia’s rankings on several world indexes improved between 2019 and 2021,” the US State Department said in the report.

Investment Climate Statements provide country-specific information and are prepared by economic officers stationed in embassies and posts around the world. The reports analyze a variety of economies that are or could be markets for US businesses of all sizes.

The list of indexes where the Kingdom made progress was long.

Among those that the report acknowledged is the World Competitiveness Yearbook 2019, which is an annual report published by the Swiss-based International Institute for Management Development (IMD), and the World Bank’s Doing Business 2020 reports, where Saudi Arabia was among the top performing nations.

The US State Department, however, raised concerns that providing jobs for Saudis and diversifying the economy away from oil “have prompted” the government to take measures that may weaken the country’s investment climate going forward. It is a claim that analysts find unrealistic with the current economic reforms undertaken.

The fiscal balance from falling oil prices and how the Kingdom is combating the coronavirus (COVID-19) pandemic also raised concerns for the US State Department.

“The Saudi government is prioritizing investments in upscaling Saudis’ skills in key economic sectors leading to a more sustainable non-oil economic growth, which will create more opportunities for foreign investors,” Mohamed Ramady, a London-based independent economist, said.

The activities of the Oversight and Anti-Corruption Authority (Nazaha) will further benefit the expenditure for government projects by removing hidden corruption elements in project costs and creating a level playing field for domestic and international investors, he added.

“The Saudi budget deficit is expected to narrow to 108 billion riyals based on International Monetary Fund estimates, while we are expecting it to be 80 billion riyals,” Mazen Alsudairi, head of research at AlRajhi Capital in Riyadh, said.

“These views are supported by the Fitch upgrade of Saudi outlook from ‘negative’ to ‘neutral’ in consideration of the Saudi budget, the foreign reserve and the structural reform.”