Arab News, Sun, Mar 03, 2024 | Shaban 22, 1445
Saudi non-oil exports to GCC nations surge by 42% to hit $5.55bn
Saudi Arabia:
Saudi Arabia’s non-oil exports to Gulf Cooperation Council countries saw a 42
percent annual increase in the final three months of 2023, according to
official data.
Information released by the Kingdom’s General
Authority of Statistics showed the total value of these transactions reached
SR20.8 billion ($5.55 billion), primarily due to an increase in re-exports,
which rose by 106 percent to hit SR11.34 billion.
Re-exports – goods imported into a country and
then exported to another without significant processing or alteration –
accounted for 55 percent of total non-oil shipments to Bahrain, Kuwait, and
Oman, as well as Qatar, and the UAE.
Among these GCC nations, the UAE emerged as the
top destination, receiving 67 percent of the non-oil shipments from Saudi
Arabia, totaling SR14 billion. Of these transactions, approximately 61 percent
were re-exports, representing a 97 percent growth during this period.
Factors contributing to this surge in re-exports
could include the solid economic bonds among GCC nations, fostering a unified
market that facilitates the free flow of goods and services.
Saudi Arabia’s strategic position as a central hub
within the GCC region could also minimize transportation expenses and transit
durations due to its proximity.
Moreover, the Kingdom’s modern and well-developed
infrastructure, encompassing ports, airports, and road networks, further
streamlines the movement of goods, potentially influencing this uptick in
re-exports.
Additionally, the GCC region’s strategic location
on major trade routes allows for efficient redistribution of goods and services.
Taking advantage of this, the countries are developing logistics hubs to
facilitate the movement of both domestic and transit goods.
Saudi Arabia also aims to revolutionize its
container-shipping sector, mirroring its efforts in non-oil industries like
electric cars and renewable energy.
With plans to expand inland logistics hubs and
improve rail connections, the country seeks to increase annual container
throughput to 40 million twenty-foot equivalent units by 2030.
This ambition aligns with the grand scale of
projects such as the $500 billion NEOM scheme, featuring a 170-km. city and a
container port with a 9 million TEU capacity.
The giga-project will also include the Oxagon
port, slated to become the largest floating structure globally, situated at the
nexus of three continents.
The robust economic ties between the UAE and Saudi
Arabia are further demonstrated through their mutual investments.
By the end of 2022, the UAE had amassed a
significant foreign direct investment stock of SR104 billion in Saudi Arabia, as
reported by the General Authority of Statistics. This substantial investment
plays a pivotal role in bolstering their economic partnership, fostering growth,
and has paved the way for the expansion of non-oil trade activities between the
two nations.
Transport equipment accounted for 31 percent of
non-oil exports to the UAE from the Kingdom in the final quarter of 2023,
reaching a value of SR4.39 billion in what is a 145 percent increase.
Machinery and electrical parts constituted another
27 percent, totaling SR3.75 billion with a 67 percent rise.
Additionally, chemical industry products accounted
for 10 percent, reaching SR1.44 billion – a 17 percent increase during this
period.
Among the GCC countries, trade with Qatar
experienced the most substantial growth, with non-oil exports to the country
soaring by 439 percent. Of these exports, 61 percent comprised transport
equipment amounting to SR888 million, while 18 percent were chemical industry
products totaling SR255 million.
Saudi Arabia and Qatar are actively working to
enhance their economic, military, sports, and cultural ties. This push comes
after the meeting of the Saudi-Qatari Coordination Council, attended by Crown
Prince Mohammed bin Salman and Qatar’s Emir, Sheikh Tamim bin Hamad, in
December.
The leaders consider the council vital for
communication and coordination, underlining the importance of expanding
cooperation to drive sustainable growth and prosperity for both nations and
their citizens.
The trade balance with the GCC saw a substantial
90 percent annual increase in the fourth quarter of 2023, although imports still
exceeded non-oil exports by SR489 million.
Around 68 percent of Saudi Arabia’s imports from
the GCC countries originated from the UAE, which saw a 22 percent rise to
SR14.37 billion.
In contrast, imports from other nations in the
economic bloc decreased, with Kuwait experiencing the most significant decline
of 49 percent to SR351 million.
Mineral products account for the largest share of
imports from the UAE at 33 percent, amounting to SR4.8 billion, followed by
pearls and other jewelry at 19 percent, totaling SR2.7 billion.
Industrial equipment, chemicals, and plastics made
up 16 percent at SR2.3 billion.