Gulf Economic Barometer

The Gulf Economic Barometer monitors initiatives taken by Gulf states as they seek fiscal, monetary, and labor policy changes to meet the challenge of reduced state revenue from natural resources. The key trend is a major shift in the way the GCC countries have been spending on public sector wages, infrastructure, and social services over the last decade. The GEB documents the policy changes as they are announced and/or implemented by country and by sector and will be updated regularly as data becomes available. The information here is neither official nor exhaustive.

December 11, 2017
Saudi Arabia will launch Citizen’s Accounts cash transfer program to help low and middle income households with costs of economic reforms.
December 11, 2017
Saudi Arabia begins plans to eliminate gas subsidies in January 2018; gasoline prices will increase by 80 percent.
December 10, 2017
Saudi Arabia introduces salary cards for domestic workers to protect wages; employers have six months to transition to new scheme.
November 25, 2017
Oman announces plans to sell OMR 150 million ($390 mln) development bond open to local and foreign investors, following similar OMR 150 million bond in September.
November 23, 2017
Saudi Arabia’s Capital Market Authority announces new regulations to allow smaller foreign investment funds into local stock market.
November 19, 2017
Saudi Arabia plans to impose 5 percent VAT on gas, effective January 1, 2018.
November 18, 2017
Saudi Arabia detains 24,000 in violation of residency and labor regulations, including 25 Saudi nationals involved in violations.
November 14, 2017
After raising fees on expats, labor market data see sharp decline in expat employment.
November 13, 2017
Oman will allocate $250 million in cash support to low-income nationals, to offset rise in fuel prices.
November 8, 2017
Kuwait will restrict work permits for foreign graduates, under age 30, to protect jobs for nationals.
November 6, 2017
Oman to issue tender for first large scale independent solar project.
October 26, 2017

Market Watch: Saudi Arabia’s Neom — State-Led Growth Meets New Global Capitalism

Crown Prince Mohammed bin Salman envisions a new kind of Saudi Arabia, or at least the opening of a space complete with yoga studios, beach resorts, and robots in place of migrant laborers. This is the image of Neom, the $500 billion master project to develop an over 10,000 square mile swath of land in the northwest corner of Saudi Arabia on the shores of the Red Sea, adjacent to Egypt’s Sinai Peninsula and southern Jordan.

 

October 24, 2017
Saudi Arabia's Public Investment Fund considers selling part of its 74% stake in SEC to investment partner, SoftBank.
October 24, 2017
Saudi Arabia raises 10 billion riyals ($2.67 bn) in fourth issue of riyal-denominated domestic sukuk: 4.15 bn ($1.11 bn) in five-year tranche, 1.35 bn ($360 mn) in seven-year tranche, and 4.50 bn ($1.2 bn) in ten-year tranche.
October 10, 2017
Saudi Arabia’s Public Investment Fund will create a subsidiary investment fund for small and medium sized enterprises.
October 10, 2017
Qatar seeks to raise at least $9 billion from new bond sale.
October 9, 2017
Saudi Arabia to require all insurance sales positions to be filled by nationals by Feb 1, 2018.
October 5, 2017
Oman to create 25,000 jobs for nationals, in both private and public sectors, starting December 2017.
October 3, 2017
Abu Dhabi raises $10 billion in bond offering: $3 billion in five-year notes, $4 billion of ten-year tranche, and $3 billion in 30-year offering.”
September 27, 2017
Saudi Arabia raises $12.5 billion in dollar-denominated bonds maturing in 2023, 2028, and 2047.
September 27, 2017
UAE excise tax on tobacco, energy drinks, and soft-drinks to be imposed starting October 1: tobacco and energy drinks will double in price; soft-drink prices will increase by 50%.
September 26, 2017
UAE approves new labor law for domestic workers: weekly day-off, 30 days paid annual leave, at least 12-hour daily rest, and right to retain personal documents.
September 25, 2017
Saudi Arabia hires foreign banks to lead plans for three-tranche bond sale, intended to offset falling oil revenues.
September 19, 2017
Saudi Arabia’s Public Investment Fund will launch Future Investment Initiative to invest in entertainment sector, with initial capital of 10 billion riyals ($2.67 billion).
September 19, 2017
Saudi Arabia raises 7 billion riyals ($1.87 billion) from third issue of riyal-denominated sukuk: 2.4 billion ($639 million) in 5-year tranche, 3.9 billion ($1.04 billion) in 7-year notes, and 700 million ($186.7 million) in 10-year tranche.
September 14, 2017
Bahrain has issued $3 billion in new syndicated debt (more than anticipated) – reportedly $850 million in a sukuk, $1.25 billion in 12-year notes, and $900 million due in 30 years.
September 14, 2017

Market Watch: The Political Perils of Economic Liberalization in the Gulf

by Karen E. Young

Economic liberalization tends to bring with it social, if not always political, openings. By definition, liberalization challenges existing orders; more specifically, liberalization tries to deny the state a dominating role in the economy. State-led capitalism, as practiced in the Gulf states over the last 40 years, has invited foreign investment and migrant human capital, but it has always privileged the state and protected opportunity for citizens, most visibly via commercial agency laws and the kafala system.

September 13, 2017
Bahrain will launch multitranche dollar-denominated bonds and sukuk, expected to raise at least $1.5 billion, as follows: 7.5-year sukuk, 12-year conventional bond, and 30-year conventional bond.
September 11, 2017
Kuwait Authority for Partnership Projects will open shares in Shamal AzZour Al Oula Independent Water and Power Plant by early 2018, in country’s first public-private partnership project.
September 6, 2017
Saudi economic cities will charge real estate 1 percent sales fee, plus a transaction fee and mortgage registration fee.
September 6, 2017
Bahrain is in talks with arrangers on new dollar bonds in seven-, 12-, and 30-year terms.
September 1, 2017
The Kuwaiti government clarifies the policy toward preferred hiring of nationals and “controlled termination” of expatriate employees in the public sector.
August 28, 2017
Kuwait’s second effort to encourage investors to own and/or operate utilities fails to close bidding process for the independent water and power plant project, Al Zour North 2.
August 24, 2017
Saudi Arabia sells its second sukuk of 2017 to local markets in three tranches, raising 13 billion riyals ($3.47 billion).
August 23, 2017
Saudi Arabia will introduce 5 percent value added tax on private educational institutions.
August 21, 2017
UAE publishes excise tax, effective October 1: 100 percent on tobacco and energy drinks, and 50 percent on sugary drinks.
August 16, 2017
Saudi Arabia plans to launch second issue of local currency sukuk.
August 14, 2017
Saudi Arabia Council of Ministers approves setting up of the General Authority for Military Industries, which enjoys legal status, as well as financial and administrative independence.
August 14, 2017
Saudi Public Investment Fund announces national state company for arms manufacturing: Saudi Arabian Military Industries.
August 8, 2017
Saudi Arabia will allow 100 percent foreign ownership of engineering firms to encourage sector development.
August 8, 2017
Bahrain hires banks in anticipation of U.S. dollar bond issue.
August 4, 2017

Market Watch: Self-Imposed Barriers to Economic Integration in the GCC

by Karen E. Young

Qatar has lodged a complaint with the World Trade Organization against the United Arab Emirates, Saudi Arabia, and Bahrain for blocking its air traffic and increasing the costs of basic food and medicine imports. Though intra-Gulf state economic relations continue to suffer as a result of the current crisis, there are long-standing barriers to trade and investment flows that deserve consideration.

 

August 3, 2017
Oman borrows $3.55 billion from Chinese banks to meet 2017 fiscal deficit.
July 31, 2017
UAE announces new tax law, with new ministry for excise and value added tax collection.
July 31, 2017
Saudi Arabia’s General Authority Civil Aviation announces plans to privatize all airports by the end of 2017.
July 31, 2017
Moody’s downgrades bond ratings for Oman (Baa2-negative outlook) and Bahrain (B1-junk status-negative outlook).
July 28, 2017

The Bridge: Qatar Must Adapt SEZs to New Regional Geopolitical Realities

by Robert Mogielnicki

The Saudi, Bahraini, and Emirati efforts to isolate Qatar logistically as part of the most recent Gulf Cooperation Council crisis will require a restructuring of the country’s plans for special economic zones (SEZs) – commonly known as free zones (FZs) in the rest of the GCC states.

July 26, 2017
Bahrain seeks proposals to arrange a dollar-denominated bond, and sukuk.
July 25, 2017
The Saudi Civil Aviation Holding hires Goldman Sachs to advise on plans to sell a minority stake in Riyadh's King Khalid International Airport.
July 25, 2017
Saudi Arabia raises 17 billion riyals ($4.53 billion) in an oversubscribed sukuk from investors, for its first riyal-denominated Islamic bond.
July 25, 2017
Saudi Arabia’s Ministry of Labor announces plans to expand sectors limited to nationals only for employment.
July 24, 2017
Abu Dhabi National Oil Company seeks large loan and project bond, as part of capital raising and restructuring efforts, including partial Initial Public Offering.
July 23, 2017
Saudi Arabia offers new sukuk in local currency, in 3 tranches (5, 7, and 10 years) hoping to raise as much as 10 billion riyals ($2.7 billion).
July 13, 2017
Kuwait's Ministry of Finance presents draft bill for implementation of selective tax on tobacco, energy drinks, and soft drinks, in line with GCC agreement.
July 12, 2017
Saudi Arabia's Ministry of Environment, Water, and Agriculture will start privatizing the sewage sector, offering three key projects in five cities and governorates across the kingdom.
July 12, 2017
Saudi Arabia's Public Transport Authority invites proposals from companies in railway transport services for the construction and operation of the Riyadh-Dammam Railway, Northern Railway, and Land Bridge Project, which would connect the Gulf with the Red Sea.
July 5, 2017
Expats living in Saudi Arabia will have to pay the newly-introduced "family tax" upfront to leave the kingdom.
June 29, 2017

Issue Paper: Prioritizing Renewable Energy in a Time of Fiscal Austerity

Surging population growth, large-scale infrastructure investment, and economic development progress have led to increased energy demand in the Gulf Cooperation Council states. Since late 2014, the new normal of low oil prices has necessitated fiscal constraints and at the same time prompted greater interest in renewable energy sources.

June 29, 2017
Saudi Arabia’s Ras al-Khair facility is set to be the first state-owned desalination plant to be privatized.
June 22, 2017
Saudi decree aimed at reinstating allowances and bonuses for public sector employees will cost between 5 and 6 billion Saudi riyals ($1.3-1.5 billion).
June 19, 2017
Oman Power and Water Procurement Company is expected to announce its pick of consultants for its first coal-fired independent power project.
June 18, 2017
Saudi Arabia has entered into long-term public-private partnerships with private companies for the development and operation of five of its airport.
June 12, 2017
Saudi Arabia to implement a monthly employment tax on foreign laborers and their dependents, starting in July.
June 11, 2017
Saudi Arabia implements a "sin tax," imposing a 100 percent tax on tobacco and energy drinks, and a 50 percent tax on soft drinks.
June 7, 2017
Kuwait’s National Assembly passes amendment to a labor law that increases holiday entitlements for public and private sector employees.
June 1, 2017
Saudi Arabia invites public consultation on proposed value added tax law.
May 31, 2017
Saudi Arabia considers listing Marafiq, a state-owned utilities company, on the local market.
May 31, 2017
State-owned Saudi shipping firm, Bahri, enters joint venture with Aramco, Hyundai (South Korea) and Lamprell (UAE) to build shipyard valued at 20 billion Saudi riyals ($5.3 billion).
May 28, 2017
Saudi Arabia announces a selective tax of 100 percent on tobacco and energy drinks, and 50 percent on carbonated beverages to be applied from June 10, 2017.
May 25, 2017

Issue Paper: War at Any Price: Domestic and Regional Economic Consequences of Yemen’s Civil War

by Karen E. Young

The civil war in Yemen is now approaching its fourth year, and the rising cost of the conflict in its humanitarian disaster and continued investments by the warring parties in military expenditures suggest that cost is not a deterrent or impediment to war. While the immediate costs to the Yemeni people have been clear, the future cost to Gulf neighbors, Saudi Arabia and the United Arab Emirates in particular, may be more than these states have estimated.

May 24, 2017
Oman raises $2 billion through sukuk, with an interest rate of 4.397 percent.
May 23, 2017
UAE announces a selective tax of 100 percent on tobacco and energy drinks, and 50 percent on carbonated beverages to be applied in the fourth quarter of 2017.
May 17, 2017
Oman plans to raise $2 billion through sukuk sale.
May 12, 2017
S&P downgrades Oman sovereign to non-investment grade, from BBB- to BB+.
May 10, 2017
Saudi Arabia's deputy minister of civil service promises to eliminate non-nationals from public sector jobs by 2020.
May 9, 2017
Oman seeks to borrow $3.6 billion from three Chinese banks to meet spending needs.
May 2, 2017
Qatar plans implementation of new public-private partnership regulatory framework.
April 21, 2017
Oman considers listing Oman Oil Company's assets on the local market.
April 18, 2017
Saudi Arabia plans to incorporate and transfer its airports to SWF in preparation for privatization.
April 13, 2017
Saudi Arabia raises $9 billion with its first international sukuk issue.
April 4, 2017
Kuwait plans to increase its public debt ceiling from 10 billion dinars, to 20 billion dinars ($65.62 billion).
March 27, 2017
Saudi Arabia reduces Aramco’s tax rate from 85 percent to 50 percent, in order to attract investors for its IPO.
March 15, 2017
Oman announces plans to list a 49 percent IPO in Muscat Electricity Distribution Company by June.
March 13, 2017
Kuwait to raise $8 billion with its first international bond issue.
March 2, 2017
Oman issues $5 billion in international bonds.
March 2, 2017

The Bridge: Restructuring of Saudi Arabia’s Energy Industry Gathers Pace

by Diane Munro

Saudi Arabia is powering ahead with ambitious plans to reorganize its massive energy sector. The restructuring is part of its strategic plan to reduce domestic oil dependence and adopt a more commercial approach to its business operations at state oil company Aramco as part of Vision 2030 and ahead of the historic initial public offering set for 2018.

February 27, 2017
Oman increases income tax, with significant changes applied to small businesses.
February 21, 2017
Bahrain issues a $600 million tap from its $1 billion October 2028 bond.
February 7, 2017
Oman issues short-term treasury bills to the local bank market in the amount of 32.77 million Omani rials ($85.08 million).
February 2, 2017
The GCC value added tax is closer to implementation.
January 31, 2017
Kuwait announces a 50 percent IPO in the Az-Zour North Independent Water and Power Project.
January 30, 2017
The Saudi Arabian cabinet approves a 5% value added tax to begin in early 2018.
January 18, 2017

The Bridge: Abu Dhabi Share-Swap Deal with BP Forges New Contract Model

by Diane Munro

Abu Dhabi capped a year of unprecedented change at state oil company Abu Dhabi National Oil Com­pany (ADNOC) with a landmark $2.2 billion share-swap with legacy partner BP. The unique model for a joint venture gives Abu Dhabi a 2 percent stake in BP in exchange for a 10 percent share in the country’s main onshore oil concession.

January 17, 2017
Saudi Telecom Company completes 400 million Saudi riyal ($106.7 million) purchase of remaining stake in Sale Advanced Co.
January 17, 2017
Qatar sells 15 billion Qatari riyals ($4.1 billion) in bonds to the local debt market.
January 16, 2017
Kuwait prepares for its first dollar-denominated bond issue.
January 10, 2017
Kuwait announces an increase in health fees.
January 9, 2017
Saudi Arabia increases residency fees for expatriates.
January 5, 2017
Saudi Arabia plans a sugar drink and tobacco tax for April.
January 5, 2017
Qatar amends the new labor regulation, reinstating the requirement for workers to have permission of employers to leave the country.
January 3, 2017
Oman prepares for an international bond issue.
January 3, 2017
Expatriate workers are sentenced to flogging and jail time for protesting unpaid wages in Saudi Arabia.
January 3, 2017
Abu Dhabi introduces a new 3 percent municipality fee on expatriate rental contracts.
December 13, 2016
Qatar eases restrictions on foreign worker mobility, contract transfer
November 30, 2016
Qatar introduces new fees for alcohol licenses for expatriates.
November 30, 2016
Saudi Arabia dips into its reserves to fund the Public Investment Fund an additional 100 billion Saudi riyals ($27 billion).
November 21, 2016
Saudi government makes back payments of over 40 billion Saudi riyals ($10 billion) to contractors
November 9, 2016
Kuwait announces plans for multiple public-private partnerships in water and electricity services.
November 8, 2016
Kuwait's quasi-sovereign EQUATE issues a new government-backed corporate bond.
November 8, 2016
Kuwait announces plans for an international bond sale in 2017.
November 2, 2016
Oman issues short term treasury bills to the local bank market in the amount of 42 million Omani rials ($109 million).
October 31, 2016
King Saud University in Riyadh lays off hundreds of expatriate medical staff under the pressure of hiring nationals.
October 19, 2016
Saudi Arabia's first international bond sale will be larger than expected.
October 4, 2016
Bahrain issues $2 billion in international bonds, half in a sukuk.
September 23, 2016
Oman moves assets between the Ministry of Finance and other government-related entities in preparation for its privatization efforts.
September 20, 2016
Saudi Arabia removes subsidies and increases fees for government services to issue passports, driving licenses, car transfers, traffic violations, residence permit renewals for domestic workers, and increases customs duties on 193 commodity products, effective October 2.
September 20, 2016
Qatar sells 4.6 billion Qatari riyals ($1.26 billion) in bonds to local debt market.
September 20, 2016
Bahrain announces a new flexible visa for temporary employment.
September 6, 2016
United Arab Emirates Cabinet approves bankruptcy law, expected to come into effect in 2017 pending presidential signature. The law is aimed at safeguarding the rights of creditors and debtors in insolvency situations, including measures that prioritize secured creditor rights, and enable companies to restructure without unanimous creditor approval.
August 23, 2016
Saudi Arabia continues bond sales to the local bank market in local currency, up to 20 billion Saudi riyals ($5.3 billion ) in August.
August 9, 2016
Saudi Cabinet approves new visa fees, including 8,000 Saudi riyals ($2,133) for a two year multiple entry permit, as well as reducing the benefits of a 500 Saudi riyals (about $133) multiple exit/entry visa from three to six months
August 2, 2016
Kuwaiti Cabinet approves increasing petrol prices by 41 percent for low octane petrol and 83 percent for low emission petrol, starting in September
July 23, 2016
The Saudi Industrial Property Authority (MODON) signs 6,000 industrial, logistic, and services contracts.
July 15, 2016
Sharjah municipality in the United Arab Emirates increases the tenancy attestation fee from 2 to 4 percent.
July 12, 2016
Kuwaiti government considers privatizing non-oil production units of the Kuwait Petroleum Corporation
June 29, 2016
State-owned Petroleum Development Oman obtains $4 billion in loans from international banks.
June 29, 2016
The price of petrol in Qatar will increase by 7 percent starting in July from 1.20 Qatari riyal ($0.32) to 1.30 Qatari riyal ($0.35) per liter.
June 23, 2016
New land tax to be introduced in Saudi Arabia.
June 15, 2016
Outbound travelers through Oman’s airports will have to pay 2 Omani rials ($5.19) extra in tax, starting July 1.
June 15, 2016
Abu Dhabi joins Dubai and Sharjah in implementing an airport departure fee, starting July.
June 13, 2016
Kuwait Investment Authority intends to sell its stake in nuclear group, Areva.
June 9, 2016
Oman issues debt in the form of a $2.5 billion bond – its first debt issue in nearly 20 years.
June 8, 2016
Saudi government considers a new income tax on expatriates
June 1, 2016
Omani government approves an increase in corporate tax
May 31, 2016
In June, the revised price for regular petrol in Oman will be about 170 baisas ($0.44) per liter, super graded will be about 180 baisas ($0.46), and diesel will be about 185 baisas ($0.48).
May 26, 2016
Qatar issues debt in the form of a $9 billion bond (in three maturities: five, 10, and 30 years), surprising markets with the amount of investor interest.
May 26, 2016
Qatar's Ministry of Energy and Industry announces gasoline prices increase to 1.30 Qatari rials ($0.36) per liter for Super 97, 1.15 Qatari rials ($0.32) per liter for Premium 90, and 1.40 Qatari rials ($0.38) per liter for diesel.
May 19, 2016
Kuwait makes plans to issue a sovereign bond.
May 15, 2016
Bahrain issues a $435 million privately placed sukuk.
May 14, 2016
Moody’s lowers Oman's credit rating from A3 to Baa1.
May 14, 2016
Moody’s lowers Bahrain's credit rating from Ba1 to Ba2.
May 4, 2016
Qatari government announces plans for a bond sale aiming to raise up to $5 billion
May 1, 2016
Employees at Saudi Binladin Group set fire to seven buses over not receiving salaries and repeated layoffs of more than 50,000 employees (nationals and expatriates).
April 30, 2016
The revised price for regular petrol in Oman will be 149 baisas ($0.39) per liter in May.
April 25, 2016
Saudi government sells five, seven, and ten year floating rate notes.
April 25, 2016
Saudi Arabia announces that it has no plans to introduce tax on income, capital, or basic goods.
April 24, 2016
Private Omani firms consider issuing sukuks.
April 12, 2016
Qatar’s Ahli Bank completes a $500 million debut bond issue.
April 4, 2016
Kuwait plans to issue debt worth 2 billion Kuwaiti dinars ($6.6 billion), split equally between sukuk and conventional bonds.
April 1, 2016
Kuwaiti work permit fee raised from 2 Kuwaiti dinars ($6.63) to 50 Kuwaiti dinars ($165.78); renewal from 2 Kuwaiti dinars ($6.63) to 10 Kuwaiti dinars ($33.16)
March 14, 2016
Kuwait plans to impose a 10 percent tax on company profits, a 5 percent value added tax, and a proposed tax on money transfers by expatriates.
March 1, 2016
Standard & Poor’s lowers Oman's credit rating two notches to BBB-minus.
February 27, 2016
Moody’s lowers Oman's credit ratings by two notches to A3.
February 23, 2016
Bahraini government terminates a $750 million bond sale of five and ten year bonds, only to reopen the cancelled sale as $600 million, with borrowing costs raised by 25 basis points.
February 17, 2016
Standard & Poor’s cut Saudi Arabia's credit worthiness twice in less than six months to A-.
February 17, 2016
Standard & Poor’s lowers Bahrain's credit worthiness from BBB- to BB, now rating it as junk.
January 12, 2016
Bahrain raises regular petrol prices to 0.125 Bahraini dinars ($0.33) per liter (56.3 percent increase).
December 31, 2015
Oman's Shura Council votes to increase corporate tax by 3 percent (from 12-15 percent without discrimination).
December 7, 2015
Bahrain contemplates proposal to introduce higher rates on traffic registration and inspections for expatriates and companies, impose fees on expatriate students at government schools, and new rates for unused plots of land and sewage usage.
November 13, 2015
The Omani government moves to find ways to reinstate over 1,500 Omanis laid off from contracting companies in November.