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GDP in the GCC Region Climbs to $983 Billion

Middle East : 13 October 2010

Gross Domestic Product (or GDP) for the Gulf Cooperation Council hit $983 billion this year, an increase of 4.4 per cent over 2009 figures according to Abdullah Zainal Alireza, the region’s Commerce and Industry Minister.

The minister spoke at a financing conference taking place in Asharqiya Chamber focusing on industrial developments.  He noted that the industrial sector was responsible for 10 per cent of 2009’s GDP, compared to only 2.5 per cent of the GDP in 1968.

Minister Alireza said that the industrial sector had a major role to play in Saudi Arabia’s push to the top of the world’s economies and that the Kingdom has recognized the importance of this sector.

Projects across the nation were backed by the SR 71 billion in loans through the Saudi Industrial Development Fund, which issued 2,694 loans altogether.  There was a total of SR 272 billion (or $72.5 billion) in investments made in industries.

Expansion within the existing industrial cities, such as Jubail, Jeddah and Yanbu, and the development of more are providing the infrastructure needed for the industrial work in Saudi Arabia.

More funds are needed for the financing of industrial developments, according to the chairman of Asharqiya Chamber Abdul Rahman Al-Rashid.  Industry professionals are looking for new mechanisms of financing for GCC projects.

Industrialists and officials from around the GCC countries were in attendance at this conference that put an emphasis on the consulting and tech support that is vital for the progress of industry.

It was unanimous within the group of conference speakers that financing should only be issued to projects that provide the assurance of success and consistency with feasibility studies and through the integrity of the owners themselves.

Acting director of credit for the Saudi Industrial Development Fund (SIDF) Adel Al-Sihaimi spoke as the conference opened.  He noted that the support his organization offers, including consulting in financial, administrative, technical and marketing areas, boosts the performance of these projects and gives them the momentum needed to overcome hurdles and project difficulties.

Of the SR 71 billion given out by SIDF, Al-Sihaimi stated that only SR 33 billion had been repaid.  Around half of the fixed assets in developments are financed by the SIDF including buildings, machinery and equipment, civil works, security requirements specific to the sector, furniture, operating capital and any further expenses that come up before the project is established.

Public Relations director for the Centennial Fund Yasser Al-Tuwaijri stated that at least 200,000 job openings are needed immediately.  He also stated that about 79 per cent of the released prisoners have yet to find work and in total, there are 876,719 jobless Saudis.

The director reiterated the goal of the Centennial Fund, which is enabling young people to grow into businessmen and to create positions for both men and women.  Around 30 per cent of the Centennial Fund’s finances are distributed as cash and the balance (70 per cent) are given out as guidance and consulting services done by the 5,100 volunteer staff at the organization.

The first session of the conference was chaired by Qasim Saqr, who sits on the board of directors for the Chamber of Commerce and Industry in Kuwait.  Coordinator for the Tamkeen projects in Bahrain, Ammar Al-Awamji noted that each foreigner in Bahrain is expected to contribute 10 dinars monthly for the support of the Tamkeen program.

Talal Al-Zadjali of the Oman Development Bank stated that the industrial economic sector is a vital source of development and activity, especially as oil wealth depletes over time.

The Omani banks are extending about one million riyals in financing to projects within the industrial sector as well as in tourism, health, agricultural, IT and professional projects.  The financing is extended over 10 years and carries an interest rate of nine per cent, with six per cent covered by the government.

Kuwait’s Industrial Development Fund began in 1973 through government initiatives and has put through 867 financing projects, according to the economic division director Jassim Al-Ammar.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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