Saudi Arabia began courting Toyota two years ago to build a large car plant as p...
RIYADH - Saudi Arabia began courting Toyota two years ago to build a large car plant as part of Crown Prince Mohammed bin Salman’s grand plan to wean the kingdom off oil revenues and create jobs for young Saudis.
Failure to do so would be a setback for Prince Mohammed, coming after the listing of oil giant Saudi Aramco was shelved and the killing of journalist Jamal Khashoggi tarnished the kingdom’s image. As part of measures designed to create 1.6 million manufacturing and logistics jobs by 2030, Prince Mohammed wants to localize half the production of imported vehicles and weapons - which are expected to account for up to $100 billion in spending by Saudi government entities and consumers by 2030.
Hundreds of thousands of Saudis work in petrochemicals, one of the biggest contributors to the economy outside oil. But it took decades to build up the industry, even with huge government funding and cheap raw materials. A strategy document posted on NIDLP’s website acknowledged that Saudi Arabia had a major competitive disadvantage and state incentives would be needed to create “substantial commercial justifications” to attract carmakers.
Riyadh would need to build integrated economic districts producing components such as windows, batteries and wheels to lower costs, a senior executive at a Western auto firm said. Cars imported into the GCC customs union which includes Saudi Arabia only attract a 5% tariff, offering little protection against cheap imports for countries trying to get domestic car production off the ground.Turkey and Egypt also provide experienced, cheap manpower while Riyadh has been reducing the number of foreign laborers to create jobs for Saudis, who prefer higher-paying public jobs.
Economists say, however, that Saudi Arabia does have the potential to build competitive industries and create jobs in the mining and pharmaceutical sectors.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Exclusive: Overruling his experts, Pompeo keeps Saudis off U.S. child soldiers listSecretary of State Mike Pompeo has blocked the inclusion of Saudi Arabia on a U....
Read more »
Saudis Push to Renew OPEC’s Oil-Export Curbs, Despite Tanker AttacksSaudi Arabia is set to push for OPEC to cut oil output in the second half of the year, as signs of slowing global demand for crude outweigh threats of war and worries about supply disruptions in the Middle East.
Read more »
Overruling his experts, Pompeo keeps Saudis off U.S. child soldiers listSecretary of State Mike Pompeo has blocked the inclusion of Saudi Arabia on a U.S. list of countries that recruit child soldiers, dismissing his experts' findings that a Saudi-led coalition has been using under-age fighters in Yemen’s civil war, according to four people familiar with the matter.
Read more »
UN rights investigator to issue report on Khashoggi murderUN extrajudicial executions investigator, Agnes Callamard, will issue her report on the assassination of Saudi journalist Jamal Khashoggi on Wednesday, a statement says.
Read more »