WASHINGTON: If US President Donald Trump’s hard-line stance on illegal immigration leads to large-scale deportations, among those hurt could be the US economy.
That is the view of many economists, who say the US cannot afford to suddenly lose vast numbers of the immigrants who work illegally picking fruit and vegetables, building houses, busing tables, staffing meat-packing plants and cleaning hotel rooms.
Immigrants living illegally in the US account for roughly 18 percent of employment in agriculture, 13 percent in construction and 10 percent at restaurants, hotels and casinos, according to a study done last year by the National Bureau of Economic Research (NBEC).
“The economic shock would cause widespread ramifications,” says Ben Gitis, director of labor market policy at the American Action Forum, a conservative think tank.
Addressing Congress on Tuesday night, Trump vowed to build “a great, great wall” to bar Mexicans from entering the US illegally. Even as he spoke, the president said, US authorities were deporting the “bad ones.”
The president’s tough talk followed remarks he had made to CBS’s “60 Minutes” after his November election: He warned that his administration might deport 2 million to 3 million of those living in the country illegally.
Yet what exactly Trump wants to do about illegal immigration remains hazy because he has said different things at different times. On Tuesday before his speech, for example, the president had signaled a potential shift in a private meeting with news anchors.
He told them he was open to legislation that would give legal status to some people living illegally in the US and provide a pathway to citizenship to people who were brought to the US illegally as children.
But in his speech Tuesday night, the president omitted any such suggestion. He instead promised to target people living in the US illegally who “threaten our communities” and prey on “innocent citizens.”
Economists note that immigrants, including those working in the country without permission, play a vital role in the US economy, and not only because they fill many low-paying jobs that Americans will not or can not do.
The US, like Japan and western Europe, is being hobbled economically by an aging and slower-growing workforce. Economic growth depends on a steadily growing supply of workers.
But aging baby boomers are retiring. And an unusually large proportion of prime-age men have stopped looking for work. Nearly eight years after the end of the Great Recession, the unemployment rate has fallen to 4.8 percent, near what economists consider full employment.
As older Americans retire, younger ones are increasingly choosing to enroll in college rather than start work right out of high school. One result is that it is become harder for employers to fill the entry-level jobs that are often taken by immigrants living in the US illegally.
Gitis reviewed the numbers and said he reached a striking conclusion: Suppose, he says, the US were to deport or otherwise lose all the estimated 6.8 million immigrants working in the country illegally. At full employment, there would not be enough legal workers to fill all those jobs. At least 4 million jobs would go unfilled.
Still, critics have often argued that low-wage immigrants in the US end up depressing pay for everyone else. And economists have long wrangled over that possibility.
A paper issued last month by the NBEC studied what happened in 1964 when the government cut the supply of seasonal Mexican farm workers entering the US. By excluding the Mexicans, the move was supposed to create jobs for American farm workers and raise their wages.
But researchers Ethan Lewis of Dartmouth College and Michael Clemens and Hannah Postel of the Center for Global Development found that barring Mexican farm workers “failed to raise wages or substantially raise employment for domestic workers.” Instead of hiring Americans, farms turned to machines to pick cotton and tomatoes and to tend to sugar beets.
Economist Ryan Edwards of Mills College says US employers would likely shrink their businesses — rather than search in vain for legal workers — if they lost workers to mass deportations.
The cutbacks could take a heavy economic toll. Edwards and Francesc Ortega of the City University of New York estimate that immigrant workers living in the country illegally account for 3 percent of private gross domestic product — the broadest measure of economic output — or nearly $5 trillion over 10 years.
Mass deportations could impose other costs as well. Gitis estimates that the government would have to spend $400 billion to $600 billion to deport all those living in the US without permission and to prevent future illegal immigration.
In a 2013 study, the Social Security Administration found that immigrants living in the country without permission had paid $13 billion into Social Security in 2010 and received only $1 billion in benefits. The administration concluded that their contributions had had “a net positive effect” on Social Security finances.
So mass deportations mean “we’d not only be losing workers,” Gitis says. “We’d lose consumers, even taxpayers.”
Deporting undocumented immigrants will slow US economy: Experts
Deporting undocumented immigrants will slow US economy: Experts
Saudi benchmark index inches up 0.26% to close at 12,386
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 32.12 points, or 0.26 percent, to close at 12,386.16.
The total trading turnover on the benchmark index reached SR5.11 billion ($1.36 billion), with 161 stocks advancing and 69 retreating.
The Kingdom’s parallel market, Nomu, also saw a modest gain, rising 49.70 points, or 0.16 percent, to close at 30,896.29, as 49 stocks advanced and 42 declined.
The MSCI Tadawul Index closed up by 2.01 points, or 0.13 percent, finishing at 1,545.39.
Kingdom Holding Co. emerged as the day’s top performer, with its share price surging 9.80 percent to SR10.20. Other notable performers included Al-Baha Investment and Development Co., which rose 9.30 percent to SR0.47, and Saudi Fisheries Co., whose share price jumped 7.84 percent to SR24.28.
On the downside, Al-Jouf Cement Co. recorded the largest drop, falling 3.57 percent to SR12.44. Arabian Pipes Co. also saw its stock decline by 2.50 percent, closing at SR13.26, while Rasan Information Technology Co. dropped 1.94 percent to SR90.80.
On the announcements front, Al-Baha Investment and Development Co. announced its annual financial results for the period ending Dec. 31. The company reported a net profit of SR8.37 million for 2024, a 69.48 percent increase compared to 2023. The growth was primarily driven by a 13 percent rise in revenues, a 98 percent drop in zakat provisions, a 39 percent reduction in financing costs, and a decline of SR1.18 million in investment properties.
Al-Moammar Information Systems Co. has signed a SR58.6 million contract with the Saudi Authority for Data and Artificial Intelligence to enhance the AI network through software and services.
According to a bourse filing, the 36-month deal is expected to generate positive financial impacts starting in Q1 2025. The stock closed at SR160.40, up 0.51 percent.
Al-Sagr Cooperative Insurance Co. received an Insurer Financial Strength Rating of “BBB” and a National IFS Rating of “A+” with a stable outlook from Fitch Ratings.
The ratings reflect Al-Sagr’s strong capitalization, solid financial performance, and well-diversified insurance portfolio, despite its moderate operating scale within the Saudi insurance market. Al-Sagr’s stock closed at SR18.10, up 3.20 percent.
Saudi-based Walaa Cooperative Insurance Co. maintains ‘A-’ rating: S&P Global
- S&P expects Walaa to maintain this level of capital adequacy over the next two years
- It also expects the company to gradually improve its combined ratio to about 98% in 2025—2026
RIYADH: Saudi Arabia’s Walaa Cooperative Insurance Co. maintained its “A-” long-term insurer financial strength rating by S&P Global, with a stable outlook.
The New York-based credit rating agency also affirmed its “gcAAA” long-term Gulf Cooperation Council regional scale rating and “ksaAAA” long-term Saudi national scale assessment for Walaa, highlighting the insurer’s capital position and planned business growth initiatives.
This comes as the company completed an SR468 million ($124.8 million) rights issue in December, initially announced in September 2023.
The additional capital will support the firm’s growth strategy and enhance its regulatory solvency margin.
S&P said Walaa’s capital adequacy exceeded its 99.99 percent confidence level before the reserve increase, with the recent capital injection further strengthening the company’s financial stability.
The rating agency expects Walaa to maintain this level of capital adequacy over the next two years, underpinning its stable outlook.
The firm’s stock price has already seen a significant 5.26 percent increase by 2:20 p.m. Saudi time to reach SR24.
Despite its strong capital position, Walaa’s operating performance has lagged behind similarly rated peers, according to S&P.
At the end of the third quarter of last year, the company ranked as the fifth largest insurer in the Kingdom, with insurance revenue reaching SR2.4 million and a growth rate of 17 percent.
However, the insurer faced challenges in profitability, driven by its medical insurance segment.
The combined ratio — a key measure of underwriting performance — stood at 101 percent for the third quarter of 2024, compared to 98 percent during the same period the previous year.
While the motor insurance segment, which experienced losses between 2021 and 2023, returned to profitability in 2024, reporting a service result of SR18 million for the third quarter, Walaa’s medical insurance business posted a significant loss of SR85 million during the same period.
This marks a sharp decline from the SR4 million loss recorded in the third quarter of 2023. The company plans to expand its medical insurance segment over the next two years, aiming for breakeven by the year’s end.
S&P said the goal may be challenging due to the competitive and concentrated nature of the medical insurance market in Saudi Arabia, which is projected to reach $4.33 billion this year, according to German online data gathering platform Statista.
The medical segment is dominated by The Co. for Cooperative Insurance and Bupa Arabia for Cooperative Insurance, which collectively accounted for 76 percent of market revenue and most of the segment’s profitability in the third quarter of 2024, according to S&P.
Walaa’s ability to achieve breakeven in this segment will play a critical role in the recovery of its overall performance.
S&P expects Walaa to gradually improve its combined ratio to about 98 percent in 2025— 2026 as it continues to diversify its business and recover its operating performance.
The agency also flagged potential risks, including the possibility of a negative rating action if Walaa’s underwriting performance is weaker than its local and regional peers or if its capital adequacy falls below the 99.95 percent confidence level.
S&P views the likelihood of a rating upgrade as limited during the outlook period. Any positive rating action would depend on Walaa’s ability to significantly increase and diversify its premium income without impairing operating performance, while maintaining capital adequacy at the 99.99 percent confidence level and a low-risk investment portfolio.
World leaders to attend Saudi Real Estate Future Forum 2025 for industry-shaping discussions
- Event will gather over 300 speakers from 85 countries to lead discussions on the direction of real estate
- Key themes and sessions at RFF 2025 will encompass various topics, with over 30 high-level dialogue events and 25 in-depth workshops
RIYADH: The Real Estate Future Forum is set to serve as a global hub for industry leaders, policymakers, and investors as Saudi Arabia transitions toward a diversified and innovation-driven economy.
The event will be held from Jan. 27— 29 at the Four Seasons Hotel in Riyadh and will gather over 300 speakers from 85 countries to lead discussions on the direction of real estate.
Under the theme “Future for Humanity: Shaping Dreams into Reality,” RFF 2025 will focus on innovations, sustainability efforts, and investment strategies reshaping the global property market.
This year’s edition will also spotlight the Middle East’s $1 trillion real estate pipeline, which is driving changes in urban development and creating new regional economic opportunities.
Saudi Arabia at the forefront of real estate evolution
The Kingdom’s Vision 2030 reforms have positioned the country as a leader in real estate development, combining innovation, sustainability, and economic growth.
Forum participants will get an in-depth look at major projects, including NEOM, The Red Sea Project, and Diriyah Gate, and their economic impact and long-term sustainability.
The discussions will provide insights into how these initiatives are influencing the broader real estate landscape.
A $1 trillion opportunity for global transformation
With the Middle East witnessing an unprecedented wave of urban expansion, the real estate sector has immense opportunities and critical responsibilities.
This year’s forum will highlight how key stakeholders can leverage digital transformation, sustainable construction, and strategic investments to build cities that are economically viable, environmentally responsible, and socially inclusive.
Benjamin Deschietere, managing director and partner at Boston Consulting Group, underscored the urgency of sustainability in real estate development.
“The Middle East’s $1 trillion real estate pipeline offers a once-in-a-generation opportunity to rethink how we design and build our communities,” he told Arab News.
“With buildings accounting for more than one-third of global greenhouse gas emissions, decisions made today in the region’s transformative mega-projects will impact generations and have the potential to influence global standards for decades,” he added.
Deschietere said that sustainability in design, the use of greener materials, and advancements in construction and procurement practices are essential rather than optional.
He said cities built with these principles would be more resource-efficient, livable, and valuable in the long term, adding that developers who adopt these approaches would gain a significant competitive edge in the coming decades
A holistic approach to sustainability and innovation
RFF 2025 will focus on environmental sustainability and social and economic resilience. With the Kingdom’s target of developing 1 million new housing units by 2030, the forum will discuss how sustainable urbanization can drive affordability, job creation, and social equity.
Edoardo Geraci, managing director and partner at BCG, told Arab News of the need for a paradigm shift. “Traditional real estate has often prioritized growth over sustainability, but the future demands a more holistic approach.”
He added that beyond reducing carbon emissions, sustainable development must also consider social outcomes, such as inclusivity, affordability, and job creation.
“Passive design principles and smart building technologies already enable a reduction of lifecycle carbon emissions by up to almost 40 percent, offering significant cost savings over time,” the expert said.
Geraci also said the Middle East has a distinct chance to demonstrate how well-planned urban development can improve the quality of life, restore natural resources, and establish new standards for sustainable and resilient cities on a global scale.
RFF 2025 themes and sessions
Key themes and sessions at this year’s forum will encompass various topics, with over 30 high-level dialogue events and 25 in-depth workshops.
Discussions on smart cities and digital transformation will explore the role of artificial intelligence and blockchain in real estate transactions and homeownership, innovations in smart buildings and urban infrastructure, and the impact of big data on market forecasting and investment strategies.
Sustainable real estate and green building innovations will be another focal point, addressing the shift toward net-zero developments and green architecture, sustainable financing models for eco-friendly projects, and case studies from leading sustainable cities and giga-projects.
Real estate investment and financing trends will be examined, with insights into alternative financing models for large-scale undertakings, the impact of global economic shifts on Middle Eastern real estate markets, and future trends in institutional investment and private sector involvement.
The forum will also highlight the role of giga-projects in economic growth, offering perspectives from key players behind NEOM, The Red Sea Project, and Diriyah Gate, while discussing how these developments are shaping tourism, hospitality, urban living, the intersection of real estate, entertainment, and sports infrastructure.
RFF 2025 will provide an outlook on integrating advanced technologies into the real estate sector. Panels will dive into emerging trends like virtual reality for property marketing, the role of the metaverse in digital real estate, and the use of robotics and 3D printing in construction. The implications of these technologies for efficiency, cost savings, and consumer experiences will be examined.
Another focus will be community-centered urban planning and sessions will address the importance of inclusivity and accessibility in development projects, exploring how innovative housing models and mixed-use initiatives can enhance quality of life and foster social and economic prosperity.
The forum will also discuss sustainable procurement practices and supply chain transformation, offering insights into minimizing waste and achieving carbon neutrality in mega-projects.
The three-day event is set to feature a distinguished lineup of speakers, including government officials, global investors, and media personalities who will provide valuable insights into industry-shaping trends.
Notable speakers include Majid Al-Hogail, Saudi minister of municipalities and housing; Turki bin Talal, governor of Asir region; Saud bin Talal, governor of Al-Ahsa; former US President Bill Clinton; international media influencer Piers Morgan; and global media commentator Tucker Carlson.
With Vision 2030 strongly supporting tourism and lifestyle projects, discussions will explore how cultural preservation and modern innovation coexist in urban developments.
Sessions will delve into the design of projects such as New Murabba and Trojena in NEOM, examining how these ventures are redefining the Kingdom’s global image while fostering sustainable growth.
Insights into the transformative impact of major sporting and entertainment events on real estate demand and city planning will highlight the sector’s potential to drive broader socio-economic change.
A platform for transformative deals and partnerships
The 2024 edition of RFF saw over 50 agreements worth SR100 billion ($26.6 billion) signed, driving investment in key real estate projects.
The 2025 forum is expected to eclipse those numbers, offering an even greater platform for deal-making, policy announcements, and strategic partnerships.
A Glimpse into the Future
The Kingdom’s real estate sector is on the cusp of a technological and financial revolution driven by digital transformation, sustainable design, and forward-thinking policies.
As Vision 2030 continues to guide the nation toward an economically diversified and innovation-driven future, RFF 2025 will serve as a platform for international investors, developers, and policymakers looking to tap into the region’s potential.
RFF 2025 will offer various opportunities for networking, collaboration, and sharing expertise, making it a key event in the ongoing development of the global real estate industry.
Oman’s inflation rate edges up 0.7% in December
RIYADH: A rise in the prices of several categories led Oman’s inflation rate to increase by 0.7 percent in December year on year for the base year 2018, according to new data.
Released by the National Center for Statistics and Information, the data shows a rise in prices across various personal goods and services groups, including a 4.5 percent increase in personal goods and services, a 3.2 percent rise in health, and a 1.7 percent increase in food and non-alcoholic beverages.
The restaurants and hotels group also saw a surge of 0.8 percent, the culture and entertainment group rose by 0.6 percent, and the clothing and footwear group grew by 0.5 percent.
Additionally, the furniture, household equipment, and maintenance group increased by 0.4 percent, while the education group saw a slight rise of 0.1 percent.
This data aligns with broader resilience observed across the Gulf Cooperation Council region. An International Monetary Fund report released in December highlighted how GCC economies have successfully weathered recent shocks, supported by strong non-hydrocarbon growth and ongoing reforms.
Oman’s economic resilience has been recognized internationally, with its sovereign credit rating recently upgraded to investment grade.
This economic strength is further reflected in Oman’s 6.2 percent budget surplus and 2.4 percent current account gain in 2024, driven by prudent fiscal policies, high oil prices, and growing non-hydrocarbon exports.
The consumer price index data also revealed specific increases in food prices. For example, the vegetable group rose by 7.6 percent, the milk, cheese, and eggs group increased by 3.8 percent, and other food products not classified under another category saw a 3.7 percent rise.
Other food categories such as sugar, jam, honey, and sweets rose by 2.8 percent, the meat group increased by 2.6 percent, the fruits group rose by 2.2 percent, and oils and fats saw a 1.6 percent increase.
In contrast, the prices of the transportation group decreased by 0.8 percent, the non-alcoholic beverages group dropped by 0.5 percent, and the fish and seafood group saw a significant decrease of 6.3 percent.
Meanwhile, the prices of the housing, water, electricity, gas, and other fuels, communications, and tobacco groups remained stable. The data also revealed that the prices of the bread and grains group stayed unchanged.
Looking ahead, the nation predicts a modest 2.7 percent growth in gross domestic product (GDP) this year, while IMF projections released earlier this month forecast a slightly higher expansion of 3.1 percent.
Inflation has continued to ease in Oman, declining to 0.6 percent during the first 10 months of 2024, compared to 1.0 percent in 2023.
GCC records $1.5tn in trade volume, ranking sixth globally
JEDDAH: The Gulf Cooperation Council achieved a trade volume of $1.5 trillion in 2023, securing its position as the sixth-largest global trader, according to the latest data.
This figure represents 3.4 percent of global trade, highlighting the region’s growing economic importance. However, the GCC saw a 4 percent decline in trade volume compared to 2022, as reported in the 2023 GCC Foreign Trade Report issued by the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf.
The report also revealed that the GCC ranked third globally in the merchandise trade balance, with a surplus of $163.7 billion in 2023. This marks a sharp drop of 57.1 percent from the previous year’s surplus of $381.3 billion.
Despite these challenges, the region’s non-oil sectors have continued to grow, reflecting the GCC’s commitment to economic diversification. Additionally, the International Monetary Fund highlighted that foreign reserves held by GCC central banks are equivalent to approximately 10 months of the region’s import needs.
The IMF further noted that the GCC has established itself as a crucial hub for regional economic growth, aided by its open trade policies, liberal capital flows, and a welcoming approach to foreign labor.
The GCC’s position in global trade was also reinforced by its ranking as the fifth-largest exporter of commodities, contributing 3.1 percent of the world’s total. In 2023, the region’s commodity exports were valued at $0.8 trillion, though this marked a 14.5 percent decline compared to 2022.
On the flip side, merchandise imports into the GCC increased by 13.4 percent to reach $0.7 trillion, accounting for 2.7 percent of global imports.
When excluding intra-GCC trade, total goods trade fell by 4 percent, reaching $1.48 trillion in 2023. The decline was primarily driven by a 14.5 percent drop in commodity exports, which decreased from $962.6 billion in 2022 to $823.1 billion in 2023. Conversely, commodity imports rose by $78 billion, reaching $659.3 billion in 2023.
A significant decline in oil exports was also recorded. The GCC saw a 20.5 percent drop in oil exports, which totaled $525.5 billion in 2023, compared to $661.1 billion the previous year.
China was the GCC’s largest trading partner in 2023, with total commodity trade valued at $297.9 billion, far outpacing India, which ranked second at $150.4 billion.
The Asian country also remained the GCC’s top destination for commodity exports, accounting for 19.2 percent of the total at $158.3 billion, although this represented a 16.8 percent drop from 2022.
Moreover, China topped the list of countries supplying merchandise imports to the GCC, contributing 21.2 percent of the total imports, valued at $139.6 billion, up 10.8 percent from $126.0 billion in 2022.
