KARACHI: Remittances to Pakistan through legal channels declined by 14 percent or over $4 billion during the outgoing fiscal year amid political and exchange rate instability, official data and experts said on Monday, as Saudi Arabia and the United Arab Emirates remained top contributors of money sent home by Pakistani workers.
Pakistan received $27 billion during the outgoing fiscal year, FY23, compared to $31.27 billion the year before. In June 2023, $2.2 billion in remittances were recorded, according to data released by the State Bank of Pakistan (SBP) on Monday.
The cash-strapped South Asian nation struggled with low foreign exchange reserves almost throughout the fiscal year due to its inability for months to reach a staff level agreement with the IMF to unlock at least $1.1 billion under the lender's ninth review of a $6.5-billion Extended Fund Facility agreed in 2019. A day before the program expired, Pakistan secured a badly-needed $3 billion short-term financial package from the IMF last month, giving its economy a much-awaited respite as it teeters on the brink of default.
“Due to instability of exchange rates in the grey, open, and interbank markets, the flow of remittances through official channels has declined,” Tahir Abbas, Head of Research at Arif Habib Limited, told Arab News.
“The country remained in the grip of uncertainty related to the IMF program that has also played a critical role in the decline of remittances through official channels. Political uncertainty was another contributing factor.”
Pakistan receives more than half of its total remittances from labor markets in Saudi Arabia, the United Arab Emirates (UAE) and other Gulf countries where more than 80 percent of Pakistan’s overseas labor force is employed.
However, remittance from Saudi Arabia, UAE and other gulf countries also declined by 16.9% to $6.4 billion, 20.5 percent to $4.6 billion and 12 percent to $3.1 billion, respectively, during the outgoing fiscal year, FY23, according to SBP data.
“The key reason for the decline from Gulf countries was the activation of the grey market in Pakistan after the exchange rate crisis,” Farhan Mahmood, Head of Research at Sherman Securities, told Arab News.
An ongoing political crisis coupled with uncertainty related to the $6.5 billion IMF program had created three exchange markets for currency transactions, characterized by significant disparities between buying and selling rates in all three markets.
In the official interbank and open markets, the exchange rate gap had widened by over Rs22 in May this year. In the grey or illegal market, the disparity in exchange rates was even greater compared to the open and interbank markets, according to the Exchange Companies Association of Pakistan (ECAP).
“To benefit from the high exchange rate, people remitted through hundi and hawala channels where rates were comparatively good,” Mahmood said, referring to informal money transfer networks that allow customers to rapidly move large sums across borders outside the scrutiny of regulators and largely without an easily traceable paper trail. Funds received through these methods are not counted towards a country’s official remittances.
“It does not mean that the inflows have reduced, it only reflects that the business has shifted to the grey market.”
Mahmood said remittance inflows from countries apart from Gulf nations had not declined.
After the approval of the new $3 billion program by the IMF, the exchange gap between the open and interbank markets had narrowed while “the grey market at present is non-existent,” Mahmood said.
“Going forward, remittance inflows through official channels will increase after the IMF program and political stability in FY24,” Abbas added.
Hotel sector now boasts more than 40,000 keys, reinforcing its capacity to cater to an increasing influx of travelers
Tourism traffic in the GCC is expected to rise as countries work to reduce their reliance on oil
Updated 30 December 2024
NADIN HASSAN
RIYADH: Qatar welcomed 5 million visitors in 2024, surpassing its target of 4.79 million and marking a 25 percent increase in international arrivals compared to the previous year.
The growth underscores the country’s rising prominence as a global tourism hub and highlights several key milestones, including surpassing its annual goal of 8.8 million room nights sold, reaching nearly 10 million room nights to date.
The country’s hotel sector now boasts more than 40,000 keys, reinforcing its capacity to cater to an increasing influx of travelers, according to a press release.
The achievement aligns with Qatar’s National Tourism Sector Strategy 2030, which aims to welcome over 6 million annual visitors by the end of this decade, positioning the country as the Middle East’s fastest-growing tourist destination.
“Surpassing five million visitors is a landmark accomplishment for Qatar, bringing us closer to realizing our vision of positioning the country as one of the world’s fastest-growing, family-friendly premier destinations,” said Saad Bin Ali Al-Kharji, the chairman of Qatar Tourism.
“This milestone is not only a celebration of our accomplishments but also a foundation for future growth as we continue to deliver unique experiences and service excellence across all the tourism touch points for every visitor,” he added.
The year’s visitor demographics reveal that 41 percent were Gulf Cooperation Council nationals, while 59 percent came from international markets, led by Saudi Arabia, India, the UK, Germany, and the US.
Qatar also recorded 56 percent of arrivals by air, 37 percent by land, and 7 percent by sea.
This comes as tourism traffic in the GCC is expected to rise as countries work to reduce their reliance on oil.
The tourism sector’s contribution to gross domestic product is expected to grow from $130 billion in 2023 to over $340 billion by 2030, exceeding 10 percent of the region’s GDP, according to a report released by Fitch Ratings in July.
The aviation industry will be crucial, with Fitch Ratings forecasting significant growth in passenger traffic, supported by some of the world’s most modern airports, including Dubai International with 87 million passengers, Hamad International in Doha with 45.9 million, and King Abdulaziz International in Jeddah with 42.9 million.
Qatar’s visitor numbers have steadily increased throughout 2024, with notable growth in both the early and late parts of the year.
Major events, such as the AFC Asian Cup in January, the Formula 1 Qatar Grand Prix, and the 2024/2025 cruise season, contributed to the surge in arrivals, particularly during the November school holidays when visitor numbers from Saudi Arabia were notably strong.
“Our tourism goals are ambitious but achievable. Between 2022 and 2030, we aim to nearly triple our visitor numbers and to at least double the tourism in-destination spend,” Al-Kharji said.
As Qatar continues to attract global travelers, the country remains focused on offering quality experiences and showcasing its cultural heritage.
By inviting visitors to explore its unique landmarks and family-friendly attractions, Qatar is strengthening its position as a top global tourism destination.
Looking ahead, Qatar’s tourism strategy aims to triple its visitor numbers by 2030, while also doubling the tourism sector’s contribution to the country’s GDP, targeting a range of 10-12 percent.
Tourist spending in Saudi Arabia up 27%, reaching nearly $7bn
Updated 30 December 2024
Dayan Abou Tine
RIYADH: Tourism spending in Saudi Arabia saw an annual increase of 27.25 percent in the three months to the end of September, hitting SR25.05 billion ($6.68 billion), according to new figures.
Data released by the Saudi Central Bank, also known as SAMA, also showed that the spending by residents traveling abroad increased by 21.79 percent to reach SR26.33 billion.
The travel balance of payments recorded a deficit of SR1.28 billion, marking a 33.83 percent decrease compared to the same period last year. The balance showed a surplus of SR40.17 billion for the first nine months of the year, reflecting a 4 percent increase from the same period in 2023.
These spending patterns align with the Kingdom’s broader ambition to rank among the top 10 global tourist destinations by the end of the decade, as outlined in its Vision 2030 economic diversification strategy.
Recent cultural advancements, including hosting art exhibitions and high-profile entertainment events, demonstrate Saudi Arabia’s commitment to enhancing its global image.
Landmark initiatives, such as the newly approved “Visiting Investor” visa, further signal the nation’s intent to attract diverse visitors while supporting the tourism sector’s growth.
Inbound tourism spending in Saudi Arabia has shown notable fluctuations throughout the year, shaped by a blend of cultural, religious, and seasonal factors.
Religious tourism, which accounted for 42 percent of all inbound visits in 2023, according to the Ministry of Tourism annual report, plays a pivotal role in this variation.
Pilgrimages during the holy months of Hajj and Ramadan drive significant surges in visitor numbers and spending, underscoring the importance of faith-driven travel to the Kingdom’s tourism sector.
Non-religious inbound tourism, which made up 58 percent of arrivals during 2023, might exhibit different dynamics influenced by factors such as climate.
Leisure tourists and those visiting friends and relatives often plan their trips during months when temperatures are milder.
This seasonal preference explains why tourism spending tends to peak during the second quarter of the year. In 2024, inbound spending reached SR47.6 billion in the second quarter, following a similar trend in 2023, when spending in the same period was SR48.93 billion.
By contrast, expenditures dropped to SR19.68 billion in the third quarter of 2023, coinciding with the peak summer heat.
Makkah remained the most visited destination in 2023, according to the ministry’s report, welcoming 15.4 million tourists, driven primarily by religious purposes.
Madinah, a secondary destination for many pilgrims, attracted 9.6 million visitors. Riyadh also emerged as a major draw, hosting 2.8 million tourists and reinforcing its growing reputation as a cultural and business hub.
Religious tourism generated the majority share of spending, contributing 55 percent of the total or SR77.4 billion, followed by visits to relatives and families at 19 percent or SR26.3 billion.
Leisure tourism, encompassing activities like entertainment and sightseeing, accounted for SR21.6 billion.
Startups of the Year: Zid and Salla revolutionize Saudi Arabia’s e-commerce landscape
Updated 30 December 2024
Nour El-Shaeri
RIYADH: E-commerce in Saudi Arabia witnessed a landmark year in 2024, with startups Zid and Salla leading the charge to reshape the Kingdom's — and region’s — digital economy.
These two firms have empowered merchants, enhanced digital infrastructure, and set the stage for exponential growth in Saudi Arabia’s online retail sector.
Zid: Where commerce meets innovation
For Zid, a Riyadh-based e-commerce enabler, the introduction of its “Total Commerce” vision at Ripple 2024 marked a defining moment in its scale-up journey.
In an interview with Arab News, Sultan Al-Asmi, CEO and co-founder of Zid, described the launch as a milestone that “wasn’t just a product launch; it was the unveiling of a unified ecosystem designed to redefine how merchants in Saudi Arabia — and eventually the region — conduct business.”
The platform allows merchants to manage e-commerce stores, social media sales, and physical outlets from a single dashboard.
He further emphasized Zid’s partnerships with platforms like Amazon, Snapchat, TikTok, and Meta, as well as its integration of artificial intelligence-powered tools, which are designed to “future-proof commerce in the Kingdom and across the region.”
Al-Asmi said: “Saudi Arabia’s e-commerce landscape is expanding rapidly, but logistical inefficiencies remain a significant barrier, especially for small and medium-sized businesses looking to scale globally.”
To address these challenges, Zid introduced a unified logistics dashboard to simplify inventory management and shipment tracking.
The company also launched flexible financing options to help merchants manage shipping costs and expand their reach.
“By integrating platforms like TikTok Shop and Amazon Marketplace and introducing AI-powered marketing tools, we’ve provided our merchants with innovative solutions to adapt to these changes and positioned them to capitalize on opportunities to drive sustainable growth,” Al-Asmi added.
Sultan Al-Asmi, CEO and co-founder of Zid. Supplied
The co-founder said that 2024 has been a year of exponential growth for Zid as the company transitions from “start-up to scale-up.”
Zid’s efforts have resulted in exponential growth. In 2024, its merchant base increased by over 30 percent, surpassing 12,000 active users, while the stock-keeping units on its platform exceeded 4 million.
The company also processed billions of transactions, providing valuable insights into Saudi commerce.
Al-Asmi highlighted the tangible impact of Zid’s solutions, stating, “Merchants on our platform have consistently increased both average basket sizes and conversion rates by 50 percent, reflecting the effectiveness of our solutions in driving larger transactions compared to our competitors,” he said.
“Additionally, our merchants experienced a 25 percent year on year growth in GMV (Gross Merchandise Value) and significant growth in the average number of orders per merchant, reinforcing Zid’s role as a reliable growth partner,” Al-Asmi added, going on to say that merchants who participated in Zid’s “10x” program saw their revenues grow tenfold.
In addition to its technical innovations, Zid credits its internal culture for its success. “At Zid, our culture is rooted in collaboration, resilience, and a relentless focus on merchant success,” said Al-Asmi.
He noted that the company’s leadership team draws on years of experience in Software-as-a-Service, retail, e-commerce, and technology, which has enabled the team to tackle complex challenges.
As Zid looks ahead to 2025, the company is focused on deepening its impact in Saudi Arabia while expanding its regional presence across the Gulf Cooperation Council.
Al-Asmi shared the company’s priorities for the coming year, stating, “Our priorities include further enhancing the Total Commerce ecosystem by introducing advanced AI capabilities, expanding Zid Financing to make capital more accessible to merchants, and driving adoption of cross-border commerce solutions.”
He emphasized that cross-border commerce represents a significant growth opportunity for Saudi merchants.
“GCC consumers have a deep appreciation for Saudi products due to their exceptional quality, cultural relevance, and value,” Al Asmi said, highlighting Zid’s efforts to strengthen logistics infrastructure and integrate platforms like Trendyol and Noon to its marketplace suite, which already includes Amazon Marketplace.
Al-Asmi underscored that sustaining momentum requires both innovation and collaboration.
“We plan to strengthen our existing collaboration with global platforms like Snapchat, Google, Meta, and TikTok while continuing to invest in local talent and infrastructure,” he explained.
“Our goal is to create an environment where every merchant can compete and win, regardless of size,” Al-Asmi stated. “With the groundwork laid this year, we are confident that Zid is well-positioned to lead the next chapter of commerce innovation in the region.”
The company has raised $59 million in funding to date, with its latest series B round garnering $50 million in 2021.
Salla: Empowering Saudi e-commerce growth
Salla, one of Saudi Arabia’s leading e-commerce enablement platforms, has cemented its position as a major player in the Kingdom’s rapidly growing digital economy through a series of high-profile partnerships and strategic milestones in 2024.
From securing substantial pre-initial public offering funding to integrating advanced tools for merchants and expanding digital payment solutions, Salla continues to shape the future of online business in the region.
In one of the year’s most notable announcements, Salla closed a $130 million pre-IPO investment round led by Investcorp, with participation from Sanabil Investment, a company owned by the Public Investment Fund, and STV, an existing shareholder.
“We are deeply grateful for the trust and investment from Investcorp and Sanabil in Salla, which reflects their confidence in our vision and our platform’s potential,” said Nawaf Hariri, CEO and co-founder of Salla.
The funds are expected to fuel the company’s growth as it supports over 80,000 active merchants across the region. Hariri emphasized Salla’s commitment to “empowering individuals, SMEs, and enterprises to start and expand their businesses both within and beyond Saudi Arabia.”
Salla’s platform has already enabled over $7 billion in e-commerce sales since 2020 and is tapping into Saudi Arabia’s $20 billion e-commerce market, which is projected to grow by more than 25 percent annually.
Nawaf Hariri, CEO and co-founder of Salla. Supplied
With a proprietary SaaS solution, Salla allows merchants to launch fully digitalized and automated online stores within hours, integrating payment solutions, logistics, and a suite of over 400 applications to support businesses throughout their lifecycle.
The company also strengthened its technology offering through a partnership with Adjust, a global analytics and measurement firm. This integration allows Salla merchants to access advanced app analytics tools, enabling them to optimize campaign performance and scale their businesses.
Amin Fadul, VP of Product at Salla, highlighted the benefits of this collaboration: “By leveraging Adjust’s powerful analytics and attribution tools, our users will have access to deeper insights into customer behavior, allowing them to make data-driven decisions that enhance their marketing strategies and drive growth.”
Adjust’s features, such as customer journey tracking, deep linking, and smart recommendations, complement Salla’s native mobile app maker to help merchants expand their mobile commerce capabilities.
Further enhancing its ecosystem, Salla partnered with STC Bank, Saudi Arabia’s first licensed digital bank, to integrate it as a payment option across more than 80,000 online stores powered by Salla.
This partnership offers merchants and their customers secure and convenient digital payment options directly through STC Bank accounts. By streamlining payment processes, the collaboration aims to boost digital payments and support the Kingdom’s broader digital transformation goals.
“This integration is expected to contribute to a more seamless shopping experience for online customers while reinforcing Salla’s role as a leader in the Saudi e-commerce market,” STC Bank said in its announcement.
Saudi oil made up 44.3% of Japan’s imports in November
Updated 30 December 2024
Arab News
TOKYO: Japan imported 31.49 million barrels of Saudi oil in November 2024, making up 44.3 percent of the total, as reported by the Japanese Ministry of Economy, Trade, and Industry’s Agency of Natural Resources and Energy.
Japan imported 71.18 million barrels of oil in November, of which 67.72 million barrels (95.1 percent) came from Arab countries.
Supplies from Arab countries play a vital role in Japan’s energy security. The main suppliers were Saudi Arabia, the UAE, Kuwait, Qatar, and the Neutral Zone (between Saudi Arabia and Kuwait).
The UAE shipped 27.16 million barrels to Japan, which represented 38.2 percent of the total imports, Kuwait contributed 5.19 million barrels (7.3 percent), and Qatar was responsible for 3.42 million barrels (4.8 percent). The Neutral Zone provided 0.6 percent of Japan’s imports.
Politics and resulting sanctions play a large part in determining the source of Japan’s oil imports. With a ban on imports from Iran and Russia, the rest of Japan’s oil imports in November came from Central and South America (1.8 percent), the United States (1.7 percent), Oceania (0.9 percent) and Southeast Asia (0.4 percent).
Omani-Saudi partnership forum explores prospects in health, education, tech
Trade between the two nations surpassed $2.59 billion in the first half of 2024
Saudi investments in Oman have increased by over 50% since 2021
Updated 30 December 2024
REEM WALID
RIYADH: Saudi Arabia and Oman are exploring new opportunities for cooperation and investment across various sectors, including health, education, technology, and consulting following a recent meeting.
Organized by the Oman Chamber of Commerce and Industry, the partnership forum considered ways to boost collaboration through the involvement of private sectors in both countries, mainly focusing on ongoing projects, the Oman News Agency reported.
This falls in line with the steady and robust economic ties between the two sides. According to data from Oman’s National Center for Statistics and Information, trade between the two nations surpassed 1 billion Omani riyals ($2.59 billion) during the first half of 2024.
This also aligns with the Kingdom’s Vision 2030 and Oman’s Vision 2040. Additionally, Saudi investments in Oman have increased by over 50 percent since 2021, significantly strengthening bilateral economic relations.
During the meeting, the OCCI showcased a presentation titled “Explore the Omani Market,” highlighting economic indicators and the appealing features that set Oman aside, including the nation’s strategic location, special economic and free zones, and incentives offered to investors.
The presentation highlighted target sectors in Oman Vision 2040 and related OCCI services.
The forum introduced firms that aspire to spearhead investment in consultation, education, information technology, and health. It also witnessed the participation of Omani and Saudi business owners.
In October, Saudi Arabia and Oman signed a memorandum of understanding aimed at bolstering economic and planning cooperation based on mutual interests.
The agreement was finalized at the time, with Saudi Minister of Economy and Planning Faisal Al-Ibrahim and his Omani counterpart, Said bin Mohammed Al-Saqri, signing a five-year commitment focused on enhancing medium- and long-term economic planning, studies, and modeling, alongside monetary policies and strategies.
In April, an MoU was signed between the Kingdom and Oman during a meeting between Sultan bin Salem Al-Habsi, Oman’s minister of finance, and Sultan Abdulrahman Al-Marshad, CEO of the Saudi Fund for Development.
Discussions focused on cooperation mechanisms between Oman and the fund, as well as updates on collaborative development projects.
The MoU signed at the time is part of broader initiatives aimed at supporting developmental efforts in Oman, including infrastructure, higher education, vocational training, and projects in industry, mining, and transportation, as well as communications and energy sectors.
