Saudi Arabia pledges big projects to soften austerity hit to business
Saudi Arabia’s Deputy Crown Prince, Mohammed bin Salman, has reportedly made a commitment at a recent meeting with a delegation representing the Saudi private sector to launch major development projects towards 2017-end. While they pledged support for Prince Mohammed's economic reforms, representatives of the business associations complained that the private sector had been hit hard by cuts to state spending and subsidies. The complaints underline growing pressure on the government as austerity policies in response to low oil prices enter their third year. The private sector, which grew by just 0.1% last year, "is now suffering from increasing operating costs and declining purchasing power among the people," Ahmed bin Suleiman al-Rajhi, the head of the Riyadh Chamber of Commerce and Industry, said in a report on the meeting. "In addition, the industry is starting to lose its competitive edge because of the increasing cost of power and fuel as well as the rising cost of foreign workers." The report said that although the government had resumed paying its debts to the construction sector in the past few months, some contractors remained unable to restart projects because banks had seized the money to cover loans.
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