Wall Street Journal: Economic reform in Saudi Arabia is counterproductive

Saudi officials have acknowledged that economic reform policies have caused "economic pain", with companies reporting low profits, mass exodus of expatriate employees due to taxation, and a drop in foreign investment.

According to the Wall Street Journal, the reputation of the Saudi Crown Prince Mohammed bin Salman internationally - because of the killing of Saudi journalist Jamal Khashoggi and the Yemen war - has inflamed foreign capital for investment inside the country.

The paper highlighted Ben Salman's economic reforms and questioned some people's views in the kingdom about their findings.

"All we see is increases in the price of gas and electricity," said Umm Saeed, 56, in Jeddah. "As citizens, we do not really benefit from any of them. "He said.

In the last two years, the Saudi crown prince has raised petrol and electricity prices, imposed new taxes and forced foreign workers to leave the country to allow citizens to be employed.

The economy also suffers from mass exodus of foreign workers, with more than a million workers leaving the country since new fees have been levied on their families and new taxes levied on the companies they employ.

Disappointing profits
The economy is facing a relatively low oil price and foreign investors reluctant to comply within the kingdom. Foreign direct investment reached $ 2.4 billion in three quarters of 2018. Although this figure is higher than the $ 1.4 billion in foreign investment in 2017, this figure is well below historical averages and the 2016 annual figure of $ 7.4 billion.

For its part, Saudi companies this month announced a disappointing profit for 2018, and some blame the government.

In its annual investor report, Almarai listed several reform measures - including a new 5% VAT and higher energy costs - as "negative factors" that caused its earnings to fall in 2018 compared to 2017.

Fawaz Abdulaziz al-Hokair and its partners, a Saudi retail company, revealed they would close more than 100 stores in 2018, saying their net income fell 45 percent in the fourth quarter of 2018, without explaining why.