Government Policies Saudi Arabia January 2017

Government and economic Policies Saudi Arabia January 2017By: Paul Young, CPA, CGADate: January 29, 2017

DisclaimerThis presentation discusses Trade and Foreign policies between Canada and Saudi Arabia

Paul Young - Presenter

BioCPA/CGA25 years of experience in Academia, Industry and Financial solutionsYoutube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AgendaSaudi Arabia GDPCanada GDPComparison between Canada and Saudi ArabiaForeign RelationsExports/Import AnalysisSummary

4

Saudi Arabia - GDP

Saudi Arabia has been recording trade surpluses since 1968 due to shipments of oil (87 percent of total exports). Main imports are: machinery, mechanical appliances and electrical equipment; transport equipment and parts thereof and base metals. Main trading partners are: United States (14 percent of total exports and 12.6 percent of imports), China (12 percent of exports and 13 percent of imports) and Japan (13 percent of exports and 6 percent of imports

http://www.forbes.com/places/saudi-arabia/ or https://www.google.ca/search?q=saudi+arabia+gdp+by+sector&espv=2&biw=1600&bih=751&tbm=isch&imgil=B1tBfr5CDXD0FM%253A%253B0wYHVBiBb_CiIM%253Bhttp%25253A%25252F%25252Fwww.slideshare.net%25252FApexBrasil%25252Fed-james-the-saudi-arabia-business-environment&source=iu&pf=m&fir=B1tBfr5CDXD0FM%253A%252C0wYHVBiBb_CiIM%252C_&usg=__oPGqrmcZfcR7HOL6ZWXtroBbHeA%3D&dpr=1&ved=0ahUKEwj2iJa7943MAhXEeCYKHd8UDBwQyjcINQ&ei=qnIPV_aLDMTxmQHfqbDgAQ#imgrc=B1tBfr5CDXD0FM%3A or http://www.tradingeconomics.com/saudi-arabia/balance-of-trade

5

Saudi Arabia GDP - Source - www.forbes.com/places/saudi-arabia/

Canada GDP

Analysis:Oil accounts fo 2% of GDPCanada exports 70% of goods/services to USACanada top three trade partners are CET, USA and China

Stats Canada

7

Canada and Saudi Arabia

Saudi Arabia

Canada

http://www.forbes.com/places/saudi-arabia/

8

Canada and Saudi Arabia RelationsSaudi Arabia buys our armored vehiclesA London, Ont., company called General Dynamics Land Systems inked a $15-billion deal last year to sell armoured vehicles to Saudi Arabia. Susan Truppe, a local Conservative MP, called the deal the largest advanced manufacturing export win in Canadas history. She said it would create 3,000 jobs in Canada over 14 years. Prime Minister Stephen Harper greets King Abdullah bin Abdulaziz Al Saud at the G20 Summit in Toronto, on Saturday, June 26, 2010. (The Canadian Press / Paul Chiasson) But many have questioned the sale. Thats a lot of weaponry to a country that has a very notorious human rights record, says Alex Neve of Amnesty International Canada.Women RightsWomen are still not allowed to drive. There are no political parties. Recently, a blogger named Raif Badawi was sentenced to 10 years in prison, 1,000 lashes and a fine of about $266,000 for criticizing Saudi clerics. His wife and family live in Canada.Doctor Training / AcademicsSaudi doctors train in Canada Canada has trained more than 4,000 Saudi physicians over the past three decades, including at least one Saudi Minister of Health. In 2010, there were 900 Saudi doctors training in Canada more than in any other country in the world, according to the Department of Foreign Affairs and International Trade. Its not just doctors. There are more than 15,000 Saudi students in Canada and Saudi Arabia is the fourth biggest source country for international students in Canada.OilSaudi Arabia has more proven oil reserves than any other country in the world, according to the U.S. Department of Energy. Its reserves are so big that analysts believe it can affect the global price of oil by changing how much it produces. The price of oil matters greatly to Canada, which has the third-largest reserves. In fact, the Bank of Canada revised its outlook for the Canadian economy this week because of dropping oil prices.Foreign Policy Iran The Saudi government plays an important role in promoting regional peace and stability, according to the Government of Canada. Canada sees Saudi Arabia as a counterbalance in the Middle East against Iran, which both view as a threat. John Baird, Canadas foreign minister, fears that Iran is making a nuclear weapon and has called out the country for its support of Hezbollah, which Canada considers a terrorist organization.

http://www.ctvnews.ca/canada/4-things-to-know-about-canada-s-relationship-with-saudi-arabia-1.22018499

Canada and Saudi Arabia

http://www.lop.parl.gc.ca/content/lop/ResearchPublications/2014-104-e.htmlIn 2013, manufactured goods accounted for 92.6% of the value of Canadas exports to Saudi Arabia, with resource-based goods representing the remaining 7.4%. This composition had changed since 2008, when manufactured goods and resource-based goods accounted for 67.9% and 32.1% respectively of the value of Canadas exports to the country.Canadas highest-valued exports to Saudi Arabia in 2013 were automobiles, and tanks and armoured vehicles, which together accounted for 28.4% of the value of Canadas exports to the country. The value of Canadian automobile, and tank and armoured vehicle exports to Saudi Arabia increased from $4.1 million and $47.2 million respectively in 2008 to $139.0 million and $121.0 million respectively in 2013.In 2013, resource-based goods represented 97.9% of the value of Canadas imports from Saudi Arabia, with manufactured goods accounting for the remaining 2.1%. This composition had changed slightly since 2008, when resource-based goods and manufactured goods represented 95.2% and 4.8% respectively of the value of Canadas imports from the country.Canadas highest-valued import from Saudi Arabia in 2013 was crude petroleum, which accounted for 97.9% of the value of Canadas imports from the country. The value of Canadian crude petroleum imports from Saudi Arabia increased from $2.1 billion in 2008 to $2.6 billion in 2013.In 2013, Canada had a trade surplus with Saudi Arabia in all product categories except metals, mines and energy.

10

Summary

CBC January 7, 2016 Justin Trudeau advised to deepen ties with Saudi Arabia, brace for change in Iran

Source - http://www.cbc.ca/news/politics/justin-trudeau-advised-to-deepen-ties-with-saudi-arabia-brace-for-change-in-iran-1.3394669

http://www.cbc.ca/news/politics/justin-trudeau-advised-to-deepen-ties-with-saudi-arabia-brace-for-change-in-iran-1.339466911

Saudi Arabia Banking SectorSource - https://www.moodys.com/research/Moodys-revises-outlook-on-Saudi-Arabias-banking-system-to-negative--PR_345694 We expect non-performing loans to increase to around 2.5% of total loans over our outlook horizon, from a very low average 1.4% in September 2015 -- still lower than for most other Gulf countries," says Panis. "Banks will also continue to remain exposed to event risks stemming from persistently high single-party exposures -- although we estimate that around 10%-25% of banks' top 20 loans are either to the government or wider public sector.Capital buffers are likely to remain solid, in Moody's view, with the sector's average tangible common equity (TCE) ratio remaining broadly stable at around 15.7% by the end of 2016, up from 15.4% as of September 2015.Profitability is also likely to remain strong, despite increased funding costs and loan-loss provisions, according to the rating agency due to the low cost of funding and the banks' lean cost structures and zero corporate tax rate. Moody's expects that, with an average of 143% of non-performing loans covered by provisions, provisioning costs will still remain one of the lowest in the GCC."Tightening liquidity -- as public-sector deposit inflows and corporate profits moderate -- will likely expose banks to greater funding volatility in line with regional pressures." explains Khalid Howladar, a Senior Credit Officer based in Dubai, "However, we expect the local impact to be manageable and funding structures to remain relatively stable thanks to a broad and growing depositor base." Moody's notes that deposits represented 90% of Saudi banks' non-equity funding as of September 2015.Finally, although Moody's expects government support for the Saudi banking system to remain high, the rating agency notes there are signs that authorities' policy stance may evolve in line with global practices. In addition, government support assumptions could be further challenged on the basis of fiscal pressure for the Saudi government, signaling a potential reduction of government capacity to support banks in case of need.

Saudi Arabia Deficit/SurplusSource - http://www.reuters.com/article/saudi-imf-idUSL5N1F63Q9Jan 17 The International Monetary Fund praised Saudi Arabia's budget plans on Tuesday and said Riyadh's goal of eliminating a huge fiscal deficit left by low oil prices by 2020 looked feasible.Late last month, Riyadh announced it had cut its deficit from a record 367 billion riyals ($98 billion) in 2015 to 297 billion in 2016, and released a budget plan projecting 198 billion for this year. For the first time, it also laid out detailed guidelines for spending and raising new revenue over the next few years.Tim Callen, the IMF's mission chief for Saudi Arabia, said the gist of Saudi Arabia's plans was in line with the IMF's recommendations and that eliminating the deficit by around 2020 appeared possible. He said the medium-term guidelines for spending and revenues were particularly important because they would reduce uncertainty in financial markets and the private sector, which the government wants to invest in its projects now that oil revenues have shrunk.Among the implementation challenges that Saudi Arabia faces are administrative and legal issues surrounding its plan to introduce a 5 percent value-added tax next year, Callen said.

Saudi Arabia foreign PoliciesKey Quote. This sea of change proves how geopolitical fortune can turn around quickly. The catalyst wasthe election of Donald Trump as President of the United States. The likely shift back towards Americas usual allies in the Middle East including Saudi Arabia, Israel, and Egypt is going to un-do Obamas flawed strategy in the region. - http://observer.com/2017/01/saudi-arabia-diplomatic-relations-improving/ - or http://journal-neo.org/2017/01/27/saudi-arabia-on-the-cusp-of-fundamental-changes/