Despite war with Yemen & the Pandemic of Covid-19, business continues to thrive in Saudi Arabia

By Our Staff reporter

Riyadh: The Kingdom of Saudia Arabia is fighting two wars simultaneously. It is at war with the Yemen-based Houthis and also battling the pandemic of Covid-19. Despite all odds, it is one of a few countries where business is thriving and companies are making huge profits.

History reveals that if a ruler decides to take his nation to the heights of development, nothing can stop him whether a country is at war or facing a great crisis like the Pandemic of Covid-19.

Saudi Arabia is one of the few fortunate countries where rulers, in this case, a Crown Prince, dreamed of developing his country and worked day and night to transform it into reality. While Saudi Arabia is battling the pandemic of Covid-19, its major cities are hit by Yemeni missiles every other day. But the world is amazed that business is flourishing in the kingdom of Saudi Arabia, poverty is decreasing and domestic and foreign businesses are making record profits.

While businesses around the globe are yet to recover, local and multinational companies have made a huge profit. Headquartered in Riyadh, Alinma bank is part of the Depository Credit Intermediation industry. On Sunday, February 5, 2022, the bank announced it has earned a huge profit in 2021.

“ In 2021, the bank earned a net profit of $722 million in 2021 recording a 37.8 percent surge in profits. Profit was propelled by higher operating income. The fact is that the bank’s operating cost went up by 4.2 percent. However, it pushed operating income to go up by 17.3 percent due to higher income from financing and investment activities,” management of the bank said in a statement issued on Sunday.

Management of the bank capped the rise in expenses by a lower impairment charge for expected losses which stood at SR1.27 million during 2021 as compared to SR1.42 million in 2020.

According to information released by the media cell of the bank, Alinma bank’s recorded an increase of 10.6 percent in assets year-on-year bases which rose to SR173 billion. Meanwhile, the bank’s profit per share shoots up from SR0.99 to SR1.31.

Amazed by the huge profit, the administration of the bank has announced the establishment of a special purpose vehicle company, called Alinma SPV Limited, in the Cayman Islands.

“ The management said it has fixed capital of SR187,500 for the newly established unit which has been given the task to manage and execute financial derivatives transactions as well as repurchase agreements with international banks, bank authorities said later on Sunday.

Several local and international financial institutions headquartered in Saudi Arabia have claimed to have earned unprecedented profits during the pandemic of Covid-19 which has dealt a heavy blow to the World’s best-performing economies.

According to data obtained from the stock exchange and Ministry of Commerce of the kingdom of Saudi Arabia, as many as 30 big companies earned huge profits in 2021. Data revealed that there were almost 26 big companies whose profitability percentage change remained 679 percent. These companies included The National Petrochemical Company, Takween Advanced Industries, and Sipchem.

Apart from the pandemic of Covid-19, the atmosphere in the entire Middle East has been riddled by Yemen-based Houthis attacks. A wave of fear and panic has been felt across the Middle East which, analysts believe, could have damaged the reputation of UAE, Gulf, and Kingdom of Saudi Arabia had the rulers not taken elaborate measures to counter them.

Expert of Foreign Policy and defense have appreciated Crown Prince Mohammad Bin Salman for taking mandatory steps to ensure a business-friendly atmosphere across the Kingdom even when his country is at war with Yemen-based rebels.

“Only the leaders with a clear vision can make their countries achieve a milestone. It takes guts and determination to translate dreams into reality. Crown Prince Mohammad bin Salman is surely driving his nation to compete with the world’s biggest economies in future,” Mustansar Abbas, Islamabad based expert on Geo-Politics and Defence told “Islamabad Telegraph” when approached for comments.

Mr. Mustansar has rightly pointed out that crown Prince Mohammad Bin Sultan ( MBS) is the driving force behind Saudi Arabia’s rapid growth. MBS has the vision to transform the Kingdom of Saudi Arabia into a modern state. To translate his dream into reality, he had presented an ambitious yet achievable ‘Vision 2030’.

Launched in 2016, project ‘Vision 2030’ has now entered its seventh year and it has already started yielding positive results. Aimed at fundamentally reforming the Saudi economy and society the ‘Vision 2030’ is an economic blueprint that seeks to transform the Kingdom from a petro-economy to an industrial manufacturing-based productive economy. In experts’ opinion, companies in Saudi Arabia were making profits just because of ‘ Vision 2030’ which is, perhaps, a bold initiative capable of transforming the historically oil-dependent and traditionally conservative Kingdom of Saudi Arabia into one of the greatest economies in the world.

“ It is perhaps the government’s business-friendly policies and overall an atmosphere suitable for doing business that companies were making huge profits. This is what the rulers in the kingdom aspired for,” Khalid bin Mohammad, Riyadh-based entrepreneur said adding that the Saudi government has introduced business-friendly policies to facilitate the private sector to a great extent and local and International companies were equally getting benefits.