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Saudi Measures Limit New Fees that Affect Tourist Activity

A landmark is lit up in the colors of the national flag in Diriyah on the occasion of Saudi National Day. (SPA file photo)
A landmark is lit up in the colors of the national flag in Diriyah on the occasion of Saudi National Day. (SPA file photo)
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Saudi Measures Limit New Fees that Affect Tourist Activity

A landmark is lit up in the colors of the national flag in Diriyah on the occasion of Saudi National Day. (SPA file photo)
A landmark is lit up in the colors of the national flag in Diriyah on the occasion of Saudi National Day. (SPA file photo)

Saudi Arabia directed the relevant public agencies to coordinate with the Non-Oil Revenue Development Center and the Ministry of Tourism before proposing any new taxes or fees that could affect tourist activities.

Last week, the government approved the new tourism law to be part of the system of development of the regulatory and legislative environment for the sector.

The newly approved law comes in line with the leadership's orders to build a competitive tourism sector and contribute to the goals of Vision 2030.

The Saudi cabinet added a new paragraph in the Ministry of Tourism law that requires coordination with the competent authorities to establish tourism colleges, institutes, and academies and set up specialized training courses and programs under regulations.

Saudi Arabia has set 90 days for establishments operating in the sector to apply to the Ministry to amend their conditions per the new law's provisions, subject to renewal.

After agreeing with the relevant government agencies, the Minister of Tourism may propose customs and tax exemptions related to tourism activities and the necessary incentives to revitalize the sector and submit them to legal procedures.

The Minister may entrust any of the Ministry's competencies and powers contained in the new law to any authorities with geographical jurisdiction, provided that the decision specifies the controls and conditions necessary for exercising those competencies and capabilities and their duration.

In cooperation with government agencies and private entities, the Ministry must set the annual workforce plan following the objectives of localization and the necessary standards and requirements from the competent authority, based on the classification of the World Tourism Organization and the best international practices.

Tourism Minister Ahmed al-Khateeb said the newly approved law comes in line with the leadership's orders to build a competitive tourism sector and contribute to the goals of Vision 2030.

Khateeb said that since the launch of the national tourism development strategy in 2019, work has continued to organize the sector, noting that during the pandemic, many tasks were issued to reach the desired reform.

He indicated that the tourism system was completed after establishing a ministry, authority, fund, and the Tourism Development Council.

"[The new law] will drive business and investment, support innovation, and attract tourists, in line with the best international practices," he added.

Khateeb stressed that organizing the sector continued with the recent issuance of the regulation of tourism development councils in the regions, hoping to accelerate the development of tourist destinations in various areas.

He explained that the law, prepared according to the best international practices identified by the top 20 countries in the World Economic Forum's Travel and Tourism Competitiveness Index, will further advance the national tourism strategy by promoting various tourist destinations.

"The law will accelerate the development of tourist destinations in various regions, including NEOM, Soudah, the Red Sea, and Diriyah Gate," Khateeb said.

Saudi Arabia is working on upgrading hospitality standards and providing unprecedented and enriching visitor experiences.

He added that this matter would be a decisive element in placing the Kingdom in its rightful place globally among the most attractive countries for tourists through its unprecedented experiences.

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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters
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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters

Although Turkish inflation slowed in September, it is still raging out of control with the government avoiding difficult decisions that could help tackle it, experts told AFP.

Türkiye has experienced spiraling inflation the past two years, peaking at an annual rate of 85.5 percent in October 2022 and 75.45 percent in May.

The government claims it slowed to 49.4 percent in September.

But the figures are disputed by the ENAG group of independent economists who estimate that year-on-year inflation stood at 88.6 percent in September.

Finance Minister Mehmet Simsek has said Ankara was hoping to bring inflation down to 17.6 percent by the end of 2025 and to “single digits” by 2026.

And President Recep Tayyip Erdogan recently hailed Türkiye’s success in “starting the process of permanent disinflation.”

“The hard times are behind us,” he said.

But economists interviewed by AFP said the surge in consumer prices in Türkiye had become “chronic” and is being exacerbated by some government policies.

“The current drop is simply due to a base effect. The price rises over the course of a month is still high, at 2.97 percent across Türkiye and 3.9 percent in Istanbul.

“You can’t call this a success story,” said Mehmet Sisman, economics professor at Istanbul’s Marmara University.

Spurning conventional economic practice of raising interest rates to curb inflation, Erdogan has long defended a policy of lowering rates. That has sent the lira sliding, further fueling inflation.

But after his reelection in May 2023, he gave Türkiye’s Central Bank free rein to raise its main interest rate from 8.5 to 50 percent between June 2023 and March 2024.

The central bank’s rate remained unchanged in September for the sixth consecutive month.

“The fight against inflation revolves around the priorities of the financial sector. As a result, it is done indirectly and generates uncertainty,” explained Erinc Yeldan, economics professor at Kadir Has University in Istanbul.

But raising interest rates alone is not enough to steady inflation without addressing massive budget deficits, according to Yakup Kucukkale, an economics professor at Karadeniz Technical University.

He pointed to Türkiye’s record budget deficit of 129.6 billion lira (3.45 billion euros).

“Simsek says this is due to expenditure linked to the reconstruction in regions hit by the February 2023 earthquake,” he said of the disaster that killed more than 53,000 people.

“But the real black hole is due to the costly public-private partnership contracts,” he said, referring to infrastructure contracts which critics say are often awarded to firms close to Erdogan’s government.

Such contracts cover construction and management of everything from motorways and bridges to hospitals and airports, and are often accompanied by generous guarantees such as state compensation in the event they are underused.

“We should question these contracts, which are a burden on the budget because this compensation is indexed to the dollar or the euro,” said Kucukkale.

Anti-inflation measures also tend to impact low-income households at a time when the minimum wage hasn’t been raised since January, he said.

“But these people already have little purchasing power. To lower demand, such measures must target higher-income groups, but there is hardly anything affecting them,” he said.