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Saudi Arabia, South Africa Hold Meeting to Discuss Qualitative Investments in Entrepreneurial Firms

The Saudi-South African roundtable meeting held in Jeddah on Sunday, October 16, 2022. (Asharq Al-Awsat)
The Saudi-South African roundtable meeting held in Jeddah on Sunday, October 16, 2022. (Asharq Al-Awsat)
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Saudi Arabia, South Africa Hold Meeting to Discuss Qualitative Investments in Entrepreneurial Firms

The Saudi-South African roundtable meeting held in Jeddah on Sunday, October 16, 2022. (Asharq Al-Awsat)
The Saudi-South African roundtable meeting held in Jeddah on Sunday, October 16, 2022. (Asharq Al-Awsat)

A Saudi-South African roundtable meeting was held Sunday in the Saudi city of Jeddah.

The meeting aimed at promoting investment relations, bolstering efforts to develop economic ties and qualitative investments for entrepreneurial companies, and enabling the private sector to benefit from the opportunities available in the two countries.

South African President Cyril Ramaphosa, Saudi Minister of Investment Eng. Khalid al-Falih, Minister of Tourism Ahmad al-Khateeb, and Minister of Industry and Mineral Resources Bandar al-Khorayef, as well as South African Minister of Trade, Industry and Competition Ebrahim Patel attended the meeting.

The roundtable talks saw the participation of Saudi and South African entrepreneurship companies, the Federation of Saudi Chambers and representatives of the private sectors and companies from the two sides.

The agenda included presentations by Saudi and South African companies, opportunities to develop their businesses and means to address challenges they are facing in an attempt to enhance business and investments in the fields of energy, renewable energy, mining, agriculture, food, tourism, logistics, and ICT.

The meeting represents a step to support the outcomes of the Saudi-South African Investment Forum that was held Saturday and reviewed bilateral investment opportunities, with the participation of several officials from the two countries and representatives of the private sectors and companies.

Falih underscored the importance of Ramaphosa’s active participation in strengthening investment, trade and business ties.

He pointed out that the two countries and their commercial societies have ambitious plans for investment and economic development.

Falih indicated that the roundtable represents the next step in achieving the aspirations, with two governments working to help provide business growth opportunities for the vibrant and innovative private sector companies in both countries.

On Saturday, the Kingdom’s Ministry of Investment held the Saudi-South African Investment Forum in Jeddah. The event was attended by Ramaphosa and dozens of senior officials from the two countries.

The two countries signed 11 agreements and Memoranda of Understanding to boost investment in energy, water, green hydrogen, waste diversion, and logistics.

The agreements aimed to promote the developing investment sectors between the two nations and between the Middle East and South Africa, and transfer specialized technical knowledge and expertise.

Bilateral trade between the two countries increased from $4.6 billion in 2019 to around $4.8 billion last year, and is expected to exceed $5.3 billion this year, Falih said.

The minister praised the solid and friendly ties between the two countries, including their economic and trade cooperation which has stood for over three decades.

He stated that the priority areas of cooperation between the two countries include renewable and green energy, mining, agriculture and food processing, hydrogen and solar energy, tourism, aerospace, and information technology, among others.

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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.