The Year That Was: 10 key events in 2018 that changed Saudi Arabia

In hindsight, 2018 will be remembered as the year with many firsts to Saudi Arabia’s credit. The Kingdom went through tremendous transformation this year, which in many ways were marked by superlatives: biggest, first, newest, and so on.

As the year comes to an end, Argaam takes a look back over such great events/announcements/ news stories, in the chronological order, that tell you how Saudi Arabia fared in 2018:

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#1 VAT introduced for first time

One of the major business reforms this year in the Kingdom was the introduction of a 5 percent value-added tax (VAT) from Jan. 1, however, there were some exemptions. The exemptions are basic necessities and medical, cultural and educational products, financial and insurance services.

“The tax helped increase the government’s revenue and despite market conditions, it still saw growth,” noted a report by Riyadh based business support services firm Proven SA.

Saudi Arabia expects to generate SAR 35 billion income from the value-added tax (VAT) in 2018, having introduced the levy as of Jan. 1, 2018, Emirates News Agency (WAM) cited a Saudi official as saying.

#2 First bankruptcy law approved

In February, Saudi Arabia’s cabinet approved a bankruptcy law as part of its efforts to attract foreign investment and encourage private sector activity. The law that came into effect on Aug. 18, was the Kingdom’s first formal bankruptcy law and is part of wider reforms to improve the ease of doing business, attract foreign investors, and boost economic growth.

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#3: Emerging Market status by MSCI, FTSE Russell

In March Saudi Arabia’s stock market (Tadawul) was included in the FTSE Russell emerging market index and will join starting March next year, a move that is set to attract billions of dollars.

A few months later, in June this year, the Saudi Stock Exchange (Tadawul) won MSCI emerging market status.

#4: First multiplex cinema opens

VOX Cinemas, a unit of Dubai-based Majid Al Futtaim, on April 30 opened the first four-screen multiplex in Saudi Arabia. This follows lifting of a 35-year ban on cinemas in December 2017 that allowed show providers to commence activity from 2018.

#5: Lifting of the driving ban on women

Saudi Arabia’s female drivers took to the streets across the Kingdom as the ban on women driving ended officially on June 24. Just weeks before the lifting of the ban, Saudi Arabia's General Directorate of Traffic issued the first driver’s licenses to 10 women.

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#6: Amaala: Riviera of the Middle East launched

In September, the Public Investment Fund, the Kingdom's sovereign wealth fund, launched "Amaala," an ultra-luxury destination on the northwestern coast of Saudi Arabia.

The new destination, which will focus on wellness, healthy living, and meditation, is being dubbed "the Riviera of the Middle East".

Amaala, alongside the previously announced $500 billion NEOM and the Red Sea Project, is part of the giga-projects investment portfolio of PIF. The initiatives are part of the Vision 2030 plan which aims to boost tourism and diversify the economy away from oil.

#7: Tourist visa Introduced for first time

In Sep. Saudi Arabia said it would issue electronic visas for the first time to allow visitors access to the debut of the Formula E Middle East racing event in Riyadh in Dec. This was the first time Saudi Arabia launched the visa service for visitors outside the scope of religious tourism through a portal named ‘Sharek’.

The recently concluded Saudia Ad Diriyah E Prix saw around 1,000 tourists of 80 nationalities from countries like the United States, Europe, Russia, Central and South America, Africa, the Caribbean, and Asia descend on Riyadh to watch Formula E.

#8: Deals over $50 bln signed in FII summit

The Future Investment Initiative (FII) 2018 started in Riyadh on Oct. 23 and the first day of the summit saw the signing of more than 25 memorandums of understanding and megadeals with a total value of $50 billion, ushering huge investments in energy and infrastructure sectors.

#9: Foreign investment more than doubles

Saudi Arabia witnessed a rise of 127 percent year-on-year in foreign direct investments in 2018, Ibrahim Al-Omar, governor of Saudi Arabian General Investment Authority said. 

According to another report by Reuters, foreign investment in the Kingdom more than doubled in 2018 to SAR 13 billion ($3.5 billion).

#10: King Salman approves Kingdom’s biggest budget

Saudi Arabia’s Council of Ministers, chaired by King Salman, this month approved the state budget for the fiscal year 2019, the largest budget in the history of the Kingdom of Saudi Arabia.

Public spending in this budget is envisaged at SAR 1.106 trillion, approximately 7 percent higher than the projected expenditure by the end of fiscal year 2018. Revenues come in at SAR 975 billion, up 9 percent over expected revenue by the end of 2018.