Black market economy growing in Saudi Arabia
Economists are requesting the establishment of a regulatory body to evaluate the Saudi Arabian black market economy in order to determine the amount of transactions and the implications the black market has on the activities and practices of the local economy.
In recent years, the Saudi black market has been estimated at 326 billion riyals (US$87 million) and growing.
Professionals argue the black market stems from economic instability in the Kingdom including the development of different economic policies affecting the price index, unemployment rates, unfair competition between citizens and expatriates, a rise in commercial fraud, and monopolies.
One problem is the arrival of new expatriates. Many expatriates practice a phenomenon called "trading trunks". New arrivals bring in trunks of goods on which they do not pay customs duties and sell the goods at very low rates.
Economist Dr. Fahd Bin Juma found that current evidence supports the World Bank's estimate that the Saudi black market will increase in size. He explained that the black market represents 18.7% of GDP between 2002 and 2007, with the percentage rising from 17.5% in 2002 to 20% in 2007, reaching 288.5 billion riyals in 2007.
Dr. Juma noted that the black market distorts the accuracy of economic numbers.
- Will terror attacks damper Arabs' appetite for European holidays?
- So cool it's hot: Saudi Arabia's $3.2B HVACR market driven by construction boom
- US, EU protectionist policies may be a blessing in disguise for GCC suppliers
- Dubai to Doha: How far can you stretch your dirham?
- OPEC's poor history of compliance will make production cut deal a challenge
- Samsung announces plans to meet growing market demand for air conditioners in GCC region
- A macro-look at the market and economies
- Lexmark unveils its new value ink range in Saudi
- Saudi non-oil trade easing as economy grows
- Egypt, Saudi Arabia, Qatar and the UAE are among the world’s 25 Rapid Growth Markets: Ernst & Young