The benami businesses by expats in the Kingdom of Saudi Arabia (KSA) has caused a humongous loss to the Kingdom.
According to a paper, presented at the third Jeddah Commercial Forum(JCF), the KSA suffered a loss close to as Rs 1 lakh crore in a decade. A lion’s share of this money could have made its way to Kerala, as a majority of the businessmen in the kingdom, are expats from the state. As per an estimate, there are around 5,74,000 workers in KSA from the state.
The paper, presented on Sunday at JCF by Professor Abdul Aziz Diyab, according to a report in the Saudi daily ‘Arab News’, said: “The cover-up operations remitted Saudi Riyal 635.7 billion to their countries between 1992 and 2002, causing a 10 per cent dent in the Kingdom’s GDP”. Thirty per cent of expatriate workers with valid legal documents have been involved in benami businesses and expatriate workers monopolised the wholesale and retail businesses of clothes and textiles by 97.5 per cent, the paper said.
The JCF is organised by Jeddah Chamber of Commerce and Industry in association with the Ministry of Commerce and Industry.
The benami (cover-up operations as described the Saudi media) in light of Saudi commercial regulations, which banned any non-Saudi, with the exception of GCC citizens, is defined as undertaking a business investment or operation not permitted for him. The economist, who is a professor of the Prince Mishaal bin Majed Chair for Cover-Up Businesses, and a faculty member of the Department of Economics at the King Abdulaziz University, stressed the need to study these kind of businesses as a component of a hidden economy. The business operations is expanding as the country’s economy continues to grow.
According to the study, the number of illegal workers between 2000 and 2009 grew at an average annual rate of 1.2 million, which accounted for 27 per cent of legal workers. The earnings of illegal workers was estimated at nearly Rs 5,000 crore in 2009 as the number of expat workers is nine million.
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