Economic Cost of Hate

Economic Cost of Hate

India has seen gradual increase of hate against its Muslim Minority. This gradual increase of last 6 years has suddenly spiked in last 8 months, which is noticed by global human rights groups and Governments.

The countries and international organizations has started discussions and so are governments. This discussion has now coming to the point it will start damaging India’s Economy and will have serious implications.

US Congress has already issued statement and so is USCIRF and Congress Members, and Bernie Sanders has raised serious questions on India’s handling of Racism, Hate and Violence against its minorities.

UK Parliament has already discussed the matter.

EU Parliament will take up the issue once opened. It has 3 resolutions on the matter.  

OIC – Organization of Islamic Cooperation is world’s second biggest group of countries has already issued statements and requested government of India, to protect the life and properties of Muslims.

GCC – Gulf Cooperative Council is world’s smallest but richest group with substantial exposure and relations with India and with very good say across the worlds, is started serious talking about Islamophobia and Hate in India. This will have serious economic impact.

US, Europe and UK, number of Muslim countries has echoed their concern for the Hate Crime and Islamophobia in India.

 

Notably among them are Turkey, Iran, Malaysia, Indonesia has come out with their statements.

The real question is How is the cost or economic impact of all this hate mongering.

I will start with GCC.

1.      GCC hosts 9 million Indian – This number can vary between 9 million and 12 million depending upon how you view or calculate.

2.      The total of 79 billion USD, 55 Billion comes from GCC countries or 70%, more importantly India is single largest recipient of foreign remittances.

Among countries, the top remittance recipients were India with $79 billion, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion). World Bank

3.      More than 80% Indian working in GCC are low wage earners or labor which are easy to replace.

4.      India’s Export – Fresh Vegetables and Meat

5.      GCC is single biggest market for Fresh Vegetables, and Fruits, Agriculture Products.

6.      GCC is single biggest market for Fresh Meat Exports – Caracas – Goat and Sheep

7.      GCC is single biggest market for Beef Exports.

8.      GCC is single biggest trading partner for Agro Commodities.

GCC countries account for 15 percent of India’s total import and 12 percent of the country’s total export basket in value terms.

Among the GCC countries, UAE accounted for the major chunk of India’s exports and imports with $30.08 billion and $29.77 billion respectively in FY19.

 

This is despite a negative growth in both imports and exports of gems and jewelry, a major item in the product basket between India and UAE.  India’s imports of gems and jewelry from UAE have seen a decline of 13 percent, while its exports of these products to UAE have fallen by 3 percent in FY19 over the previous fiscal.

UAE accounts for 9 percent of India’s total export basket and 5.80 percent of India’s import basket by value.

UAE is the major destination for India’s jewelry exports, accounting for about 80 percent of India’s exports.

Energy, Expatriates and Economy

Indian National make up the Gulf states’ largest expatriate community, with an estimated 9.6 million Indian nationals living and working in the region; especially in Saudi Arabia (2.8 million) and the UAE (2.6 million.

The GCC is India’s largest regional-bloc trading partner, which accounted for $104 billion of trade in 2017–18, nearly a 7 per cent increase from $97 billion the previous year. This is higher than both India–ASEAN trade ($81 billion) and India–EU trade ($102 billion) in 2017-18. Two of India’s top five trading partners, the UAE and Saudi Arabia, are from the Gulf. The GCC also provided over $55 billion in foreign-exchange remittances from Indian expatriates in 2017, accounting for over 70 per cent of India’s total.

The total bilateral trade between the GCC and India was estimated at US$121.34 billion ($203 billion) in 2018-19. The UAE is estimated to be India’s third-largest partner with trade in 2018-19 estimated at nearly US$60 billion ($100 billion), while Saudi Arabia is India’s fourth-largest trading partner, with trade in 2018-19 estimated at over US$34billion ($57 billion).

They aim to increase bilateral trade by 60 per cent over the next five years and have set a target of $75 billion for UAE investments into India’s infrastructure development, spanning ports, airports, highways and construction, as well as petrochemical projects.

India expected to attract large-scale investment from the GCC to India, following the recent announcement of the development of a $44 billion oil refinery to be built by Abu Dhabi National Oil Company (ADNOC), Saudi Aramco and Indian counterparts.
The announcement comes a few months after Emirates Group announced a $4.23 billion (INR300 billion) aircraft maintenance, repair and overhaul (MRO) project in Andhra Pradesh in February this year.
Aramco is also in talks with Reliance Industries Limited  to purchase a 20 per cent stake in its oil to chemical business, which is estimated at US$75 billion ($125.5 billion).

The GCC has also invested in developing India’s energy infrastructure. In 2019, the Saudi Ambassador to India stated that Riyadh wished to invest US$100 billion ($166 billion) in India

Foreign Direct Investment (FDI) in India increased to $61.96 billion in 2017-18, according to Indian Government’s Department of Industrial Policy and Promotion (DIPP). Total FDI reached $ 61.96 billion in the last four years, it said.

India: An investment gateway

Yusuffali predicts that an investment to the tune of $150 billion will flow into retail, aviation, tourism and manufacturing sectors from Gulf countries.

This will have a mutual benefit for both the countries as India faces 30 per cent wastage in the Indian farm sector due to bottlenecks in storage, packaging and transportation, and investment by Saudi Arabia would benefit both the countries.

 

 

 

 

Why GCC Matters

And with an average GDP per capita of US $ 61,559 in terms of purchasing parity, most GCC nation rank in worlds top ten richest countries.

 

Indonesia and Malaysia account for 85% of the world's palm oil output while India is the biggest buyer of edible oil.

Indonesian crude palm oil has sold at a premium to Malaysian oil since India this month placed curbs on imports of refined palm oil.
The trade ministers of India and Indonesia, which want to more than double their bilateral trade to $50 billion by 2025, met in Davos on Thursday and agreed to fast-forward trade between them, one of the informed sources
An Indian government document, reviewed by Reuters, said that Indonesia had "informally agreed" to double the annual quota for Indian bovine meat exports to 200,000 tonnes.
Indian-Indonesian trade was worth $21.2 billion in the  2019.

Indonesia imported 94,500 tonnes of Indian buffalo meat worth $323 million in the 2018/19 fiscal year. It is the third biggest buyer of Indian buffalo meat after Vietnam and Malaysia.

India’s Tourism Sector

The Foreign Tourist Arrivals in India is small compared to global standards. The lack of enough and quality infrastructure is one reason, the culture and social environment is second factor.

The arrivals are divided as Foreign and NRI, we will discuss only Foreign Arrivals.

The single largest arrival is Bangladesh Nationals. Then come US and Europe. The Bangladesh alone constitute more than 20% of total arrivals, USA and Europe together constitute another 25%.  The remaining 55% is scattered over countries. North Africa, GCC and Malaysia together is above 10%. Other Muslim Countries has another 3% arrivals in India.

Tourism is one of very important employment sector for India. The present environment of hate will directly affect sentiments of Tourist and their arrivals. Not only the Muslims but all arrivals will be affected.

We see more than 50% reduction in Tourist arrivals from Muslim World to India. The NRI arrival will also be heavily affected because of Job loss.

The arrivals from USA and Europe will be affected by 15%, as sentiments go negative. This will affect India’s direct foreign currency income and employment.

 

Services Sector – India’s services sector is more dependent on USA and Europe. IT, ITES are mostly catered to developed world. In last few years, there is substantial growth and Opportunities are generated from GCC. This growth is steady and remain double the average growth of India’s services sector exports. This nascent sector will face challenge to survive in GCC, North Africa and Malaysia, Indonesia.

The Effect of Hate on FDI and PPP and other projects

As Result of Increase of Hate in India, India will see substantial losses in terms of financial loss. Remittance will be down by 30% or 17 Billion Dollar, direct commercial loss or loss of business will be 55 billion and overall Indian economy will be take hit of 1.5 percent.

 

The sentiment in GCC particularly and worldwide in general will be negatively impacted. The investors look for safety of their amount and social conditioning. Peace is most important to drive growth anywhere in the world. Without peace and harmony, it is impossible to find growth and development. Hate will not only drag down the growth of particular community but it will have drag down effect on everyone. These negative sentiments will persist for the long time. GCC human rights activist and global Human Rights activist particularly in EU and USA will have substantial impact on FDI in India.

 

Data Source - 

India Tourism Statistics 2019 Ministry of Tourism Government of India

Annual Report 2018 -2019 Department of Commerce Government of India

GCC Stat

World Bank Remittances Report

IMF Economic Review

Venture Art Economic Projections

 

HOW STARTUPS CAN SAVE NUCLEAR TECH

A growing number of nuclear startups are trying to solve the world’s most pressing problem.

A recent disturbing report predicts that despite a colossal number of new solar panels and wind turbines over the next quarter century, the planet will still face dangerous rising temperatures. Basically even if these widely embraced clean energy technologies are put on overdrive, we’re still probably screwed.

The report was understandably bearish on big growth in nuclear power. Following the tragic earthquake and accompanying meltdown of the nuclear reactors in Fukushima, Japan in 2011, new nuclear reactor construction has been largely halted in many countries. Public fear over safety, especially following such incidents, has long hampered the industry, and led to it being the sort of black sheep of clean power.But four years after the infamous accident, environmentalists, nuclear advocates, and researchers are now looking at nuclear tech as an almost necessary way to generate power without carbon emissions that, if used correctly, could be crucial to help the world avoid the worst of global warming. And unlike with solar and wind, nuclear reactors generate power around the clock.

Tapping into this emerging sentiment is a new wave of entrepreneurs and investors, many in Silicon Valley, who are passionate about how tech innovation can lift the industry out of its nuclear stalemate.

The new guard are working within a nuclear industry that is stuck in the regulatory and financing patterns of old. Big conglomerates dominate and career nuclear execs are the norm. But the lack of interest in new tech and new ideas are in sharp contrast to the high stakes of averting planetary catastrophe. Last month, beneath the high-vaulted ceilings of the sleek offices of Founders Fund, a venture capital firm that backed Facebook, Airbnb and SpaceX, sits a small group of these passionate nuclear evangelists. They are supposed to appear on a panel about nuclear energy that I’m moderating, but they’re actually far more interesting to listen to just chatting on their own.

There’s a spread of wine and cheese in one corner, and around the room are windows big enough to see the San Francisco Bay in the background. The wooden door into the office is so preposterously large that you can’t help but instinctively feel what they seem to be implying: We do big things. At one point, the firm adopted the motto “we wanted flying cars, instead we got 140 characters,” as a sort of dismissal of the preoccupation among many Silicon Valley investors with the next hot consumer app. Last Summer, Founders Fund invested a small $2 million seed round into an early stage nuclear startup calledTransatomic Power. Founded in 2011 by MIT nuclear scientists Leslie Dewan and Mark Massie, Transatomic Power is working on a nuclear reactor that uses molten salt and nuclear waste as a power source. While molten salt nuclear reactor tech is decades old, Dewan and Massie are using new designs and materials.

Dewan, who looks a bit like actress Amy Adams, is one of the clear leaders of this growing movement of nuclear entrepreneurs. The nuclear policy advocates in the room refer to her as “their secret weapon” that they use in meetings on Capital Hill to inspire and make connections. She’s young, well-spoken and doesn’t fit the profile of the typical nuclear industry exec. She and the senior statesman in the room, venture capital icon Ray Rothrock, take turns interrupting each other to answer questions about the hurdles that face startups in the nuclear sector. Unlike Dewan, Rothrock fits the physical description of the typical nuclear exec, but he’s actually anything but.

Rothrock’s been a venture capitalist for over two decades. He backed Sun Microsystems early on, launched the Internet investing practice for VC firm Venrock in the early 90’s, and later formed the company’s energy investing practice. He also started his career as a nuclear engineer in the late 80’s and early 90’s before getting the investing itch.

Some of Rothrock’s nuclear ambitions are poured into a stealthy startup, Tri Alpa Energy, that is working on nuclear fusion (nuclear fission is what’s used in today’s reactors). Years ago Venrock backed Tri Alpha Energy, and the company now also has the financial support of the Russian government (through the nanotech company Rusnano), Microsoft co-founder Paul Allen, and Goldman Sachs. Rothrock is Tri Alpa Energy’s chairman.

Nuclear tech renaissance? Dewan and Rothrock say nuclear tech is undergoing a period of rare entrepreneurial innovation. Rothrock says that compared to when he was in school, there are many more students today working on nuclear tech projects because of pressing climate change.

They cite figures of 55 nuclear startups with a total of $1.6 billion in funding. Rothrock says people don’t believe him when he says there’s that many startups working on nuclear technology. But those numbers are tiny compared to how many on-demand delivery startups, or mobile photo sharing startups, there are with millions of dollars from venture capitalists.

Founders Fund partner Scott Nolan, who made the investment in Transatomic Power, compares the nuclear entrepreneurial tech movement to what’s been happening in aerospace with young disruptor SpaceX and others. Nolan was an early employee at SpaceX and helped develop the propulsion systems used on the Falcon 1 and Falcon 9 rockets and the Dragon spacecraft.

Investors beyond Venrock and Founders Fund are starting to take notice. Last month the head of Silicon Valley accelerator Y Combinator, Sam Altman, said he was joining the boards of two nuclear startups. Helion Energy, which is building a magnet-based fusion reactor, and UPower,which has designed a small modular fission reactor, unusually went through the Y Combinator program.Then there’s young nuclear fusion startup General Fusion, which is backed by Canadian venture capitalists Chrysalix Venture Capital, Amazon CEO Jeff Bezos, and the Canadian government. The company hopes to have a working prototype of its fusion reactor this year and an operating reactor in 2020. Bill Gates has backed a nuclear startup called TerraPower, which was a spin off from the intellectual property incubator Intellectual Ventures. The company is working on a technology called a traveling wave nuclear reactor, which uses nuclear waste as a power source. There’s also NuScale Power, which has been working on small, modular water reactors. Instead of the massive 1 gigawatt nuclear power generators that are in use today, NuScale Power makes a smaller 50 megawatt one (1,000 megawatts make 1 gigawatt).

Many of these nuclear startups, like Transatomic Power and TerraPower, are trying to address the issue of nuclear waste with their new reactor designs. That’s because the problem of what to do with the radioactive byproduct that results after a reactor has used up its fuel, is both complicated and important for the future of the nuclear industry.

Barriers to nuclear innovation Despite the dozens of nuclear startups these days, the sector is far from welcoming to entrepreneurs. Combining the difficulties of the startup world with the difficulties of nuclear technology is a colossal endeavor.

Nuclear technology can take decades to move from the lab into commercialization. Many nuclear startups don’t even give commercialization estimates because it can be so many years away. That makes it difficult for investors to back because they don’t know when they can expect a return.

The traditional nuclear industry also requires billions of dollars to get nuclear reactors built. The first nuclear plant under construction in the U.S. in decades, in Georgia, is estimated to cost $14 billion, and is now over budget and behind schedule. Access to funding will plague all of the nuclear startups. NuScale Power faced a funding crunch and sold a majority ownership to Texas energy services company Fluor. But the biggest barrier for a nuclear startup could be regulation. It can take years to wade through the regulatory process of the U.S. Nuclear Regulatory Commission.

The NRC was born out of the Atomic Energy Commission of the 1940s, and its history is tied with nuclear arms proliferation and the military. It’s a closed, enforcing regulatory body and not equipped to deal with building relationships with entrepreneurs. Rothrock has been advocating for an entirely new federal nuclear agency that would operate like the federal Food and Drug Administration. When pharmaceutical companies submit drugs for approval with the FDA they have to meet certain milestones with their studies and prove that it works. Rothrock thinks an ‘FDA for nuclear’ could create the same predictable milestones for nuclear reactors and enable entrepreneurs and startups to get their new reactor technologies off the ground much more quickly. If Rothrock and Dewan can help deliver changes in the nuclear tech industry, it could help open up this much neglected sector to some of the brightest and passionate young minds. Instead of flocking to Silicon Valley to create mobile apps, maybe the top students will turn to nuclear, like Dewan did. And if the U.S. nuclear industry doesn’t change, many of these innovations will be commercialized overseas. China’s appetite for any new power generation tech is voracious. Russia is also particularly interested in new nuclear power. Dewan and Rothrock have an important mission. With climate change looming on the horizon, nuclear technology could be the planet’s best hope.

CITATION FROM FORTUNE : http://goo.gl/vioiO3

STOCKS ON SME BOURSES TURN MULTIBAGGERS

In a high risk-high return market, companies listed on the small and medium enterprises (SME) platforms have turned out to be multibaggers, notching up returns ranging from 300 per cent to 2,500 per cent.

The BSE SME IPO index, a representative of all the SME stocks listed on BSE, has risen over nine times in just two years to 947 from a base of 100.

Out of the 101 companies listed on the BSE SME platform, 60 have given positive returns ranging from 200 per cent to 2,500 per cent, while 41 others are currently trading in the red.

“The BSE SME index presents a broader picture of the companies listed on the platform. Some of them have done very well while a few others have given average returns. Overall, this segment has put up a good show,” said Ajay Thakur, head of BSE SME Exchange.

Both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have SME platforms, where trading is restricted mainly to large investors as the lot size is of Rs 1,00,000. The NSE platform has seen just seven listings so far.

Out of the 94 companies listed on the BSE SME platform, seven have already moved to the main board. As on date, the BSE SME platform has a total market-capitalisation of Rs 8,202 crore.

Companies listed on the SME platform are allowed to migrate to the main board when they grow in size and are able to meet the criteria for listing on the main board.

Existing norms need firm to complete two years on SME platform and achieve post-issue paid-up capital of Rs 10 crore or above to qualify for listing on the main board.

Also, if the paid-up capital of a company exceeds Rs 25 crore, it would be compulsorily required to migrate to the main board. “SME stocks provide significant opportunity to investors. It is a high risk-high return instrument, which has yielded superb returns to long-term investors,” said Mahavir Lunawat, managing director of Pantomath Capital Advisors, a leading merchant banker in the SME market. The firm claims to have lead-managed most SME IPOs in terms of value during 2014-15. “It’s heartening to note that ultra-HNIs and institutional investors have also started looking at the SME market... ” Lunawat said. Pantomath SMEX-30, an index for SME scrips, saw over 188 per cent rise in last calendar alone. The SME platforms are for meant for small-sized companies, to facilitate raising of equity capital under relaxed regulatory and disclosure requirements compared with those for the main platform.

Many investors on the SME platforms are domestic high networth individuals (HNIs). Institutional players like banks and brokerages have also begun to take interest in this segment.

“Several investors have gained by investing in these companies. Many of them have huge potential for growth and investors gain by taking exposure to them at an early stage,” said Gaurav Jain, director of Hem Securities, a Mumbai brokerage.

More than 20 SMEs have filed draft red herring prospectus with the BSE SME platform this year, seeking permission to get listed. Seeing the success of companies listed on the SME platform, many small firms are showing interest in listing on the BSE SME platform, Thakur said.

“We are also creating awareness among SMEs about the benefits of listing on this platform, which can help them not only raise funds but also improve corporate governance practices apart from improving operational efficiencies,” he said.

“The SME exchange is a never-before opportunity for stakeholders. It enables emerging companies to unlock value, raise growth capital and reduce debt burden,” Lunawat said.

Citation from Deccan Chronicles : http://goo.gl/ggKjXN

Saudi Arabia Opening for Investment

Infrastructure Projects in Saudi Arabia: Getting qualified

By Daniel Goodwin - d.goodwin@tamimi.com

With the Kingdom of Saudi Arabia (KSA) rolling out a succession of major public infrastructure projects in recent years, KSA's foreign investment policy makers have made it clear that they are keen to see more foreign participation in those projects. As the economic powerhouse of the GCC with a strong pipeline of work in the years ahead, KSA is on the radar for foreign contractors looking to expand in the Middle East. Often, to be eligible to bid for these larger projects, a contractor must be pre-qualified.

Pre-qualification for government contracts in Saudi Arabia

Pre-qualification is used to identify contractors who have the necessary experience, know-how and resources to successfully carry out a particular scope of work or project.

Looking to Opportunities in GCC

In KSA the pre-qualification process, where utilised, is itself a competitive tender process and is governed by the Government Tender and Procurement Law ("GTPL") and its implementing regulations ("GTPR").

The specific requirements for pre-qualification for government tenders vary between different government agencies and also from project to project. Generally for government projects the GTPR mandates that contractors must:

• Have a Commercial Registration in KSA. For foreign contractors this first requires a licence from the Saudi Arabian General Investment Authority ("SAGIA").
• Be registered with the General Organisation for Social Insurance.
• Have a tax or zakat certificate.
• Have a Saudization certificate.
• Have a certificate of membership of the Chamber of Commerce.
• Be registered with the Ministry of Labour.
• Have a requisite Contractor Classification issued by the Ministry of Municipal and Rural Affairs ("MOMRA") to carry out the work required. This will depend on the type of work specified and the value of the contract.

Generally, though it may vary between various government entities, other pre-qualification requirements may require the contractor to:

• Have no conflict of interest (including for any proposed subcontractors).
• Have no recent instances of contractual non-performance (which could be within say the past five years).
• Meet required financial levels, provide audited financial statements, and be solvent with no recent history of liquidation, bankruptcy or defaults (say within the past five years).
• Have certain annual turnovers (depending on the project requirements).
• Meet specific experience requirements depending on the precise nature of the project.
• Declare any fees, gratuities, payments or inducements paid to any party in respect of pre-qualification or the bidding or tender process.

Streamlined processes for foreign contractors
A foreign contractor that does not have a commercial presence / registration in KSA may still qualify to bid for a government contract.

The recent Council of Ministers Resolution No. 405, released in August 2014, applies to contractors in the areas of: construction; roads; water and sewage works; implementation of works for water conveyance; desalination plants and electric power; electrical, mechanical, electronic, industrial and marine works; and communications technology.

This resolution allows contractors that are licensed as first class in their home country, or certain 'well known' contractors, to obtain a temporary certificate from SAGIA allowing the contractor to bid on government projects (but only one at a time). The contractor may then fulfil the other requirements (set out above) after it is awarded a government contract.

If successful in being awarded a government contract, the foreign contractor must establish an entity in KSA and obtain a temporary commercial registration. A temporary commercial registration licence must be applied for within 30 days of the date the contract is awarded and a copy of the award letter or the project execution contract signed by the government authority must be submitted to SAGIA.

A temporary commercial registration licence from SAGIA:

• Will be limited to the activities necessary to carry out the project awarded by the KSA government authority.
• Will be limited to a time period linked to the expected duration of the project awarded by the KSA government authority.
• Will be linked to the KSA government authority that awarded the project.
• Must be renewed every 12 months and the consent of the KSA government authority that awarded the project is required.

As a further refinement, a foreign contractor classified in the first class in its country, or which has implemented a project with a value of not less than SAR500 million, has not less than 2,000 employees and total assets of not less than SAR50 million, can apply for a SAGIA licence using the recently introduced Fast Track process. SAGIA states that the Fast Track system allows a licence to be issued in as few as five days from acknowledgement of a completed application.

Joining a consortium to bid for contracts in KSA

A consortium is essentially an agreement between a number of parties to undertake a joint venture. If a foreign entity is a joint venture partner it must hold a SAGIA foreign investment licence and a Commercial Registration issued by the Ministry of Commerce and Industry. Usually (but not always) the consortium will establish a KSA limited liability company to execute the contract. A consortium intending to bid for a government contract will be required to submit a copy of the consortium agreement.

For a foreign contractor bidding for KSA government contracts as part of a consortium, there may be a need for the foreign contractor to have a KSA SAGIA licence, depending on the terms of the Request for Proposal or Tender. Some may require KSA registration first, others may not. The SAGIA licence will need to be obtained by the new JV company (if there is one) otherwise it must be obtained by the foreign company setting up an entity in KSA as part of an unincorporated consortium.

Pre-qualifying for private sector contracts

Tender and pre-qualification processes for private sector contracts in KSA are not governed by specific laws.

Requirements for pre-qualification issued by private companies in KSA (other than government procurement) vary depending on the level of sophistication of the company, whether the company has experience in carrying out similar past projects, and the value and complexity of the work. However, most of the information required for government pre-qualification is generally also requested in private sector tenders.

Other pre-qualification requirements may include:

• Past occupational health and safety record.
• Any ISO or similar compliance.
• References from past employers, head-contractors or sub-contractors.
• A requirement to provide a financial guarantee / bond.

It may be a pre-qualification requirement that all bidders already have a KSA established entity.

Inducement of government officials

KSA has laws that keep the tender process transparent, fair and free from impropriety.

The Anti-Bribery Law 1992 makes it clear that the receipt of any benefit or advantage (financial or non-financial) concerning any government official would be considered a bribe and includes a promise, gift, bounty, favour or recommendation.

Prohibited circumstances include not only when officials demand a bribe for themselves or another person for performing their normal duties (or abstaining from performing such duties) but also receiving what is deemed to be a bribe without demand by the official concerned.

There are severe penalties for bribery, which vary according to the severity of the circumstances. The most severe penalties are 10 years imprisonment and/or a SAR1 million fine. The lesser crimes still carry imprisonment penalties of up to 3 years and/or a fine of up to SAR100,000.

Bribes or inducements in the private sector are illegal under Shari'ah principles.

Conclusion

Qualifying as an approved bidder is the first part of the tender process and contractors now have a more streamlined way to qualify as a bidder in KSA.

The willingness of the government to bring in more streamlined processes for contractors entering KSA is a reflection of the significant amount of work being carried out and the need for experienced foreign contractors to bring their know-how and resources to implement projects in the Kingdom of Saudi Arabia.

With the continued rollout of world class infrastructure projects across the Kingdom, the demand for foreign contractors and suppliers will remain strong in the years ahead. Knowing how to pre-qualify to tender on those projects is an essential first step for any contractor looking to win tenders in KSA.

© Al Tamimi & Company 2015

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