The Connection Between Export and the National Economy
What is the connection between export and national economy?
Export is important in supporting the national economy and increasing its growth rate. As it raises the productivity of goods and services, which enhances economic growth in the long term and helps to expand exports and raise the level of the country’s economy in general. Because exporting brings more revenues that can be invested in both the local and global markets, which positively affects its economy.
Within the framework of Vision 2030, the Kingdom seeks to develop the field of exports. As the Saudi EXIM Bank was established in 2020 with the aim of providing export financing services. The General Authority of Foreign Trade was also launched in 2019 to enhance the Kingdom’s gains in foreign trade and increase its competitiveness, in addition to enabling exports to the enter foreign markets.
The Saudi EXIM Bank also focused on increasing the proportion of non-oil exports, and the Saudi Export Development Authority made many efforts in the field of supporting these exports, emphasizing the words of the Crown Prince, Muhammad bin Salman “I want to reach that we are not an oil sector, we want to increase our benefit from the oil sector, from manufacturing industries to it max, and we are also work on various other opportunities away from the oil sector in order to diversify our economy and increase the size of our economy.”
And evidence of the size of the joint efforts made by the relevant authorities and their active role, according to the General Authority for Statistics, Saudi non-oil exports witnessed a remarkable improvement after facing the pandemic in 2020 and recorded the highest half-term value with an increase of 37% for the first half of 2021 compared to what it recorded in the same period in 2020, and it also recorded an increase of 8%. % in quantities. Thus, showing an improvement in the quantity and performance of non-oil exports and their value, and their return to their normal levels.
How does export support the national economy?
Export is one of the most important engines of the national economy, and its role in supporting the national economy appears through a number of matters, including the following:
Encourages the expansion of the industrial sector and the production of national goods
The export process contributes to increasing the demand for commodities, especially when a strong customer base is formed in foreign markets, which positively affects the rate of economic growth in the country.
When the rate of economic growth increases, the expansion of the industrial sector and the production of national goods becomes a necessity for many exporting companies, which is what makes them contribute clearly to supporting the national economy.
In this regard, it was noticed through the statistics of the Ministry of Industry and Mineral Resources that the number of factories in the Kingdom increased from the end of December 2021 to the end of December 2022, and this is indicated in the following graph:
The Saudi Export Development Authority also launched the “Made in Saudi Arabia” initiative, a national initiative under the patronage of His Royal Highness Prince Muhammad bin Salman in 2021, to be part of the National Industry and Logistics Development Program “Ndlip”, with the aim of enhancing national industries and encouraging consumers to buy local commodities, in addition to promoting the Kingdom’s exports to global markets.
Enhances the improvement of efficiency and raises productivity
The need to export more services and merchandise enhances the growth of productivity and efficiency to meet the needs of foreign markets to which products and services are exported.
In this regard, the Saudi Export Development Authority encourages all Saudi companies concerned in production and export to register on the Saudi Exports website to take advantage of the services and tools to develop their production capabilities, provide them with export opportunities, and achieve growth in their business in order to serve the national economy.
Provides more job opportunities for citizens
Exporting contributes to an increase in revenues, and this encourages the expansion of investments, which this creates more jobs, raises wages, and empowers citizens.
Makes the local product a strong competitor in the global and regional markets
Exporting allows the availability of local products in the global and regional markets, and with the increase in their spread, the demand for them increases which makes the exporting companies make every effort to raise the efficiency of local products, in order to meet the demand in foreign markets. In this case, to make room for local products to be a strong competitor at the regional and global levels, which supports the national economy.
The best thing that exporting companies in the Kingdom can benefit from is the services provided by the Saudi Industrial Development Fund, which provides financial and advisory support, and offers innovative solutions in order to develop the local industry and raise its efficiency. Following the aim of supporting local products and the national economy and promoting non-oil exports in order to compete in foreign markets.
How can the export sector be supported to achieve the growth of the national economy?
Given the importance of the export sector in enhancing economic development in the country, governments must support this sector to achieve the growth of the national economy. As this is achieved through a set of steps, and these are the most important ones:
Spreading awareness of export practices
Spreading awareness of export practices is a first step in supporting this sector, In activating this step, in 2021, the Saudi Export Development Authority made many efforts to spread awareness, which are evident in the following:
- Participated in 4 local exhibitions; Including Al-Qassim Scientific Exhibition, the International Conference and Exhibition for Dates, and sponsored two international exhibitions.
- It was keen on media coverage of the Authority’s efforts and activities, by editing and publishing 29 news stories, and organizing 5 television interviews and visual media coverage.
- Launched 3 digital awareness campaigns and other promotional campaigns for the Authority’s services and initiatives.
- Posted more than 600 different posts on the Authority’s social media channels.
The authority also presented a set of initiatives, including the initiative to develop export capabilities for Saudi enterprises, which aimed to raise the knowledge of Saudi enterprises of the best export practices, in addition to the policies and procedures followed in the Kingdom and the priority markets for the export process, through training programs and financial and advisory assistance.
Building and developing human competencies with experience in the field of export
To enhance support for the export sector, the Saudi Export Development Authority launched a program to support specialized certificates in the field of export in 2019 in cooperation with the International Chamber of Commerce Academy, with the aim of raising knowledge and developing human competencies in the field of export, by providing 250 training scholarships for employees of 112 national exporting or aspiring to export establishments in many sectors.
Improving the efficiency of the export environment
Working to increase the efficiency of the export environment contributes effectively to achieving the growth of the national economy, and the support of the Saudi Export Development Authority for the export sector in the Kingdom, it introduces an initiative to improve the efficiency of the export environment.
This initiative aims to understand the needs of exporters, spread the culture of export among them, and make solving the challenges facing them a priority. In addition, supporting them with qualified human services and competencies, in order to raise their level of satisfaction with the export environment.
Providing financing solutions for exporters
The obstacle may be financial sometimes in front of exporters in the export sector. Therefore, providing financing solutions will support this sector, which is what the Saudi EXIM Bank is doing, which providing financing and advisory services to assist establishments operating in the Kingdom to export their non-oil products and services, facilitating their entry into global markets and enhancing their competitiveness, in addition to helping them reduce export risks.
The bank provides its services through a range of products. Such as pre-export financing products, working capital financing, and other credit facilities.
Promoting exporters and their products
The Saudi Export Development Authority has worked to support exporters in the export sector by finding export opportunities and selecting markets that are suitable for their products. It has also connected them with some potential buyers in global markets, in order to raise awareness of Saudi products within the initiative to promote exporters and their products, and to find export opportunities for them.