RIYADH, 12 February — The Supreme Economic Council yesterday approved a list of economic sectors that would remain off-limits to foreign investors. It also set up a seven-member committee to oversee the Kingdom's privatization program.
The SEC meeting, which was chaired by Crown Prince Abdullah, deputy premier and commander of the National Guard, also decided to consider the BOT (build, operate and transfer) system as an integral part of the country's privatization strategy.
The new list, proposed by the General Investment Authority, will bar foreigners from investing in projects related to oil exploration, drilling and production, real estate projects in Makkah and Madinah, military equipment and uniforms, printing and publishing.
The list also includes telecommunications, education, insurance, land and air transportation, pipelines, space projects and services and tourist guidance services related to Haj and Umrah.
"This list will be revised every year with the aim of opening up certain sectors," Dr. Abdul Rahman Al-Tuwaijeri, SEC's secretary-general, told the Saudi Press Agency. He said the Council established the new committee to carry out its responsibilities related to privatization.
The panel will be headed by State Minister Dr. Muhammad ibn Abdul Aziz Al-Sheikh and its members are Commerce Minister Osama Faqeeh, Finance and National Economy Minister Dr. Ibrahim Al-Assaf, Planning Minister Khaled Al-Gosaibi, State Minister Mutlab Al-Nafeesa, Dr. Khaled Al-Fayez and Muhammad Odwan, two members from SEC's advisory body.
Al-Tuwaijeri said the SEC urged the GIA to work in accordance with the new list. Other economic and service sectors banned from foreign investment are: Manufacturing of civilian explosives, catering services for military sectors, security, fishing, employment and recruitment services, midwifery and nursing, poison centers, blood banks, quarantines, real estate brokerage, wholesale and retail distribution, and electricity distribution through the public network.
Al-Tuwaijeri said commercial agencies, except those related to special rights, would remain off-limits, adding that the percentage of foreign participation in special rights should not exceed 49 percent and that only one license would be given to each region.
The Kingdom is finalizing the details of an investment law approved in April last year which for the first time allows foreigners to fully own projects, relaxes rules for sponsoring foreign employees, permits foreign ownership of project-related property and lowers tax on corporate profits.
Foreign investors and diplomats say the new investment law is attracting huge interest from potential foreign investors, but add that many are waiting for the Kingdom to pinpoint which sectors of its economy would be opened up.
The General Investment Authority (GIA) has already set limits for the amount of investment needed for foreigners to qualify for owning projects in several sectors, including agriculture and industry.
The GIA was set up in April to provide the mechanism for a new investment law, which also aims to address some concerns by foreign investors who until now could only invest in joint ventures with Saudi nationals.
