Economists differ on the best relationship between developing countries and industrial nations. There are those who view such partnerships with suspicion, saying the industrial nations regard any partnership with developing countries as a means of gaining much while giving little. Others say the problem lies with developing countries themselves. These countries continue to place obstacles in the path of capital movements, forcing potential investors to move elsewhere. The reasons are many — for instance, entrenched red tape, scarcity of a trained national workforce and a rising tendency among trained foreign labor to give up the challenges too soon and return home.
The conditions for both foreign and national investments in the Kingdom continue to attract public interest with discussions focusing on investors’ frustration with bureaucracy, the sheer volume of paperwork and long delays, protracted negotiations, conflicting and ambiguous laws and overlapping jurisdiction. It is this aspect of our economy that has become the subject of debate among foreign and local investors and other countries which are competing with us for international investments. Under these circumstances it is no surprise that foreign investors shun our markets.
We need to revamp and streamline our laws and ensure they are enforced properly. It is not enough to say we welcome the transfer of technology, know-how and financial investments. What really counts is that the system be applied professionally without any reversals or change in mood. On the positive side, some sectors of the economy continue to thrive: building and construction, tourism and recreation, consumer trade, travel including Haj and Umrah, recruitment of foreign labor, Saudization, etc. Unfortunately, many who see an increase in their income are carried away by consumerism, unaware of the need to save. The irony is that they join the critics leading the campaign for reform while they are busy investing in low-risk quick-profit ventures. These non-productive investments do not employ big numbers, or attract highly trained local workers. Instead, they absorb any extra income at a time when the country is in need of activities to help boost the national income, reduce unemployment and most importantly, serve as a catalyst for attracting more investments.
Encouraging local investments in partnership with foreigners equipped with technical know-how and expertise should be our priority. This is especially so when some Saudis are stashing billions of dollars in foreign banks. This money is kept abroad awaiting a favorable investment atmosphere free of complications and the much- publicized restrictions that prevail here. It is worth noting that with such complexities in the economy, the gap keeps widening between local investors and foreign partners. The party armed with knowledge, property rights and trade names is going to prevail. In addition to activating our trade laws and stressing the need for local investors to learn how to deal with multinationals that are not restricted by any geographical barriers, we need to pay more attention to religious and cultural aspects influencing the relations of both locals and foreigners. We should not ignore the sufferings of workers of other nationalities nor forget their rights and demands. Their priorities may not be the same as ours, but if ignored or not properly addressed, the damage will be serious. Local bodies in charge of investment are doing their best to facilitate the flow of foreign capital. Seminars are being held, problems discussed and solutions suggested. Investments running into billions of dollars have already been announced by the appropriate authorities indicating a promising response so far. However, the public at large still needs to have clear unambiguous pictures of the circumstances surrounding local and foreign realities about investment in our country. If in doubt, perhaps it may be appropriate for an independent and experienced body to be given the task of studying and evaluating the real local investment environment. Introducing and enforcing laws is important for the success of any economic activity but what is more important is practicing self-reform and for people to have a sense of responsibility, dedication and patriotism.
