Many say they don’t understand why both Saudis and foreign investors refuse to put their money and expertise into the Saudi market. I see no justification for this since the businessmen and officials at the investment authority are all aware of the reasons. These people have been talking covertly and overtly about the impediments to investments.
One important statement was made by the head of the Saudi Arabian General Investment Authority (SAGIA), who cited more than 100 obstacles that have to be removed, including reforming existing laws and cutting bureaucracy.
The chairman of the Council of Saudi Chambers of Commerce and Industry, Abdul Rahman Al-Jeraisy, has also pointed out the obstacles that prevent the Kingdom from embarking on a major industrial drive matching the one in the United Arab Emirates and in other Gulf states.
According to him, the laws and procedures which are currently in practice in the Kingdom are to blame for the situation preventing development. Entrenched red-tape and the way decision-making processes are managed have adversely affected every aspect of investment.
While other Gulf countries have succeeded in achieving a high degree of industrial growth by using a resilient policy, the Kingdom which originally led the region’s industrial revolution is now far behind. Foot-dragging and failure to make the right decisions at the right time has led to the Kingdom’s being left behind despite the Saudi market being the largest in the region.
Al-Jeraisy was expressing dissatisfaction at what has caused foreign capital and investment to flee the Kingdom and at local money fleeing or being invested in projects that have no social return such as real estate and stock speculation. This kind of investment creates no jobs and adds nothing to the country’s GNP. Large amounts of money are effectively being buried in the sand.
The puzzling question here is: If all the obstacles are well-known and the solution is clear, what prevents us from making the decisions to address the situation?
Different answers are being put forward in private meetings — concern for security, the lack of desire for change, red-tape. There seems to be a general conviction among administrators that development and reform means reducing their authority and that openness will inevitably produce chaos.
I hope Al-Jeraisy’s words have fallen on attentive ones.
