RIYADH, 4 August 2004 — Small investors complain that they are facing hurdles at the hands of young and inexperienced Saudis employed in the licensing departments of various government agencies. Some of these new recruits have created a situation in which the investors feel they are shooting in the dark with no proper guidance along the way. They are neither qualified nor sufficiently aware of the licensing procedures.
Speaking on condition of anonymity, one of the investors told Arab News: “I had been to a government agency and told one of the Saudi officials that I, a non-Saudi, intend starting an Internet café. Immediately he told me the minimum capital requirement was SR2 million. It was impossible for us as a group of small investors to raise that much capital. So we launched our enterprise in the name of a Saudi and got the license without fulfilling that condition.”
He continued: “Let me also tell you that the place which we rented in Riyadh was formerly a commercial establishment that had been running for two years without a government license.”
According to information available on the website of the Saudi Arabian General Investment Authority (SAGIA), SR2 million is the minimum capital requirement for a foreign investor. The Internet café in question has been set up by a group of local investors, including Saudis.
The investors point out that while SAGIA is engaged in conducting a survey of the licenses issued since its inception in 2000 to find out how many of them became operational, the agency should also try to assess the bureaucratic hurdles they are facing along the line.
In this context, one of the investors said: “The inspectors from the Al-Maather Municipality and the Civil Defense Department told us that they will inspect our facilities at any time on Monday. Since they were not specific, we had to wait from 8 a.m. to 2 p.m. — their working hours, putting everything else on hold.
“When we asked them approximately what time we could expect them, they replied that it could be any time between 8 a.m. and 2 p.m. Such vague instructions cause a lot of inconvenience to the applicants for business license who may begin to have second thoughts about setting up business in Saudi Arabia when nearby Dubai is offering so many incentives.”
It is pointed out that the municipality imposes a penalty ranging from SR200 to SR15,000 for a variety of offenses. However, determining the amount of fine is left to the whims and fancies of the inspector. “If the defaulter has got the right connection, he could be fined the minimum amount even if he deserves a higher penalty. So it’s all arbitrary depending on the inspector concerned.”
Saudization is also said to have created an element of instability on the job front. “Even when Saudis are put through the training program, they are not motivated enough to take it seriously. As a result, they are either not aware of the rules and regulations or have only sketchy information.”
The cumulative result of all this is that whereas it takes about two months to obtain a license in Riyadh, in Jeddah it takes anywhere from 10 days to one day or even a few hours, according to Jeddah Mayor Abdullah Al-Muallimi.
Lack of motivation is one of the reasons for absenteeism among civil servants, as a recent Kingdomwide study by the Institute of Public Administration has revealed. It found that 69 percent of civil servants stay away from work without a valid reason, while 54 percent report late. They also become late-comers, with 39.4 percent turning up 15 minutes late, 24.1 percent 30 minutes, and 17.8 percent just under an hour and 18.7 percent for more than an hour. Employees with master’s and doctoral degrees showed up three hours late, according to the study that covered 2,365 civil servants.
