The phenomenon of Saudi investors, both big and small, rushing to invest in real estate projects and stock markets in neighboring countries is a clear sign of failure by local officials. It reflects the real picture of the Kingdom’s investment environment. It shows that in Saudi Arabia we lack investment opportunities able to absorb the surplus money from both individuals and banks here.
Many economists say that the increasing percentage of investors’ liquidity in banks is a bad sign for the country’s economy. Some believe that the reason for this is the absence of good investment opportunities while others dispute this, saying there are many attractive investment opportunities here. Some people say that there is no real private sector in the country that can create big investment opportunities. This is not true because there are businessmen who have been able to build and run successful commercial entities.
Why is there so much liquidity in real estate and stocks? Or when it moves outside, why is it invested in those same sectors? One glaring example is the SR14 billion that recently left the Kingdom for the Dubai money market. Saudi investors are second in the Dubai money market as far as Gulf investment in the UAE is concerned. Saudi investments there are in addition to those in other Arab countries such as Egypt where Saudis are the leading investors.
Investing abroad is certainly not something bad or forbidden. We are proud that the government does not impose restrictions on citizens investing abroad — but we have to ask why Saudi money is leaving the country. And it is a question which must be answered; it is also a reality which we must not deny. Not even the official propaganda designed to attract foreign investment to the Kingdom can hide the painful reality that we cannot stop the drain of our own Saudi capital. Despite a great deal of government support, we see that the majority of our investors prefer to invest abroad. I am very sad to see that some of our investment officials talk about success in the media. They use figures and statistics that are far from the truth in order to justify their statements.
I wish the Shoura Council would discuss the issue and find out why local investment is limited to real estate and stocks. I imagine that there is a big mistake, either in planning or in implementing our investment plans. Bureaucracy is still a major obstacle in attracting investment. It is the old mindset of some government officials which is an obstacle to privatization. Also the complications in the Capital Market Authority (CMA) are an obstacle to establishing new joint stock companies and increasing capital in some companies. I ask why there is no cash for development and industrial projects such as establishing joint stock companies for university education or a joint stock company to manage hospitals and medical centers? Why do we not support the establishment of a joint stock company to establish and develop industrial cities?
We are in need of forming more joint stock companies to develop investment opportunities and to soak up the billions of riyals that are lying idly in bank accounts. If small businessmen who do not have experience were able to collect millions of riyals for investment projects that end up as big scams, then these joint stock companies under the direction of CMA would surely be able to attract billions of riyals and turn the money into projects which would benefit the country.
As this is the reality, are officials going to convince us through their seminars, statistics and media that the investment situation in the country is fine and dandy? In the past they may have got away with it, but they will not be able to do it now. Before we ask — and expect — foreigners to invest in the Kingdom, I suggest that we try to convince our own people to invest their money here as well.
