JEDDAH, 18 January 2006 — A high-level Saudi business delegation is expected to visit the United Kingdom next week seeking investment for projects worth SR2.34 trillion ($624 billion), especially in the vital sectors of petrochemicals, natural gas, tourism, desalination, power generation and railways.
The Saudi team, including senior government officials, will attend special events in Edinburgh on Jan. 24 and Manchester on Jan. 26 to woo British investors. The move is seen as an effort to open the economy of the world’s largest oil exporter after it joined the World Trade Organization (WTO) last month.
According to Omar Bahlaiwa, secretary general of the foreign trade development committee at the Council of Saudi Chambers of Commerce and Industry, infrastructure projects offer the largest investment opportunity of $140 billion.
The petrochemicals sector comes second with $92 billion projects followed by electricity and water $88.9 billion, telecommunications $60 billion, tourism $53.3 billion, natural gas $50 billion, agriculture $28.3 billion and information technology $10.7 billion.
“These are not privatizations ... but investment opportunities between Saudi (public and private) firms and foreign partners,” said Bahlaiwa.
A Saudi team had earlier visited US seeking investment.
The former Saudi ambassador to Britain (present ambassador to the US), Prince Turki Al-Faisal had earlier invited British businessmen to invest in the lucrative projects. Addressing the Middle East Symposium 2005 titled “Commercial Diplomacy: A Force for Regional Prosperity” in London, Prince Turki said the new projects would be implemented within the next 15 years.
In his speech at the symposium, which was held in July last year, Prince Turki emphasized the significance of the land-bridge project that aims at linking the Kingdom’s east with its west by a railway line, saying it would bring about a revolution in the country’s trade and transportation.
Prince Turki emphasized the strength of Saudi economy, saying it is the largest in the Middle East in terms of revenues, banking, capital market and oil reserves and exports.
“Saudi Arabia is one of the 25 major economies in the world and its gross national product (GNP) accounts for one fifth of the total Middle East GNP,” the ambassador said.
The Saudi economy has an annual growth rate of more than seven percent, which is the largest in the region.
Saudi Arabia is the largest trading partner of Britain in the Middle East, Prince Turki said, adding that direct British investments in the Kingdom reached $3.5 billion. There are more than 150 Saudi-British joint projects.
Amr Al-Dabbagh, governor of the Saudi Arabian General Investment Authority (SAGIA), said foreign direct investment was “crucially important” for the Kingdom to finance key projects like power and water desalination plants, communications, energy and others.
SAGIA has recently started an aggressive policy to attract foreign funds, providing incentives and tax breaks for investors and removing hurdles facing them, he said. The authority concluded 17 agreements with various government departments aimed at knocking down hurdles to local and foreign investment.
Foreign investors can now establish projects totally owned by them.
“There is no restriction on foreigners buying 100 percent of Saudi companies or totally owning their projects,” Dabbagh said.
Dabbagh said the Kingdom’s WTO accession would boost the flow of foreign investments into the Kingdom. “Accession will significantly enhance foreign direct investment. We will have more access to world markets,” he explained.
Dabbagh said the WTO accession would not change the Kingdom’s investment strategy. The strategy paid off handsomely in the first half of 2005 with the Kingdom receiving a record $17.3 billion in foreign investments, a 17-fold increase over the same period in 2004, he said. In the second quarter of 2005 alone, the Kingdom received $10.9 billion in foreign investments, a spectacular 46-fold increase over the corresponding period of 2004.