RIYADH, 20 December 2006 — The Saudi leadership is committed to promoting investment opportunities in the Kingdom. However, the sluggish bureaucracy, lack of a strong work ethic, expertise and research centers in the capital market remain the stumbling blocks in the Kingdom’s drive to attract overseas investment.
This message came out of the three-day international seminar inaugurated Monday night on behalf of Riyadh Gov. Prince Salman by his deputy Prince Sattam. Delegates from the region, as well as from Singapore and Turkey, are participating in the seminar that will identify the investment opportunities and also the obstacles in realizing the full investment potential of the country.
Speaking on the occasion, Abdul Rahman Al-Jeraisy, president of the Riyadh Chamber of Commerce and Industry, underlined the government’s seriousness in transforming the Saudi economy into a magnet for overseas investors. He said that the presence of the doyens of industry and commerce would lend weight to the recommendations of the seminar.
Fahd Al-Sultan, secretary-general of the Council of Saudi Chambers of Commerce and Industry, stressed the need for further improving the investment climate in the Kingdom in order to attract $650 billion in investment over the next 20 years, a government policy goal.
However, speakers from the Gulf states expressed their reservations about the investment climate in the Kingdom and its neighbors. Ali Al-Zumaia, former planning minister of Kuwait, set the tone of the deliberations by pinpointing the shortcomings in the regulatory framework. He pointed out that stock markets in the Gulf lacked men with high caliber professional and administrative skills. There was no clear strategic vision in these countries in terms of economic development. The problem was further compounded by a lack of expertise in the area of research and development as well as consultancy services. Even the banking sector faced the same problem, said Al-Zumaia, who added that he hoped the entry of foreign banks in the Gulf market would stimulate competition as the local banks would up their investment in technology and streamline their services to the customers, the ultimate beneficiary.
On the investment side, he said, the Islamic banks were facing a peculiar situation. Their drive to attract investment was hamstrung by the lack of a unified vision in terms of the schools of Islamic thought. As a result, they were unable to face the global competition and got lost in philosophical hair splitting.
Speaking on behalf of Dubai-based Al-Qudra Real Estate, Thabet Hashem Al-Qaissieh, the company’s marketing officer, told Arab News that the Saudi economy had a huge investment potential in the real estate sector. “We received a lot of inquiries from Saudi businessmen who wanted to know how our company could help them both in the Kingdom and in Dubai,” he said.
A spokesman of Rakisa Holding Co., which is in charge of developing Prince Abdul Aziz Bin Musaed Economic City, said the company would float 30 percent of its SR7.5 billion capital in an initial public offering in the first quarter of next year.
A number of Saudi and Gulf investment companies have put up stalls at the exhibition explaining the type of facilities they offer to the prospective investors.