DAMMAM, 14 February 2007 — A recent economic study has identified the major stumbling blocks to attracting investment in the Kingdom. The stumbling blocks are expensive utility and port services, complications related to getting the required land for investments, bureaucratic delays and the difficulties in getting expert workers.
The study, entitled “The Horizons of Investment Growth in the Eastern Province,” prepared by a special committee appointed by the Eastern Province Chamber of Commerce and Industry, found that it was not easy to get electricity and water connections for industrial purpose. Other factors which discouraged investors included the lack of developed plots close to cities, the absence of transparency in regulations governing investment projects and a total lack of flexibility when implementing the regulations.
The study said the Kingdom’s investment and commercial regulations have not been revised with more attractive incentives and concessions to investors as is done in investment-friendly countries. The study pointed out that the obstacles have their origin in the administrative policies that govern investment activities. The lengthy bureaucratic procedures involved in the issue of licenses, slow customs formalities, the excessive number of documents required for the issue of commercial registrations and the insufficiency of information about the investment environment discourage any investor.
The study also cited the obstacles commonly experienced at the ports, airports, road transportation and customs houses. The difficulty in getting visas and resident permits for foreign workers is another discouraging factor.
In the absence of a favorable investment atmosphere, the government’s efforts to attract investment are not producing the expected results, the study noted. The study said a sound investment environment in the Kingdom would prove highly advantageous to the Eastern Province.
Though Saudization is a matter to be given top priority, it is being implemented in a way that defeats its own purpose. The study found that the nationalization of jobs restricted foreign labor recruitment in such a way that several sectors do not get the essential work force required for rapid economic development.
The study said the province is in an advantageous position with its numerous oil, natural gas and petrochemical industries in addition to water desalination and electrical plants. It is also considered the eastern gateway to the Kingdom with a 700-kilometer Arabian Gulf coastline with desert, aquatic and agricultural environments that provide abundant opportunities for long-term investments.