JEDDAH — Saudi Arabian General Investment Authority has embarked on a major plan to attract foreign investment to the Kingdom’s less developed regions, SAGIA’s Gov. Amr Al-Dabbagh announced yesterday.
“This plan will help us control the flow of people to major cities from less developed regions, by providing them with direct and indirect jobs after creating viable investment opportunities,” he said.
Al-Dabbagh said the economic cities being established at Rabigh, Hail, Madinah and Jizan would play a role in boosting Saudi economy and drawing foreign funds to less developed regions.
The four mega-economic cities launched in 2006 are expected to provide investment opportunities worth SR300 billion and create more than a million jobs. “These economic cities are one of the tools for the successful implementation of our new plan,” the governor said. “We will also establish the necessary infrastructure to attract funds,” he added. The number of investment licenses issued by the authority during the past few years increased considerably.
The value of investment licenses rose from SR18 billion in 2004, when Al-Dabbagh took over as SAGIA chief, to SR200 billion in 2005, SR251 billion in 2006 and SR334 billion in 2007. Custodian of the Two Holy Mosques King Abdullah issued a royal decree on Thursday extending Al-Dabbagh’s term to another four years.
Dr. Habibullah Turkistani, professor of management and international marketing, said SAGIA’s efforts to woo foreign funds were yielding fruits.
“The new SAGIA move will reduce pressure on major cities and solve a lot of social, economic and environmental problems caused by the intensity of population in major cities such as Riyadh, Jeddah and Dammam,” he said.
Turkistani said SAGIA’s efforts would also help reduce unemployment among Saudis by creating more job opportunities in various parts of the country. It will also help offset the impact of inflation, he added.
He said he believed that less developed regions could attract more funds as they provide larger areas at lesser prices to implement investment projects.
According to the latest report, SAGIA has licensed 1,438 joint ventures worth SR334 billion. The licensed joint ventures were: 104 in telecommunication and information technology (worth SR28 billion); 63 joint projects in energy (SR178 billion); 28 joint projects in real estate (SR57 billion); 24 projects in the health sector (SR845 million); 15 in earth sciences (SR22 billion); and 17 in the transport sector worth SR121 million.
The United Nations Conference on Trade and Development (UNCTAD) listed Saudi Arabia among the top 20 countries in the world in attracting direct foreign investment.
King Abdullah Economic City (KAEC) in Rabigh is the largest private sector development in the region developed by Emaar in association with SAGIA. KAEC has six key components: the Sea Port, Industrial Zone, Central Business District (including the Financial District), Resort District, Educational Zone and Residential Communities. Work is progressing according to schedule on the first phase of KAEC including the Industrial Zone, Residential Communities, Sea Port and Resort Zone. KAEC recently unveiled Bay La Sun Village, the first residential component of the project.