This is in response to the story, “From global to local: Time for collective action.” Abdullatif A. Al-Othman was given the reins of Saudi Arabian General Investment Authority (SAGIA) this year to regulate the foreign investments in Saudi Arabia. He has rightly highlighted the areas which require more focus to maintain the competitive edge and the need for judicial reforms to address the issues related to enforcement of contracts, execution of judgments and insolvency.
However, I see no reason or need to facilitate grant of loans to foreign investors by the institutions like Saudi Industrial Development Fund (SIDF). Either they invest out of their own funds or obtain credit facilities from their banks on commercial terms.
Besides the burgeoning local and regional population guaranteeing ready markets and an easy access to export zones, the foreign investors eye Kingdom’s robust infrastructure, abundant and cheap real estate to construct factories and plants, availability of power at very reasonable cost and proximity to raw materials of different kinds, thanks to the flourishing downstream oil sector.
Added to this positive scenario is the public spending and surpluses that not only energizes the business environment but also spells less dependence on foreign monies. In the circumstances, SAGIA should be more selective and allow foreign investments in the sectors which require high-end technology, critical know-how or expanding the manufacturing base in real terms and not just adding to the fabrication or assembly activities. More importantly, the foreign companies must employ and train Saudis to the maximum extent and renewal of investment license be made subject to their fulfilling this commitment. — Safi H. Jannaty, Dammam
Investment climate in Kingdom
