Saudi Arabia benefits from boost in foreign investment

The report identified improvements to the business environment in Saudi Arabia as a key driver of annual growth. (Shutterstock)
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Updated 18 June 2020

Saudi Arabia benefits from boost in foreign investment

  • The report, published on June 16, confirms an upward trend indicated by investor license figures released last month by Invest Saudi

RIYADH: Foreign direct investment in Saudi Arabia rose to $4.6 billion in 2019, according to the World Investment Report 2020 published by the United Nations Conference on Trade and Development. For a second consecutive year the figure increased by 7 percent, which is more than three times the level of growth recorded in 2017.
The report, published on June 16, confirms an upward trend indicated by investor license figures released last month by Invest Saudi. These revealed a 19 percent increase in the number of licenses granted by the Kingdom in the first three months of this year compared with the same period last year.
The annual World Investment Report analyzes trends in foreign direct investment around the world, at regional and national levels. The latest edition revealed that Saudi Arabia is one of the top destinations for foreign direct investment in the West Asia region, and accounted for a majority of regional inflows before the economic downturn caused by the COVID-19 pandemic began to have an effect.
The report identified improvements to the business environment in Saudi Arabia as a key driver of annual growth. In particular it highlighted a number of the economic reforms last year as improving the overall ease of doing business.
“We are delighted to see in this latest edition that Saudi Arabia’s efforts to distinguish itself as a global investment destination of choice, by implementing an extensive program of pro-business reforms, has resulted in yet another positive uptick in the amount of FDI coming into the Kingdom in 2019,” said Dr. Ayedh Al-Otaibi, deputy for investment climate at the Saudi Ministry of Investment (MISA).
“Saudi Arabia continued to see this encouraging pattern of growth in the first quarter of 2020, with strong month-by-month increases in the number of international companies setting up in the Kingdom recorded in Jan. and Feb. However, as the economic effects of COVID-19 began to be felt in March, we found that growth began to slow.”
UNCTAD forecasts that the global health crisis caused by the pandemic will continue to have an unprecedented effect on international foreign direct investment flows, and predicts an overall decline of 40 percent this year and next. The report emphasizes that investment has a key role to play in countering the long-term developmental impact of the pandemic on national economies.
The UN trade body also assessed national economic responses to COVID-19, and identified policy recommendations and best practices by investment promotion agencies. MISA’s COVID-19 Response Center (MCRC) was cited as an example of global best practice among efforts by IPAs to mitigate the financial effects of the pandemic on the private sector.
 


Expat businessmen optimistic about life after COVID-19 lockdown

Updated 11 min 54 sec ago

Expat businessmen optimistic about life after COVID-19 lockdown

  • Many expat business owners have praised the Saudi government for its role in helping them survive the COVID-19 outbreak

JEDDAH: Expat business owners in Saudi Arabia hit by loss of sales during the coronavirus disease (COVID-19) lockdown period have expressed hope for the future as trading gradually gets underway again.

Many foreign-run firms operating in the Kingdom have been facing uncertain times due to curfews and restrictions put in place throughout the Kingdom to stop the spread of the virus.

But with the easing of precautionary measures allowing the resumption of commercial activities, expat business proprietors are looking forward with optimism to life after lockdown.

According to the World Investment Report 2020, published by the UN Conference on Trade and Development, investment had a key role to play in countering the long-term developmental impact of the COVID-19 pandemic on national economies.

Awais Misri, the Pakistani CEO of Ramsons Trading Co. in Jeddah, told Arab News: “Saudi Arabia has been more protected and insulated from the worst effects of the COVID-19 depression, so I see consumption rebounding at least initially and that’s because Saudi Arabia’s economy is generally robust.”

His company, which supplies hotels, caterers, restaurants, and cafes in Makkah and Madinah with food products, along with supermarkets, was heavily impacted by the lockdown but he was confident of bouncing back.

“People are tired of being at home, they want to go out and spend; hence, consumption will go up and possibly even higher than pre-COVID-19 levels, at least initially,” Misri added.

Many expat business owners have praised the Saudi government for its role in helping them survive the COVID-19 outbreak.

Mahmood Khan, from India, who has a clothing manufacturing business in Riyadh, told Arab News: “Fortunately, some retailers were able to sell online, which proved successful for many businesses. However, for companies like ours, we were closed for the past three months. It has affected our revenue significantly. Up to 70 percent in sales were lost.

“With the curfew lifted and tremendous efforts put in by the government to ensure health and safety, we are positive that we will come out of these trying times soon. We have already seen a surge in orders and deliveries for the end of the year,” he added. 

Another factory owner said the pandemic had forced production to be halted. Jeddah-based Pakistani-British clothing retailer Farhan Ashfaq said: “This, of course, impacted our workers and community.

“However, we applaud the way Saudi Arabia has fought against COVID-19 to protect its citizens and residents. The government ensured safety first and has opened up businesses so we can get back on our feet and flourish.”

Startups dealing with the aftermath of the unprecedented health crisis were also hopeful of being able to resume business as usual.

Iman Azmat, an Indian-Canadian fashion retailer based in Dammam, said: “This has been a very trying time for all startups, especially those that began their journey in 2019.

“However, with the curfew being lifted and as things go back to normal, we hope to achieve the aims we set out with in the near future. Many foreign investors are eyeing Saudi Arabia as the beacon of hope.”