RIYADH, 15 June — Two Saudi economists said yesterday the establishment of free trade zones in Saudi Arabia would help Riyadh’s efforts to join the World Trade Organization and restructure the Saudi economy. The two officials expected the first free trade zone (FTZ) to be created on the Red Sea, which is close to the Suez Canal. The proximity of the two Red Sea ports of Jeddah and Yanbu would also help.
Chairman of the Riyadh Chamber of Commerce and Industry (RCCI) Abdul Rahman Al-Jeraisy said: “Free trade zones are important in promoting local and foreign investments.” He added, the location of the Kingdom, a stable political and economic climate, a strong banking system, high-level infrastructure and the legal framework that meets the needs of the major economic partners are the main factors that would enable the planned free trade zones to be a success.
The Secretary-General of the RCCI Hussein Al-Athl said the free trade zones would enable the Kingdom to improve the domestic products and diversify industrial products.
Meanwhile, a RCCI’s study said the free trade zones were important to halt the decline in the Saudi share of foreign investments in the Gulf Cooperation Council (GCC) states, which dropped from $289 million between 1984 and 1989 to $256 million between 1990 and 1996.
Add to this the fact foreign investments in the Saudi industrial sector have not met the development goals. The study notes that legislative incentives including customs exemptions, full ownership for foreign investors, free trade transactions and free remittance of capitals and profits in addition to the cancellation of the sponsorship system would help attract foreign investors. (KUNA)
