DUBAI, 30 October — Prince Abdullah ibn Faisal ibn Turki, governor of the Saudi Arabian General Investment Authority, said yesterday that the government might open more sectors to foreign investors in February as part of landmark economic reforms to reduce reliance on oil revenues and create jobs.
The Kingdom has attracted about $10 billion in foreign investment commitments since it introduced sweeping market reforms last year allowing full ownership in some sectors for the first time.
But it kept many lucrative sectors such as upstream oil, telecommunications and insurance off-limits to foreigners.
Prince Abdullah said the Supreme Economic Council was revising the negative list and would issue a new one in February. "We have already submitted requests for a reduction of that list," Prince Abdullah told reporters after a meeting of Gulf Arab investors in Dubai in the United Arab Emirates.
He declined to say which sectors would be open. "It would be unfair to say anything now because it would affect stock prices," Prince Abdullah said. "You’ll see lots of things happening over the next few months."
"I would like to see more competition... If the decision were in my hand, I would have opened everything up because our organization was set up to open up investment opportunities," he added.
"If you create the right legislation, a tax system and good environment for investment, you should not be worried at all. On the contrary, they (foreign investors) bring money, technology and know-how."
Saudi economists said they expected the government to allow foreigners to have stakes in the giant telecom and insurance sectors — two areas which have huge investment potentials.
A new insurance law is expected by yearend, and the Supreme Economic Council is studying a bill proposed by the Shoura Council, allowing private investment for the first time in the telecom sector, run solely by the Saudi Telecom Company (STC).
Prince Abdullah said the services sector was expected to grow three- or four-fold in less than a decade to meet the rising demand in a country whose population, currently estimated at around 22 million, is growing by more than four percent every year — one of the highest rates in the world. "In some sectors, like services mostly, the latent demand could, in my opinion, triple or quadruple if only things are opened up, rate structures changed, prices lowered or more services introduced," he said.
Income from oil exports accounts for around 75 percent of the OPEC country’s revenue and more than a third of its gross domestic product. But the Kingdom is keen to reduce it dependence on energy revenues and speed up the pace of job creation to cut the unemployment rate, now at an alarming level of around 25 percent of the male workforce.
