News reports say that scores of Saudi investors with money abroad have begun bringing billions of dollars home instead of leaving it in foreign banks. Some did it to avoid risks. Others were driven by Arab magnanimity and a sense of honor and decided to stand with their country in these difficult times when it is facing fierce attacks in the Western media.
The money, it is true, is back — but what a disappointing return! Though the money is coming home, there have not yet been any tangible results. Whether the money is at home or abroad, the result is the same. The reason is that after having withdrawn their money from foreign banks, the investors decided to choose the safest place to put their money — and they decided on real estate. The result has been soaring property prices — in some cases as much as a 30 percent increase. Not only that but in their attempt to control the sector, the investors are blocking their young countrymen from ever dreaming of acquiring a plot of land at any time at an affordable price. All our young people can now hope for is laying their hands on a tiny fish in a roaring sea.
As if the economy were free from trouble, billions are now frozen in sand dunes and empty spaces around the country, making property prices among the highest in the world. And this is despite the fact that according to the Ministry of Municipal and Rural Affairs, the country’s population occupies only five percent of the total land area. Despite the millions being pumped into property, the real estate sector remains the least productive and trails others in the list of sectors that provide services for the community. An investor may put millions into a project without creating a single job for his fellow Saudis. The entire transaction is completed using a mobile phone that costs no more than SR500. Other big transactions are concluded on paper and millions are moved from one bank account to another, generating huge profits for a small number of people.
In the small town where I am from, thousands of young people have been waiting for the day when they can acquire a plot of land; they have now woken up to find that all the available land had been acquired by only four rich investors. The four then began selling plots at high prices. This is what the money that has been brought home is doing.
Arab News From the Local Press 17 December 2002
