RIYADH, 16 April 2003 — There are 15 major obstacles hampering the inflow of foreign investment, according to a panel set up by Crown Prince Abdullah, deputy premier and commander of the National Guard, who chairs the Supreme Economic Council.
The panel’s field studies also revealed that the performance of government agencies responsible for investment affairs is weak, and called for the removal of red tape which complicates procedures to issue investment licenses.
Mujahid Al-Qain, secretary of the General Investment Authority (GIA), said his organization in cooperation with government agencies was making efforts to remove the procedural and administrative obstacles affecting investment.
Since its formation in 2000, the GIA has licensed 1,782 industrial, agricultural and service projects worth SR51 billion ($13.6 billion). Al-Qain said the authority would cancel licenses if investors failed to fulfill their commitment and showed a lack of interest. The panel submitted its recommendations in a bid to attract more foreign funds.
The study, described as frank and transparent, observed an unprecedented “serious desire” on the part of the state to improve the investment climate in the Kingdom.
The panel called for speedy implementation of the privatization program by setting out a timeframe to privatize each sector. It also emphasized the need to encourage competition in order to avoid private monopolies. Data related to the sectors listed for privatization must be transparent, it said, and the state should avoid competing in the field once privatization was implemented.
The panel also studied the effectiveness of government resolutions to promote investment and noted a lack of coordination between the GIA and other government departments. Investors require approval of not only the GIA but also other government departments, especially to invest in areas such as education, health, information, water and public works.
Investors must be informed of the requirements to get a license, the panel said, adding that the services of the one-stop centers should be improved. “It is difficult to get correct information,” it said and stressed the need to unify information and attribute it to the proper sources.
The panel noted a lack of Saudi manpower qualified to meet the requirements of the job market. As a result, it said, the Kingdom’s curricula needed to be revised and quality educational programs of an international standard established.
