LONDON, 20 June 2006 — “It’s all about timing; currently, some may be reluctant to invest in Saudi Arabia because of the perceived security risk; however, this is contrary to the reality on the ground. There is a gap between reality and perception. The reality is that Saudi Arabia is safe and provides exceptional investment climate and opportunities today; this means, the longer you wait, the more competition there will be among investors for these opportunities, and you will not gain a first mover advantage,” stressed Prince Mohammed ibn Nawaf, Saudi Arabian ambassador to the UK at a conference in London yesterday.
Prince Nawaf was giving the keynote speech at a conference themed ‘Invest: Saudi Arabia’ held at the Sheraton Park Lane hotel in front of a packed audience of bankers, corporate executives and officials.
Saudi Arabia is going through an unprecedented boom, emphasized Prince Nawaf. This boom is real and sustainable.
“This is no secret. The Custodian of the Holy Mosques King Abdullah has directed that significant revenues be committed to the dynamic development of our country. It was only last year when King Abdullah announced development projects worth $624 billion in the Kingdom.”
These include the King Abdullah Economic City, a $26.6 billion project which when completed will be the largest integrated economic city in the Middle East. Other projects, according to Prince Nawaf, include the building of two oil refineries at $6 billion each; multimillion dollar Landbridge railway across the Kingdom and other projects in key sectors ranging from education to health, tourism, transport, energy, electricity, petrochemicals and water. Business relations between the Kingdom and the UK are very healthy, said Prince Nawaf, who took up his post in London last year. British exports to the Kingdom in 2005 totaled just under £1.6 billion; while British imports from Saudi Arabia were just over £1.8 billion, resulting a trade a surplus of £240 million in favor of Saudi Arabia.
The Saudi envoy told delegates that the Kingdom’s latest 8th Five-Year Development Plan, (2005-2009) is different from previous one because the policies and programs under this plan are more ambitious and long-term oriented.
“Our goal is not just to plan for the next five years, but to develop a firm and secure strategy for the next 20 years and beyond,” he added.
This strategy is aimed at developing the Kingdom’s economy to higher levels, comparable to the most advanced economies of the world. It is also aimed at encouraging and facilitating greater role for the private sector by creating investment opportunities and providing market access for goods and services.
Dr. Fawaz Al-Alamy, deputy minister of industry and commerce, outlined the process of Saudi Arabia’s accession to the World Trade Organization (WTO) and stressed that the Kingdom can leverage its membership by gradually opening up its economy and creating better atmosphere for foreign direct investment (FDI).
Amr Al-Dabbagh, governor of Saudi Arabian General Investment Authority (SAGIA), highlighted the tremendous progress the Kingdom has made over the last few years in facilitating FDI flows especially through the one-stop center — that is SAGIA.
To further enhance this, Al-Dabbagh, said the Kingdom is in the process of establishing seven economic zones in key regions of the country over the next few years.
Basil Al-Ghalayini, CEO of BMG Financial Advisors, the organizer of the conference together with MEED, emphasized that “all eyes are fixated on that region and never before have we seen a huge interest to engage in business both from inside the Kingdom and from investors eying the lucrative market from the outside.”
The business environment in Saudi Arabia is characterized by a large number of family-owned establishments that are now looking into growth potential by going public.
The topic of Initial Public Offerings (IPOs) took center stage and the appetite for IPOs in the Saudi market was analyzed. The results clearly showed that despite the recent slump in the market, the solid business fundamentals of the region still make it very conducive to introduce IPOs into the market given adequate pricing.
Overall, the conference provided much needed comprehensive analysis of the Saudi market as seen from several perspectives.
On Wednesday, after the end of the two-day conference, the BMG Foundation, the humanitarian arm of Jeddah-based BMG Financial Advisors will host the annual GCC Polo Cup at the Guards Polo Club in Windsor. This is the 10th anniversary of the event and is in honor of Saudi Arabia’s late King Fahd.
