RIYADH, 19 February 2007 — A member of the Shoura Council and former official of the Ministry of Trade and Industry proposed that the Kingdom issues new laws to improve the country’s investment climate.
Usamah Kurdi, underlining the urgency, said new laws governing sponsorship and the treatment of foreign workers, laws on Capital Market Authority, corporations and taxes on foreign investors are some of the areas that need amendments.
“Joining the World Trade Organization itself will not boost the investment climate in the Kingdom but implementing its laws is an opportunity for the future,” he said.
Kurdi spoke in the symposium (Investment Climate and its Development in the Kingdom) held here yesterday evening.
In his speech, Kurdi mentioned that the Kingdom faced many obstacles that hindered its development in the investment scene. Among the first was the difficulty of getting a visa to visit Saudi Arabia.
Another problem, he said, was the long duration for issuing an industrial license. “Despite the Kingdom’s progress in the international classification of countries that simplify labor procedures, it still takes a long time,” he said.
The current sponsorship system in the Kingdom is another hindrance he believed needs to be changed.
He also urged the need for coordination between government bodies in the Kingdom. He called for the implementation of the accords which the Kingdom had signed with GCC countries as well as Arab countries.
Among the other obstacles, he noted, is the lack of support for the small- and medium-enterprises in the Kingdom.
Kurdi said that though the Kingdom’s economy is “strong and diversified”, yet it is vital that it sustains growth.
He said the Saudi economy needed to grow in six aspects: providing jobs and developing human resources (raising the living conditions of citizens); lowering the dependency on oil and diversifying the economy basis; developing the basic infrastructure; preserving social security; developing relations between the Kingdom and its international partners; and importance of foreign investment: knowledge, market, and training.
However, he said, the fact that the Saudi riyal is pegged to the US dollar was not a hindrance to the Saudi economy.
“We have benefited from this for decades,” Kurdi said. “There is no doubt that the security of the relation between the riyal and dollar has enabled both Saudi and foreign investors to establish joint ventures.”
Another Shoura member, Dr. Osamah Abdu Azarah, who managed the symposium, believed that the Kingdom’s bureaucratic procedures were a major hindrance for investment in the Kingdom.
“Government bodies have fun in putting obstacles in the Kingdom that hinder investment,” he said.
According to a study by the Investment Authority in the Kingdom, there was a serious contradiction between foreign investment in the Kingdom and over 40 government laws which block investment in a whole in Saudi Arabia, he added.
Another problem, he pointed out, was that so many of the Kingdom’s laws intervened with one another.
He noted that many local investors turned to the United Arab Emirates instead of Saudi Arabia “because licenses there are given on the same day when they take weeks or months to be issued here even though the service charge for industries in the United Arab Emirates is higher than that in the Kingdom.”
