The overall environment of the Kingdom mainly from a security point of view is considered to be conducive to investment.
Economists say that the capital is coward and that it doesn’t stay in the absence of security and safety. Among other factors that are in favor of the Kingdom is its strength in the field of internal funding support and its ability to provide the necessary solutions to supplement foreign capital to ensure production capacity, as such achieving continued profitability.
But we shouldn’t forget two important factors: Intensity of competition, making the supply factor globally much greater than the demand factor. Secondly, many of our competitors in attracting investment depend mainly on this income generating factor and they build their structure on the grounds that they are investment-friendly environments.
The Saudi Arabian General Authority for Investment (SAGIA) is well aware of these two factors evident from its report on investment situation in the Kingdom. It is clear from this report that Saudi Arabia can compete strongly and achieve the desired goals.
But hopes are not enough, because the SAGIA requires presence of an important key factor in order to succeed in competing with other economies: Coming together and cooperation of all other government agencies and institutions that are overlapping as far as investment is concerned. This is because the SAGIA is the forerunner in the field of investment, but it is not the only player as there are ministries and other bodies that also play an important role in implementation or evaluation.
According to the report, the authority has prepared all procedures, visions and steps. What really has caught my attention in this report and made it distinctive from my point of view is that it was not based on history in naming achievements; rather it is a practical and vital report aligning the present reality and the future.
In fact, the report is a guide to all potential investors, as it has outlined the vision of the Kingdom. The report doesn’t only mention the bright side of the picture, but it has presented a comprehensive overview of all the obstacles that we face now and we might face in the future. In fact, this reality is an open challenge to the management of the SAGIA and an evidence of its ability and determination to deal with all hurdles, which are not exceptional, but are normal constraints associated with the nature of work in the field of investment.
In other countries, all official structures are equipped to serve the investment sector where coordination takes place at very high levels. Here, the situation is different, where it seems as if the SAGIA is marching to a different tune and it is the first to suffer from bureaucracy.
In the latest report published by the World Bank, which included an assessment and classification of most countries in the world in foreign investment service, we find that the Kingdom has got poor ratings. Although it was close to the middle, but still this is far away from our expectations.
The World Bank report talked in particular about attracting investment and its working tools, evaluating each tool alone. In general, we know that the report was aimed at assessing the general investment situation in various parts of the world including the Kingdom. But when we review the report and analyze it, we find that the SAGIA as far as items under its supervision and powers are concerned, has performed exceptionally well.
Another reason for putting us in poor position in the World Bank report is a lack of a special bankruptcy law. This, according to the report, is a major factor in attracting investment. As far as I know, this law is in the final stages.
We need to be very specific as far as correcting all overlapping in the public sector is concerned, and that all agencies should function according to the mechanism of the sound investment attractions. Once this requirement is met, then any party whosoever will be held responsible for any defect or shortcoming in any future evaluation showing decline or lack of progress in attracting investment.
Needless to say that improving the overall environment for investment in the Kingdom and the development of factors of investment attraction should not be the responsibility of a certain agency.
In order to boost investment in the Kingdom, we need to take practical steps and equip the countries’ institutions to cope with all sorts of issues conveniently making it easy for investors to go through all procedures.
