INVESTORS WITH LONG-TIME HORIZON LOOK TO SAUDI

While it is important to address the short-term challenges facing the Saudi economy due to coronavirus, the government is also keeping an eye on the long-term opportunities available in the country.

In March, Saudi minister of commerce Dr. MajidAl-Qasabi met 100 American investors in Washington D.C., to explore investment and business opportunities in tourism, economy and culture, apart from the 2030 Vision programme that is transforming the economy.

The minister gave a keynote speech at the American-Saudi Business Leaders Forum in the US capital, which was attended by US secretary of commerce Wilbur Ross, the United States ambassador to Riyadh John Abi Zaid, and other dignitaries.

“We are in the midst of a dynamic and fast growing region that includes more than 424 million consumers, and there are more than two billion consumers near us, we need only three hours of air travel to reach them, besides we have been playing a global leading role in terms of energy for years, in addition to other natural resources in the kingdom, which make us an excellent platform for manufacturing and developing products in many sectors and industries that need large energy resources,” the minister told the business audience.

Dr. Al Qasabi also visited New York and Boston to promote the current investment opportunities in the kingdom, especially in the areas of health, energy, industry, tourism and financial services.

International investors have been attracted by the new economic reforms that have been rolled out since the Vision 2030 programme was announced in 2016.

Invest Saudi, developed by the General Investment Authority (SAGIA), reports that the kingdom saw sharp growth in the number of new investment licenses being issued to foreign companies. In fact, more than 1,100 such licenses were issued in 2019 – 54% more than in 2018 and three times as many as in 2017.

As many as 193 foreign investor licenses were in the construction sector, with 190 in manufacturing, 178 in the new economy sectors of information and communication and 125 in professional, scientific and technical sector, which highlights the focus on non-oil economy. The wholesale and retail trade sector saw 102 new licenses.

ENGIE, the French multinational electric utility company, which has invested USD 5 billion in the kingdom believes Saudi Vision 2030 was a turning point not just for ENGIE but for the country as a whole, according to the company’s Saudi CEO Turki Alshehri.

“We’re seeing significant change in the country: it is moving strictly towards public-private partnerships (PPPs) and providing more opportunities for the private sector to participate,” the CEO told Invest Dubai in a new report. “Regulations are changing in favour of the private sector. As a result of this new Vision, we’re working with a clean sheet of paper. There are clear objectives for what the government expects to achieve, creating unity.”

Last year, Saudi Arabia also launched an innovators’ citizen programme to attract the world’s top talent such as innovators and leading scientific professionals.

“Innovators’ citizenship is open to experts in forensic and medical science, technology, agriculture, nuclear and renewable energy, oil and gas, and artificial intelligence, as well as distinguished scientists in areas such as desalination,” according to Invest Saudi. “The new scheme will play an important role in supporting Vision 2030 objectives, including the kingdom’s transformation into a knowledge-based economy.”

Meanwhile, the Saudi Authority for Industrial Cities and Technology Zones, or MODON, said the 35 industrial cities it oversees now boasts half a million jobs.

Developed land in the industrial cities exceed 198.8 million square metres with investment of SAR 367 billion. Over the past year, the country saw a number of high-value add factories set up in industrial cities. These include General Electric’s manufacturing gas turbines, Isuzu Motors’ truck production plant, Ebara Pumps Saudi Arabia LLC, Schlumberger drilling rigs facilities, and a chemical industry by Henkel AG.

In addition, MODON has teamed up with Saudi Industrial Development Fund and King Abdulaziz City for Science and Technology (KACST) to launch the National Productivity Program, which will enable factories to adopt technologies of the 4th Industrial Revolution.

“The first phase of the programme that includes working with 20 factories has been launched in April 2019 in co-operation with General Electric, while the second phase will be launched in 2020 with 40 factories, enabling them to be leading and encouraging for other factories to shift toward the technologies of the 4th Industrial Revolution,” MODON stated.

The investment and business opportunities in Saudi Arabia will outlast the coronavirus. As the kingdom aims to gear up again once the virus-related lockdown subsides, investors are expected to seek opportunities in the country again.