Saudi Ara­bia seeks out non-oil cap­i­tal

The China Post - - WORLD BUSINESS - BY AYA BATRAWY

Saudi Ara­bia has un­der­taken sev­eral ini­tia­tives to at­tract for­eign cap­i­tal out­side of its oil and gas sec­tor, the deputy gover­nor of the king­dom’s in­vest­ment author­ity said Mon­day.

“There is a strong ef­fort by the gov­ern­ment to di­ver­sify this rev­enue,” said Prince Saud al-Faisal of the Saudi Ara­bian Gen­eral In­vest­ment Author­ity, or SAGIA.

“The chal­lenge that we face ... is rec­og­niz­ing that Saudi Ara­bia is fer­tile ground to at­tract in­vest­ment in all sec­tors,” he added. Prince Saud spoke to The As­so­ci­ated Press on the side­lines of the fifth An­nual In­vest­ment Meet­ing held in Dubai, United Arab Emi­rates.

SAGIA’s main mission — to at­tract for­eign in­vest­ment and im­prove the coun­try’s busi­ness en­vi­ron­ment — is a key part of the king­dom’s over­all strat­egy to strengthen the pri­vate sec­tor, Saud said.

To

at­tract im­me­di­ate

cap­i­tal, the gov­ern­ment an­nounced plans last year to open the Saudi stock ex­change to di­rect in­vest­ment by for­eign­ers — some­thing he said would hap­pen “soon.”

Other ini­tia­tives in­clude

the cre­ation of eco­nomic cities such as the King Ab­dul­lah Eco­nomic City near the Red Sea city of Jid­dah, which will boast one of the world’s largest ports, busi­ness zones, man­u­fac­tur­ing fa­cil­i­ties, hos­pi­tals, schools and res­i­den­tial com­pounds for Western­ers and oth­ers.

The ini­tia­tives come as the king­dom is run­ning a bud­get deficit due to oil prices dip­ping to a sixyear low and for­eign di­rect in­vest­ment in­flows have been on a fiveyear decline.

The king­dom is also rac­ing to cre­ate new jobs for mil­lions of young Saudis who make up the ma­jor­ity of the pop­u­la­tion and who will be en­ter­ing the work­force in the com­ing years. King Sal­man this month urged busi­nesses to do the same, call­ing it a na­tional duty.

Ac­cord­ing to the most re­cent World In­vest­ment Re­port re­leased in 2014 by the U.N. Con­fer­ence on Trade and Devel­op­ment, FDI in­flows to Saudi Ara­bia dipped from US$39.5 bil­lion in 2008 to US$9.2 bil­lion in 2013.

The re­port said the down­ward trend is partly the re­sult of “per­sis­tent ten­sions in the re­gion” and be­cause petro­chem­i­cal man­u­fac­tur­ers were in­creas­ingly in­vest­ing in North Amer­i­can shale oil.

AP

Prince Saud al-Faisal talks to The As­so­ci­ated Press about plans to open the Saudi stock ex­change to di­rect in­vest­ment by for­eign­ers, just one of sev­eral plans for the ex­change, dur­ing an In­vest­ment Ex­hi­bi­tion in Dubai, United Arab Emi­rates on Mon­day, March 30.

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