Green light for foreign investors

18 January 2002

Saudi Arabia has given one of the strongest indications so far that it is committed to opening all sectors to foreign competition. Speaking at an international agricultural forum in Riyadh on 15 January, Crown Prince Abdullah said the government would smooth the course for investors. 'Saudi Arabia has made a strategic decision to encourage national and foreign investment and provide all guarantees and facilities for investment in all sectors,' he said. Some of the most 'lucrative opportunities for investment' would be found in the agricultural sector, he added. Major plans are afoot to develop agricultural and fisheries projects on an 800-kilometre strip of land on the Red Sea coast.

According to Saudi Arabian General Investment Authority (SAGIA) governor Prince Abdullah bin Faisal bin Turki, who also attended the forum, changes to the list of areas excluded from foreign investment are expected soon. 'The Supreme Economic Council is now looking at changes to the negative list in co-operation with the private sector and ministries,' he said. 'It has been presented with suggestions since the start of the year.' However, Prince Abdullah said the list was unlikely to be scrapped altogether and the government would pursue liberalisation at a cautious pace. 'It is still too soon to see what the effects are of the foreign investment law,' he said. 'You can have direct investment and privatisation even with subsidies.'

The heavily subsidised agricultural sector is one of the prime targets for new investment. A number of major projects are planned for the fertile plains of Jizan and Tihama in the southwest of the kingdom. Incentives for foreign investors include long-term land leases, which will be awarded on a 30-40-year basis, and access to new irrigation systems. The government has set aside $613 million for the construction of 10 new dams in the region, which will be built over the next two years. Several projects are already under way to develop the coastal plain for agricultural land and fisheries. The largest shrimp farm in the world, capable of producing some 10,000 tonnes a year, is already under construction and is expected to be completed in 2003.

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