Veteran businessman to head Sagia

A Saudi royal member has quit his job as head of the kingdom's top investment body to give way to a veteran businessman who economists expect to spur a capital inflow and hasten reforms in foreign direct investment.

Prince Abdullah bin Faisal bin Turki cited personal reasons for his decision to ask King Fahd bin Abdulaziz Al Saud, Custodian of the Two Holy Mosques, to relieve him from his post as chairman of the Saudi Arabian General Investment Authority (Sagia), according to officials at the Riyadh-based authority.

He was succeeded this week by Amr bin Abdullah Al Dabbagh, a veteran Saudi businessman and a graduate in business administration from Harvard Business School.

"I expect this move to give Sagia a strong push and this will contribute to larger and quicker capital flow into the kingdom since this man is a veteran businessman and has experience in the private sector and in local and foreign investment," said Nahed Taher, an economist at the Saudi National Commercial Bank.

"He is a very well known personality abroad and has numerous contacts. He is a business oriented man and an open-minded person.

"He knows very well the ins and outs here and there. He has attended too many economic and business conferences and symposiums in the kingdom and abroad and knows about investment opportunities," the economist added.

Taher, a Saudi female economist who knows Dabbagh, said the 38-year-old businessman holds many posts in Saudi Arabia and has his own firms.

He is a member of the Supreme Economic Council's consultative body, and of the Makkah Provincial Council, and also a member of the Jeddah Chamber of Commerce and Industry.

"His open mindedness means he will push for more liberal investment laws and we hope he will take advantage of the breakthrough in negotiations between Saudi Arabia and the World Trade Organisation on joining it.

"His appointment at a time when Saudi Arabia is about to join WTO should prompt him to devote his efforts to encourage foreign investment in the kingdom in all fields without restrictions."

Quoted by Sagia, bin Turki said he decided to quit the four-year-old Authority because he wanted to "take time off to look after his family after 29 years in public service."

Bin Turki was a strong advocate of removing all barriers to foreign investment in the kingdom and a frequent critic of official bureaucracy, which he blamed for the lower than expected capital flow. He said last year that foreign direct investment approved by Sagia since it was created in 2000 was below expectations.

Bin Turki has also called for dismantling the Negative List, which still includes many fields that are confined only to Saudi investors.

On top of the list, which was introduced four years ago, is the kingdom's mammoth oil sector, where exploration, drilling and production are restricted to the government.

The list has gradually been narrowed but it still includes 16 major fields which are closed to foreign businessmen despite the kingdom's promise to liberalise its economy and open up to other countries ahead of joining the WTO.

Since its creation, Sagia has licensed more than 2,100 projects with a total value of around 56.79 billion riyals ($15 billion). Foreign investors from nearly 60 countries contributed around 82 per cent to those projects, which cover industry and other fields.

"Dabbagh is an experienced businessman and trader and is well known here and abroad. I am sure the choice of this man was a wise decision and I expect him to be very instrumental in the Kingdom's investment map," said Abdulaziz Al Dakheel, Chairman of the Riyadh-based Financial and Investment Services Centre.

Citing official forecasts, Sagia said last year that at least 3.3 trillion riyals ($902 billion) are expected to be invested in the kingdom in the next 20 years and a large part of the capital will have to come from foreign investors.

"There are several promising economic sectors in the kingdom with many investment opportunities. This is especially so after the government's latest decision targeting more sectors for privatisation," it said.

"Research, studies and reports from internal and external resources estimate that these sectors require huge investments during the next 20 years."

A breakdown showed housing and services for Riyadh would be the main investment target as they are expected to attract a staggering 1.1 trillion riyals ($293 billion) during that period. The second biggest sector is infrastructure, which is projected to attract investment of 520 billion riyals ($138.6 billion).

Another key sector is electricity, which needs around 430 billion riyals ($114.6 billion). Nearly 345 billion riyals ($92 billion) are likely to be pumped into petrochemical projects while 330 billion riyals ($88 billion) would be needed for water projects, including desalination plants.

Other investments include around 220 billion riyals ($58.6 billion) for telecommunication, 40 billion riyals ($10.6 billion) for technology and information, and around 30 billion riyals ($8 billion) for railways.

The report estimated investment for the gas sector at around 188 billion riyals ($50.1 billion).