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Saudi corruption crackdown should only be the start

The kingdom has much to do to close gaps in global standings on full transparency

Gulf News

The recent move by the Saudi leadership to do away with financial and administrative corruption should help enhance its rankings on vital comparative rankings such as regulatory transparency and ease of doing business. Another possible advantage relates to a future strengthening of inward foreign direct investments.

Saudi Arabia lags other major Gulf economies on key indexes. To be sure, some of the rankings do not square with facts such as the kingdom having the largest GDP among Arab economies and a leading exporter of crude.

At 62nd globally, Saudi Arabia’s ranking is the third-best among Arab countries after the UAE and jointly-placed Qatar and Jordan in the 2016 Corruption Perceptions Index. The UAE leads Arab countries at large by securing the 24th spot and ahead of many a EU member-state.

Berlin-based Transparency International publishes the Index on the basis of perceptions expressed by business leaders as well as local and expatriate professionals concerning ways of doing business. The study explores corrupt practices involving public officials with regards to winning preferential treatment.

In addition, the Saudi economy could not do well in the 2018 version of “Doing Business” issued by the World Bank, ranking 92nd out of 190 economies and considerably behind many other countries. The performance puts Saudi Arabia only ahead of Kuwait within the GCC, while the UAE is ranked 21st.

Turning to foreign investments, the “World Investment Report 2017” tracks steady drop in the value of inward investments into Saudi Arabia in recent years. The kingdom, which attracted some $39.5 billion in 2008, saw the tally decline to $8.1 billion in 2015 and $7.5 billion in 2016.

The UAE has long replaced the kingdom as the primary regional recipient of FDIs, pulling some $12 billion worth in 2016. But Saudi Arabia stands out by virtue of being the sole Arab country in the Group of Twenty economies, which includes the US, China and Japan, among others.

Saudi Arabia is scheduled to host the 2020 G20 summit after Argentina in 2018 and Japan’s turn in 2019. Officials intend to showcase the sweeping changes underway in the best possible way while hosting the summit.

The National Anti-Corruption Commission — or “Nazaha” — is pleased with the recent momentum. The commission was set by a royal decree in 2011 to combat financial and administrative corruption. The thrust to stamp out corruption is giving Nazaha the power needed to push for a culture of zero tolerance.

It is probable that future editions of international rankings would see a marked improvement for the Saudi economy. More so in the light of the new founded determination to confront wrong practices by anyone. Saudi Arabia can do better in line with the kingdom’s economic might and resources. But it is not going to be easy.

The writer is a Member of Parliament in Bahrain.