SAUDI ARABIA - Economy
Governor, Saudi Arabian General Investment Authority (SAGIA)
Eng. Ibrahim Al-Omar was appointed Governor of SAGIA in April 2017. He brings over 15 years of private sector experience, with a strong professional background in the ICT and logistics services sector. He previously served as CEO of Bahri, Chief Alliance & Partnership Officer and Chief Product Development Officer at the Etihad-Etisalat Company (Mobily), and CEO of VIVA Bahrain. He started his career at STC, serving in progressive roles. He is an alumnus of Harvard’s Program for Leadership Development and holds a Bachelor’s Degree in Electric Engineering from the King Fahad University of Petroleum and Minerals (KFUPM).
The TAYSEER executive committee was formed to improve business performance in the private sector. It was officially launched in November 2016 in line with Saudi Vision 2030. The intent was to increase the competencies of relevant government services and place he Kingdom among the top countries in the world in terms of ease of doing business. The committee was established to pursue four main objectives: increase the efficiency of government services, position Saudi Arabia among the top 20 countries globally for doing business, implement regulations aimed at stimulating the private sector growth, and increase private sector engagement with direct involvement in decision making. Moreover, more than 100 additional reforms are on the list for approval and implementation. The challenges and obstacles facing both local and foreign businessmen and investors will be monitored by SAGIA or other authorities, including the chambers of commerce. These bodies will study and provide recommendations for solutions and submit them to the Saudi Council of Economic and Development Affairs for discussion and approval.
Innovation is indispensable to doing business in today’s world. Vision 2030 clearly states that innovation and entrepreneurship are two key factors that will foster healthy economic development in the Kingdom. From food trucks to design firms to tech start-ups, young Saudi entrepreneurs are happily realizing the fruits of forming one’s own business. Increased focus on e-commerce in the Kingdom also opens the doors for young Saudi techies to create new products aimed at furthering digitization. To ease the transition from idea to marketplace, SAGIA now offers a special entrepreneur’s license that makes founding a company deemed “innovative“ far easier than it used to be. A network of incubators and creative hubs also exists to nurture innovative entrepreneurs. There is also a loan program aimed at funding start-ups and SMEs that is fully operational.
Vision 2030 focuses on creating promising opportunities for investment and development based on investment advantages the Kingdom offers and the competitiveness reflected by the geographic and strategic dimensions of the economy. The economic objectives include raising FDI to 5.7% of GDP and private sector contribution from 40% to 65% of GDP. Vision 2030 is coming to fruition and has succeeded in placing the Kingdom among the top 10 countries worldwide in terms of the business environment, as indicated by the World Bank report on the protection of minority investors. This came as part of the reforms adopted by the government in accordance with the plans and objectives of Vision 2030 to make the Kingdom a unique global model across all levels. The most important thing that distinguishes Vision 2030 is that it has given the local and foreign private sector special importance as a key partner in accomplishing its objectives. Saudi Arabia has allocated billions of dollars to the private sector for its development in accordance with Vision 2030 and the National Transformation Program 2020. The most important program is the Public Investment Fund (PIF) program, which is the main supporter of investment internally and externally and serves as the engine for diversifying the Kingdom’s economy. The Kingdom’s vision of privatizing programs is a top priority. The Government of the Custodian of the Two Holy Mosques has begun to privatize 10 vital and promising sectors, including industry and mineral resources, labor and social development, housing, education, municipal and rural affairs, telecommunications and information technology, and finally Hajj and Umrah.
The partnership between SAGIA and the General Authority for Tourism and National Heritage has contributed to supporting the efforts to attract investment in various aspects of tourism, including tourism itself, archaeology and entertainment. A joint team was formed to support investment opportunities and provide job opportunities. SAGIA is a key partner in the national economy and focuses on investment. Investment opportunities in the tourism sector are meant to exert a multiplier effect on high economic returns, local development in less developed regions, and the production of real and available jobs for citizens of different ages and educational levels.
The Kingdom’s commitment to fighting corruption creates a transparent and fair investment environment. We are also dedicated to reforming the government’s licensing system to make investors feel more welcome in Saudi Arabia and emphasize that the environment is part of a detailed legal structure that governs it all. SAGIA also seeks to stimulate the private sector and SMEs. The government has installed an infrastructure program to achieve the objectives of Saudi Vision 2030. The regulatory environment has been modified significantly and new laws have been introduced that governs bankruptcy, mortgage and franchising, facilitating investment by reducing administrative work and combating corruption.
In order to attract more FDI, we granted 35 investment licenses during our visits to the US and the UK. 25 of the licenses went to major American companies such as Apple and Amazon, while the remaining 10 went to British companies, including DMG Events LLC and Ethos Energy Arabia Limited. These licenses reflect SAGIA’s interest in achieving economic diversification, attracting more foreign investment to the Kingdom, strengthening public-private partnerships, and overcoming obstacles facing investors in cooperation with the relevant government agencies to develop the licensing mechanism and facilitate business in the Kingdom.
SAGIA seeks to achieve economic diversification, attract more FDI, and strengthen the partnership between the public and private sectors. As a necessary tool to achieve this strategy, the new 100% ownership licenses that allow foreign investors to practice inside the Kingdom will help to transform the economy into a more robust and sustainable one. In cooperation with relevant government entities, SAGIA also aims to improve the business environment and facilitate business processes in the Kingdom by simplifying the licensing procedures through the TAYSEER committee. TAYSEER has recognized 10 reform committees, one for each “Doing Business“ indicator. Each committee has proposed actions with deadlines that are monitored through weekly meetings. A monthly meeting chaired by the Minister of Commerce and Investments was held to follow up on the progress. According to World Bank rankings, Saudi Arabia has risen from 63rd to 10th place globally in terms of Protecting Minority Investors and has the second-highest GDP per capita among the G20 countries. The reform process is ongoing and is tackling all aspects of doing business. As the reforms take hold and more international investors begin to witness the changes in the business environment, I fully expect our ranking in Ease of Doing Business to thrive.
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