KINGDOM COME

Saudi Arabia 2017 | ECONOMY | VIP INTERVIEW

TBY talks to HRH Prince Saud bin Khalid Al Faisal, Governor of Saudi Arabian General Investment Authority (SAGIA), on meeting the major objectives of Vision 2030 and improving technology in the Kingdom.

Is SAGIA still on course for its target to double FDI in the Kingdom to USD15 billion in the next 10 years?

Since last year we have aligned our goals with Vision 2030 and the National Transformation Program (NTP) 2020, allowing us to create a clear vision for the country, outlining the sectors necessary to reach those goals. There have been no fundamental changes in terms of what SAGIA focuses on. What has happened instead is that the goals are now clear for everyone, for both the government and the private sector. This is important in terms of aligning different government entities toward specific goals, and as a result for 2030 we have seen a number of things happen. There is now more collaboration between public sector entities. In terms of the private sector, we have seen a great deal of gearing up toward reaching the goals of 2030, with many multinationals establishing 2030 departments and forming 2030 teams. These teams are redesigning and re-engineering their organizations in Saudi Arabia to reach those goals in line with the reforms. In terms of the target of USD15 billion, this was set by Vision 2030 and are currently reverse engineering this figure in order to establish our annual targets to match the Vision 2030 targets.

How has Vision 2030 influenced, facilitated, and boosted investor sentiment?

Entities that already have a local presence are extremely excited and we have seen many visits by the leaders, presidents, and CEOs of a number of multinationals in the past year. They seek to explore how their companies can contribute to reach those 2030 goals. In particular, we see this surge in tech-driven companies, as Saudi Arabia is now focusing on attracting FDI that facilitates innovation, the transfer of technology and knowledge, and the creation of jobs. Our outward investments in tech companies has also changed sentiment and signaled to the tech industry that there is a real focus and motion toward that field. In other sectors including healthcare, mining, transport and logistics, and alternative energy, we have also seen the same healthy buzz around the Kingdom. Global leaders are certainly showing greater interest since the Vision's launch.

In what ways does SAGIA contribute to improving the investment environment and ease of doing business in the Kingdom?

About two years ago, we launched the Competitiveness Acceleration Program (CAP) that works with 52 different entities to improve the investment environment, because one of SAGIA's mandates is spearheading the competitiveness agenda of the Kingdom. CAP has since grown and evolved into a project monitored by a ministerial council. It also has an executive council, headed by His Excellency the Minister of Commerce and Investment, which meets weekly at SAGIA and is managed by SAGIA. SAGIA's CAP team works on over 200 points to improve the investment climate, in terms of both procedures and regulations. The pace is rapid, with the team quickly and closely engaging with different government entities to reengineer processes. We are benchmarking our approach against global best practices, using around 300 global indicators along with locally developed indicators, major indicators, and also sub-indicators. All this work has produced clear results. Recently, the Kingdom announced an application system to issue electronic business visas within 24 hours. In ports, we have reduced the time it takes to clear containers from 14 days to 24 hours. These initiatives were completed in just a few months, and the CAP is only in its initial stages. Investors can expect much more going forward.

How does SAGIA facilitate investment and growth in innovation and technology-related fields?

Saudi Arabia is one of the world's last great untold stories: there are many things about the Kingdom that would probably surprise any first-time visitor. Saudis are incredibly tech-savvy: they are the highest per capita users of YouTube and Twitter in the world. We have one of the highest education rates in the world, with 92% of high-school graduates going to university. We have the largest government scholarship program in the world, with around 200,000 students at any given time worldwide. So the foundations for a lively tech sector are there. We just need to put the wheels in motion, which is what we have started doing. There is a great deal there to be excited about and our investment attraction team in the past year has visited a number of tech companies around the world to spread the word. Locally, the Kingdom has a number of initiatives supporting innovation-based investment. One of them is SAGIA's licensing requirements for innovative companies, which are conducive to attracting such businesses, many of which are SMEs. Many of the requirements that would apply to larger companies are not applicable to SMEs, so our licensing requirements are tailored to attracting SMEs, to smooth any administrative barriers that may be in their way. Elsewhere, SAGIA works closely with other organizations across the country to ensure investors are fully aware of the range of incentives available to them that, particularly, can ease some of the burdens unique to SMEs. For example, hiring and training talent for small businesses is essential, yet sometimes costly. To mitigate this, Saudi Arabia's Human Resource Development Fund (HRDF) will pay up to half the training costs, and up to half the salary of a new Saudi national employee for up to two years. Annually, we also organize the Global Competitiveness Forum (GCF), an event that promotes innovation through innovation-based panels, making it a platform for innovation-based businesses and people with cutting-edge ideas and concepts to discuss their projects through what we call “Big Idea" sessions.

What are your expectations for FDI trends in 2017?

FDI trends in the Kingdom have generally followed global trends, increasing and falling in line with FDI trends worldwide. We will see a continuation of that in 2017. We expect an increase in FDI this year and the next in line with the implementation of Vision 2030, particularly as the government establishes PPP models across a number of sectors. One of our main challenges now is engaging the local private sector, focusing on them, nurturing them, and having them as active partners both in terms of development and growth in Saudi Arabia, and in terms of attracting foreign companies. That is an area that we will start to focus more on this year.