Saudi Arabia fully commited to increase private sector participation
RIYADH, April 1 (NNN-Bernama) -- Saudi Arabia is fully committed to increase private sector participation in the economic growth of the oil exporting country, says its investment promoter.
According to the Saudi Arabia General Investment Authority (SAGIA), privatisation is a key element of the kingdom's economic liberalisation and a host of sectors are being opened up to the private sector.
Among the potential sectors for investment are telecommunications, airlines, electricity, postal and port services, railways and water utilities.
The kingdom plans to invest US$200 billion (US$1 = RM3.45) in the oil, gas, electricity, desalination and petrochemical industries.
It also expects US$6 billion in domestic capital to be invested in the tourism sector. SAGIA says in an article distributed at this week's Arab Summit here.
"The investment environment in the kingdom reflects traditions of liberal, open market private enterprise policies," it says.
Saudi Arabia's foreign investment law allows 100 percent foreign ownership of projects and real estate.
Saudi Arabia also has an impressive record of political and economic stability and has modern world-class infrastructure, the article says.
Its privatisation and economic diversification efforts have gained momentum since the creation of the Supreme Economic Council which aims to open domestic markets and ensure a stable environment for investors.
Saudi Arabia has the biggest oil reserves in the world at about 25 percent of the total and has other minerals as well, such as bauxite, limestone, gypsum, phosphate and iron ore.
There are also no restrictions on foreign exchange and repatriation of capital and profits.
The kingdom is among the few countries in the world which allow companies to carry forward losses indefinitely, effectively relieving businesses of the tax burden until they become profitable.
There is no personal income tax in Saudi Arabia.
The Saudi government also makes electricity, water and fuels available to industrial projects at low prices.
In human resource, there has been a rise in the number of young Saudi professionals, and joint ventures between the Saudi government and the private sector have groomed a generation of managers and technocrats.
SAGIA says the Saudi Industrial Development Fund (SIDF) provides soft medium and long term loans to industrial establishments for up to 50 percent of the total cost projects.
The payback period is up to 15 years with a two-year grace period from the start of production.
Saudi Arabia, says SAGIA, is the largest free market economy in the Middle East and North Africa, with a 25 percent share of the total Arab GDP.