23/03/2011
SAGIA Chief admits mistakes in mega cities locations
During Jeddah Economic Forum on Tuesday
Responding to questions following his speech at the Jeddah Economic Forum on Tuesday, Amr Al-Dabbagh, governor of the Saudi Arabian General Investment Authority (SAGIA) stated that before an organizational body existed, mistakes have been made concerning the locations of mega economic cities.
"Currently issues of contracting and construction are being handled by the Engineering Society of Saudi Arabia but in the past there has been noticed some mistakes in selecting locations for the economic cities," the SAGIA chief said. The four economic cities are located in the least developed areas of Rabigh, Hail, Madinah and Jazan.
"There could be errors as no one is perfect and we at SAGIA welcome criticism in order to improve performance of these economic cities, which are primarily aimed at regional development and creating more job opportunities," he said.
He added that the goal behind selecting the least developed areas to help energize these areas and allow them to become major drivers of investment, new jobs, and elements of potential economic growth for the Kingdom. "Mistakes have happened due to the absence of an organizational and regulatory body," he said referring to the Economic Cities Authority.
Al-Dabbagh said the formation of the authority, which is responsible for providing and overseeing all services to residents and investors of the cities, would reduce mistakes. In February 2010, an Act was passed to organize activities of the economic cities, he said adding that Article 10 of the Act states that delivery of government services must be done within a 60/ 24/ 7 program, which created a 60-minute, 24 hours a day and 7 days a week timeframe in which work must be done for investors.
Responding to another question regarding the share prices of the economic cities dropping from SR30 to SR10, Al-Dabbagh said that this has been in part due to a set requirement by the Supreme Economic Council stating that administration employees and personnel holding stock in the cities may not buy or sell shares for at least five years.
Concerning the outlook for the Saudi economy and economic cities, Al-Dabbagh explained that in 2010 Saudi Arabia reached the 11th position on the World Bank's Ease of Doing Business Report and that for the future into 2015, SAGIA would continue to focus on four tasks to improve the Kingdom's economy. The four tasks are: Continuing enhancement of domestic and foreign investment, working to build a pro-business environment, developing ways to expand services to Saudis as well as foreign investors and investing in FDI for human resource development. He stated that these expansions would be taking place in all the13 regions of the Kingdom.
He also confirmed that SAGIA is involved in providing training for Saudi citizens in helping them become qualified for jobs while working with the Ministry of Labor and investors in the area of human resource development in Saudi Arabia.
He stated that according to the Kingdom's Ninth Development Plan for 2010-2014 funds to the tune of SR1.4 trillion ($375 billion) have been allocated for the development sector, the largest sum ever allocated which will provide the largest number of continued investment opportunities to the Kingdom.
He said SAGIA has offered incentives for companies willing to open operations in less developed areas of the Kingdom, including a 50 percent tax credit on research costs as well as 50 percent tax credit on costs to train and hire Saudis.
Al-Dabbagh highlighted the progress achieved by the four economic cities in terms of attracting foreign and domestic investments and implementing new projects. "We should understand that building cities of this magnitude is not simple and is a long-term project taking up to 15 years. It requires building of economic and industrial infrastructure," he said.
The SAGIA chief added: "Since ascending the throne, Custodian of the Two Holy Mosques King Abdullah has issued more than 100 reforms in various sectors of the Kingdom but the fruit of these reforms will not be felt overnight. Radical changes in sectors, economy and investment is time-consuming, but is putting the Kingdom on the right track." He said the new welfare programs worth SR500 billion announced by the king would boost investment in various sectors, especially in construction and health.
