WTO set to boost foreign direct investment into Saudi Arabia

Meanwhile, the Saudi Arabian General Investment Authority in co-operation with the World Bank, is carrying out an evaluation of the investment environment in the Kingdom.

The Kingdom took its giant step towards joining the organisation following a key trade agreement signed with the US on September 9. Saudi Arabia is in the course of concluding trade pacts with all the WTO members and has so far concluded 38 such agreements. The agreement with Washington though is considered a “decisive” move.

Commerce and Industry Minister Hashem Yamani says he hopes the Kingdom will be able to attend the organisation’s summit in Hong Kong in mid-December “as the 149th member” of the WTO.

US Trade Representative Robert Portman believes the agreement also boosts the cause of reforms in the Kingdom.

“As a result of negotiations on its accession to the WTO, we will see greater openness, further development of the rule of law, and political and economic reforms in Saudi Arabia.”

Many in the Saudi business community believe the move will witness greater commercial and industrial links with other countries.

According to Bernard Savage, chief of the European Union’s delegation to Saudi Arabia, the Kingdom’s WTO membership will, in addition, give it a voice and an influence in making the rules that govern international trade.

Observers believe that Saudi accession to the WTO will act as a confidence boost to potential investors since it consolidates a process and framework of economic modernisation that can be built upon in the long term.

The Saudi government has recently introduced new regulations concerning investments in the economic, financial and commercial areas to ease the process of obtaining entry to the WTO.

New speedy entry rules

Customs clearance procedures are to be speeded up at airports and seaports and land entry points, while the time needed to obtain permits and obtain commercial registration is to be reduced.

SAGIA is planning to enhance training of personnel to improve the authority’s role and efforts to help potential foreign investors. Facilitating entry visas for business visitors into the Kingdom is seen as one means by which this can be achieved.

The requirement to obtain a letter of invitation before a visa can be considered, for example, is to be lifted for potential investors from all OECD countries

SAGIA is also preparing to open representative offices in major Saudi missions overseas to help streamline visa applications in order that applicants can receive them within 24 hours. Help desks at Saudi airports are also to be established to assist business visitors.

In spite of concerns that parts of the economy are vulnerable to outside competition, Agriculture Minister Dr. Fahd Balghunaim maintains that overall, membership of the WTO will see an improvement in both services and products. “We are looking forward to WTO accession with a positive outlook. Increasing competition is good for the national economy and for consumers.”