“The worst has already passed.”
This is the message that Saudi authorities and officials are trying to convey to the international community after the anti-corruption probe that swept the kingdom since November 4, 2017.
A total of 350 people were questioned in the sweep, and an anti-corruption committee netted at least $100 billion in corruption.
Most high profile personalities have been released with only 90 still detained, but Saudi authorities have assured on many occasions that the probe is only aimed at fighting corruption, to safeguard investors’ interests.
But needless to say, Saudi finds itself in a position where it needs to change investors’ perception by reassuring them and driving them to invest in the kingdom.
According to media reports, Crown Prince Mohamad bin Salman is planning a trip to Washington, Europe and the United Kingdom in February this year to do that very same thing.
Crown prince Salman will seek to hold talks with his foreign counterparts on the potential of increasing investments in the kingdom as the kingdom moves ahead with economic diversification away from oil as per Saudi Vision 2030.
Meanwhile, an investment delegation consisting of 70 major Saudi companies will visit Cairo soon to discuss investment and trade opportunities.
Interest in Saudi
Middle East Venture Partners (MEVP), a Dubai venture capital firm, has just made its business intentions clear engaging in talks with prospective partners in Saudi Arabia to co-invest in start-ups in the kingdom.
“Saudi Arabia is a massive country and we’re talking to a big government institution – a large one – in Saudi Arabia. If this works out it would be a pleasure to co-invest with them,” said MEVP Chairman Walid Hanna.
MEVP also aims to collaborate with the kingdom’s state-owned telecoms operator Saudi Telecom Company (STC) on a deal-by-deal basis to invest in start-ups in the kingdom.
Even at the peak of the corruption purge crisis in December 2017, Apple and Amazon announced plans to invest in the kingdom, according to the Financial Times (FT).
“Deals for Apple to establish flagship retail outlets and for Amazon to expand cloud-computing services could be announced as soon as the first quarter of next year,” FT said.
“The potential agreements would be a validation of the kingdom’s drive to attract global technology companies and bolster the role of private enterprise,” it added.
As simple as 1,2,3… actually 53 to 4
Media reports revealed that Saudi Arabia General Investment Authority (SAGIA) streamlined the business licensing process to encourage investment by slashing the time to secure a licence from 53 working days to just four.
“SAGIA aims to attract more investments through facilitating and improving procedures,” Ibrahim Al Suwayel, Saudi Arabia’s deputy governor for investors’ services and consultancy, was quoted as saying.
The streamlined procedures apply to issuing, amending and renewing investment licences for businesses operating in the country, reports said.
Ending the (current) probe
Releasing detainees before Salman’s international tour is aimed at sending signals to the international community that the situation in the kingdom is stable and not scary, according to Reuters.
“The releases, and what kind of deals may have been struck, could have huge implications for Saudi Arabia’s image in the international investment community,” said Reuters.
It quoted Jason Tuvey, Middle East economist at Capital Economics in London, as saying: “Investors will probably need some reassurance on the exact procedures going forward to deal with corruption allegations.”
According to CNBC, Saudi finance minister Mohammed Al-Jadaan sought at the World Economic Forum in Davos to reassure investors that the kingdom is a secure place to invest.
“We are creating a reform at all levels including the fact that we really need to make sure that investors feel it is a level playing field, that it is a level playing field that it is fair and very transparent,” Al-Jadaan told CNBC in Davos.
“What is happening with the anti-corruption (drive) is just one part of that,” he said.