Interview: Mazen Batterjee
What sort of scope is there for increased production of value-added products?
MAZEN BATTERJEE: In a lower oil price environment, economic patterns change, which means that Vision 2030 arrived at the right time. The Kingdom cannot continue to rely solely on the oil and gas industry, and Vision 2030 will be beneficial to the entire economy in this regard, particularly when it comes to empowering the business community, as the private sector will be given a greater role. Business and investment opportunities will arise as Saudi Arabia will be diversifying its economy, especially in terms of producing and exporting value-added products. The idea is to re-orientate Saudi Arabia’s industrial sector away from a commodities-based model towards one that produces more value-added products, including chemical and petrochemical products.
How can public-private cooperation be a catalyst for economic growth in Jeddah?
BATTERJEE: Jeddah has long been conducive to private investment, and therefore the city is highly compatible with Vision 2030 and its plan to give the private sector a leading role in the Kingdom’s economic expansion. There are a lot of public-private partnership opportunities in the pipeline to address the country’s infrastructure needs, including build-operate-transfer projects such as the Saudi Landbridge project — a high-speed rail line linking the Kingdom’s main cities. There will also soon be many opportunities in the transport and health care sectors. Speaking of Jeddah specifically, I believe that we should target sectors like manufacturing, tourism and hospitality. Indeed, privatisation efforts and extended private sector involvement in the economy will be a growth engine for Jeddah’s GDP.
What are your expectations in terms of long-term inflows of foreign direct investment (FDI)?
BATTERJEE: Many business delegations from abroad, especially from Europe and Asia, come and visit Jeddah. It is safe to say that a lot of companies are ready to invest and share their know-how across a broad range of sectors, for example, the pharmaceutical industry. Now, in terms of FDI, there is some room for improvement in capital inflows. While investors are very confident in Saudi Arabia’s potential as a high-growth emerging market, further measures to ease investment regulations are also being taken. The Saudi Arabian General Investment Authority has already made significant progress in improving investor confidence and in strengthening the overall regulatory environment. It has introduced several steps aimed at simplifying licensing procedures for foreign companies planning to invest in Saudi Arabia. Moving forward, long-term and sustainable investment will be the key to prosperity. But truth be told, there is a lot of competition within GCC countries in attracting foreign investment.
Jeddah has much to offer investors, especially in terms of industrial activities, with dedicated, special industrial zones offering cheap rates for land. In addition, the Saudi Industrial Development Fund (SIDF) provides tremendous help to companies willing to invest in those industrial zones. Indeed, SIDF grants substantial subsidies depending on which particular line of business companies want to invest in.
How can Jeddah capitalise on its cultural richness and spur the entertainment industry?
BATTERJEE: In order to secure long-term prosperity, the Kingdom will need to continue its efforts in identifying new sectors that can generate sustainable fiscal revenues, and the entertainment industry is one of them. As such, the newly formed General Entertainment Authority (GEA) is already doing a great job in bringing solutions that fit our society. Indeed, the GEA approves and gives away licences very quickly and grants subsidies of up to 30% of the total event cost. There are some great projects in the pipeline including a large-scale entertainment city south of the capital Riyadh.
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