Interview: Abdulrahman Al Zamil
How can the government and private sector work together to build more globally competitive nonoil export sectors in Saudi Arabia?
ABDULRAHMAN AL ZAMIL: Saudi Arabia already possesses non-oil export sectors with multiple competitive advantages. More activities and industries can be added to these, provided that the government and private sector work in tandem to implement a unified strategy that includes a number of steps that can be simultaneous or separated by short periods of time. These must be initiated by the government. These include organising certain economic activities, issuing necessary laws and regulations to overcome existing obstacles facing private sector activities, especially exports, and enhancing the private sector’s contribution, which largely relies on three factors – profitability levels, the ease of doing business, and domestic economic and political stability. Naturally, these steps coincide with increasing private sector investments, expanding its export activities, and earning it more competitive advantages in pricing, and so forth.
These steps must also be followed by joint public-private initiatives, in which the government intensifies its efforts by signing international agreements that open more markets for exports and joint investments. Likewise, the private sector must play its role by promoting itself through profile-raising campaigns and seeking partners in targeted markets abroad.
In terms of knowledge transfer, in which sectors does Saudi Arabia stand to benefit the most from bringing in foreign partners to assist growth?
AL ZAMIL: On the one hand, it is preferable to have a comprehensive transfer of knowledge, especially considering the inextricably intertwined linkages between different sciences and different economic sectors. On the other hand, business development requires remaining competitive in a global economy. With our current strengths, we can be sure that the Kingdom is capable of maximising the contribution of key sectors such as petrochemicals, foodstuffs, and construction through transferring knowledge and benefiting from work with foreign companies.
Moreover, I want to point out that the Kingdom is also capable of attracting foreign companies and transferring knowledge to several emerging sectors, including education, health care, pharmaceuticals and agriculture, which are all strategically significant. We must also prioritise when transferring knowledge so as to achieve a turning point in production and productivity levels. Transferring knowledge to the aforementioned sectors will likely be influential and effective from a macroeconomic perspective.
How is the Kingdom leveraging its existing competitive advantages to attract greater levels of foreign direct investment (FDI)?
AL ZAMIL: The Kingdom has, among other things, three basic fundamentals that attract investment. These are political and economic stability, high purchasing power and profitability.
The question we ask is: Do we have room for more development to attract and facilitate more foreign investment in productive activities? The answer is yes. FDI is a target for both the government and private sector, which they attempt to achieve through two main approaches: firstly, by facilitating FDI through developing the regulatory and administrative environment, and secondly by attracting and encouraging more key investments related to strategic sectors by offering them additional incentives. As for the first approach, the government is working to reduce the time required to approve investments to the shortest duration possible. The second approach is related to financial incentives packages, which depend on the importance and nature of the investment, and where it is located. Incentives are higher for investments located in geographic areas designated as promising.
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