Global Federation Competitiveness Councils
Keynote Address
His Excellency, Governor Abdullatif Al Othman
King Abdullah Economic City
November 1, 2015
Your Royal Highnesses, Your Excellencies, Honored Guests, Ladies and Gentlemen – good morning.
It is my pleasure to welcome you to the King Abdullah Economic City and Saudi Arabia for the 2015 annual meeting of the Global Federation of Competitiveness Councils, and the Global Innovation Summit.
Before I begin, I would like to take this opportunity to thank our sponsors for this event.
I would also like to thank Deborah Wince-Smith and the GFCC for all that you have done to enhance the discussion surrounding competitiveness as the nature of global business continues to evolve.
Working together to promote greater innovation, sustainability and reliance among nations is a crucial part of encouraging global economic growth and stability.
For 6 years, the GFCC has provided the platform for this cooperation to take place.
We expect that you will continue to work with Saudi Arabia and the region to enhance our competitiveness, as we in turn continue to enhance our economic fitness to meet the realities global business.
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Greater competitiveness, however, is an agenda that is not exclusive to the GCC countries.
Remaining ahead of the curve in the age we live in requires fresh thinking from leaders in government and business alike, across the globe.
Traditional barriers to business have been brought down by globalization.
Companies are no longer restricted by geographical location, while simultaneously, a generation of entrepreneurs is driving global innovation through new companies that create, or harness cutting edge technologies.
Governments around the world are looking to capture both of these elements: established companies seeking to invest in new markets, and promising young businesses that will provide the world with the industries of tomorrow.
Saudi Arabia too has recognized this.
Since our accession to the WTO in 2005, increasing our competitiveness to attract a new generation of investments to diversify the economy has truly become a national effort.
In fact, we are sitting in one of the physical embodiments of the ongoing transformation happening in the Kingdom right now – the King Abdullah Economic City.
KAEC hosts the King Abdullah port, which is poised to become a regional and global hub of shipping and trade.
On the other side of the city rests Haramian station, one of four stops on our planned high-speed rail network, and a second important transportation link for companies looking to do business on the Arabian Peninsula.
Encircling the port is KAEC’s industrial valley.
With its proximity to the King Abdullah Port and its attractive incentives, a number of the world’s leading companies have already chosen to establish operations there.
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While you are here, I would invite you to go on a tour of KAEC to see all it has to offer.
But I would also invite you to consider the fact that this is just one step in a journey Saudi Arabia is on towards greater competitiveness and economic diversity.
Our approach is multi-faceted, but broadly, we are working across four fronts.
First, we have renewed our commitment to maintain leadership in ease of doing business.
As many of you know, much has been done in the past five years to improve the Kingdom’s business environment.
But recently we’ve completed an in-depth, introspective look into what can be done to take Saudi Arabia to the next level.
In this regard, I am excited to say that a number of important decisions and announcements will be made soon to further signal to the global community that Saudi Arabia is indeed open for business.
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Second, although we maintain a very strong financial position with deep reserves and almost no debt, we recognize the need and the benefits of diversifying our economy away from oil.
And this will offer plentiful opportunities for the private sector – we have a developing success story that we want all who are capable to be a part of.
Through national initiatives, we are targeting a number of sectors where we believe Saudi Arabia has a great deal to offer investors, whether it be through attractive incentives, or investment opportunities
Currently SAGIA is working with a number of government ministries to leverage their annual spending and create investment opportunities, with an aim of encouraging foreign companies to localize in Saudi Arabia.
This Unified Investment Plan – or UIP – has already identified 140 billion dollars worth of investments in the transport sector, and 180 billion dollars in the healthcare sector to be spent over the next 10 years.
Should you want information on the opportunities in transport, healthcare, and other sectors now, you can download our Invest Saudi app onto any Apple or Android device.
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Third, we want our competitiveness to be measured not only by the opportunities and incentives we offer, but through a clear commitment to our customers through the actions we take for their sake, and on their behalf.
Offering a superior and differentiated service to investors and potential investors alike has therefore become our mission.
To accomplish this, we have simplified the process to get an investment license.
Nearly all of it can now be completed online… and where previously 12 documents were needed for a license, by the beginning of January, we will only require 3.
This has been done alongside a significant improvement in the time it takes to receive a license.
All applications – from reception to final decision – now have a turnaround time of less than 5 working days.
On our website, you can find our average processing time of an application – I am pleased to say we were recently averaging just 1 day to award an investment license!
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This, of course, is the type of high quality administrative service we want to provide.
But we want the relationship between investors and Saudi Arabia to go deeper.
Working closely with our partners to understand their needs and help them fulfill their obligations is another part of the service we are looking to provide.
Comprehensive targeted relationship management with executives and boards will be the next step we take, however, we are already some of the way there.
Our investor care hotline is available to answer any questions you might have…
And already, we have a dedicated team to explore with investors how they can build on their contributions to the Kingdom, and what more – in turn –Saudi Arabia can contribute to help them accomplish their goals.
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Finally, we are promoting innovation and enhancing the entrepreneurial culture within the Kingdom.
Like in many sectors, we are building pockets of competitiveness for R&D to make Saudi Arabia a regional and global hub for innovation.
While at KAEC, we are not too far away from the King Abdullah University for Science and Technology that has quickly becoming world renowned as a global center for research.
But the students at KAUST are taking the next step by turning the insights from their work into the exciting businesses and industries of tomorrow.
The university has created over 30 spin-off companies, many of which have achieved major scientific advances in – for example – desalination and renewable energies.
This is partly a testament to the fact that we are making it easier for cutting-edge, homegrown enterprises and foreign SMEs to grow and thrive in Saudi Arabia.
Finding the right competitive mix of regulations and incentives for SMEs is always an ongoing process for any country.
But SMEs in the Kingdom can enjoy access to hundreds of millions of dollars in public funding, comprehensive support services, and a licensing procedure tailored specifically to them.
For foreign SMEs, we have refined and aligned our visa requirements to make it easier for small businesses to come to Saudi Arabia.
They can take their time to discover the opportunity the Kingdom has to offer before deciding to establish an operation.
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Whether you are a large multi-national or a small business, there are a number of other aspects about the investment climate in Saudi Arabia worth noting.
Our economy has a strong position and is still growing.
We have a domestic market of 30.8 million people with significant purchasing power.
Your quick and easy access to this large and growing domestic market will give you a foothold that will facilitate your expansion across the region and further afield.
Our strategic location serves as a gateway to business in the rest of the Middle East, Africa and other parts of the world.
And finally, the Saudi government is fully committed to its diversification strategy.
Our regulatory, fiscal, and financial policies all view diversification and private sector growth as national objectives, meaning you’ll have the encouragement and support of the Kingdom behind you.
Nowhere else can you find the market size, location and the commitment to help you achieve your aims.
Other key aspects of the business environment include:
100% foreign ownership in most sectors;
Wholesalers and retailers in particular can now own 100% of their business, when previously they could only own 75%.
There is no personal income tax, no value-added tax, no sales tax, no property tax, and a competitive corporate tax rate;
And we have full repatriation of capital, profit, and dividends;
We are also changing our investment law that will allow strategic investors – after their first year – an extension of their licensing period for up to fifteen years before having to renew again.
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Telling you about how we are gearing regulations and incentives to increase our competitiveness is of course an enjoyable part of my job - but it is not the most exciting.
What is exciting is that we have a non-traditional competitive advantage that many do not.
The Kingdom offers individuals the chance – the unique opportunity – to be a part of a story larger than just regulatory and policy changes.
Up to this point, the real story of Saudi Arabia has been left largely untold.
But everyday, a new page is being turned on a beautiful tale that will continue to unfold as the years go by.
And we’re inviting you to benefit from it, and be a part of it…
You will be a part of the rich cultural fabric of a nation that is becoming increasingly diverse with each generation…
You will be a part of a community that is, and will continue to be, a great place to raise children and have a family…
And you will be at the forefront of our diversification push, allowing you become a key player in a growing, lively, and dynamic business environment, geared towards commercial success.
This is Saudi Arabia’s competitive landscape.
This is Saudi Arabia’s story
We look forward to you becoming a part of it.
Thank you.
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