The Ministry of Investment confirms to “Maaal”:‎ We exceeded 2021 goals, seeking to achieve Medium-term goals by 2025, ‎long-term ones by 2030 ‎

Dr. Saad bin Ali Al-Shahrani, Undersecretary of the Ministry of Investment for Economic Affairs and Investment Studies and Undersecretary in charge of Investment Marketing and Communication, confirmed that the ministry exceeded all its targets by the end of last year, while it is currently working to achieve investment targets for the medium term until the year 2025. Dr. Saad Al-Shahrani said in an exclusive interview with “Maaal” that the efforts made to improve the investment environment, attract more foreign investments, and enhance local investments, led to achieving the objectives of the national investment strategy for the year 2021.

Al-Shahrani also confirmed in this regard that 112% of the total investment target (measured by gross fixed capital formation) has been achieved, reaching 738 billion riyals and 23.6% of the GDP in 2021, compared to a target of 656 billion riyals. It is 23.5% of the GDP. He explained that this is due to the expansion of private sector investments by 47.4% during the same period.

He also confirmed that 104% of the local investment target (measured by fixed capital formation) has been achieved, reaching 638 billion riyals in 2021, compared to a target of 614 billion riyals. Private sector investments have become the main factor in the growth of gross fixed capital formation since the fourth quarter of 2020. He said: “This may be attributed to the efforts made to enhance the role of the private sector in economic development, and to provide it with the opportunity to undertake a number of investment projects.”

Al-Shahrani, who has a large cumulative experience, previously worked in the Saudi Central Bank and the International Monetary Fund (IMF) before returning home and working as a former agent in the Ministry of Finance before joining the Ministry of Investment, disclosed that the ministry achieved 172% of the target of foreign direct investment flows, reaching 72 billion riyals, which is 2.3% of the GDP in 2021, compared to a target of 42 billion riyals, or 1.5% of the GDP. The Aramco deal that took place during the second quarter of 2021, amounting to about 46.5 billion riyals, in addition to the efforts, reforms and government initiatives that support to attract investments and develop the investment environment that helped in attracting these foreign investments.

Regarding the Ministry of Investment’s medium-term goals until 2025, the Undersecretary said that the National Investment Strategy includes annual targets for both foreign direct investment and fixed capital formation, as the Ministry of Investment aims to double the volume of annual investments based on total fixed capital formation to reach. It also aims to increase the gross domestic investment component of the total fixed capital to reach 955 billion riyals, as well as work to increase foreign direct investment flows to reach 140 billion riyals.

‎ Saudi economy surpasses the global situation, flying on the wings of flexibility and durability

Al-Shahrani pointed out that the Kingdom has shown high economic resilience and strength in recent years, as the International Monetary Fund expected Saudi Arabia to become the fastest growing economy in 2022 globally, with a growth rate of 7.6%, adding that the data for the first quarter of this year showed that the Kingdom is the highest Growth among the G20 countries by 9.9% compared to the same period of the previous year.

‎Al-Shahrani stressed that the Saudi economy achieved an unprecedented jump in the second quarter in more than ten years, growing by 12.2% on an annual basis. He said: “On the side of the basic factors, the Kingdom possesses a number of strengths that helped it in dealing exceptionally with the Covid-19 pandemic, strong with abundant reserves, a well-developed and adequately funded health system.

He stated that the indicators of the Saudi economy witnessed a remarkable improvement, as the Industrial Production Index (IPI) achieved a growth of 17.7% in July 2022 on an annual basis, indicating that the Ministry It expects the industrial sector to continue to thrive. Sales of point-of-sale operations in the Kingdom increased by 16.6% during the second quarter of 2022 AD on an annual basis, exceeding the value of cash withdrawals from ATMs; This proves the strength of consumer confidence and the speed of adaptation by transforming into a cashless society in the Kingdom

The Kingdom ranked fifth in foreign currency reserves among the G20 countries in June of the year 2022 AD, and the ownership of foreign investors in the Tadawul financial market recorded a growth of 31% in the third quarter.

The Undersecretary of the Ministry of Investment revealed that the Kingdom’s progress in 2022 AD with several indicators that indicate economic and investment improvement. According to the International Competitiveness Book (IMD), the Kingdom ranked 24 in the Global Competitiveness Index, advancing by about 8 ranks compared to 2021, and it also ranked 31^st in The economic performance index advanced by 17 spots compared to 2021, and ranked 19^th in the government efficiency index, advancing by 5 ranks compared to 2021, and ranked 16th in the business efficiency index, advancing by 10 spots compared to 2021, in addition to achieving rank 34^th in the index Infrastructure is about two spots advanced compared to 2021.

He went on to say that all these positive indicators and supporting facts reflect the strength and durability of the Saudi economy and the fruit of the efforts pursued by the Kingdom’s government, represented in economic policies and reforms in order to support the Kingdom’s economic growth globally, strengthen its regional position, and raise its ability to face various global crises.

Foreign Direct Investment (FDI) flows grow in time of the pandemic

Al-Shahrani touched on the growth of foreign direct investment flows during the pandemic, pointing out that the biggest challenges that the whole world faced, passed through the performance of foreign investment in the coolness and peace.

‎What are the effects of the pandemic on the global economy, specifically in the field of attracting investments? And what is the impact of the pandemic on attracting foreign investments to the Kingdom? To what extent has the crisis between Russia and Ukraine affected the attraction of foreign capital to invest in the Kingdom?

Dr. Al-Shahrani said: The Covid-19 pandemic crisis that swept the world has led to unprecedented results in many countries, on the social and economic level, and this has resulted in extended negative effects so far, for example: global supply chains were affected by previous closures and food stocks decreased in Some countries globally, and in addition to these negative effects, this pandemic and the closures associated with it posed a challenge to the private sector and increased investment, as the pandemic led to bankruptcy of some companies and an increase in unemployment rate globally, which resulted in a change in the volume of consumption and investment.

His Excellency stressed that despite the consequences of the pandemic on the global economy, the Kingdom’s policy and the precautionary measures have been taken, have resulted in mitigating the negative effects and the rapid return to economic recovery, which appeared in many economic indicators for the years 2021 AD and 2022 AD, indicating that one of the most important of these decisions and the measures taken by the Kingdom to confront the pandemic: closing commercial activities and closing borders, providing large public aid to companies and individuals, subsidizing health care costs for local and foreign residents, and requiring examination and vaccination to reduce the impact of the spread of the virus.

Dr. Al-Shahrani noted that the performance of foreign direct investment flows in the Kingdom has achieved positive growth rates from 2020 AD until the first quarter of 2022 AD, as it recorded a growth of about 18.3% in 2020 AD on an annual basis, despite the repercussions of the pandemic and the decrease in investment globally, by about 35% in the same year, which contributed to the recovery of the Saudi economy very quickly. His Excellency also indicated that foreign direct investment flows grew by 257.2% in 2021 on an annual basis, as they doubled four times compared to 2020. In addition, the Kingdom ranked 14^th among the G20 countries during the year 2021 AD in foreign direct investment flows, according to the World Investment Report issued by UNCTAD.

He stressed that despite the recent global challenges and the emergence of a new wave of the pandemic in many countries and the beginning of the spread of monkeypox, and the Russian and Ukrainian crisis and its consequences on the global economy, the net foreign direct investment flows to the Kingdom recorded a growth in the first quarter of 2022 AD by 10% compared to the same period of the previous year; This indicates the strength of the Saudi economy in the face of various global crises and the increasing confidence of foreign investors in the Kingdom’s investment environment. 

More than 600 reforms to improve and speed up business implemented

His Excellency Dr. Saad Al-Shahrani stated that the Kingdom’s government has implemented more than 600 reforms in regulations and legislation; which contributed to the acceleration and improvement of doing business. He explained that these reforms come as a continuation of the efforts to improve the legislative and regulatory structure that resulted in the completion of many transitional stations in the Ministry of Investment’s journey, beginning since its establishment, as the Ministry’s efforts focused on providing a safe and more competitive investment environment, and working on developing investment systems and procedures with its partners from government agencies.

His Excellency disclosed the most prominent legislative and procedural steps, including, but not limited to: the establishment of the National Incentives Committee, the Cabinet’s approval of the organization of the Ministry of Investment, the launch of the national investment strategy, the launch of the initiative to establish businesses from abroad, the adoption of the organizational structure of the Ministry of Investment, and the launch of a project. The new investment system, aims to promote equality of treatment between local and foreign investors, increase investor confidence, establish a regulatory framework that balances investors’ rights and obligations in accordance with international best practices, and enhance protection for all direct investments in accordance with the relevant laws, regulations, and instructions in The Kingdom and the international agreements to which the Kingdom is a party.

According to Al-Shahrani, the Kingdom has worked to develop a number of initiatives to promote investment, such as: the possibility of 100% ownership by foreigners in most sectors, the possibility of obtaining a foreign investment license from outside the Kingdom, opening bank accounts for foreign companies from outside the country, and establishing foreign companies Electronically from outside the Kingdom, launching the upgraded version of the “Invest in Saudi Arabia 2.0” platform, and launching the new investment system project, while work is being done to issue the investor’s visa electronically or upon arrival. Looking at ways to provide investment opportunities for the private sector, His Excellency Dr. Al-Shahrani said that the National Investment Strategy launched by His Highness the Crown Prince – may God protect him – is based on four main pillars: developing strong and diversified investment opportunities, targeting different categories of investors, and diversifying Financing options available to investors, and creating an attractive and competitive investment environment for local and international investors.

He added: “The national investment strategy included about 40 initiatives that support local content, which we expect will contribute to enhancing the competitiveness of the Saudi economy and attractiveness of the investment environment. Incentives are offered to investors, acceleration of priority investment deals with appropriate conditions and incentives, in addition to accelerating public-private partnerships and privatization programs, and launching a supply chain attraction program, which will enhance the localization of important supply chains, which will reduce production costs on the investors.”

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A Plan to multiply inward FDI 19 times

His Excellency the Undersecretary of the Ministry of Investment for Economic Affairs and Investment Studies, and the Undersecretary in charge of Investment Marketing and Communication, Dr. Saad Al-Shahrani, confirmed the existence of a plan to increase the net inward foreign direct investment (FDI) to 388 billion riyals (103 billion dollars) for long-term goals by 2030, ie doubling it by more than 19 times.

In this regard, His Excellency said that Saudi Vision 2030 is characterized by ambitious goals to diversify the Kingdom’s economy, reduce dependence on oil, and lay the foundations for long-term sustainable growth where investment will play a major role in the stage of economic diversification, whether it is in developing major infrastructure or supporting the development of new and promising sectors.

He added, “To achieve this, the Kingdom is implementing a series of reforms to unlock its investment potential in recent years, in addition to working on the initiatives of the National Investment Strategy, which will contribute to achieving the ambitious target of foreign direct investment.”

His Excellency also indicated that the adoption of several incentives and investment packages, in various economic sectors, and the contribution to the launch of several special economic zones; It will enhance the durability of the investment environment; It contributes to increasing the competitiveness of the promising economic sectors and attracting more investments

He explained that the strategic objectives of the Saudi Investment Marketing Authority will contribute to highlighting investment opportunities and competitive advantages, which will result in the entry of major companies to the Saudi market and attract more value-added foreign investments. Thus, the Kingdom will become an attractive center for global business. It is worth noting that despite the importance of foreign direct investment in the investment scene, the majority of investment within the framework of the new investment system will be achieved from within the Kingdom, whether from the public or private sectors. ‎

Detailed investment plans to develop promising sectors

The Ministry of Investment pays attention to the promising investment sectors through the National Investment Strategy, which aims to increase the volume and efficiency of investments in the Kingdom in order to stimulate economic growth in the various priority sectors of the strategy in line with the Saudi Vision 2030. The national strategy includes detailed investment plans to develop these sectors and increase the percentage of investments in them.

In this regard, His Excellency Dr. Saad bin Ali Al-Shahrani, Undersecretary of the Ministry of Investment for Economic Affairs and Investment Studies, and the Undersecretary in charge of Investment Marketing and Communication for “Maal” confirmed the existence of integrated technical work between government agencies led by the Ministry of Investment to prioritize sectors supporting economic goals, and from The most prominent of these sectors, for example, but not limited to: (industry, renewable energy, transport and logistics, tourism, digital infrastructure, health care, communications and information technology, building and construction, entertainment) .

‎Functions of the Saudi Investment Marketing Authority

Dr. Saad bin Ali Al-Shahrani, Undersecretary of the Ministry of Investment for Economic Affairs and Investment Studies, the Undersecretary in charge of Investment Marketing and Communication, explained to “Maaal” the functions of the Saudi Investment Marketing Authority, explaining that it revolves around achieving many strategic goals to make the Kingdom An attractive destination for investments locally and globally, in cooperation with the concerned authorities.

Among the most prominent of these goals are: achieving integration and cooperation between the authorities, upgrading all business and services related to investment marketing, and supporting the Kingdom’s investment marketing activities to complement the goals of the Saudi Vision 2030 for the Kingdom to become a leading investment destination in the world, and managing the unified national identity for investment marketing. Attracting it to the Kingdom and activating it in coordination with the concerned authorities, managing the Invest in Saudi electronic platform, updating it periodically and making it available to investors, highlighting investment opportunities in all sectors, and unifying the efforts of the public and private sectors through studying the necessary programs, projects and incentives to facilitate investment for the benefit of the local economy. .

His Excellency explained that one of the most prominent goals is to prepare plans and programs related to marketing locally and internationally to enhance the attractiveness of investment in the Kingdom, encourage and support partnerships that achieve development goals between local and foreign investors, prepare studies, research and statistics supporting investment marketing and the Saudi economy, and issue periodic and specialized reports. This is in light of what the ministry sets, in accordance with its terms of reference, of general policies, plans and development programs for investment. The authority also aims to achieve integration and cooperation between the authorities and improve all work and services related to investment marketing.

In addition to targeting marketing campaigns inside and outside the Kingdom to introduce the advantages, opportunities and incentives of investment in the Kingdom, or to contribute to them with government agencies, and to develop media plans that support investment marketing, and implement them inside and outside the Kingdom in coordination with the Ministry, holding and organizing forums, conferences, forums and exhibitions inside the Kingdom and outside it, and participate in them by any means it deems appropriate, in coordination with the Ministry and the concerned authorities, to serve the investment marketing in the Kingdom, and to create standard indicators and statistical surveys related to investment and implement them directly, or in cooperation with other competent authorities, and develop them to achieve their objectives, and submit them to the Ministry Seeking the assistance of specialists and experts from distinguished local and international companies and institutions to provide professional products and tools and benefit from its expertise in the areas of the authority’s jurisdiction, encourage and support partnerships that achieve development goals between the local investor and foreign investor, issue the necessary approvals for government agencies to establish and encourage investment marketing initiatives, and provide Technical support for it by supporting its participation in conferences and events To work inside and outside the Kingdom, in accordance with the regular procedures, to host international conferences related to investment marketing, to contribute to the development and support of local conferences, to develop new initiatives in accordance with the regular procedures, and to cooperate and exchange experiences with government agencies, regional and international bodies and organizations and similar bodies in countries Others, within the limits of the authority’s competencies, in addition to participating in international organizations and associations with regard to their competencies; According to the regular procedures.