DUBAI, United Arab Emirates | Contrary to general impressions, Saudi Arabia is an easier place than many Western countries to start a new business and aims to be among the top 10 most competitive nations next year.
On average, starting a business in developed nations requires 5.7 procedures and takes 13 days, according to a recent report by the World Bank. In Saudi Arabia, it takes only four procedures and five days, the report said.
On a list of 183 countries, the report put the oil-rich nation No. 13 in terms of ease of doing business. Singapore was first, and the U.S. ranked fourth.
Saudi Arabia’s goal is to go from the top 15 to the top 10 most competitive nations in the world by 2010, said Dahlia Khalifa, a senior strategy adviser at the World Bank and a co-author of the recent report.
She told The Washington Times that the Saudi Arabian General Investment Authority (SAGIA) has been the spearhead for the national strategy known as 10 by 10.
SAGIA was established in 2000 to act as a gateway to investments inside the kingdom, create a pro-business environment and build a knowledge-based society.
SAGIA is credited with introducing one-step shops to centralize critical services. A large number of government departments are represented in such offices and provide free access to 128 business-related services ranging from licensing to banking.
Saudi economic columnist and businessman Hussein Shobakshi credited the progress to King Abdullah, who has been de facto ruler of the country since 1996 and succeeded to the throne in 2005.
Under King Abdullah, “we entered a new era,” Mr. Shobakshi said. “We started to witness a paradigm shift in the mentality [of society] and in the way of handling problems. It has become less sensitive to talk about problems publicly and directly in media, and even in public gatherings.”
At the same time, Mr. Shobakshi said more progress is needed and that “there are many complaints we still hear from Saudis, Arabs and foreigners, as well, that there are obstacles that can be removed.”
He cited problems with obtaining visas and “the need to develop the banking and employment sectors.”
Describing the kingdom as “underbanked,” he said there are only about 15 banks operating in a nation of 25 million, the world’s biggest producer and exporter of oil. Mr. Shobakshi described the banks in Saudi Arabia as “exclusive clubs” that discourage competition. He added that other sectors such as media and communications should also be opened for more competition.
Still, he said, “the investment climate in Saudi Arabia has greatly improved as a result of the reformist measures taken by the government and its tolerance of a higher level of criticism of sectors like business, the judiciary and employment.”
The 10 indicators used by the World Bank include the ease of obtaining construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
“Yes, it is real,” prominent Saudi businessman Ihasan Abu-Huleiqah said when asked to comment on the World Bank’s findings. “We still have a long way to go, but we need to base things on facts.”
During the past five years, the Saudi government started “to invest more and more; if you look at the government expenditures, like public expenditure, you will see that figures are going higher, plus more and more is spent on infrastructure,” he said.
He said the government is also seeking foreign investors to diversify the economy beyond petroleum.
The non-oil-manufacturing sector now accounts for 10 percent of GDP, Mr. Abu-Huleiqah said.
GDP was estimated at $481 billion in 2008.
Despite the global recession, Saudi Arabia’s budget this year is a record $126.7 billion in expenditures, based on revenues of $109.3 billion.
Saudi Arabia unveiled last year a $400 billion development and investment program for the next five years to sustain growth despite the drop in oil prices from record highs.
“Diversification is a must … in this era of globalization,” Mr. Abu-Huleiqah said, to achieve strategic goals and “create [high-] value jobs for our kids.”
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