Why doing business in Saudi Arabia is becoming easy
Last Thursday, I was invited by the Saudi National Competitiveness Center (NCC) to the launch of the World Bank report on “Ease of Doing Business” in Saudi Arabia with the participation of senior government officials, leading businessmen and women, diplomats and the media. I was impressed by the quality of presentation and content.
The Commerce and Investment Ministry, headed by Majid Al-Qasabi, is behind these achievements in cooperation and coordination with other ministries. It was also a pleasant surprise to listen to the CEO of the NCC, Iman bint Habas Al-Mutairi, who took us through the main drivers behind the enhancement of the business environment in the country.
Saudi Arabia had launched several reforms in eight areas monitored by the World Bank — more than any other country. The report, based on interviews with 50,000 global private-sector executives, found the Kingdom had made the greatest progress in the area of business start-ups.
In terms of indicators, the Kingdom has separate rankings. For instance, in terms of starting a business, the Kingdom ranked 38th. It was 28th for receiving permits, 18th for access to electricity, 19th for registering property, and third for protecting minority investors. It fared less well for trading across borders (86th), enforcing contracts (51st), paying taxes (57th) and resolving insolvency (168th).
The outcome of this report is in the mainstream of the Saudi Vision 2030 mission, aiming to rely less on oil-based revenues while implementing the aforementioned reforms to maximize revenues from non-oil channels and economic drivers. As for the next level of reforms, in my opinion, we should further enhance transparency, fair competition and good governance.
Sharing my own observations from the initial feedback on this report, there is a certain degree of confusion in the local private sector, which is still experiencing difficulties and challenges in running or setting up new businesses. Hence, I do suggest that NCC exert more efforts to make the local sector fully aware of these enhancements and how to benefit from them in an efficient and speedy fashion.
The launch of this report is timely with just a week until the Future Investment Initiative (FII) conference, with high-level governmental delegations from the US, Switzerland and India planning to participate. It should provide a vote of confidence in foreign direct investments in different sectors in the country.
The outcome of this report is something we are all proud of and we should capitalize on when inviting global partners to benefit from the investment opportunities in Saudi Arabia.
Basil M.K. Al-Ghalayini is the Chairman and CEO of BMG Financial Group.
