Saudi Arabia plans special economic zones to attract investment

Kingdom has the most 'resilient economy' despite the pandemic, investment minister Khalid Al Falih says

Saudi Arabia's investment minister Khalid Al Falih. Kamran Jebreili / AP Photo

Saudi Arabia is planning to launch a series of special economic zones focused on logistics, bio-technology, maritime industry, chemical industry, manufacturing and others to attract investment and boost its economy, according to the country’s investment minister Khalid Al Falih.

"There will be many incentives designed for specific investors in focused zones that will be launched in the kingdom in the months to come," Mr Al Falih said on Wednesday at the Financial Times Global Digital Summit Series.

The kingdom is also planning “unique special economic zones for the financial sector, for the tourism and hospitality”.

Saudi Arabia, the Arab world’s largest economy, developing new projects and rolling out reforms to attract investment as part of the Saudi Vision 2030 programme.

Some of the projects launched by the country in the last few years include Neom, a $500bn (Dh1.8 trillion) futuristic project extending into Egypt and Jordan and the Red Sea project, which includes a nature reserve, diving in coral reefs and heritage sites on about 50 islands off the Red Sea coast. It is also constructing a mega entertainment and sports project named Qiddiya in the capital Riyadh.

Mr Falih, who was appointed to his post earlier this year, said the kingdom has the “most resilient economy” and is supporting the private sector to help them ride out the crisis.

“We had a confluence of an economic crisis, a demand crisis, a health crisis, a human psychology crisis, with the onset of fear that we saw in the beginning of the pandemic, and of course it was compounded by the oil market crisis, given the importance of oil to our economy.

"Yet, our financial sector is stronger than ever, our credit rating is maintained, our economy, shrinking a little but we are on our way to recovery.

"We are also making sure that regulations are transparent, fair, predictable and honest conversation is taking place with the private sector."

Saudi Arabia has rolled out 142 stimulus initiatives with a total value of 214 billion Saudi riyals ($57bn) to support individuals, private sector businesses and investors since the outbreak of the pandemic in March, Saudi Press Agency reported in July.

Although the pandemic has tipped the global economy into a steep recession and dimmed the outlook for foreign investment flows globally, the kingdom has continued to be of interest to investors.

The Ministry of Investment of Saudi Arabia said it granted 506 new licences to international companies during the first six months of the year, with companies from the US, India and the UK among the most active investors.

About 54 companies that received licences were from the US, 49 were from India and 47 from the UK, the ministry said last month.