Why foreign investors flee KSA?

By Mohammed Al-Oufi Makkah   SOME people will consider it only natural if one, two, three of even 10 investment companies have withdrawn from the Saudi market. They will claim that this happens in investment markets all over the world. Others will, however, see this as a negative indicator showing some faults in the Saudi market or loopholes in the country›s investment laws. Most of these withdrawals happen without the concerned Saudi authorities taking the trouble to explain the reasons. Most of the time, except on very rare occasions, the responsible authorities in the Kingdom will keep silent on the real causes of the companies› withdrawals. They reserve their right to keep silent on why a foreign investment company has deserted the Saudi market. Whatever their number may be, these withdrawals put us on a crossroads regarding the issue of foreign investment in the Kingdom. In my opinion, one of the reasons for these withdrawals is the lack of transparency in explaining why any foreign investment company would quit the Saudi market after it has come here with the sole purpose of investment. We are never told if the reason of the withdrawal is caused by the differences in viewpoints or if the company has changed its mind about investing in the Kingdom after it has arrived in the country. Silence is not always wise. On the contrary, it will put us in a weak position. While we keep silent locally, the foreign investment companies will talk in loud voices holding the Saudi government responsible for their flight from the Saudi market. The companies talk in conferences, seminars and debates holding us responsible for their escape. They will also accuse the government of not honoring agreements or complicating the investment procedures due to red tape and the stubbornness of narrow-mindedness officials. The withdrawal of any foreign investment company will relay a negative message to other companies wishing to invest in our country, particularly at a time we are making strenuous efforts to attract more investments from abroad. The picture will become gloomy regardless of the conferences and seminars we organize here and there talking about feasible investment opportunities in the Kingdom. Most of the time, the investor will not heed what we say but will be more concerned about the practice and application on the ground. So the foreign investor will be more likely to focus on what other companies say about us. It is common knowledge that the foreign capital is very timid and will not gamble for the sake of anyone›s eyes. To avoid the repercussions of the silence about the withdrawal of foreign companies, I will advice each government department to hold a press conference after any withdrawal by any company or investor to explain to the public the real reasons behind it. We should not leave the arena open for the companies to acquit themselves and put the blame on us. This will distort the investment environment in our country and will relay a negative picture to the other investors. Our investment procedures must be thoroughly revised to make them easy in order to prevent any foreign investor from fleeing the country. The time for issuing investment licenses should be shortened and there should not be any slackness in the services provided to foreign investors. The spotless environment for foreign investments has been behind the success of a number of countries, which were able to attract and maintain capital inflows. Correcting the investment laws, simplifying procedures and providing accurate and timely data will no doubt stop the exit of foreign investors from our country.