The nation’s industry faces numerous challenges, the foremost of which is capital flight estimated at SR 2.65 trillion, according to Shoura Council member Dr. Abdullah Al-Harbi. Today, any Arab investment is questionable and will be under suspicion of funding terrorism until proven otherwise. Therefore, there are fears that these funds may be frozen by US and European authorities without any justifiable reason or based on false accusations. Therefore, these funds should return to the Kingdom as soon as possible and should be employed to enhance industry and economic growth.
According to economic experts, the only way to encourage investors to return money is to improve investment opportunities. We should not only issue laws encouraging investment, but should also compete with other countries to attract foreign investors. The incentives and benefits given to investors should be reconsidered and compared with the incentives other countries offer. We should have flexible legislation and mechanisms and balanced policies that take our national interests into consideration but at the same time attract capital money.
The real crisis facing industry can be summed up in the problems that have caused 1,000 factories to stop working, according to a recent study conducted by the Ministry of Commerce and Investment. These problems include the administrative systems adopted by these factories and the absence of sufficient research that helps identify the targeted markets. We need to conduct extensive research to identify the targeted markets and appoint experts who can supervise and manage the export process, as many countries abroad prefer to work with factories that have international experience. Preferences should also be taken into consideration, meaning that products that local consumers prefer might not be popular in another country. We must improve the performance and skills of factory managers if we want our factories to have a global competitive edge and achieve sustainability.
To solve the problem of factory closures, we need transparent and credible solutions and most importantly seriousness and collaboration. The national interest should always come first. We need to set up a comprehensive administrative committee with members from the ministry. They should be given full powers so that they can solve any problem facing factories. This will help enhance our national economy and bring benefits to factory owners and create job opportunities for Saudis.
Singapore set up a comprehensive industry program at the beginning of its journey on the road to industrial growth. But Singapore did not have an industrial heritage, meaning that the majority of Singaporeans did not have experience in industry. Moreover, the country did not have oil or minerals or any major resources.
In the 1960s, Singapore was a backward country with 70 percent of its people living in congested areas and one third living on the street. Half of the population was illiterate. Through industry, Singapore has been transformed into an advanced country.
Singapore focused first on industries such as textiles, clothes and plastic materials. The country funded factories from national savings. Then the government started to attract foreign investment after making sure that bureaucracy was eradicated. Singapore took advantage of the fact that China, India and Indonesia did not welcome foreign investments at that time due to nationalism concerns. Singapore enhanced the added value of its products and progressed gradually to advanced industries such as electronics. Today, it is one of the fastest growing economies in the world and ranks sixth in terms of the highest GDP per capital in the world.
In the 1980s, the average income of a Singaporean did not exceed $340, while the income of a Saudi exceeded $12,000, according to The Economist. Today, the average income of Singaporean has jumped to $55,000, while the income of a Saudi has reached $24,000, which means that the income of a Saudi has doubled since the 1980s while the income of a Singaporean has increased 161 times during the same period. This underlines the industrial miracle of Singapore.
Comparing the Kingdom and Singapore is not fair because as a country we have natural resources and vast areas of land. Singapore is a small country. Nevertheless, we have not managed to achieve the same economic miracle. However because of our natural resources, we can achieve the same in less time and we can become an advanced country.
