Saudi Arabia is undergoing a massive program of economic growth and industrial diversification as it plans its future progress. The Saudi Arabian General Investment Authority (SAGIA), created by the government in 2000, is at the forefront of this development.
SAGIA plays an active role in the economic liberalization of Saudi Arabia and is responsible for fostering investment opportunities in key sectors of the economy, including energy, transportation, and knowledge-based industries.
As the world’s fastest-reforming economy, Saudi Arabia has seen growing momentum and recognition for its economic transformation. Its economy is ranked third in the world for economic stability and it has proven itself to be an attractive business environment. In just four years, Saudi Arabia has risen from 67th to 22nd position in the World Bank’s Ease of Doing Business Index. It also ranks 12th in the world for ease of registering property and third for paying taxes.
Four Economic Cities
At the heart of SAGIA’s strategy for growth is a massive building program. Working in partnership with some of the world’s most prestigious developers and investors, SAGIA is creating four spectacular Economic Cities in key locations around the nation at a cost of more than $60 billion. These cities will become powerhouses of technology, industry and knowledge, and are designed to maximize investment potential and deliver huge advantages to businesses located there.
In developing the Economic Cities, more than 1,000 of the world’s cities were surveyed. The 60 deemed most successful were meticulously studied to determine key success factors. As a result, the Economic Cities represent the ultimate innovation in public-private partnerships (PPPs).
Each city will feature modern building design alongside world-class services and infrastructure. SAGIA is working with leading environmental institutions to ensure that the cities are developed with minimum negative environmental impact and maximum energy efficiency and sustainability. The visionary project will promote economic diversification, create over a million new job opportunities, homes for 5 million residents, and contribute more than $150 billion to Saudi’s GDP.
|SAGIA is working with leading environmental institutions to ensure that the four economic cities are developed with minimum negative environmental impact and maximum energy efficiency and sustainability|
The four cities are the King Abdullah Economic City (KAEC), Prince Abdulaziz Bin Mousaed Economic City (PABMEC), Knowledge Economic City (KEC), and Jazan Economic City (JEC).
KAEC has a planned investment of $27 billion funded entirely by private capital; when complete in 2025 it will be the same size as Washington DC. The city will be divided into four main areas: industrial and residential zones, a seaport, and a sea resort that stretches along 1.5 miles of unspoiled beach – a concept new to Saudi that will surely make it a top tourist destination.
PABMEC has been dubbed “skyscraper city” and is set to be the Middle East’s most modern transportation and logistics hub, strategically located at the crossroads for navigational, trade and transportation routes between East and West. Transport infrastructure will include an international airport expected to serve 3 million passengers per year, a railway station, and a dry port and operations center capable of handling more than 1.5 million tons of cargo per year. The railway system and road connections will further expand to connect with Al-Madinah province, Jordan, and Iraq.
KEC will be a cultural landmark and the focal point of Saudi Arabia’s knowledge-based economies, focusing on intellectual property, medicine, hospitality, tourism, and multi-media industries. The city will create opportunities for both foreign and local entrepreneurs in these sectors. Given its proximity to the Holy Mosque in Al-Madinah, it is expected to attract huge numbers of visitors from within Saudi and around the world.
JEC is designed to become an export platform for international consumer markets. Close to the main trade routes between Europe, Asia and Africa, JEC will be a strategic stop for neighboring countries that do not have the infrastructure necessary to access export markets. An industrial park will occupy over two-thirds of the city and it will contain a modern oil refinery and integrated petrochemical complex, a copper refinery, fisheries, and an aluminum complex. Transport infrastructure has been designed to include a new seaport and dry dock.
For foreign investors, the new Economic Cities create a unique opportunity for private-sector involvement and business success. SAGIA is dedicated to making it as easy as possible to invest in or set up and operate a business in the country. Already foreign direct investment inflow is the 14th largest in the world; the Economic Cities will continue to build on this achievement. The outlook for Saudi Arabia has never been brighter or more secure.