Saudi Arabia to launch new special economic zones for varied sectors

By Rahul Vaimal, Associate Editor
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Saudi Arabia
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Saudi Arabia is reportedly planning to launch a series of special economic zones focused on logistics, biotechnology, maritime industry, chemical industry, manufacturing and others to attract investment and boost its economy.

Khalid Al-Falih, Minister Investment, Saudi Arabia said, “There will be many incentives designed for specific investors in focused zones that will be launched in the kingdom in the months to come. The kingdom is also planning “unique special economic zones for the financial sector, for the tourism and hospitality”.

As part of the Saudi Vision 2030 plan, Saudi Arabia, the Arab world’s largest economy is planning new ventures and introducing reforms to draw investment.

Neom, a $500 billion (Dh1.8 trillion) futuristic project extending to Egypt and Jordan, and the Red Sea project, which involves a nature sanctuary, coral reef diving and heritage sites on around 50 islands off the Red Sea coast, are some of the projects launched by the country in recent years. In the capital of Riyadh, a mega entertainment and sports project called Qiddiya is also being developed.

Mr. Falih, who was assigned to his post earlier this year, said the “most resilient economy” is in the kingdom and supports the private sector to help them solve the crisis.

Khalid Al-Falih
Khalid al-Falih
Minister of Investment Saudi Arabia

“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 at 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.”

According to the reports, since the outbreak of the pandemic in March, Saudi Arabia has rolled out 142 stimulus initiatives with a total value of $57 billion (214 billion Saudi riyals) to help individuals, private sector companies and investors.

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

During the first six months of the year, the Ministry of Investment of Saudi Arabia said it had issued 506 new licenses to foreign firms, with the most successful investors being firms from the US, India and the UK. The 54 companies that obtained licenses were from the US, 49 were from India and 47 were from the UK.