A new vigour pervades the Saudi investment scene following the kingdom’s entry into the World Trade Organisation (WTO) and as the oil price continues its forward march bringing in the ‘black gold’ bonanza.

The kingdom is scouting for foreign direct investment (FDI) totalling $623 billion in 15 years from global investors in a wide range of industries and services. Though the focus is on energy-related projects, the spectrum covers other high technology sectors as well.
‘These are investment opportunities between Saudi (public and private) firms and foreign partners,” says Omar Bahlaiwa, secretary-general of the foreign trade committee of the Council of Saudi Chambers of Commerce and Industry.
The investment opportunities include $90.7 billion in electricity, $88 billion in water, $60 billion in telecoms, $140.7 billion in infrastructure, and $92 billion in petrochemicals, $50 billion in natural gas, $28.3 billion in agriculture, $10.7 billion in information technologies, $53.3 billion in tourism and $10.7 billion in education.
The government has also set up a supreme guiding committee to prepare a national industrial strategy for the future until the year 2020.
The project is called “The comprehensive programme: The strategies for enforcing the competitive industrial capacity and diversifying the industrial base in Saudi Arabia”. It is being done in cooperation with the United Nations Industrial Development Organization (UNIDO) and with the participation of all relevant public and private institutions.
In its budget estimates for the year, the government forecast that the non-oil industry sector - which the government has targeted for growth to reduce dependence on oil revenues – will expand by a significant 8.4 per cent in 2006.
Though the WTO membership is expected to open up the vast global markets to Saudi exports, there is apprehension among the local industries about their ability to meet the global challenge. 
Allaying these fears, Commerce and Industry Minister Hashem Yamani says the accession to the WTO would help open new markets for Saudi products and services.
The kingdom will eliminate any non-tariff measures that cannot be justified under WTO rules while maintaining the right to restrict the import and export of a certain number of goods and services for reasons that include protecting public morals, the life and health of the population and national security interests, he says.
Ghassan A Al-Sulaiman, former chief of the Jeddah Chamber of Commerce and Industry (JCCI), was quoted in a recent report as saying the competitive landscape in the country will not be affected by accession into the WTO.
First, the Saudi economy was relatively open prior to the accession and most small and medium-size businesses were accustomed to the presence of large foreign companies in the domestic market, he says.
Many of these foreign-owned operations work through subsidiaries and affiliates even if they do not have a full presence and 100 percent ownership, Al-Sulaiman says.
Major multinational companies (MNCs) that are about to access the market will compete with large Saudi companies because they operate on the same level. Al-Sulaiman believes that smaller businesses can survive if they play a supportive role to the large companies.
“The future of any relationship between a local company and an international one will be governed by the value addition brought to the table by both parties, and the performance of both,” says Amr Al-Dabbagh, the governor of the Saudi Arabian General Investment Authority (Sagia).
“Without the World Trade Organisation (WTO) you are out of the race in today’s globalised world. With the WTO, you are guaranteed a place at the starting line even if there are no guarantees that you will make it to the finish line,” says Khan H Zahid, chief economist and vice president at Riyad Bank.
“But, most important, without the WTO the kingdom’s strategy of economic diversification could be at peril. From the perspective of traders, businesses and investors, transparency and predictability of foreign trade and investment is a key advantage,” he says.
In the long run, WTO-bred competition will allow world-class local industries to develop, lower prices, increased quality and more consumer choice, he adds.