Prince Abd Allah bin Faisal bin Turki said on Monday that none of the big sectors have opened.
“In the case of sectors taken off the ‘negative list’, public sector monopoly holders are preventing new investors from coming into the market,” he said.
Bin Faisal heads the Saudi Arabian General Investment Authority (SAGIA) which since its establishment in 2000 has licensed about 2000 projects worth more than 52 billion riyals ($14 billion) in which the share of foreign investors totals 85%.
But the SAGIA chairman said this was by no means satisfactory in a market the size of Saudi Arabia and blamed “blimps” from the bureaucracy for hampering privatisation despite the fact that it was sanctioned by the highest levels of government.
“Privatisation is important not only to bring in money but because it creates competition and thus results in better services. Basically, government departments should get out of the way,” he said.
Riyadh endorsed a plan a year ago to open up 20 vital sectors to local and foreign private investors in a bid to generate tens of billions of dollars to pay for a staggering public debt. It was also aimed at creating more jobs for nationals and improving services.
The plan opened up telecommunications, water desalination, air transport, airport services, construction and management of highways, seaport services and local oil refineries for the private sector.
But sectors like telecommunications, oil exploration, security, retail and wholesale, education and land and sea transport are among 16 activities still barred to foreign investors.
“Until when will we think we have a timeframe different from that of the rest of the world?”
Prince Abd Allah bin Faisal bin Turki, Saudi investment chief
Bin Faisal said the legislation needed to encourage privatisation and foreign investment was also coming in at a snail’s pace.
“Until when will we think we have a timeframe different from that of the rest of the world?” he said.
The investment leader said the slowness of privatisation was more of an impediment to investment than political factors such as the high tension in the run up to the US-led war against Iraq.
He dismissed a perceived threat to Saudi Arabia from extremists such as those presumed to have carried out triple suicide bombings in Riyadh on 12 May that left 35 people dead.
“Saudi Arabia was not born from a political deal or an agreement between oil companies. This is an old and strong country that is the product of its own evolution,” he said.