Amr al-Dabbagh has no doubt that if he builds it, they will come. The governor of the Saudi Arabian General Investment Authority (SAGIA) is one of the forces behind King Abdullah Economic City (KAEC), a $27 billion development rising out of the desert 62 miles (100 km) north of Jeddah. …
When it’s completed 20 years from now, KAEC will be roughly the size of Washington, D.C., with a population exceeding 1.5 million. It will have a seaport, an industrial district, a financial center, a health-care zone, a full-fledged university and a beach resort. Not since Brasília and Chandigarh in the 1950s and ’60s has any country set out to build an entirely new city on such a scale. Saudi Arabia is planning to build five of them. Simultaneously. … The Saudis plan for nothing less than to make the country more competitive globally, and they are willing to spend what it takes to do it. …
The Dubal project is a template for the kind of investment Saudi Arabia wants to attract: it will be 100% foreign-owned and will probably generate several downstream businesses. The ownership is crucial; in the past, the only way foreign companies could operate in the kingdom was through joint ventures and local agents. … With that barrier gone, al-Dabbagh hopes investors will pour in. … Al-Dabbagh is working to remove other barriers as well. … As a result, the kingdom is on the move. On the World Economic Forum’s list, it is 27th, up from 35th last year. It sprinted up the World Bank’s list, from 67th in 2005 to 16th in 2008. … In that time, foreign investment in Saudi Arabia has nearly doubled, to $23 billion. …
But Saudi Arabia is still some distance from being an investor’s mecca. The kingdom ranks a woeful 137th on the World Bank’s list when measured by ability to enforce contracts. … Saudi Arabia has also … slipped to 80th place on Transparency International’s Corruption Perceptions Index for 2008, from 70th in 2005. … The quality of the local workforce is poor, owing to an education system that has long placed religious studies above science and math. … It doesn’t help that employers don’t have access to half the potential workforce: despite some recent gains for women, only small numbers of them have overcome the stiff cultural resistance to females going to work. Access the full article>>

