Prince Bin Turki: slow privatization is bigger threat to economy than possible attacks
Chairman of Saudi-Arabia's General Investment Authority (SAGIA) Prince Abdullah Bin Faisal Bin Turki criticized the Kingdom’s sluggish privatization process on Monday, November 3, 2003, calling it a larger threat to the economy than any suspected terror threat.
"Privatization 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," Prince Bin Turki said to AFP . He blames "blimps" from the bureaucracy for hindering privatization despite the fact that it was sanctioned by the highest levels of government.
Seeking to service internal debt and narrow the budget deficit, the Saudi government has been shifting toward privatization policies in recent years. The Saudi cabinet ratified plans last year to sell its shares in big public firms including the Saudi Telecommunication Company (STC) and industrial giant Sabic. Revenues from the sell-offs will be used to pay off the Kingdom’s domestic public debt, valued at $1.68 billion.
The plan opened a number of sectors to the private sector including telecommunications, water desalination and air transport, however the national privatization program bars foreign investors from entering the telecommunications, oil exploration, security, retail and wholesale, education, and transport sectors.
"None of the big sectors have been opened up yet, and in the case of sectors taken off the 'negative list', public sector monopoly holders are preventing new investors from coming into the market," Bin Turki said.
Bin Turki asserted that the slowness of privatization was more of an obstacle to investment than political factors such as the aftermath of the US-led war on Iraq and a perceived threat to Saudi Arabia from Islamic activists. — (menareport.com)
© 2003 Mena Report (www.menareport.com)