On December 16, Amr al-Dabbagh, the governor of the Saudi Arabian General Investment Authority (SAGIA) discussed how the kingdom’s ambitious economic cities projects would break new ground in the integration and use of information and communications technology (ICT).
Al-Dabbagh spoke during a forum entitled Intelligent Cities, held in Riyadh. The forum discussed the concept of the project and the investment opportunities associated with the cities. All are to be solely funded by the private sector but al-Dabbagh was quick to emphasize the government was offering tremendous support to the initiatives.
In addition, the head of SAGIA also announced two new cities, which would bring the total to six. Studies are underway to establish two new economic cities in the northern and eastern regions, al-Dabbagh said.
The four cities announced to date are King Abdullah Economic City in Rabigh, on the coast north of Jeddah, Prince Abdulaziz bin Mousaed’s Economic City (PABMEC) near Hail, Knowledge Economic City in al-Madinah, and Jizan Economic City. SAGIA estimates that these projects alone will attract $80 million in investment.
Liberalizing restrictive regulations
SAGIA was founded in 2000 on the back of the government’s new Foreign Investment Law which paved the way for liberalizing some of the kingdom’s traditionally restrictive regulations regarding the rights of private foreign investors. The authority has the mandate to attract foreign direct investment (FDI) and increase economic diversification, particularly through knowledge-based enterprises.
The government’s economic strategy, of which SAGIA is but a part, centers on diversifying the economy. Another vital aspect is the creation of employment opportunities for the growing population—an estimated 60% are under the age of 14. Among these and other strategies there remains a strong emphasis on spreading wealth equitably throughout the kingdom.
The economic cities projects are intended to go some way in fulfilling both SAGIA’s stated objectives and the government’s broader economic vision by enabling diversification and creating jobs, as well as steering the kingdom into a prime position to compete on the global stage.
Al-Dabbagh and the other speakers emphasized that through the creation of completely new cities on Greenfield sites, a great opportunity existed to give Saudi Arabia a huge competitive advantage in terms of ICT and the benefits it can offer to business and industry. Combining the concepts of the ‘digital city,’ originally coined by the Intel Corporation, the ‘smart city’ by Cisco and the ‘internet frontier’ by Microsoft, SAGIA intends for the cities to be at the cutting edge of ICT systems, integrating all aspects of the infrastructure networks to enable transfer of information at every possible level. Attendant to this would be software and content creation opportunities.
Abdullah al-Rakhis, the chairman of Rakisa Holding, the company responsible for developing PABMEC, said the project would create a ‘silicon valley’ style area at a cost of some $22 million. This project at Hail is specifically intended to focus on ICT, taking a less prominent role in other areas. He said that the project had the potential to create some 600 jobs for women alone.
A human resource challenge
Al-Rakhis was also quick to highlight how aware of the human resource challenge his project and the broader ICT sector needed to be. “We have started to send a number of Saudis to the US, Canada, Ireland and Singapore for training on smart infrastructure facilities,” he said, speaking of the initial preparations already being made. He also spoke of the associations Rakisa Holding had already made with companies such as Cisco and Intel in terms of training.
Intel Corporation’s Chairman Craig Barrett, who was in Riyadh, unveiled a series of agreements with the Saudi government, including a commitment to train 50,000 Saudi teachers in their Intel Teach Essential Program. His comments echoed those made in a similar speech by Microsoft Chairman Bill Gates back in November. He also signed a number of commitments to spur on ICT development and train Saudis.
Also, earlier this year, fellow US firm Cisco Systems announced an investment of $300 million in the kingdom’s ICT sector when John Chambers, the president and CEO, visited the kingdom.
