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Saudi investment projects flow into Yemen

Investments in Yemen this year will create 2500 new jobs. [FAISAL DAREM/Al-Shorfa]

Investments in Yemen this year will create 2500 new jobs. [FAISAL DAREM/Al-Shorfa]

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Saudi investment projects ranked first among foreign ventures registered with the General Investment Authority during the first half of 2010 in terms of numbers and investment capital, according to an official report issued in July by the General Investment Authority.

Saudi investors had a total of seven registered projects with a capital investment of 1.649 billion riyals ($7,703,706), creating about 147 jobs. Many of the projects are in the real estate and tourism sectors.

Muntaha Ali Muthana, head of the Promotion Sector at the General Investment Authority, told Al-Shorfa that there were a total of 15 foreign projects that invested approximately 3.511 billion riyals ($16,402,493) creating 416 jobs. Aside from Saudi Arabia, the 15 projects included foreign investors from Kuwait, Jordan, Lebanon, Turkey, China, Canada and Britain.

According to economists, there are several factors behind the influx of Saudi investments to Yemen, the most important being geographical proximity. Saudi Arabia also represents the largest source of capital in the Gulf.

"The direction in Saudi capital toward Yemen comes by virtue of the excellent relations between the two neighbours, Yemen and Saudi Arabia, in addition to Saudi Arabia possessing the largest financial base on the peninsula and in the Gulf," Mustafa Nasr, chairman of the Studies and Economic Media Centre, told Al-Shorfa.

Nasr said financial crises places such as Dubai and elsewhere made investors look for new markets such as Yemen.

"Saudi Arabia is one of the countries that have embraced Yemeni expatriates for decades, most of whom were traders and now they are in the top of the list of Saudi investors who reinvest part of their capital in their country of origin," he said.

But the influx of Saudi investments in Yemen has not reached the level they reached in some countries in the region, such as Egypt, Nasr said.

In August, the Yemeni government passed a new investment law offering many incentives. It equates foreign and domestic investors and permits foreign ownership of real estate.

The report of the General Investment Authority also said Jordanian projects ranked second in investment capital during the same period with a single investment project at a cost of 824,480,000 riyals ($3,851,759) providing 51 jobs, followed by Britain with capital investment in one project at a cost of 456,764,000 riyals ($2,133,884) providing 58 jobs.

Lebanese projects came in fourth place with capital investment in two projects at a cost of 174,691,000 riyals ($816,111) providing 44 jobs, followed by Turkey with capital investment for one project at a cost of 157,000,000 riyals ($733,463) providing 52 jobs.

Foreign investments also included a Chinese project at a cost of 124,386,000 riyals ($581,099) providing 43 jobs, a Kuwaiti project with capital investment of 75,000,000 riyals ($350,380) providing 11 jobs, and a Canadian project at a cost of 50,000,000 riyals ($233,587) providing more than 10 jobs.

"Foreign investment capital recorded during the first half of this year is broken down into 1,429,910,000 riyals ($6,680,173) during the first quarter and 2,081,532,000 riyals ($9,724,384) during the second quarter," Muthana said.

The total number of domestic and foreign projects registered with the General Investment Authority during the first half of this year reached 113 investment projects with capital investment of 31,996,624,000 riyals ($149,480,039), along with fixed assets amounting to 21,173,324,000 riyals ($98,916,351).

These projects will provide approximately 2,536 jobs.