VZCZCXRO1107
PP RUEHDE RUEHDH RUEHDIR
DE RUEHRH #1426 3001101
ZNR UUUUU ZZH
P 271101Z OCT 09
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC PRIORITY 1791
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS RIYADH 001426 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR FOR CHRIS WILSON, JASON BUNTIN 
USDOC FOR STEVEN GARRETT 
DEPT FOR NEA/ARP, E U/S HORMATS 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON EINV PREL SA
SUBJECT: SAUDI INVESTMENT CHIEF CALLS FOR MORE U.S. 
INVESTMENT 
 
¶1. (SBU) Summary:  The Governor of Saudi Arabian General 
Investment Authority (SAGIA) told visiting Assistant U.S. 
Trade Representative Christopher Wilson on October 19 that 
the protection of intellectual property rights is essential 
for SAGIA to reach its goals.  SAGIA wants to increase Saudi 
competitiveness to become one of the top ten most attractive 
places globally to do business by 2010.  It also wants to 
attract more advanced foreign investment, which is  dependent 
on technology-based industries.  Al-Dabbagh expressed concern 
over the relative decline in the share of U.S. investment in 
Saudi Arabia, and said better bilateral ties would likely 
increase investment in the United States.  End summary. 
 
¶2. (SBU) SAGIA Governor Amr Al-Dabbagh told Wilson that the 
protection of intellectual property rights (IPR) is essential 
for his organization to reach its competitiveness and 
investment goals.  For example, the IPR-dependent 
pharmaceutical sector is the fourth highest targeted industry 
in the Kingdom's industrial strategy, and 25 to 30 percent of 
the Kingdom's priority investment industries are 
technology-based.  Al-Dabbagh said he and other Saudi 
ministries are very familiar with USG goals on IPR in Saudi 
Arabia, thanks to several years of hard work on the Special 
301 process.  He noted Saudi Arabia has done a lot to address 
U.S. concerns.  He hoped the USG would recognize these 
efforts by removing Saudi Arabia from the Watch List. 
 
¶3. (SBU) SAGIA's three roles are to manage the Kingdom's 
efforts at increasing the competitiveness of its business 
sector, facilitate the flow of foreign direct investment 
(FDI), and regulate and promote the economic cities. 
Al-Dabbagh highlighted Saudi Arabia's progress towards its 
goal of reaching the top ten of the World Bank's annual "Ease 
of Doing Business" report, noting the country's rapid ascent 
to its current ranking, thirteen, up from 67 in 2005. 
Al-Dabbagh credits the Ministry of Commerce and Industry's 
significant improvements in processing limited liability 
company applications for this year's progress, as well as 
one-day turnaround time to get building permits and 
improvements in the Capital Market Authority's transparency 
requirements for corporate governance.  In 2010, he said, 
SAGIA will focus on improving the enforcement of contracts. 
Contract sanctity is dependent on the creation of commercial 
courts, he said, emphasizing that capacity building in the 
judicial sector is critical to improve competitiveness. 
Al-Dabbagh noted the announcement of the next Global 
Competitiveness Forum, to be held in Jeddah January 23-26, 
will include the CEOs of Dell and Cisco Systems, as well as 
statesmen and 7 Nobel prize economists. 
 
¶4. (SBU) Saudi Arabia was the 14th largest global recipient 
of FDI in 2008 with $38.2 billion in inflows, a dramatic 
increase over 2004 levels of just $2 billion.  Seventy-five 
percent of this FDI is outside the energy sector, Al-Dabbagh 
said, noting the Kingdom needed to increase investment in 
energy-intensive industries to take advantage of the 
country's abundant oil reserves.  Asked about the impact of 
Saudi Arabia's accession to the World Trade Organization 
(WTO), Al-Dabbagh said it had increased confidence in the 
country, but quickly noted that the U.S. was not "getting its 
fair share of the Saudi cake."  The Kingdom has received an 
"avalanche" of investment from China, Malaysia, and France, 
but not from the United States, he said.  Al-Dabbagh said 
SAGIA is keen to work to increase U.S. investment share in 
Saudi Arabia.  He noted SABIC's acquisition of GE plastics as 
an example of the benefit of Saudi investment in the U.S., 
and expressed interest in promoting similar agreements. 
Al-Dabbagh said that bilateral political issues stemming from 
9/11 and the resultant problems, such as access to visas, was 
slowing the amount of Saudi investment in the U.S. 
 
¶5. (SBU) Al-Dabbagh also discussed the economic cities, four 
of which have been launched to date, and their potential to 
add $150 billion to the country's GDP.  The economic cities 
embody a "smart city" concept, he said, in which every 
building will be LEED certified and every government service 
will be offered within 60 minutes, 24 hours a day, 7 days a 
week (60-24-7).  Each city is designed to focus on a 
particular technology and foster the development of 
relatively poorer areas. 
 
¶6. (U) AUSTR Chris Wilson cleared on this cable. 
SMITH