SAUDI Arabia, the slumbering giant of the Middle East, is catching up with its
more high-profile neighbours with plans for six new economic cities and a slew
of initiatives to attract businesses and professionals from near and far.

The government confirmed last week that Saudi construction work valued at more
than US$400 billion (S$615 billion) is on track to be completed within the next
decade.

Most of it centres on a bold initiative to create six economic cities which are
designed to diversify the kingdom?s narrow economic base, and are likely to
cost the government over US$150 billion.

Locations for four of these have been announced, while a new one is due to be
unveiled at Tabuk and a sixth will be launched at a later stage in the Eastern
province.

The capital Riyadh is also getting a facelift, with the government announcing
plans a couple of months ago to build a new financial centre, shopping malls
and educational facilities. Infrastructure facilities, too, will be upgraded,
it said.

Alongside the plans, the red tape that has stifled the private sector for the
past decade is being lifted.

A new mortgage law, which will enable greater private sector participation, is
expected to fuel an unprecedented real estate boom across the country when it
is implemented later this year.

"We are committed to enhancing the investment potential of the kingdom, and to
solve difficulties, if any, that are faced by regional and international
investors," said Saudi Arabian General Investment Authority (Sagia) governor
Amr Bin Abdullah Al-Dabbagh.

"The founding of economic cities is one of the strategic initiatives in this
direction?(and) we are committed to developing a strong power, transport and
industry base to serve as a platform for economic cities to thrive and create a
favourable growth environment for international investors."

Sagia estimates the plan will raise the nation?s per-capita gross domestic
product to US$33,500 from US$13,000 currently, and raise its profile as a
leading investment destination in the Middle East.

The kingdom is the world?s largest oil exporter and the region?s biggest
economy. But for too long it has relied on oil while other Arab economies such
as Dubai in the United Arab Emirates have established themselves as more
attractive, investor-friendly destinations for international business.

Now, however, that could change.

The six projects vary in terms of size and designation, but one thing is
certain ? King Abdullah Economic City is set to rule them all.

Announced in December 2005, the 168-million-sq-m project is located on the Red
Sea coast, close to the holy cities of Mecca and Medina and the nation?s
commercial nerve-centre Jeddah.

The development?s diverse interests include six key components: a sea port, an
industrial zone, a central business and financial district, a resort district,
an educational zone and residential communities.

Further north, the US$8billion Prince Abdul Aziz bin Mousaed Economic City will
be the largest project of its kind in the Middle East for logistics and
transportation services, taking on Dubai as the logistics hub of the region.

Bulldozers moved in last September to begin work on the city spread over 156
million sq m.

The development will be fully funded by the private sector ? another bold step
for a country renowned for it reliance on government petrodollars for
investment.

For Jizan, the focus will be on industry, while Medina will develop
knowledge-based industries.

According to Mr Saeed Al Muntafiq, chairman of the Young Arab Leaders, an
organisation tasked with creating opportunities for Arab youth in education,
leadership development and entrepreneurship, the foreign investment laws in
Saudi Arabia are now "some of the most advanced in the Gulf".

In due course, he expects the kingdom to open up even more to foreign
investment, which could go a long way in tackling the nation?s unemployment
problem ? which stands at between 12 and 20 per cent right now.

And as for Saudi King Abdullah, he would have achieved his ambition ? ensuring
that the future of the next generation of Saudis is not tied entirely to oil.