Vice-Minister Khalid Al-Mudaifer details Saudi Arabia's successful approach to attracting FDI across its economy and in mining specifically, highlighting lessons learned and successes achieved
RIYADH, Saudi Arabia, Oct. 28, 2021 /PRNewswire/ -- Speaking during a Future Investment Initiative (FII) session titled, "Wealth of Nations: How New Legal Policies Can Turbocharge FDI," His Excellency Vice-Minister for Mining Affairs Khalid Al-Mudaifer highlighted the need for a country's entire government to embrace transformation of its legal and regulatory system to attract foreign direct investment (FDI).
Noting the Kingdom's recent FDI success, Mr Al-Mudaifer shared insights with FII participants about critical characteristics needed to foster positive governance changes, using the well-received recent legal and regulatory transformation within the mining sector as a case study.
"We commissioned global research and studied the findings of groups like the Organisation for Economic Co-Operation and Development, to understand what's needed to attract foreign direct investment," said Vice-Minister Al-Mudaifer. "We learned that the basic requirements for successful attraction of FDI are things like political stability and clear fiscal policies. However, what elevates FDI attraction, are characteristics which demonstrate a holistic approach to investment. This includes institutional coordination, broad stakeholder engagement, coherent and consistent legislation to name a few."
Mr Al-Mudaifer noted that the government of Saudi Arabia, through Vision 2030 and its implementation, and through governance reforms that are well under way, has made more than 400 updates and improvements to the country's overall legal system since 2016. This includes the issuance of more than 60 new law systems and 77 new regulations designed to spur growth. As a result investments in the Kingdom have been increasing steadily, reaching the highest-ever level in the second quarter of 2021 with more than $13.8 billion invested.
"The dramatic changes to the overall legal and regulatory framework associated with FDI are paying major dividends in Saudi Arabia," added Vice-Minister. "We can see the results in mining, following the launch of the new Mining Investment Law, $4.7 billion worth of industrial investments were made in the first quarter of 2021, more than four times higher than the same quarter in 2020."
The Vice-Minister explained how the Mining Investment Law and Regulation, which came into effect only in January 2021 is built around the regulatory predictability and security of tenure that long-term investors require. Key principles of the mining sector's approach to its transformed legal and regulatory framework include:
Non-discrimination between local and foreign investors
Procedural fairness and predictability
Disclosure and clarity of investment policy actions
The featured session was moderated by John Quinn, Partner and Founder of global law firm Quinn Emanual Urquhart & Sullivan. Other esteemed panelists included Y.S. (Steve) Leigh, Visiting Professor of Law, Georgia State University (USA); and Shihana Al-Azzaz, General Counsel, Saudi Public Investment Fund. The Hon. Dan Tehan, Minister of Trade, Tourism and Investment from Australia provided recorded comments on the topic.
Following the panel, Mr. Quinn commented: "The Kingdom's Mining Investment Law is an excellent example of how positive changes to a country's rule of law can have a positive effect on foreign direct investment and create an overall ecosystem that attracts the right kind of investors by giving them confidence in the stability and efficiency of their country-partners."
Vice-Minister Al-Mudaifer closed his remarks by inviting all FII participants to the inaugural Future Minerals Summit (FMS), the first-ever event to offer a 'one-stop-shop' for investors, miners and other industry stakeholders interested in learning more about the mining potential of the Middle East, Central Asia, and North and East Africa. Planned for January 11 to 13, 2022, in Riyadh, FMS will welcome attendees from around the world, including governments, investors, and mining majors and corporates. For more information, visit www.futuremineralssumit.com.
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SOURCE The Ministry of Industry and Mineral Resources (MIM)