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Yemeni Investments Untracked in Saudi Arabia

National Yemen

Yemeni Investments Un-tracked in Saudi Arabia

Yasser Hassan – Jeddah

Yemeni communities are among the greatest investors in the Kingdom of Saudi Arabia, despite the latest conditions of Saudi’s new investment law.

According to the law, foreigners who have entered Saudi Arabia as workers are not allowed to engage in investment activity. Many Yemeni workers who wish to invest in Saudi projects are instead forced to register their investments through Saudi brokers. Another significant group of Yemeni investors in the Kingdom solved the investment problem by securing Saudi citizenship for themselves, becoming dual nationals in the process. Yemeni investor Mohammed Al-Wosabi has said that formal Yemeni investment in the Kingdom constitutes a significant percentage of foreign investment in that country. This is especially true due to recent, extensive changes in the Saudi investment law such as those mentioned above.

Al- Wosabi said that the large portions of Yemeni investment in the Kingdom arrive in the form Yemeni capital. Both Yemenis and dual Yemeni-Saudi citizens together contribute to these investments. Roughly 80% of business, economics, and service workers in the Kingdom also make investments in Saudi projects.

Al-Wosabi considers this a significant contribution to the Saudi economy.  If those Yemenis invested in their own country instead of sending it to Yemen’s northern neighbor, there would not be a need for foreign assistance in Yemen. But the problem isn’t necessarily one of investment security: political stability in Yemen leads many investors to prefer to keep their money in Saudi, despite new legal pressures against investing in commercial and real estate work.

Yemenis and others only enjoy a narrow window of potential investment domains in the Kingdom. Per Saudi’s investment law, foreign investment is only allowed in industrial, construction, and some service sectors. In the recent past, all investment areas saw doors opening to foreign capital, but recent amendments to the investment law have halted and even reversed this trend.

Al-Wosabi displayed annoyance that some would-be investors have run into problems of arbitrary policymaking and harassment by Saudi citizens as a result of Saudi’s insular culture. Many Saudis see all visitors to the country either as “small workers” or as “big investors,” but even the latter group is viewed as carpet bagging foreigners designing to steal the country’s wealth. Saudis blame national unemployment on these “big investors,” even though these investors hire local labor in order to carry out their investment projects.

Yemeni investors have indicated that the main obstacles to investment are difficulties with the new investment law. For example, current foreign residents of the Kingdom who did not enter the country as investors have no means of changing their official “activity” to investment.

Manager of the Media Committee on the Yemeni Community in Hajja, Abdul Rahman Bashar, says that Yemeni expatriates occupy a special place in the Saudi Kingdom and deserve special attention.  Yemeni investors and Yemeni capital comprise a significant amount of the total trade, industry, investment and exchange that goes on within the country.

Bashar told Al Jazeera Net that Yemeni investment has made key contributions to the industrial and economic renaissance in Saudi as well as construction and reconstruction efforts in the Kingdom. This in part was due to the support given by the Saudi government in provision of investment space in industrial investment, medical and engineering services, construction, IT, and logistics support. The Saudi government has also provided substantial investment room for foreigners in the areas of government and private tender, as well as rights to sell their products in Saudi markets.

Bashar mentioned that the Kingdom attracts capital for a number of reasons, primarily being its stability and security. A strong body of laws and regulations which provide rights for both Saudi and non-Saudi investors also encourages greater investment in the country.

Presidential Manager of the Center for Studies and Economic Media Mustafa Nasr as not encountered any accurate, scientific information on the volume of Yemeni investments in Saudi Arabia, as most of these investments are issued under the names of Saudi middlemen instead of the Yemeni investors themselves. This in turn is a result of the difficulty Yemenis face in registering investments in their own names. A number of famous Yemeni investors avoided this problem by acquiring Saudi nationality, but their investments should not be counted as purely Yemeni.

According to Nasr, Yemenis have played an important role in the development of the Saudi economy since the 1970’s, when they worked in numerous economic sectors across the Kingdom. However, in recent years the Kingdom has begun to implement a set of “Al-Saudh” policies, which specify work in the gold, textiles, electronics, and other career sectors as “Saudi-only,” relisting affected stores under Saudi names.

Nasr further mentioned that large obstacles stand between Yemeni investors and Saudi investments, the most important being that there are no common agreements for employment and investment between Yemen and the Kingdom. Without these agreements, there are few advantages for Yemeni investors to send their capital to Saudi, although some Yemeni investors continue to devote portions of their economic activity to Saudi economic sectors.

Regarding the embassy and the Yemeni community in Saudi Arabia, Nasr does not see their role exceeding routine protocol work coordinating work delegations and signing transactions. The embassy has seemed to be absent on the issue of following up on investments and the interests of Yemeni workers in the Kingdom.

 

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