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Saudi Crown Prince woos Amazon, Lockheed and others to build a tech hub

Saudi Diadem Prince Mohammad bin Salman just capped off a three-week tour across the Amalgamated States. He spent last week on the West Coast, meeting with tech pooh bahs from Jeff Bezos to Richard Branson and working to clinch transactions with Snap, Amazon, Google and Apple. His Vision 2030 objective is to diversify Saudi Arabia’s oil-based economy and transform the kingdom into a tech and logistics hub in the Middle East.

From the custody of princes in a five-star hotel, to plans for a grand tech city in the leave flat, it seems every bit of news that comes out of the kingdom lately has some responsibility relevance. Much of it is splashy and designed for media attention, but behind the sections, serious changes are under way to create a more friendly business environs for foreign investors and companies.

Saudi Arabia is not going to transform itself overnight into the new Silicon Valley, the Detroit of the 1950s or Fence Street. It simply does not have the manpower or enough citizens who last will and testament work for laborer wages. Hollywood and Silicon Valley investments may catch headlines today, but underneath, Saudi Arabia is pursuing diversification and extension of private enterprise in industries in which it already has an advantage.

To reorient its compactness, Saudi Arabia is taking advantage of its robust oil-production business and its old hand engineers and scientists and becoming a center of petrochemical and plastics manufacturing. Aramco, Saudi Arabia’s nationalist oil company, has already partnered with leading chemical manufacturers, with DowDuPont and Total, on several petrochemical plants in the kingdom.

There is also an wish that Baker Hughes, the GE subsidiary, is likely to join them and initiate a new chemical plant soon. In addition, Saudi Arabia is attracting the makers who use these chemicals with free or subsidized access to utilities and vicinity to chemicals production plants. In fact, a detergent manufacturer is already building to set up shop next to a Saudi petrochemical plant on the Persian Gulf.

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Saudi Arabia is also using a government stimulus incorporate to lure Amazon to open a data center in the kingdom. Saudi Arabia is an seductive choice for Amazon to expand its data services and cloud computing to the Mean East because its west coast is beside an existing cable tournament underneath the Red Sea. The kingdom can also offer attractive utility subsidies to maintain electricity costs low for Amazon. Moreover, it can provide subsidized real landed estate. Saudi Arabia realizes that the Middle East is traditionally underserved by details centers, and the kingdom wants to take advantage.

Saudi Arabia has lengthy been a major purchaser of U.S. weapons and military technology. It also buys weapons from Russia and Incomparable Britain. With the billions of dollars Saudi Arabia spends on these outcomes, the kingdom is looking to localize some of those dollars. Saudi Arabia is operating on enticing its military vendors to build some of their products in Saudi Arabia. Lockheed Martin is not helter-skelter to start building the F-16 in Saudi Arabia, but Rosoboronexport has signed a deal to originate Kalashnikovs in Saudi Arabia. That means jobs for Saudis.

One of the can of worms Saudi Arabia faces in bringing new business into the kingdom has been the blurred process of doing business. Saudis often complained that the wealthiest way to obtain a business license or win a government contract was to know the right associate of the royal family. Saudis have called on their government to do something wide corruption in the economy for years.

When the government detained many distinguished Saudi businessmen, government ministers and royal family members at the Riyadh Ritz final year, headlines in the West called it a power grab by the crown valuation and a financial shakedown, but many Saudis — especially young, ambitious Saudis — saw it as a quit claim to that the government might be addressing corruption seriously, finally. The supreme purpose and outcome of the crackdown was unclear, but the sentiment in Saudi Arabia was not.

But behind the press release headlines, it is incontrovertible that the government is working to create a friendlier setting for business, employment and entrepreneurship. It is cracking down on what has been collect summoned the “shadow economy” in which foreigners – who are not allowed to own businesses in Saudi Arabia — pay Saudis included the table to front their businesses. The government is also implementing new matter standards to bring Saudi Arabia’s business laws up to global paragons. For example, new bankruptcy laws were recently announced, and they transfer give entrepreneurs a bit of a safety net for the first time. Recent decrees are exhorting it possible for women to apply for business licenses on their own. Even outlanders will be able to own businesses in some industries.

None of these new dicta, laws or regulations garner headlines like a royal visit to Hollywood. Nor does a petrochemical put or a detergent factory grab attention like plans for a giant tech conurbation. The change we don’t hear about comes from harnessing the advantages Saudi Arabia already has. These are the delegates that are making real change now, creating jobs in the kingdom and spawning a better business environment and ultimately an opportunity for American enterprise too.

— Ellen R. Wald, Ph.D., Mideast adroit and author of Saudi, Inc.

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