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PRINCE ABDULLAH BIN FAISAL AFFIRMS IMPORTANCE OF FOREIGN INVESTMENT

10/4/00 2:46:34 PM
RIYADH, OCT 4, SPA -- PRINCE ABDULLAH BIN FAISAL BIN TURKI, PRESIDENT OF THE GENERAL INVESTMENT COMMISSION, STRESSED ON WEDNESDAY THAT THE FOREIGN INVESTMENT IS NOT NEW IN THE KINGDOM AND EMPHASIZED THE IMPORTANCE OF THE ISSUE OF MERGERS AND ACQUISITIONS AS QUICKER MECHANISMS TO IMPROVE ECONOMIC GROWTH AND PROVIDE MORE ACTIVITIES IN VARIOUS ECONOMIC DOMAINS.

SPEAKING AT A PRESS CONFERENCE ON THE OCCASION OF THE PRESENTATION OF THE WORLD INVESTMENT REPORT 2000:CROSS-BORDER MERGERS AND ACQUISITIONS AND DEVELOPMENT, WHICH WAS RELEASED TODAY SIMULTANEOUSLY IN LONDON, GENEVA, NEW YORK AND RIYADH, PRINCE ABDULLAH SAID: 'THE KINGDOM OF SAUDI ARABIA HAS HAD FOR A LONG TIME THE FOREIGN INVESTMENT. I THINK THE JOINT VENTURES WITH FOREIGN COMPANIES REACHED AN AMOUNT OF $ 50 BILLION IN THE PAST 20 YEARS.'

HE SAID THE KINGDOM OF SAUDI ARABIA IS ONE OF THE BEST PLACES FOR SUCH ACTIVITIES.

'ITS MARKET IS WELL KNOWN. THE INFRASTRUCTURES ARE VERY GOOD. IN ADDITION, SAUDI ARABIA HAS SUCCEEDED IN THE LAST THREE OR FOUR DECADES IN ALMOST EVERY SECTOR. THE SITUATION FACING BY THE COMMUNITY, ECONOMY AND MARKET ARE BEING HANDLED EXTREMELY WELL,' HE EXPLAINED.

PRINCE ABDULLAH NOTED THAT MERGERS AND ACQUISITIONS ARE EXTREMELY INTERESTING FOR THE SAUDI MARKET FOR THE FACT THAT THE GOVERNMENT HAS SPENT ALL ITS INCOME ON INTERNAL DEVELOPMENTS, ADDING THAT A LOT OF SAUDI BUSINESSES HAVE ACTUALLY DIVERSIFIED A LOT AND MANY OF THEM WILL BE HAPPY TO LET OTHERS COME AND TAKE MAJOR PARTS OF THEIR BUSINESSES, DIVISIONS AND BRING THEM AS STRATEGIC PARTNER.

THE PRINCE HINTED TO SOME ACQUISITIONS IN THE SAUDI MARKET, BUT REFUSED TO ANNOUNCE THE NAMES OF THE COMPANIES.

IN THIS REGARD, HE SAID: 'I WAS APPROACHED BY ONE FOREIGN AND SAUDI COMPANIES IN THE LAST FEW WEEKS WHO ARE NOW TALKING ABOUT ACQUISITION, I CANT NOT TELL YOU WHICH CAMPANILES AND WHICH SECTOR.'

HE STRESSED THAT THE KINGDOM OF SAUDI ARABIA IS VERY CAPABLE COMMERCIALLY, FINANCIALLY AND TECHNICALLY AS WELL AS ITS PRIVATE SECTOR IS WELL-EXPERIENCED. --MORE

Source: SPA

PRINCE ABDULLAH BIN FAISAL AFFIRMS IMPORTANCE OF FOREIGN INVESTMENT

10/4/00 3:01:34 PM
MEANWHILE, THE WORLD INVESTMENT REPORT SAID THAT FOREIGN INVESTMENT FLOWS ARE CONTINUING TO THE WEST ASIA WHICH TOTALED $9 BILLION LAST YEAR COMPARED TO $8 BILLION IN 1998. OUT OF THIS AMOUNT,$4.8 BILLION WERE INVESTED ALONE IN SAUDI ARABIA LAST YEAR COMPARED WITH $4.3 BILLION IN 1998.THE KEY SECTORS WHICH ATTRACTED INVESTMENT IN THE KINGDOM WERE TOURISM, ELECTRICITY AND ELECTRONICS.

IT ADDED THAT THE KINGDOM HAD NEGOTIATED WITH 12 INTERNATIONAL OIL COMPANIES TO DEVELOP THE INFRASTRUCTURE AND IMPLEMENT PROJECTS IN SPHERE OF GAS WHICH WERE WORTH OVER $100 BILLION FOR THE NEXT 20 YEARS.

REFERRING TO THE INTERNATIONAL ARENA, FOREIGN DIRECT INVESTMENT (FDI) INFLOWS BY TRANSNATIONAL CORPORATIONS (TNCS) MAY WELL SURPASS THE ONE-TRILLION-DOLLAR LEVEL THIS YEAR, FOLLOWING LAST YEAR'S ALREADY IMPRESSIVE $865 BILLION, ACCORDING TO THE REPORT.

'CROSS-BORDER MERGERS AND ACQUISITIONS, INCLUDING THE PURCHASE BY FOREIGN INVESTORS OF PRIVATIZED STATE-OWNED ENTERPRISES, ARE DRIVING THE FOREIGN INVESTMENT VOLUMES TO NEW RECORDS,' SAYS UNCTAD SECRETARY GENERAL RUBENS RICUPERO.

HE SAID 'INTERNATIONAL PRODUCTION BY TRANSNATIONAL CORPORATIONS -- NUMBERING SOME 63,000 TODAY, WITH APPROXIMATELY 700,000 FOREIGN AFFILIATES -- NOW SPANS VIRTUALLY ALL COUNTRIES AND ECONOMIC ACTIVITIES, RENDERING IT A FORMIDABLE FORCE IN TODAY'S ECONOMY.'

FOR HIS PART, KARL P.SAUVANT, CHIEF AUTHOR OF THE REPORT SAID' A GLOBAL MARKETPLACE FOR FIRMS IS EMERGING. COMPANIES ARE BEING BOUGHT AND SOLD ACROSS BORDERS ON AN UNPRECEDENTED SCALE.'

FDI FLOWS INTO DEVELOPED COUNTRIES LAST YEAR ROSE TO $636 BILLION (FROM $481 BILLION IN 1998), WHILE FDI TO DEVELOPING COUNTRIES CLIMBED TO $208 BILLION ($179 BILLION IN 1998).WORLDWIDE ANNUAL SALES OF THE FOREIGN AFFILIATES OF TNC'S IN 1999 REACHED $14 TRILLION (FROM $3 TRILLION IN 1980), ALMOST DOUBLE THE VOLUME OF GLOBAL EXPORTS.

IN 1998, THE REPORT POINTS OUT THAT GENERAL ELECTRIC AGAIN HELD THE TOP POSITION AMONG THE WORLD'S 100 LARGEST NON-FINANCIAL TRANSNATIONAL CORPORATIONS (TNCS) RANKED BY FOREIGN ASSETS.

THE MOST STRIKING FEATURE OF THE TOP 100 LIST IS HOW LITTLE IT APPEARS TO CHANGE FROM ONE YEAR TO THE NEXT. THE DOMINANCE OF THE WORLD'S BIGGEST FIRMS IS UNDERLINED BY THIS LEVEL OF STABILITY. ALMOST 90 OF THE TOP 100 ARE HEADQUARTERED IN THE TRIAD OF THE EUROPEAN UNION, JAPAN AND THE UNITED STATES. DURING THE PAST NINE YEARS, 57 OF THE TOP 100 TNCS HAVE CONTINUED TO APPEAR ON THE LIST.

THE LIST WAS DOMINATED IN 1998 BY THE SAME THREE INDUSTRIES AS IN PREVIOUS YEARS: MOTOR VEHICLES: PETROLEUM EXPLORATION AND DISTRIBUTION: AND ELECTRONICS AND ELECTRICAL EQUIPMENT. HOWEVER, UTILITY AND TELECOMMUNICATION COMPANIES ARE CATCHING UP.

FDI INFLOWS TO THE UNITED STATES SURGED BY $90 BILLION TO AN ASTOUNDING $276 BILLION LAST YEAR AS FOREIGN-BASED TNCS CONTINUE TO STRIVE TO ACCESS THE COUNTRY'S RAPIDLY GROWING MARKET AND TAKE ADVANTAGE OF COST-PRODUCTIVITY CONSIDERATIONS.

UNITED KINGDOM FIRMS WERE THE LARGEST SINGLE FOREIGN INVESTORS IN 1999, WITH AN FDI VOLUME OF $199 BILLION, TRAILED BY THE UNITED STATES, WITH $151 BILLION.-- MORE

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