Saudi Arabia looked to loosen its famously strict economic regulations in order to allow for more foreign investment, Bloomberg reported Thursday. The oil-dependent nation has suffered as oil prices remained low throughout the start of 2016, aiming to diversify its economy, according to the Saudi Arabian General Investment Authority (SAGIA).
“SAGIA welcomes feedback from any investor on any regulation that will enable them to expand and grow their investment in Saudi Arabia,” Abdullatif Al-Othman, the Saudi Arabian General Investment Authority governor, told Bloomberg. “We would love anyone to say look, if you change this law or regulation, I am coming here with these investments. Any regulation.”
Exceptionally high production in Middle Eastern countries such as Saudi Arabia, coupled with the shale boon in the United States, has contributed to a large supply of oil, as the demand has been reduced in developing nations in particular. This supply-and-demand imbalance has caused the price of oil to plummet for nearly two years, with the price per barrel of crude oil falling to less than $30, hitting 12-year lows in early January.
Oil prices rallied slightly Wednesday, following news that Russia and the Organization of the Petroleum Exporting Countries (OPEC) – of which Saudi Arabia is a member – could cut production. Brent crude, the global benchmark, gained 4.1 percent or $1.30, rising to $33.10 per barrel, the Wall Street Journal reported Wednesday.
— Forbes (@Forbes) January 27, 2016
Saudi Arabia’s economy, as well as its national budget, has long been dependent on oil exports, with about 75 percent of its national budget coming from oil revenues, according to CNN Money. Industry experts have encouraged Saudi Arabia to diversify as the worldwide glut shows no signs of ending in the near future.
“After a surge in prosperity over the past decade fueled by rising oil prices, Saudi Arabia’s economy is at an inflection point,” read a report released in December 2015 by consulting group McKinsey. “We see a real opportunity for the country to inject new dynamism into its economy through a productivity- and investment-led transformation.”