COMMERCE A/S PROMOTES "INVEST IN AMERICA"

UNCLAS JEDDAH 000199 SIPDIS DEPARTMENT, PLEASE PASS TO NEA/ARP E.O. 12958: N/A TAGS: BEXP BTIO CVIS ECON ETRD SA SUBJECT: COMMERCE A/S PROMOTES "INVEST IN AMERICA" INITIATIVE TO BUSINESS LEADERS REF: 07 JEDDAH 00508 ¶1. (U) During an April 12-14 visit, Assistant Secretary of Commerce David Bohigian met with officials and business leaders to promote the DoC's "Invest in America" initiative and to discuss ways to promote U.S.-Saudi investment and trade. Venues included the Jeddah Chamber of Commerce and Industry, the Islamic Development Bank, Saudi Arabian Airlines, local companies, and the homes of prominent business leaders. Audiences and press reacted positively while expressing typical concerns regarding visa procedures. WELCOME DINNER WITH JEDDAH EXECUTIVES AND OFFICIALS ¶2. (U) At an April 12 welcome dinner hosted by merchant family head Talal Zahid, the A/S met with approximately forty executives and local officials. His remarks concerning political, cultural, and economic ties between the two countries were well-received, although several guests expressed frustration at the length of time it generally takes to receive a visa appointment. One guest also said he was concerned about stories of mistreatment of Saudis at U.S. airports. (NOTE: Visa-related complaints are very common and are usually based on personal experiences. Concerns over treatment at U.S. airports are also prevalent, although they are usually based on second-hand accounts. END NOTE.) After dinner, Mr. Zahid led the remaining guests in a discussion on how to create a Silicon Valley in Jeddah, soliciting general agreement on the need for more universities and a better system of trade law. JEDDAH CHAMBER OF COMMERCE AND INDUSTRY ¶3. (U) At the Jeddah Chamber of Commerce and Industry (JCCI), A/S Bohigian met with Vice-Chairman Mazen Batterjee and several businessmen to discuss ways to increase U.S.-Saudi trade and investment. Mr. Batterjee agreed with the importance of improving economic ties and said that Saudi businessmen are eager for relationships with the U.S. to return to their previous strength. He also said that common Saudi concerns regarding doing business in the U.S. extend past visa issues to include the fear of asset seizures and litigation. KING ABDULLAH ECONOMIC CITY ¶4. (U) A/S Bohigian visited the headquarters of Emaar the Economic City (EEC),the consortium responsible for building the King Abdullah Economic City (KAEC),where executives briefed him on the project's goals and progress. 90 miles north of Jeddah, KAEC is the largest of seven "economic cities" sponsored by the King with the goal of modernizing and diversifying the Saudi economy (reftel). CEO Fahd Al-Rasheed and most of the other members of the executive team present were all relatively new to their positions. Mr. Al-Rasheed described recent progress both in construction and in commitments from manufacturing and technology companies to build facilities within the new city. He was interested in the Assistant Secretary's experience with technology incubators, envisioning a similar role for KAEC. He expressed a strong preference for dealing with American businesses, but also said that the long wait time for U.S. visas has made it harder to interact with these companies. SAUDI ARABIAN AIRLINES ¶5. (U) At the offices of Saudi Arabian Airlines (SAA), Director General Khalid Abdullah Almolhem discussed Saudi aviation's gradual liberalization, a process overseen by the General Authority of Civil Aviation (GACA). Mr. Almolhelm cited two new low-cost carriers, Sama and Nas Air, which now compete with SAA on domestic routes. He said that SAA was coping well with these changes, although he complained about stiff competition from the large number of state-owned airlines operating in the region. The Director General, whose background includes telecom privatization, also described the ongoing process of dividing SAA into strategic business units. One of GACA's most significant restructurings has been separating the airport division from SAA with the intent of gradual privatization. Mr. Almolhem told the Assistant Secretary that expansion plans for the King Abdulaziz International Airport in Jeddah are ambitious, and that he hopes American companies will bid on construction contracts. OTHER STOPS ¶6. (U) Additional stops included the offices of Raytheon, an American defense contractor with a significant Jeddah presence, and the Kanoo Group, a prominent merchant family company. Also included was a casual dinner, co-hosted by the Attar merchant family and the Polish Ambassador, where mixed company in Western dress discussed creating business opportunities for women and promoting entrepreneurship. The Assistant Secretary also visited the Islamic Development Bank (IDB),where bank president Ahmed Mohamed Ali presented an overview of the organization's programs. VISA ISSUES COMPETE WITH "INVEST IN AMERICA" MESSAGE IN PRESS COVERAGE ¶7. (U) Local press covered the Assistant Secretary's JCCI meeting and a press roundtable organized by the Consulate General. Coverage of the JCCI meeting highlighted efforts to improve foreign direct investment between the two countries and also noted that several attendees expressed frustration with the visa process. Most coverage drew information directly from an April 13 release from the Saudi Press Agency (SPA),which highlighted A/S Bohigian's remarks on removing obstacles to direct investment. Reports also repeated the SPA's incorrect account that the Assistant Secretary "revealed that the U.S. Department of Commerce will grant visas to commercial investors in the Kingdom of Saudi Arabia for 5 years." (NOTE: The Assistant Secretary neither commented on the future duration of visas nor implied that the DoC would have a role in granting them. END NOTE.) Coverage of the Consulate-organized press roundtable emphasized what A/S Bohigian referred to as "enormous investment opportunities" between the U.S. and Saudi Arabia, and noted the Assistant Secretary's statement that the U.S. welcomes foreign visitors. AGUILERA