The United States has eased foreign investment curbs to send the right signal of a welcoming market to the Middle Eastern investors who came out with no major investment deals in the United States in 2007, said David Bohigian, Assistant Secretary of Commerce for Market Access and Compliance during a roundtable discussion here on Sunday. Only one percent of the $160b Foreign Direct Investment (FDI) in the US came from the Middle East, he said. His statements came during his second trip to the Kingdom to strengthen US-Saudi business ties through “Invest in America” program to inject more liquidity into the US sluggish economy to contribute to its long-term growth. The slowdown of the Middle East investment in the US was reportedly due to the effect of tight scrutiny and protectionism associated with the aftermath of 9/11 and the US weakening economy, which might meet the technical definition of recession soon. Despite the US government's classic remedies to combat recession, it hasn't kicked in yet. The news Friday said the US economy shed 80,000 jobs in March, the worst loss in five years. With that in mind, the US is trying to attract more foreign investment funds in a last ditch to head off. Bohigian said that foreign companies headquartered overseas, primarily in Europe or Asia, employ more than five million US workers, he said. The US attracts foreign investments based on promising business opportunities with the best risk-adjusted return on investment rather than on political manipulations, he said. “One of the strengths of US economy is that it is separated from US politics,” he answered when asked if the US would use political force to strike business deals with foreign entities. The “Invest in America” program was created to demonstrate that the US workforce isn't the globalization's great loser in the aftermath of the fallout of Dubai Ports World's (DPW) bid to manage US ports in March 2006. The politically-charged collapse of DPW contributed to an investment climate that Middle Eastern investors continued to describe as hostile. Ever since, the Middle Eastern firms have largely stayed away from setting up operations in the US. But now time has changed for the path of cash. Bohigian is in town to assure Saudi investors that the US has now become a friendly place to do business. Since the DPW case, no other proposed transaction has ignited the same level of controversy in the US, rolling out the red carpet for Middle Eastern investments. Protectionism shouldn't discourage foreign firms to invest in America now as the government has launched a political campaign to support foreign investment, he added, citing President Bush last May as saying his administration “is committed to ensuring that the United States continues to be the most attractive place in the world to invest.” The US Congress has now become more understanding of the nature of foreign investments in the US, Bohigian said. The Committee on Foreign Investment in the United States (CFIUS) which reviews the national security implications of foreign acquisitions of US companies or operations has only looked into 5-10 percent of the foreign firms seeking riches in the US, he said. There were even mergers and aqcuisitions that the CFIUS didn't look into, he added. Saudi investment in America is vital, as the Kingdom is becoming one of the most competitive economies in the world by 2010, he said. Saudi money is expected to pick up again steam in the US after economic fears have haunted Saudi investors in the aftermath of 9/11 coupled with a sluggish US economy, he added. “The response was positive from the Saudi businesses,” he said commenting on his meeting with Saudi businessmen at the Jeddah Chamber of Commerce and Industry. They should invest with confidence in America backed by “strong rule of law,” he assured. “Once you own a business in America, you are treated like an American investor,” he said. With the US visa becoming more of a hassle for Saudi businesspeople to obtain, he said the wait-time will be shorter and the procedures will be faster with the completion of the new US consulate building in Jeddah within two years. He said that the US investment in the Kingdom increased from $3.2b in 2005 to $4.3b in 2006, stressing the importance of inflow of foreign investment to keep the economy going. US exports to Gulf Arab countries surged to an all-time high of nearly $29 billion in 2007, with a 30 percent increase to Saudi Arabia. He praised the student exchange program and King Abdullah Scholarship Program where students become able to come back home with business and culture ideas. – SG __
