IN CONVERSATION: MM Lee yesterday calling on Crown Prince Sultan bin Abdul Aziz Al-Saud (right), the First Deputy Prime Minister and Minister for Defence and Aviation. Mr Lee also met Foreign Minister Prince Saud al-Faisal yesterday. -- PHOTO: LIANHE ZAOBAO

This is the verdict of Mr Amr Al-Dabbagh, governor of the Saudi Arabian General Investment Authority (Sagia), the body tasked with wooing foreign investment to the country.

'What is lacking in Singapore companies is aggressiveness,' he said in a brief interview with the Singapore media here.

He noted that Sagia had set up an office in Singapore two years ago, its first overseas branch.

But while response has been positive, 'we're expecting much more'.

Singapore's Minister of State for Trade and Industry Lee Yi Shyan, however, told The Straits Times that Singapore companies are very open to the idea of going into Saudi Arabia. But not every business opportunity may prove feasible.

'I think that we have to give Singapore companies some credit,' he said.

'They are participating, they are going in, but they are selective about the opportunities viable.'

Mr Lee, who is currently in Saudi Arabia as part of a delegation led by Minister Mentor Lee Kuan Yew, said that as far as Saudi Arabia's economic cities are concerned, Singapore companies 'have probably not found the commercial basis on which to invest - and they have invested in other parts of the world'.

Sagia is charged with promoting the six economic cities being developed around the country. They are to lead the country's plan to achieving its '10x10' target - to be among the world's top 10 most competitive nations by 2010.

One cited challenge to Singapore companies entering the Saudi market is cultural hurdles, for instance, the restrictions on women staff. Another is that the Singapore companies are often too small to angle for the billion-dollar projects that are on offer.

Aircraft manufacturer Boeing has been operating in Saudi Arabia for 60 years. Mr Jim Albaugh, president of Boeing Integrated Defenses Systems, was asked what advice he would give Singapore companies.

He said: 'Government to government, and government to company relations are very important.'

Urging Singapore companies to move quickly, Mr Al-Dabbagh said Saudi Arabia is already ranked first in the Middle East in terms of in-flow of foreign direct investments, with funds flowing in from China, Japan and the rest of the world.

'It's very important for Singapore to take a strategic position,' he said, referring to the US$600 billion (S$864 billion) worth of infrastructure projects up for grabs.

The two countries already have strong trading ties.

Saudi Arabia is Singapore's 15th largest trading partner, and its largest trading partner in the Middle East.

Latest figures from the Trade and Industry Ministry showed that bilateral trade was S$12.8 billion for the period from January to November last year, although it consisted primarily of imports of crude petroleum and refined petroleum products from Saudi Arabia.

Saudi Arabia is also Singapore's largest foreign investor from the Middle East. As of end-2005, Saudi Arabia's investments in Singapore was valued at S$1.3 billion.

On his second day in Riyadh yesterday, MM Lee met the Crown Prince and Deputy Prime Minister Sultan bin Abdul Aziz Al-Saud.

He also met Foreign Minister Prince Saud al-Faisal, one of the world's longest serving foreign ministers, having been appointed to the position 33 years ago in 1975.

In the morning, he met board members of the National Competitiveness Centre, a think-tank set up by Sagia that looks at how Saudi Arabia can be more competitive.

He advised them that Saudi Arabia has to examine its areas of strengths, and to make changes according to its own pace. Education is also paramount, he added.

xueying@sph.com.sg