Riyadh (AFP)

Hanging from glass skyscrapers under a scorching sun, workers are putting the finishing touches to the long-awaited new financial district of Riyadh, with Saudi Arabia hoping to compete with Dubai and become a crossroads for foreign companies in the Gulf.

King Abdullah Financial District (KAFD), a multibillion-dollar project announced in 2006, is to be officially opened in the coming months, several sources told AFP after significant delays and additional costs.

Located in the heart of the capital, this district wants to capitalize on the ultimatum launched in February by the government to foreign companies: those who wish to obtain public contracts with the largest Arab economy will have to set up their regional headquarters there by 2024.

A challenge addressed to Dubai, a shiny neighboring emirate that has become in recent years the center for business in the region, at a time when Saudi Arabia, the leading oil exporter, is trying to attract foreign investment to diversify its economy, undermined by the health crisis and the drop in crude prices.

With its 1.6 million square meters of skyscrapers and greenery, with a mosque in the shape of a desert rose, KAFD is "a sleeping giant who is preparing to wake up", observes a consultant close to the project.

- "Twist the arm" -

Stamped as a special economic zone, the district allows companies an exemption from corporate taxes for 50 years, a "preferential" treatment for government contracts and a ten-year exemption from the public policy of "Saudiization" aimed at reserving jobs. to the Saudis, according to a document consulted by AFP.

The incentives, presented in confidence to several multinationals, are subject to change closer to the launch, according to consultants familiar with the discussions.

The Public Investment Fund (PIF), owner of the project, expects "strong demand", according to several sources.

KAFD management declined any request for comment.

Saudi Arabia is seeking to attract up to 500 multinationals to Riyadh, according to local media, when Dubai hosts around 140 seats, the record for the Middle East.

The Indian hotel group Oyo and the investment fund and incubator 500 Startups have told AFP that they will set up their regional headquarters at KAFD and some Saudi companies, such as the banking giant Samba, have already started operating there.

But the neighborhood has been planned "without considering its economic feasibility" and "achieving decent occupancy rates will be very difficult," according to a public document.

Some Western leaders privately criticize the Saudi ultimatum, seeing it as a way to "twist the arm" of business.

"But if the choice is + work or no work +, people will go," a Dubai-based financial executive told AFP.

- "The bids go up" -

With a population of 34 million, Saudi Arabia has the largest market in the region and offers lucrative contracts in various megaprojects worth hundreds of billions of dollars.

Many Dubai-based companies are already primarily working in the Saudi Arabian market.

For Sam Blatteis, co-founder of the Middle East High Tech Business Council, based in the emirate, the ultimatum "raises the stakes" for companies wishing to obtain contracts with the government.

But the question of whether those which directly target Saudi consumers will come to settle there remains open, explains to AFP this consultant for dozens of companies planning to expand in Saudi Arabia.

While the kingdom has slightly relaxed its ultraconservative rules, allowing cinemas, concerts and sports competitions, it remains far from the relatively liberal lifestyle that has made Dubai so popular with wealthy expatriates.

"When you ask European executives + When are you going to move your headquarters to Saudi Arabia? +, The answer is usually: + When are you going to allow alcohol? +", Tells AFP a diplomat based in the Gulf.

Saudi officials have publicly ruled out lifting the absolute alcohol ban and are playing down rumors of rivalry with Dubai.

"Dubai was built on our (Saudi) shortcomings," said King Salman, a consultant told AFP, adding that "the time when executives could work in Saudi Arabia for five days and return to Dubai for the weekend is over ".

© 2021 AFP