Abstract

The Kingdom of Saudi Arabia is attractive power for direct foreign investment because of its available features and its great importance in international economy as one of the largest economies in the Middle East, especially to the Gulf Cooperation Council .Therefore , it characterizes with advantage of chief trading partner in the Middle East for most of the industrial economies of the countries of the Organization Economic Cooperation and Development as well as its huge reserves of crude oil, which estimated at a quarter of total global reserves. So Saudi Arabia has to follow policies that attract foreign investment, making it the first Arab countries in the investment flowing to it, in spite of the weakness of some policies that depend on them some countries, like absolute openness policy of. But , Saudi Arabia through structural correction policy which the foreign investor regards it as away to achieve a steady increase in flows our the period (1990-2010).
The study relies on economic theory involved the presence of a positive relationship between investment climate and economic variables using the method of econometrics. The study found that significant of the functional relationship is too high according to statistical and econometrical standards. But exports have weak effect, But the ratio of foreign investment / domestic investment and internal balance policies have large positive impact which means the Kingdom's ability to achieve economic stability that enhances the investment climate, and have negative impact to external balance policy, population and economic growth, and natural resources which doesn't consistent with the study hypothesis