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SAUDI ARABIA

The process of political liberalization in the Kingdom is being accompanied by a programme of economic reform in order, in particular, to combat the high rate of unemployment (according to estimates between 10 and 16 %). The focus has been maintained on restructuring the economy in an extremely favourable context, essentially due to the high price of oil.

Population: 23 Millions
GDP : 580 (MDS $)
Economic Growth: 8 %
Inflation: 1.25 %
Imports: 75.5 (MDS $)
Balance of trade 22.76 (MDS $)

The key features remain:

Diversification of resources, “Saudi-izing” the workforce (pushing employment for its own citizens in both the public and private sectors), liberalization and integration into a globalized economy (with membership of the World Trade Organization in December 2005), attracting foreign investors (change in Governor of the Saudi Investment Authority in March 2004), development of tourism.

Privatisation has entered its implementation phase. The question of financing for infrastructure projects (development of electrical power supply, telecommunications, road and rail transport, urban development, desalinization, waste and waste water and treatment, environmental projects, mining operations) has not been resolved when the requirements are estimated to be $US 17 billion per annum for the next 20 to 30 years.

The massive budget surplus (over $US 26 billion for 2004) due to oil revenues and the particularly high market rates should contribute but remains cyclical. However, it has enabled the launching of the King Abdullah City project, a gigantic urban and technology centre which should materialize to the north of Jeddah ($US 26.6 billion in investment).

The industrialization of Saudi Arabia: Several ambitious industrial development programmes have been launched since the beginning of the 1970’s, in the petrochemical and light manufacturing industries in particular.

Financing of industrial projects: several funds for financing viable industrial projects have been created, in particular to develop the transformation of petrochemical products.

The 100 top industrial companies: the government has classed the 100 top-performing companies and put them forward for various large scale investment projects with Western partners.

Investment funds: Saudi Arabia has more than 180 international class investment funds, 80% of which are active in industry. The Saudi government is very conscious that the future of Saudi Arabia lies in developing exports other than hydrocarbons and wants to profit from the country’s financial affluence to invest massively in industrial opportunities that arise.

Stability: Since its creation, the Kingdom of Saudi Arabia has been governed by the iron hand in a velvet glove of the Al Saud family who have maintained the country’s stability and prosperity despite the various Islamic factions.

With a positive growth of 8% in 2011 and 8.5% forecast for 2012, despite the global economic situation, the country is discretely developing monumental projects, notably with the oil giant ARAMCO and the petrochemical company SABIC.

Infrastructure and building projects: The King’s decision to eradicate poverty in Saudi Arabia has enabled the launch of a number of important structural projects, notably a programme of 500.000 residential units and 50 hospitals per annum, 4 universities and a number of social welfare units providing job centres and vocational training.

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