ARAB NATIONS
COUNTRY FOCUS – KINGDOM OF SAUDI ARABIA Bright prospects
is investing its huge oil wealth in economic diversification and education reform. Growth will pick up in 2010, credit
D
will become more readily available and the government budget will return to surplus. High government spending will be the main engine of growth, with the private sector making a greater contribution as credit conditions improve. Saudi Arabia is the world’s leading
petroleum exporter. Oil accounts for more than 90 per cent of exports and nearly 75 per cent of government revenues. Officially, Saudi Arabia has around 260 billion barrels of oil reserves, about 24 per cent of the world’s total. Saudi Arabia has announced its
2010 budget, the largest in its history, with expenditure of US$144 billion and revenue of $125 billion. According to the budget summary, 48 per cent of the Kingdom’s 2010 budget (about $69 billion) is allocated for capital investment projects and 25 per cent for education and training ($36.7 billion). Education allocations include construction of 1200 new schools and rehabilitation of 2000 existing school buildings. Healthcare and social services
comprise 11 per cent of spending ($16.3 billion) for building 92 new
Kaaba, Mecca, Saudi Arabia. Photo by: deendotsg
hospitals with a capacity of 17,150 beds and new primary care centres. Due to the prevalence of lifestyle diseases, such as obesity, diabetes and hypertension, the healthcare sector in the Kingdom is growing faster than in other countries in the Middle East.
Rising youth population Saudi Arabia possesses a young population, with close to 48 per cent of Saudi nationals under the age of 20. An estimated 500,000−600,000 new graduates will join the workforce over the next five years. Population estimates forecast that the current population of 27.5 million will reach 33 million by 2020.
FURTHER RAIL EXPANSION ON TRACK
The launch of a new $26 billion, high-speed railway linking the six states of the GCC is just one of several huge new rail projects planned for the Gulf region in the next 10 years. Projects include national and cross-border intercity lines, as well as urban lines within the Gulf’s major metropolitan areas. Altogether, they will cost close to $110 billion, and provide lucrative work for contractors, engineers and consultants in the region and neighbouring states, as well as for firms from Europe, the USA, Latin America and Asia. These projects will no doubt encourage more inter-regional trade.
The King is pushing to raise women’s
employment, as only 15 per cent of the labour force is female. More working women would give Saudi and international companies higher-skilled employees, since almost 60 per cent of Saudi university students are women.
Construction Current and planned projects in Saudi Arabia are valued at $387 billion, including six new economic cities. Recent reports have shown the
Kingdom needs to build around 1.5 million new homes by 2015. More than 60 per cent of Saudi households can’t afford to buy their own homes, but this should change shortly as the Kingdom is set to enact a new mortgage law, which has the potential to increase housing demand by as much as 50 per cent. The tourism sector is also receiving
attention. A major strategy has been to develop tourism assets to entice the millions of religious tourism visitors to stay longer in the Kingdom. A further diversification strategy is to develop the financial services sector
106 AUSTRALIA AND THE ARAB COUNTRIES | 2010
riven by the need to provide meaningful jobs for its burgeoning young population, Saudi Arabia
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