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In The Name Of Allah, The Most Merciful, The Most Compassionate
Thanks to Allah, The Almighty, our beloved country is enjoying broad-based development and economic growth under the wise leadership of the Custodian of the Two Holy Mosques King Abdullah Bin Abdulaziz. Strategic projects throughout the Kingdom will, God willing, lead to further economic and social prosperity, and will also contribute to achieve balanced economic growth throughout the Kingdom.
The establishment and construction efforts during the last decades, with God’s help, have strengthened Arriyadh’s position as a highly attractive investment destination, offering unparalleled investment opportunities that profit from a wide range of public sector services and facilities, coupled with administrative support and regulatory facilities. These benefits are further enhanced by the free movement of capital, high economic growth rates, diversity of economic resources and the existence of a prudent short and long-term planning vision.
The city of Arriyadh welcomes all affirmative and purposive investment and routinely provides new investment opportunities particularly in high-tech industries, financial, health, educational and tourism services, along with the establishment of utilities and infrastructure …etc.
Arriyadh continues to offer investment support through its administrative, executive and planning bodies, including administrative and regulatory support, information transparency and studies, to be reflected on the City, its inhabitants and investors alike.
Salman Bin AbdulazizChairman, High Commission for the Development of Arriyadh
The economic indicators show that Arriyadh will witness growing investment opportunities during the coming decades, by God’s will and the persistent efforts exerted by the government of the Custodian of the Two Holly Mosques towards building the country’s economy throughout its various regions. The economic potential of Arriyadh City is evident in its human capabilities, highly qualified manpower, and financial capability, prosperity of the commercial and industrial sectors, investment portfolios, as well as the availability and diversity of natural resources. The High Commission for the Development of Arriyadh, led by its Chairman HRH Prince Salman Bin Abdulaziz, who closely follows the City’s future economic prosperity, has developed a strategic vision based on sufficient organizational frameworks and long term implementation of strategic plans, together with a keenness of considering economic factors and their employment in various urban, service and construction projects of Arriyadh City. This strategy is reflected in the City’s reality, through preparation of several investment opportunities based on exploiting new economic resources and development of existing ones, along with conducting in-depth researches and studies for new, promising economic sectors and developing pertinent regulatory benchmarks that facilitate launching investment projects in these domains. This can also be accomplished through providing support based on planning and participation, as well as provision of technical and incorporeal support, along with administrative facilities to any strategic economic project. These efforts have resulted in a number of investment portfolios in various areas, such as installation and operation of infrastructure, management of natural resources, conservation and protection of environment, development of service and tourism facilities, public transport, financial sector information technology and telecommunications. The efforts exerted at all levels and in all directions, to develop the City’s economy, aim at making Arriyadh a model City for investment, provided with potential successful and flourishing economy, an environment capable of attracting investment, enjoying all the features of a successful economy, capable to renew its investment atmosphere now and always God’s willing.
Abdullatif Bin Abdulmalik Alshaikh Member of the High Commission for the Development of Arriyadh President of Arriyadh Development Authority
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Contents
This Report 13
Kingdom of Saudi Arabia: General Information. 15
Arriyadh City: Ongoing Development & Promising Investment Opportunities 19
Theme One: Arriyadh City: General Features 20
Theme Two: Infrastructure in Arriyadh City 23
Roads & Communications 23
Airports 23
Ports & Railroads 24
Telecommunications & Information Technology 24
Post 24
Electricity 25
Water & Sanitary Waste 26
Theme Three: Economic & Service Sectors in Arriyadh City 27
Industrial Sector 27
Agricultural Sector 28
Trade Sector 29
Construction & Building Sector (Contracting) 29
Real Estate Sector 30
Insurance Services Sector 31
Education Sector 31
Tourism Sector 33
Health Sector 34
Financial & Banking Services Sector 35
Communications & Information Technology Sector 35
Theme Four : High Commision for the Development of Arriyadh & its Role in Developing the City 37
Introduction 37
Comprehensive Strategic Plan for Arriyadh City 37
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Theme Five: Arriyadh Chamber of Commerce & Industry & the Enhancement of Investment Climate
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Kingdom of Saudi Arabia & the Enhancement of Investment Climate 43
Theme One: The Kingdom’s Macro-Economic Indicators 44
State Budget 44
Gross Domestic Product (GDP) 44
Balance of Payments 46
Foreign Trade 46
Cost of Living Index 46
Wholesale Price Index 46
Per Capita Income 47
Labor Market Structure During 2005 47
Transportation & Telecommunications Infrastructure 47
Major Producing Sectors 48
Performance & Future Outlook of the Saudi Economy 49
Theme Two: Policies & Measures Supporting Investment in the Kingdom 52
Economic Activities Planned for Privatization 52
Economic Freedom & the Enhancement of Investment Climate 53
The Kingdom & World Trade Organization 55
Saudi Capital Market 57
Real Estate Investment and Companies 60
Development of the Banking System 61
Economic Cities 63
Theme Three: Rules & Related Investment Regulations in the Kingdom 66
Labor Law 66
Foreign Investment Law 66
Capital Market Law 67
Corporate Law 67
Commercial Register Law 69
Trade Agencies Law 69
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Trade Marks Law 69
Customs Law 70
Income Tax Law 71
Standards & Measures Law 71
Insurance Law 71
Social Insurance Law 72
General Environment Law 72
Theme Four: High & Related Major Investment Authorities in the Kingdom 73
Supreme Economic Council 73
Supreme Council for Petroleum and Minerals Affairs 74
Saudi Arabian General Investment Authority (SAGIA) 75
Supreme Commission for Tourism (SCT) 79
Capital Market Authority (CMA) 80
Communications and Information Technology Commission (CITC) 81
Royal Commission for Jubail and Yanbu 82
Saudi Organization for Industrial Estates & Technology Zones 83
Saudi ARAMCO 84
Saudi Basic Industries Corporation (SABIC) 85
Saudi Arabian Mining Company (MAA’DEN) 86
Saudi Ports Authority 87
Theme Five: Financial Services & Credit Funds in the Kingdom 88
Saudi Industrial Development Fund (SIDF) 88
Real Estate Development Fund (REDF) 90
Public Investment Fund (PIF) 90
Saudi Fund for Development (SFD) 90
Saudi Arabian Agriculture Bank (SAAB) 91
Saudi Credit Bank (SCB) 92
Human Resources Development Fund (HRDF) 93
Centennial Fund 94
Commercial Banks & Bank Financing 94
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Theme Six: Eighth Development Plan & Investment Outlook in the Kingdom 95
General Objectives & Strategic Basis of the Eighth Development Plan 95
Eighth Development Plan & Economic Policy 98
Eighth Development Plan & Private Sector Investments 98
Eighth Development Plan & Investment Requirements 99
Investment Opportunities in the City of Arriyadh 105
Theme One: Investment Opportunities Provided by Government & other Agencies 106
Arriyadh Development Authority 106
Public Pension Agency 110
Supreme Commission for Tourism 112
Saudi Electricity Company 112
Arriyadh Region Municipality 113
Arriyadh Chamber of Commerce & Industry 113
Theme Two: Investment Opportunities in Various Economic & Service Sectors 114
Industrial Investment Opportunities in Arriyadh City 114
Commercial Investment Opportunities in Arriyadh City 115
Real Estate Investment Opportunities in Arriyadh City 115
Educational Investment Opportunities in Arriyadh City 116
Health Investment Opportunities in Arriyadh City 118
Investment Opportunities in Personal Services 119
Statistical Tables 123
Addresses of Some Public & Private Authorities 132
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This Report
This edition of INVESTMENT CLIMATE IN ARRIYADH CITY, 2007, is published by Arriyadh Development Authority to provide local and foreign businessmen and investors with guidelines and information on policies and procedures, responsible agencies, and the range of investment opportunities that are available in Arriyadh City.
The 2007 edition comprises four parts. The first provides background information on the Kingdom of Saudi Arabia.
Part two presents background information on Arriyadh City, including infrastructure, economic and service sectors, and the role of Arriyadh Development Authority in the economic development of the City.
Part three discusses economic indicators for the Kingdom of Saudi Arabia, and policies and procedures at the national and local levels that enhance investment climate and promote investment opportunities, including the recent Labor, Foreign Investment and Capital Market rules and regulations. Further, this part covers government agencies in the investment domain, such as the Supreme Economic Council, Supreme Council for Petroleum & Minerals, Saudi Arabian General Investment Authority, Supreme Commission for Tourism, Communications & Information Technology Commission…etc., and also includes the agencies which provide funding and investment support, such as Saudi Industrial Development Fund, Real Estate Development Fund, Saudi Fund for Development, and other financing agencies. In addition, this part covers the investment outlook for the Kingdom, the Eighth Development Plan and the proposed investment opportunities covered by this plan.
Part four handles investment opportunities in Arriyadh which are provided by various public agencies such as Arriyadh Development Authority, Supreme Commission for Tourism and other agencies. Further, it includes information on investment opportunities in various economic and service sectors.
The INVESTMENT CLIMATE Report concludes with various statistical tables on Arriyadh, accompanied by a list of Websites and other useful information on the most important public and private sector organizations involved in investment activities in Arriyadh.
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The Kingdom of Saudi Arabia is an Arab Islamic country, applying Islamic Sharia law in its judicial system. The constitution of the Kingdom is based on the Holy Qura’n and the Sunna of the Prophet (peace be upon him).
The political system is based on absolute monarchy. The executive and legislative powers are exercised by the King and the Council of Ministers within the teachings of Islam. The Consultative Council was established to provide advice to the King and the Council of Ministers in matters of relevance to the Government and its policies. Regional Municipal Councils were also established (half of the members are elected) to participate in the decision making process.The King of the Kingdom and Prime Minister: The Custodian of the Two Holly Mosques, King Abdullah bin Abdulaziz Al-Saud.
Membership in International Economic & Trade Organizations The Kingdom of Saudi Arabia is a member in many trade, economic and international organizations, such as: 1. Organization of Islamic Conference 2. Arab League 3. Gulf Cooperation Council 4. Islamic Development Bank5. United Nations Organization6. World Trade Organization 7. Arab Monetary Fund8. Arab Investment Guarantee Corporation
9. Great Arab Free Trade Organization10. World Bank 11. International Monetary Fund
Administrative Regions (Provinces)The Kingdom consists of thirteen administrative provinces. Each province consists of a number of governorates. The total number of governorates in the Kingdom amounts to 43 of class A and 61 of class B. Capital: Arriyadh Main Cities: Makkah, Madinah, Jeddah, Dammam, and Taif Religion: Islam Official Language: Arabic
Geographic FeaturesLocation: The Kingdom of Saudi Arabia lies in the southernmost part of western Asia. It is bordered by the Red Sea from the West; Arabian Gulf, United Arab Emirates and Qatar from the East; Kuwait, Iraq and Jordan from the North and Yemen and Sultanate of Oman from the South.
Area: The Kingdom occupies about 80% of the Arabian Peninsula, with a total land area of around 2,250,000 square kilometers.
Terrain: There are various types of terrains in the Kingdom resulting from its vast geographical area. In the Western parts there is a narrow coastal plain paralleled by a mountainous chain sloping eastwards to the Arabian Gulf. There are also the Empty Quarter and Annufoud Deserts, which occupy the South Eastern and Northern parts of the Kingdom respectively.
Climate: The climate of the Kingdom varies from one region to another according to the type of terrain. In general, it is continental, i.e. hot during summer and cold during the winter, with a low level of rainfall. However, the climate is moderate in the Western and South Western highlands. In the central part of the Kingdom, the climate is dry and hot in summer and dry and cold in winter. The coastal areas are generally characterized by high degrees of humidity.
Population According to 2004 census(1)
Total Population 22.67 million
Population Growth Rate 2.9%
Distribution by Gender
Male 12.56 million 55%
Female 10.11 million 45%
Distribution by Nationality
Saudi 16.53 million 72.9%
Non Saudi 6.14 million 27.1%
Distribution by Age Groups
14 years or less 39.7%
15 – 64 years 57.9%
65 + 2.4 %
Population Density 10 / Km²
Distribution of Population by Provinces
Arriyadh 23%
Makkah 26%
Eastern Province 15%
Assir 8%
Madinah 6%
Others 22%
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Work Hours- Government Sector: 7:30 a.m. to 2:30 p.m. - Banking Sector: 9:30 a.m. to 4: 30 p.m. (Saturday to Wednesday)- Private Sector: Varies from one firm to another and from one place to another.
Official HolidaysBesides the weekends (Thursdays & Fridays), the following official holidays are customary:
- Eid-Al-Fitr Holdiays: From the 25th of Ramadan to the 5th of Shawal (*) - Eid-Al-Adha Holidays: From the 5th to the 15th of Dhil Hijja (*)
- National Day Holiday: Falls on 23rd of September.
Official TimeThe Kingdom’s official local time is three hours ahead of Greenwich Mean Time. (GMT)
CurrencyThe currency unit of the Kingdom is the Saudi
Riyal, which is divided into 100 Halalas. The main banknote denominations are: One riyal, Five Riyals, Ten Riyals, Twenty Riyals, Fifty Riyals, One Hundred Riyals, Two Hundred Riyals and Five Hundred Riyals. With respect to coins, the main denominations are: One Riyal - Fifty Halalas - Twenty Five Halalas - Ten Halalas - Five Hallalas.
- Custom duty on most imported items is 5%.
Foreign Exchange Control There is no restriction on currency transfer to or from the Kingdom. The exchange rate of the Saudi Riyal is SR 3.75 per one US Dollar.
Measures and Weights The Kingdom adopts the Metric System in Measures and Kilograms in Weights.
Power VoltageBoth 110 Volts and 220 Volts are used. International Telephone Code
+ 966 + Area Code (Riyadh 1, Jeddah 2, and Dammam, Dhahran and AlKhobar is 3).
Population According to 2004 census(1)
Total Population 22.67 million
Population Growth Rate 2.9%
Distribution by Gender
Male 12.56 million 55%
Female 10.11 million 45%
Distribution by Nationality
Saudi 16.53 million 72.9%
Non Saudi 6.14 million 27.1%
Distribution by Age Groups
14 years or less 39.7%
15 – 64 years 57.9%
65 + 2.4 %
Population Density 10 / Km²
Distribution of Population by Provinces
Arriyadh 23%
Makkah 26%
Eastern Province 15%
Assir 8%
Madinah 6%
Others 22%
(*) Duration of holidays in the private sector varies from one firm to another.(1) Council of Chambers of Commerce & Industry, 4th Issue, July 2005
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History of Arriyadh (1)
Arriyadh is the plural of the Arabic word
“Rawdah”, which means “Garden” or
“Meadow”. The city might have taken
this name due to the fact that it was one
of the few green areas amid the desert.
Historians indicated that it was a vast area
with numerous farms and water springs. The
City has risen on the ruins of (Hajar) ancient
city which was on top of limited altitude
highlands in the middle of a small basin on
both sides of Wadi Watr (Bathaa), a tributary
of Wadi Hanifa. The name “Arriyadh” became
known about 300 years ago.
Economically, trade and animal grazing
acquired special importance in Najd
Highlands, in the centre of which Arriyadh
is located. The City used to be a commercial
center linking East-West and South-North
areas of the Arabian Peninsula. Politically,
Arriyadh played a prominent role in the
history of Najd. It was the capital of the area
during the era of Imam Turki Bin Abdullah,
upon the rise of the second Saudi State in
1824. Arriyadh regained its glory when it
was restored by the late King Abdulaziz on
January 15, 1902.
Location
Arriyadh occupies a location derived from
the Kingdom’s geographical location amid
Theme One:
Arriyadh City: General Features
the world’s continents. This location acquires
another dimension as it lies in the center
of the Kingdom, at the Eastern part of the
heart of the Arabian Peninsula. It lies within
Latitude 38.24°ْ North and Longitude 43.46°
East and is about 600m above sea level.
Area
Within a period of half a century, Arriyadh
City was transformed from a small village
surrounded by walls into a modern city.
The developed area of Arriyadh City is
about 1,000 square kilometers. The City
includes 13 municipalities in addition to
Dereya District as well as 209 quarters(2).
This reflects the tangible expansion the
City witnessed after exceeding its walls and
fences to become one of the largest three
metropolitans in the Kingdom, together
with Makkah and Jeddah metropolitans and
those of Dhahran, Dammam and AlKhobar
in the Eastern Region.
Climate
Arriyadh climate is marked by very hot
temperatures in summer and cold temperatures
in winter, with low humidity throughout the
year, particularly in the summer season; the
temperature varies greatly between night
and day. In summer the highest average
temperature ranges between 40 ْc - 43ْc. The
rate of humidity ranges between 10% to 13%. In
winter, the weather is very cold with the highest
temperature ranging between 20 ْc & 28 ْc and
the lowest temperature between 8 ْc and 14 ْc.
Sometimes, the temperature may decline to
minus two degrees, while the humidity ranges
between 40% & 49%. Rainfall ranges between
10 cm to 13.1 cm (around four inches) (3).
(1) Arriyadh City website www.arriyadh.com(2) Arriyadh Development Authority, Investment Climate, 2005(3) CDSI, Central Department. of Statistics & Information, Statistical Yearbook, Issue 41, 2005
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Composition of Population (1)
Arriyadh is one of the world’s fastest
growing cities, including population
growth, which witnessed consecutive
jumps over the last ten years, at a rate of
4.2% during the period 1990 to 2004.
According to population projections
for 2006, carried out by Arriyadh
Development Authority, the population
of Arriyadh stands at about 4.5 million
(including Dereya, Erqa, Oyaynah,
Jibailyah and Hair Governorates).
The Saudi population makes up 66%,
while non Saudis represent 34% of total
population. Male and female population
represents 53% and 47% respectively of
the total number of Saudi population.
Non-Saudi male and female population
makes up 62% and 38% respectively
of the total number of non-Saudi
population. The median age is 18 years
for Saudis and 30 years for non-Saudis.
The percent of married population is 73%
of total population aged 22 years and
above. Arriyadh population is expected
to reach 7.2 million in 2024.
Population Pyramid
Young people dominate Arriyadh
population. Population under age 15
constitutes about 40% for Saudis and
23% for non-Saudis, while the age of
population over 60 years does not exceed
20%. It is noteworthy to know that the
Saudi population represents 63.32% of
total population in the ages ranging
between 15 to 60 years while non-Saudis
in the same age group represent 75% (2).
Gender
Saudi residents of Arriyadh are characterized by high
fertility rates and almost equal number of males
and females. Males represent 53% compared to 47%
for females. Age distribution is almost consistent
between males and females with more consistency
within younger population and less consistency within
older population. As for non-Saudis, the percentage
of males is higher as it accounts for 62% compared
75+
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
05 - 09
00 - 04
30
00
00
20
00
00
100
00
0
0 100
00
0
20
00
00
30
00
00
male
Female
Saudi Population Pyramid (3)
150
00
0
100
00
0
50
00
0
0 50
00
0
100
00
0
150
00
0
male
Female
Non- Saudi Population Pyramid (4)
(1) ADA, Arriyadh Development Authority- Population Estimates Study for Arriyadh City, for Period 2004 to 2024 (2) ADA, Arriyadh Development Authority- Population Study for Arriyadh City, 2004 (3- 4) ADA, Arriyadh Development Authority Investment Climate for Arriyadh City, 2005
75+
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
10 - 14
05 - 09
00 - 04
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with 38% for females (1). The distribution
and classification of Non-Saudis with
respect of age and gender is explained by
the nature of expatriates arriving to work.
Households
Arriyadh witnessed a tangible increase
in the number of Households. There are
two types of households: nuclear family
consists of couples and their children,
and extended family consists of couples
and relatives. The previous era, since
1986, reflected a change in the pattern of
Saudi households, when the single family
became dominant, representing 75%
in 2004, compared to 67% in 1996. The
percentage of extended family reached
21% in 2004.
The average household size in Arriyadh is
7.1 for Saudis and 4.9 for non-Saudis. The
average number of household members to
total population (Saudis and non-Saudis) is
6.3 persons (2). The number of households
in Arriyadh is estimated to reach 940,000
up to 2007 (3).
Labor Force
Population studies, conducted by
Arriyadh Development Authority in
2004(4) regarding labor force in Arriyadh
City, show the following indicators:
Total Work Force
The total number of workers at the age
of 16 and above is about 1.4 million of
whom 607,847 are Saudis, representing
32% of the labor force, compared with
816,859 of non-Saudis representing
73%. The government sector employs
32% of workers while the private sector
employs 68%. The percentage of Saudi
workers in the government sector is 93%
compared to 25% in the private sector. The
unemployment rate among Saudi males is
10%. The services sector absorbs 44% of
total workers in the private sector, followed
by construction sector (24%), trade sector
(22%) and the industrial sector 10% (5). The
number of jobs that need be provided up
to 2024 is 760,000, by an annual rate of
42,300 jobs (6)
Per Capita Income
The findings of the population study
conducted by Arriyadh Development
Authority for 2004(7) indicate that the
income of Saudis in Arriyadh City increased
by 35% whereas per capita income from
all sources reached SR 100,000 per year
compared to SR 74,000 in 1996. The non-
Saudis income grew by 122% to reach
an average of SR 24,000 compared to SR
12,000 in 1996 (8).
Cost of Living
The general index of the cost of living
standard for all population of the Kingdom’s
cities including Arriyadh City increased by 1.1
points according to 2004 / 2005 census, to
reach 100 points compared to 98.9 points in
the previous year (9). This increase in the general
index of the cost of living is attributed to the
changes in the main expenditure groups,
(some increased and some decreased) such
as increase in foods groups (3.5%), increase in
groups of other goods services (2%), while it
decreased in the remaining groups between
-0.1% to -2.3% (10).
(1) CDSI, Central Department. of Statistics & Information, Statistical Yearbook, Issue 40, 2004(2) ADA, Arriyadh Development Authority, Population Study for Arriyadh City, 2004 (3) Arriyadh City Website: www.arriyadh.com(4) ADA, Arriyadh Development Authority Population Study for Arriyadh City, 2004 (5) Arriyadh City Website: www.arriyadh.com (6) Ibid
(7) ADA, Arriyadh Development Authority Population Study for Arriyadh City, 2004. (8) Ibid(9) CDSI, Central Department. of Statistics & Information, Statistical Yearbook, Issue 41, 2005 (10) Ibid
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Roads and Communications
Arriyadh Development Authority has developed a
strategy for the development of the transport system
within the framework of the comprehensive strategic
plan in the City. This strategy encompassed several
elements, including development of the road network
through upgrading existing elements and addition of
new ones, along with determination of development
priorities to meet the existing and expected transport
requirements. The total length of main roads reached
320 km, 500 km for main arteries, the number of
main crossings reached 44, while the number of
independent crossings reached 54. Many elements of
the road network were implemented during the first
five years of the five-year plan to implement roads at a
total cost of SR 2.6 billion, which ends by 2006. Work
has started on the second five-year plan. It will include
the implementation and improvement of 28 main
roads during the period 2007 – 2012 (1).
Arriyadh’s various parts are connected by a modern
roads network that includes loop roads, ring roads, and
expressways, in addition to arterial roads. Both “King
Fahad” and Makkah” Expressways represent the two main
hubs of Arriyadh City. The first connects North and South
of the City while the second connects the East and West
parts. A circular expressway around the city connects the
outskirts of the city with the main roads. Arriyadh is linked
with the various parts of the Kingdom through a network
of expressways, such as (Arriyadh- Dammam) leading
to the Kingdom of Bahrain via King Fahad Causeway,
Arriyadh – Alhassa Expressway, leading to Qatar, UAE
and Oman, Arriyadh – Taif – Jeddah, Arriyadh – Qassim,
Arriyadh – Hafr Al-Batin – Qurryat, links with International
roads leading to Jordan and Arriyadh – Wadi Dawasir
– Najran extending to Abha, Jizan and on to Yemen.
Airports
Arriyadh City has one international airport (King Khalid
International Airport) linking it with the outside world
and with other airports throughout the Kingdom. The
airport is 35 km North of Arriyadh City and comprises one
Royal Terminal, three Commercial Terminals and a fourth
Auxiliary Terminal. The total number of departure and
arriving flights reached 70,970 flights in 2004 / 2005,
an increase of 5.8% which represents 28.5% of total
commercial flights Kingdom wide (2).
Main Indicators of Air Transport at King Khalid International Airport 2004 - 2005 (3)
Total number of passengers (Arrivals) International flights 5,308,000
Total number of passengers (Departures) International flights 5,225,000
Total number of passengers (Arrivals) domestic flights 4,276,000
Total number of passengers (departures) domestic flights 4,287,000
Cargo traffic (Arrivals) on International flights (tons) 117,910
Cargo traffic (Departures) on International flights (tons) 73,194
Cargo traffic (Arrivals) on domestic flights (tons) 92,017
Cargo traffic (Departures) on domestic flights (tons) 68,080
Mail traffic (Arrivals) on International flights (tons) 1,939
Mail traffic (Departures) on International flights (tons) 7,696
Theme Two:
Infrastructure in Arriyadh City
(1) ADA, Arriyadh Development Authority, Transport Unit (2) CDSI, Central Department. of Statistics, Statistical Yearbook, Issue 41, 2005(3) Ibid
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The private sector participates in many services related
to airport services. A private domestic airline (Al-Khyalah)
was established in 2005. In addition, two other domestic
airlines (NAS Airlines and SAMA Airlines) were established.
The private sector also contributes in maintenance of
facilities, making use of airport buildings and arrival of
passengers in providing several services such as banking
services, sale of goods, auto rental, hotels, etc.
Ports and Railroads
Arriyadh City is linked with the Eastern Province (Dammam
and Al-Hassa) via a 556 km long railroad and a new one
with a length of 449 km. The Saudi Government Railroad
Organization (SGRRO) provides passenger and goods
transport services to Arriyadh Dry Port to become a
practical extension to Dammam Port. Customs clearance
and storage processes are carried out in this Dry Port.
This railroad is served by 57 locomotives and 2,225
different cars for passengers and goods. Arriyadh City
has a passenger station, which has arrival and departure
terminals, where various services are provided. The
number of passengers arriving and departing from and to
Arriyadh Station in 2004 reached 435,000, representing
39.3% of total arriving and departing passengers in
all Kingdom’s stations, where their number exceeded
1.1 million. The volume of goods handled among all
stations including Arriyadh Dry Port reached more than
2.5 million tons (1). According to SGRRO’s strategic plans,
new lines are expected to operate between Arriyadh and
Jeddah, and Riyadh / Jeddah and Makkah. The private
sector will contribute to implementation of these new
projects.
Communications and Information Technology
Arriyadh City hosts the headquarters of Arab Satellite
Institution (Arabsat). Various telecommunications
services are provided through land lines, mobile
telephones, and data transmission services, etc., in
Arriyadh City by Saudi Telecom Company (STC) and
Etihad Itisalat (Mobily) Company (a Saudi – UAE Joint
Stock Company).
The number of operating land lines in Arriyadh City
reached 1.1 million in 2005, while the number of
roaming and mobile telephone lines reached. 1.1
million. Since 2002, the number of mobile telephones
increased significantly, particularly with the launching of
prepaid mobile cards (Sawa) by the STC, which started
in the first quarter of 2002. Besides, a reduction on
the establishment fees for AlJawal gradually, as well as
reduction of call rates per minute to 35 Halalas in case of
the monthly subscription fee of SR 45 and to 45 Halalas
in case of a monthly subscription fee of SR 35 (2).
Other services are also provided such as Friends &
Relatives Service, Qitaf Service and the services provided
by Etihad Itisalat (Mobily), which was awarded the
implementation and service contract in the last quarter
of 2004, such as free establishment service, additional
minutes and the various reductions on prepaid Mobily
cards.
Arriyadh Development Authority approved on November
28, 2005 (3), the establishment of a Communications
and Information Technology City on an area of 800,000
m2 on land owned by the Public Pensions Agency.
Post
The Saudi Post Corporation (SPC) provides all types of
postal services in Arriyadh City, such as Parcels Post,
Express Mail Service (EMS), Commercial Mail, Promotional
Mail, and Postal Agencies. SPC also supervises mail services
provided to customers. The private sector contributes in
providing these services through investments in Postal
Agencies, which provide mail services to citizens. The
number of Post Offices in Arriyadh, according to 2004
statistics, reached 93 Main Offices and 16 Branch Offices
while the number of Postal Agencies reached 36 as well
as 33 private sector Postal Agencies and 955 surface and
roaming mail points.
The number of Street Mail Boxes reached 561 and the
(1) SGRRO, Saudi Government Rail Road Organization, Annual Report, 2004 (2) STC, Saudi Telecom Company, Annual Report, 2004(3) Pension Magazine, Issue 15, 2006
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number of subscribers post office boxes reached more
than 130,000 in addition to 59,500(1) Postal Agencies
boxes. Since early 2006, SPC started offering home mail
delivery services through subscription to this service.
The mail box is placed in a location determined by the
subscriber. Furthermore, mail services are provided by
private companies such as DHL, ARAMEX, FEDEX, and UPS
and others, which render Express Mail Service in Arriyadh
City domestically and internationally.
Electricity
Six electricity generation plants are operating in Arriyadh
from among nine plants affiliated to Saudi Electricity
Company in the Central Region which supervises
the provision of electricity services in the City. These
services are provided to customers per tariffs based on
consumption segments system.
The total number of subscribers in Arriyadh City in 2004,
reached about 1.5 million, or 32% of the total number
of subscribers in the Kingdom (2). Following are the most
important projects implemented by the Central Region
Electricity Company during the said year:
• Transmission projects at the cost of about SR 2,542
million
• Distribution projects at the cost of about SR 486
million
• Generation and support projects at the cost of more
than SR 355 million (3)
Electricity Consumption Tariff (Halalas) (4)
Monthly Consumption
Brackets (KW/HR)Residential Commercial Government
Industrial Agricultural
Hospitals, Clinics, Private Institutes
and Schools
Mosques and Benevolent
Societies
0-1000 5 5 5 12 5
1001-2000 5 5 5 12 5
2001-3000 10 10 10 12 10
3001-4000 10 10 10 12 10
4001-5000 12 12 12 12 10
5001-6000 12 12 12 12 10
6001-7000 15 15 15 12 12
7001-8000 20 20 20 12 12
8001-9000 22 22 22 12 12
9001-10000 24 24 24 12 12
Over 10000 26 26 26 12 12
Electricity Service Connecting Fees (5)
Circuit Breaker (Ampere) Monthly Tariff (SR) Service Connecting Fees (SR)
60 10 1,380
100 15 2,800
200 21 11,400
300 22 18,800
400 25 26,600
Over 400 30 26,600+25 for any extra kv ampere
(1) SPC, Saudi Post Corporation, As Stated in the Statistical Yearbook, Issue 41, 2005(2) SEC, Saudi Electricity Company Annual Report, 2004 (3) Ibid(4) SEC, Saudi Electricity Company Website: www.se.com.sa (5) Ibid.
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Number of Subscribers & Electricity Consumption Method in Central Region 2003 - 2004(1)
Description 2003Thousand
2004Thousand
(%)Growth
Rate
No of Customers 1,372 1,439 4.9
Generated Energy (MW/HR) 30,692 32,191 4.9
Imported Power (MW/HR) 12,975 12,271 -5.4
Available Power (MW/HR) 43,129 44,763 3.8
Sold Power (MW/HR) 39,789 41,326 3.9
Average Sold Power sold to customers this year (MW/HR) 28,99 28,71 -1
Peak Synchronized Load at 15:00 hours on (6/9/1998) (MW/HR) with Al Hawyah Plant 6,057 - -
Water & Sanitary Waste
The General Water Directorate in Arriyadh Province
supervises provision of potable water and sanitary
waste water services in the province. It exerts on-
going efforts to meet the growing needs for these
services in the various development sectors. Drinking
water is delivered to the city from two main sources.
The first is from desalinated seawater through
special transmission pipes from desalination plants
in Jubail on the Arabian Gulf, which represents 60%
of water feeding the city. The second source is from
local artesian wells making up 40% of the total water
supply. The cumulative number of government wells
for different purposes up to 2004 reached 2,479
wells in addition to 49,565 licensed private wells.
The volume of water consumed in Arriyadh city in
2004 reached 1.7 billion m3 and the total number
of subscribers reached 313,390 (2) during the same
year. The General Water Directorate adopts a
program for operation and maintenance of sanitary
water network in Arriyadh. This program covers
various issues such as collection, treatment and
purification of sanitary waste water to contribute in
the protection of the environment and public health
against pollution hazards and making use of treated
waste water for agricultural and industrial purposes.
There are three treatment plants in Arriyadh with
a capacity of 403,000 m3/day. The total length of
sanitary waste network in Arriyadh reached more
than 2,500 km in 2004, with diameters ranging
between 200 mm to 2,900 mm connected to more
than 161,000 residential sanitary connections (3).
Water is provided to subscribers against a tariff
based on consumption segments.
Water Consumption Tariff in the Kingdom (4)
Monthly Consumption (CM ) Tariff (SR /CM)
1-50 0.1
51-100 0.15
101-200 2
201-300 4
Over 301 6
(1) Saudi Electricity Company Website: www.se.com.sa (2) General Water Directorate in Arriyadh Region: Informative Bulletin(3) Ibid(4) Ministry of Water & Electricity, The Ministry's Web Site for Arriyadh www.riyadhwater.org
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in the Southern outskirts of Arriyadh City. It is
composed of four phases. The first phase has an
area of 5.08 million m2. The second phase has
an area of 6.92 million m2. The first part of the
third phase has an area of 1.3 million m2 and
the second part (under development) has an
area of 2.5 million m2. The fourth phase (under
development) has an area of 891,000 m2, in
addition to an area of 2.1 million m2 allocated
for housing. There are 588 producing factories (2)
in the Second Industrial City. Factories operating
in Arriyadh in 2005 constitute more than 35% of
total factories in the Kingdom, totaling 1,229, with
total gross funding valued at SR 37,097 million,
employing 123,190 workers. These factories are
engaged in producing various products, such as:
344 metal products, 258 chemicals and plastics,
163 building materials, ceramics, chinaware and
glass, 116 foodstuff and soft drinks, 85 textile
and ready made clothes, 85 paper, printing of
publishing activities, 82 timber and related
products, 65 basic metals industry and 31 various
other industries (3).
Arriyadh City also houses Yamama Cement Factory
with an estimated production capacity of 3.6
million tons in 2005, an increase of 52.3 thousand
tons over the previous year. The production of
this factory accounts for 13.7% of total cement
production in the Kingdom (4).
The Saudi Industrial Development Fund (SIDF)
finances industrial projects through provision of
loans to various projects. The total number of
projects financed by SIDF up to 2004 reached 663
projects with a total value of about SR 11.4 billion,
representing 34.9% of the total 1,899 industrial
projects financed by the SIDF Kingdom wide. The
number of new industrial projects financed by
the SIDF, classified by main industrial sectors in
Arriyadh City during the same year, reached 16
Industrial Sector
Arriyadh City witnesses growing growth rates
higher than rates reached in other cities
considering that it is the Political, Commercial &
Financial Capital of the country. Several factors
stand behind the rising economic capabilities of
Arriyadh City, such as higher population growth,
increasing job opportunities that sustain the
growth of demand on goods and services, as
well as its unique location amid a large regional
market represented in the GCC States and other
neighboring countries. Arriyadh has also become
a financial center hosting the headquarters of
commercial banks operating in the country, the
Saudi Arabian Monetary Agency (SAMA), the
Capital Market Authority (CMA) in addition to
other government credit and financial institutions.
These factors play a significant role regarding
the progress achieved in the City during the last
three decades in the various economic sectors,
as industry and others. The private sector is
assumed to have a major and effective role in
the development of the industrial sector and the
growing number of producing factories.
Arriyadh City houses two Industrial Cities equipped
with various services and facilities. Both Cities
are supervised by the Ministry of Commerce and
Industry (1). The total area of the first Industrial City,
which lies in the center of Arriyadh City, is 451,000
m2 and includes 51 producing factories. The second
Industrial City, with an area of 18.8 million m2, lies
Theme Three:
Economic & Service Sectors
in Arriyadh City
(1) 258,000 Km² was allocated in Arriyadh Region for Sudair Industrial City, which is still in the design & study phase(2) Ministry of Economy & Planning, Statistical Yearbook, Issue 41, 2005 (3) Ministry of Commerce & Industry, Data Center Report, 2006(4) Figures from Statistical Yearbook, Issue 41, of Central Department of Statistics and Information, 2005
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Animal Resources in Arriyadh Region 2004 (3) (Thousand heads)
Description Kingdom Arriyadh (%)
Camel 283 99 34.98
Sheep 8,047 1,846 22.94
Goat 2,372 400 16.86
Cattle 346 164 47.40
Poultry 474,777 65,556 13.81
Total 485,825 68.065 14.01
Agricultural Subsidies Allocated for Agricultural ProjectsIn Arriyadh 2004 (SR Thousand) (4)
Field Arriyadh Kingdom (%)
Engines and Pumps 51,418 145,611 35.3
Machinery 27,820 97,467 28.5
Poultry Breeding Equipment 1,1283 1,966 65.3
Transport of Imported Cattle 1,189 1,189 100
Total 81,710 246,233 33.2
projects distributed between consumer, chemical
and engineering products, with a total finance
value of SR 842 million, constituting 37.2% of
the total industrial projects financed, 43 projects
and 25.6% of the value of total approved loans
Kingdom wide (1).
Agricultural Sector
The Agricultural sector in Arriyadh Province is
one of the major important sectors, constituting
35% of the Kingdom’s agricultural production.
Arriyadh occupies a central location between
the main agricultural areas in the Kingdom. This
makes the City a central market and a regional
center for distribution of agricultural products,
particularly as it is near Al-Kharj Governorate,
which is considered one of the largest agricultural
regions in the Kingdom. 2004 statistics indicate
that the total arable land in Arriyadh Province
is 314,000 hectares of which 129,900 hectares
are planted with all types of grain with total
production of 624,000 tons. 56,600 hectares
are planted with vegetables, (both opened and
covered), with a production volume of 1,235,900
tons. The land area for fodder production is
84,700 hectares, with a production volume of 1.3
million tons. The land area for fruit production is
43,000 hectares with a total production volume
of 266,000 tons (2).
Animal resources and its related products
(1) Saudi Industrial Development Fund Annual Report, 2004, as Reported in Arriyadh Economy, 14th Issue, 2005 (2) Ministry of Agriculture, Agricultural Statistics, 2004(3) Ibid (4) Saudi Arabian Agriculture Bank, Annual Report, 2004
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represent a significant part of the agricultural
sector in Arriyadh region. Animal resources include
cattle, goats, sheep, camel, poultry and related
products including milk, eggs, honey etc.
Arriyadh City is considered one of the largest
producing regions of the Kingdom for milk and
its derivatives. It houses 21 projects with a total
production of 645.4 million liters per year, or 74% of
the Kingdom's production. There are also specialized
apiaries with a production of 26,692 kg of honey
per year, or 15% of the Kingdom's production (1).
The government encourages the private sector
to expand its investment in agriculture industries
for its role in contributing to the national income,
providing job opportunities and diversification of
the economic base, by providing several agricultural
subsidy programs, which contributed to the growth
and development of the Agricultural Sector, such as
subsidies aimed at encouraging the private sector to
enter into agricultural investment. There are several
agencies which ensure such subsidies, such as the
Ministry of Agriculture, which provides subsidies
for cattle; the Agricultural Bank which provides
subsidies for various agricultural inputs, such as
pumps and agricultural machinery and equipment,
and also the Grain Silos and Flour Mills Organization
that purchases wheat from farmers at encouraging
prices in addition to other subsidy programs such
as agricultural researches, guidance and services,
credit facilities along with streamlining technology
transfer and adaptation measures.
Trade Sector
The trade sector in Saudi Arabia witnessed real
growth during 2004. The preliminary GDP results
by type of activity indicated that growth of this
sector was 4.8 % and 7.9 % nominal growth (2). The
contribution of the wholesale, retail, restaurants,
and hotels in GDP at 2004 current prices reached
6.2%. The General Index for wholesale prices
increased from 117.2 points in 2003 to 120.8 points
in 2004 and to 124.2 points in the first quarter of
2005.
The percentages of monthly expenditure on various
goods reflect the importance of the trade sector
in Arriyadh City which is considered a significant
commercial center in the Kingdom and the
Province. The monthly expenditures, in Arriyadh
City, on consumer goods are estimated at 26% for
foodstuff, 8% for clothes and 11% for furniture(3).
With respect of licenses for stores, the issue of
which is supervised by Ministry of Municipal & Rural
Affairs (MOMRA) municipalities. The total number
of new and renewed licenses issued by Arriyadh
Region Municipality reached 56,020, or 25.4 % of
the total licenses issued in the Kingdom, of which
13,791 were for foodstuff, 1,073 for supermarkets
and 2,968 for commercial firms (4).
The number of Commercial Registers (CRs), the issue
of which is supervised by the Ministry of Commerce
and Industry and its branches, reached 176,424 up
to 2004 of which 8,556 CRs were issued in 2004 (5).
Construction & Building Sector (Contracting)
The Building and Construction Sector is crucial to
the development and support of infrastructure
and other productive sectors. During the past
five years, the Building and Construction Sector
experienced remarkable growth, resulting in the
value added of the sector which has grown from SR
41.7 billion in 2000 to SR 54.8 billion in 2005, and
contributed 4.8% of GDP in 2005, (current prices),
making the sector the fifth largest economic
activity among contributors to GDP during the
same year, at producers value (6).
The objective of the 8th Development Plan is
to achieve an annual growth rate of 6.7% in the
(1) Ministry of Agriculture, Agricultural Statistics, 2004(2) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report, 2005(3) CDSI, Central Department of Statistics & Information Cost of Living General Index, 2005(4) MOMRA, Ministry of Municipal & Rural Affairs, Municipalities Statistics, 2004(5) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 40, 2004(6) MOMRA, Ministry of Municipal & Rural Affairs, Department of Economic Studies
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sector, in order to increase the private sector’s role in the development of the Building and Construction
Sector, to implement the building and operational projects of the 8th Development Plan (1).
Buildings licenses issued in Arriyadh Region reached 9,606 in 2004 or 21.48% of total licenses issued in
the Kingdom which were 44,721 licenses. Most building licenses which were issued by Arriyadh Region
Municipality were intended for construction of residential and commercial buildings, reaching 8,483
licenses, representing 88.3% of total licenses issued in 2004 (2). State-of-the-art, distinguished buildings,
skyscrapers, sophisticated malls, and nicely designed buildings constitute the majority of new buildings
in Arriyadh City in recent years.
A large number of Saudi, mixed and foreign construction companies work in the construction field in
Arriyadh City. They cover all the sub-sectors of construction including, buildings, bridges, residential
and commercial buildings, construction of factories and maintenance of facilities. Arriyadh Building and
Construction Sector is further enhanced by the existence of more than 194 licensed factories, which
produce building materials, China wares, ceramics and glass (4). The Sector is also sustained by the
concessionary loans provided by the Real Estate Development Fund to citizens.
Real Estate Sector
The Real Estate Sector’s contribution to the GDP was 8.4% in 2005 in current prices (6). This Sector is
supported by the Real Estate Development Fund which granted special loans to Arriyadh City totaling
SR 392.7 million covering 1,309 loans in 2004. The Building and Construction activity is an important
component of the Real Estate Sector.
Subdivided Vacant land constitutes 44.5% of total land area in Arriyadh City, whereas un-subdivided
developed vacant land constitutes 27%.
The Comprehensive Strategic Plan for Arriyadh City has set up a number of general objectives and policies
to develop the housing sector to accommodate the City’s future demands. The City’s housing needs
Arriyadh City Construction Licenses – 2004 (3)
Type of building Number %
Residential / commercial 8,483 88.31
Industrial / commercial 868 9.04
Mosques / educational buildings/ medical 255 2.65
Government social buildings - -
Total 9,606 100
Classified Contractors Arriyadh Region 2005 (5)
Year Kingdom TotalArriyadh Region
Number % to Kingdom
2003 328 185 56.40
2004 332 183 55.12
2005 392 190 48.35
(1) Ministry of Economy & Planning, Eighth Development Plan, 2005 - 2009(2) CDSI, Central Department of Statistics & Information Statistical Yearbook, Issue 40, 2004 (3) MOMRA, Ministry of Municipal & Rural Affairs, Municipal Statistics, 2004 (4) CDSI, Central Department of Statistics & Information Statistical Yearbook, Issue 40, 2004(5) MOMRA, Ministry of Municipal and Rural Affairs, Classification of Contractors Agency, 2005 (6) CDSI, Central Department of Statistics & Information Statistical Yearbook, Issue 41, 2005, Preliminary Data
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are estimated at 495,000 units, at an annual rate of 27,500 units. This represents a good investment
opportunity for the private sector in the areas of building and construction and associated demand for
health, education and living services (1), etc.
Insurance Services Sector
The Saudi Insurance Sector witnessed significant developments in 2004, whereby Royal Decree M / 32,
dated July 13, 2003, was issued approving Cooperative Insurance Companies Control Law. The decree
appoints Saudi Arabian Monetary Agency (SAMA) to control and supervise the insurance and re-insurance
companies and the activities of entrepreneurs working on insurance related activities.
The By-Laws for the Cooperative Insurance Companies Control Law was issued on June 6, 2004. SAMA
emplaced licensing procedures for insurance and re-insurance companies, and control and supervisory
requirements, etc. Insurance business covers different areas, including medical, auto, aviation, energy,
fire, engineering, goods and miscellaneous insurance.
Approval to establish a number of insurance companies, as joint-stock insurance companies, was granted
in 2006.
Education Sector
Education in Arriyadh is provided by public and private sectors at the level of general
education for boys and girls of different grades, or at the level of technical education and
vocational training and higher education. Enrollment rate within the age category of 6 – 22
years in different educational levels (primary to college) reached 92%. This reflects a good
improvement compared to 88% in 1996. Rate of illiteracy was reduced from 11.5% in 1996 to
8% in 2006 (3).
- General Education
The three phases of general education in Arriyadh City (primary, intermediate and secondary) are under
the supervision of the Ministry of Education. In 2005 a total of 421,000 male students were enrolled in
government schools in Arriyadh in all educational phases, from kindergarten, primary, intermediate to
secondary, while the total number of female students reached 396,288 (4). It is worth mentioning that
private schools accommodate 15% of the total number of enrolled students.
Arriyadh City Insurance Services as of End of 2004 (2)
Type of business Number Kingdom % to Kingdom
Companies 32 62 32.65
Brokers/underwriters 15 31 15.31
Consulting Bureaus 0 1 0
Insurance operation audit bureaus 3 4 3.06
Total 50 98 51.02
(1) ADA, Arriyadh Development Authority, Analytical Study For Land Use Survey in Arriyadh City 2005(2) SAMA, Saudi Arabian Monetary Agency , 41st Annual Report, 2005(3) ADA, Arriyadh Development Authority, Household Survey 2004 (4) Web site of the Ministry of Education, www.moe.gov.sa
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management. As of 2005 there were 10,874
students enrolled in these colleges (3). GOTEVOT
also supervises Secondary Institutes, of which
there are six Governmental Institutes in Arriyadh;
two industrial, one commercial, one for technical
controllers and two agricultural. GOTEVOT also
supervises vocational training centers which prepare
national workforce as electricians, auto mechanics,
carpenters, welders, sewage networks, general
mechanics, sewing, printing, etc. It also supervises
Private Sector Institutes & Training Centers and
grants operating licenses. These Institutes confer
upon graduate students post intermediary and
post secondary school diplomas, or attendance
certificates to those who attended medium or short
period training courses in computers, commercial
sciences, electronics, and others. As of 2004,
there were 266 institutes and training centers in
Arriyadh, of which 65 were training institutes, 183
training centers, and 18 commercial and technical
controllers units. With respect to private training
facilities in Arriyadh, in 2005, there were 36
technical training institutes, 228 training centers,
and 17 secondary technical institutes (4).
Both Saudi Commission for Health Specialties and
Ministry of Health supervise a number of health
institutes. The Council of Ministers Resolution
No. 3108/MB dated April 10, 2005, assigned the
responsibility of private training facilities for women
to the General Directorate for Private Training. There
are 23 private training facilities for women Kingdom
wide, of which 20% are in Arriyadh City (5).
- Universities
Three of the largest Government universities in
the Kingdom are located in Arriyadh, namely,
King Saud University, Imam Mohammed bin Saud
Islamic University, where each has an integrated
university city with state-of-the-art facilities, in
addition to Arriyadh University for Women, founded
at the beginning of 2004, which was originally the
Teachers’ College. There are also a number of private
universities, namely Prince Sultan University, Arab
Open University, Al-Faisal Specialized University,
College of Dentistry and Pharmacology, and Al-
Yamamah College, in addition to Prince Nayef
Security University, which is of government nature.
These universities and colleges offer academic
programs of different disciplines, i.e. Sharia,
Medicine, Engineering, Management, Technology
and Social Sciences. They confer Diplomas, Bachelors,
Masters and Doctoral degrees. These universities
accept both male and female students. 60,868
students were enrolled in King Saud University in
2005 and 28,000 students in Imam Mohammed bin
Saud University, in Arriyadh (1)
.
- Technical Colleges, Vocational Institutes &
Training Centers
The General Organization for Technical Education
& Vocational Training (GOTEVOT) operates and
supervises a number of technical colleges, vocational
institutes and training centers throughout the
Kingdom on the basis of a strategy focusing on
training programs tailored to address the labor
market requirements and the skills needed by each
profession. Two colleges are located in Arriyadh,
the Technical College and Telecommunication
and Information College (2). The Technical College
provides a wide range of training programs, i.e.
mechanical, electrical, electronics, computer,
industrial chemistry, building techniques and
(1) Ministry of Higher Education, Higher Education Statistics, Academic Year 2005, as stated in CDSI’s Statistical Yearbook Issue 41(2) General Organization for Technical Education & Vocational Training (GOTEVOT), Annual Report 2005(3) Ibid(4) Ibid(5) Ibid
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- Teachers’ & Women’s Colleges
Teachers’ colleges are specialized colleges which
qualify teachers. They provide qualification
and training programs for teachers and school
principals and the like. In Arriyadh City there
were 4,090 male students and 28,417 female
students enrolled in these colleges in 2005 (1).
Tourism Sector
Arriyadh City enjoys several attractive tourist
features, including recreation facilities to citizens,
residents aliens and visitors. The City includes
several historical sties such as Al-Masmak Palace,
Al-Dereya archeological sites, King Abdulaziz
Historical Center in downtown Arriyadh City,
which comprises historical features, museums,
libraries, public squares, parks and gardens.
Arriyadh City has a number of public parks, the
most famous of which is Salam Park in the City
Center and Al-Watan Park within King Abdulaziz
Historical Center, in addition to sport clubs, Malaz
Zoo which includes different species of animals
and birds. The Zoo is equipped with recreation
and children play facilities. Arriyadh contains
stylish shopping malls, state-of-the-art buildings
which are recognized not only in the City but
region wide. Special sidewalks were constructed
prepared in some areas of Arriyadh City, equipped
with lights and trees for those who like to exercise,
especially families.
Arriyadh City is known for many recreation
projects undertaken by the Private Sector, such
as the indoor and outdoor recreation cities,
spread all over the City, particularly in some
areas, which are now famous for being recreation
sites, such as on the Eastern Ring Road and Al-
Thumamah Road and others. Several projects
are currently underway, which will add to the
attractive features of Arriyadh City. An example
is the development of areas around Wadi Hanifa
and Al-Thumamah Park, which are supervised by
Arriyadh Development Authority. These projects
constitute good investment opportunities and
serve as additional entertainment and recreation
places to the inhabitants of Arriyadh City. Arriyadh
hosts the famous annual Janadriya festival for
National Heritage and Culture, which is attended
by national and international guests. Arriyadh
also hosts important annual and periodical
international exhibitions of different purposes,
the most important of which is the international
book exhibition.
The fact that the headquarters of all ministries
and government agencies are located in Arriyadh
assist the City in hosting international conferences,
which offer more opportunities for this special type
of tourism “Conference Tourism”. Also students
from all regions come to Arriyadh for university
and college education, and for medical treatment,
since Arriyadh houses well-known governmental
and private advanced medical facilities.
In Arriyadh, there are a number of hotels of
different classes receiving visitors to the City. As of
2004, Arriyadh had 58 hotels as follows: (2)
Class Number Number of Rooms
Premium Class 9 2,451
First Class 18 2,712
Second Class 21 1,629
Third Class 10 426
Total 58 7,218
(1) Ministry of Education Website www.moe.gov.sa(2) Supreme Commission for Tourism, Tourism Statistics, 2004
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Additionally, there are about 260 units
comprising 5,066 furnished apartments
which are available for leasing, distributed
as follows:
- First class 65 units 1,871
apartments
- Second class 125 units 2,175
apartments
- Third class 70 units 1,020
apartments
Arriyadh Region Municipality in collaboration
with the Supreme Commission for Tourism are
planning to jointly implement a number of
projects, i.e. parks within residential quarters,
municipal squares, botanical gardens, and
lay the foundation of infrastructure for King
Abdullah International Gardens, which are
good investment opportunities to the Private
Sector.
Health Sector
Health services are offered by three major
sectors in the Kingdom and Arriyadh,
namely; Ministry of Health facilities, other
government agencies facilities, and private
sector facilities.
Arriyadh City houses a number of Ministry
of Health’s hospitals. These include King
Fahad Medical City, Arriyadh Medical
Center, Prince Salman Hospital, Al-Yamamah
Hospital, Al-Iman Hospital, Pediatrics
Hospital, Psychology Health Hospital, Al-
Amal Hospital, TB & Pulmonary Diseases
Hospital and Convalescence Hospital. It
also houses 63 Primary Health Care Centers
spread throughout the City. These hospitals
provide free treatment, diagnosis and
surgery services to citizens.
Additionally, there are other medical facilities
that are affiliated with other government
agencies. These are: university hospitals, King
Faisal Specialist Hospital, General Presidency
for Youth Welfare Hospital, Armed Forces
Hospital, King Abdulaziz Medical City of the
National Guard, Security Forces Hospital,
King Khalid Eye Specialist Hospital, General
Organization for Social Insurance (GOSI)
Hospitals, and Schools Health Care Units.
The Private Sector provides paid medical
services in Arriyadh through several medical
facilities. As of 2004, there were 19 private
hospitals, 383 clinics, 511 dispensaries, 22
medical laboratories, 14 physiotherapy
centers, 452 optical shops, 15 dental centers,
1,170 pharmacies, 199 drug stores and 42
scientific offices (1).
King Fahad Medical City in Arriyadh is one
of the largest medical and most modern
projects in the Middle East. It includes a
number of specialist hospitals, which employ
qualified national and expatriate medical
staff .The City includes (2):
- Pediatrics hospital with a capacity of 246 beds.
- Gynecology and Obstetrics hospital with
a capacity of 236 beds.
- Medical Rehabilitation Center with a
capacity of 159 beds.
- General Hospital with a capacity of 459
beds.
- Outpatient & Support Services Clinics
that include 33 clinics, x-ray facilities,
pharmacy, and a laboratory. A Medical
College will be established as part of the
final phase (3)
(1) Ministry of Health, Statistical Yearbook, 2004(2) Ministry of Health – Achievements during the Seventh Development Plan , 2000 - 2004(3) Minister of Health Decree 66662 /10/ 1 Issued on June 9, 2004 to Set-up the College. 40 Students were admitted in Scholastic Year 2005
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Financial and Banking Services Sector
The finance and banking sector is one of the most
important economic sectors as it provides huge
investment potential, through the expansion
of existing banks or the establishment of new
ones. Another opportunity lies in King Abdullah
Financial Center, which will be established in
Arriyadh and is expected to open in 2009 (2). As of
2005, there were 13 banks operating in Arriyadh
including Gulf International Bank which has its
headquarters in Bahrain, as it opened a branch
in Arriyadh in 2000, and Emirates Bank which
was opened in 2002. Arriyadh houses the head
quarters of ten (10) Saudi commercial banks
which add economic advantages to the City. The
banking sector of Saudi Arabia is supervised by
the Saudi Arabian Monetary Agency (SAMA). The
key indicators of Saudi banks for the first quarter
of 2005 are as follows (3):
- There are 1,224 bank branches in the Kingdom,
519 of which are in Arriyadh Region.
- 4,588 ATM’s.
- 189 Investment Funds.
- 568,284 subscribers to Investment Funds
- Banks credit granted: SR 452,501 million, of
which SR 250,841million are short term credit
(one year or less), SR 53,495 million are medium
term credit (1 - 3 years) and SR 148,164 million
are long term credit (over three years).
- Total bank deposits: SR 447,853 million.
- Total assets: SR 681,454 million. (Unified
Financial Position of Commercial Banks)
- Value of banks investments in securities:
SR 177,525 million.
On July 13, 2003 a Royal Decree was issued to
create the Cooperative Insurance Companies
Regulations. The decree appoints Saudi Arabian
Monetary Agency (SAMA) to control and supervise
the insurance and re-insurance companies and the
activities of entrepreneurs working on insurance
related activities and to establish a database on
the insurance market in the Kingdom.
Communications & Information Technology
Sector
Communications and IT play a decisive role in
communities’ development process. Information
and knowledge become important factors of
Medical Facilities & Services of the Ministry of Health In Arriyadh 2004 (1)
Description Arriyadh Kingdom % to Kingdom
Medical centers 349 1,848 18.89
Hospitals 39 213 18.31
Beds 6,025 30,020 20.07
Physicians 3,308 18,621 17.76
Nurses 7,055 41,356 17.06
Pharmacists 199 1,167 17.05
Support medical staff 3,676 21,802 16.86
Smoking clinics 7 29 24.14
Health college 2 16 12.50
Health institute 4 27 14.81
Emergency center 46 219 21.00
Ambulance 147 765 19.22
(1) This Table Was Derived From the Statistical Yearbook of the Ministry of Health, 2004(2) Future Symposium, Arriyadh, 9 _10 May 2006(3) Central Department of Statistics & Information (CDSI), 41st Statistical Yearbook, 2005
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Working Telephone Lines (landlines) in Arriyadh City Years (2001 – 2005) (4) (Thousand Lines)
Year Number
2001 783
2002 811
2003 855
2004 899
2005 1,112
Mobile Lines in Arriyadh City Years (2001 – 2005) (5) (Thousand Lines)
Year Number
2001 663
2002 734
2003 846
2004 1,070
2005 1,106
production, as they facilitate productivity in other sectors.
Telecommunication and Internet infrastructure are the
nerve centers of modern communities.
The Telecommunications sector in the Kingdom in general
and in Arriyadh in particular, experienced fundamental
changes after the privatization of the sector and the
establishment of Communications and Information
Technology Commission (CITC). The Kingdom is heading
towards information and knowledge based community,
through the e-government program, which is based on the
National Plan of Information Technology through (1):
- Making Telecommunication and IT services available to
all community members.
- Providing an educational and training environment that
ensures that the majority of citizens possess adequate
skills to deal with Telecommunication and IT applications.
- Pushing the economic & social sectors towards achieving
advanced levels of IT applications.
- Making the Telecommunications and IT sectors a major
source of revenue generation.
As part of the government initiative, to encourage
investments in the Telecommunications and IT industries
and motivate private companies to take advantage
of technology applications, as e-commerce, Arriyadh
Development Authority in collaboration with Arriyadh
Chamber of Commerce & Industry announced plans
to create a Telecommunications and IT City on an area
of 800,000 m2, on land owned by the Public Pension
Agency. The City will add new economic dimensions and
a gateway to commercial and industrial firms to enter
the open market at the regional and international levels.
It will also assist in the attraction of foreign investments
and large hi-tech companies. Signs indicating that
Arriyadh City has become a society of technology are:
- Application of Information Technology in banking
transactions (payment of utility bills, passports,
traffic and aviation services, etc).
- Use of IT in most private and public sectors organizations.
- Fast expansion of mobile phone use through the two
service providers Saudi Telecom (Al-Jawal) and Etihad
Itisalat (Mobily), where the number of mobile lines in
Arriyadh has grown to 1.1 million lines in 2005,
representing 29% of total lines of 3,863 thousands lines
Kingdom wide (2).
- Introduction of G3 mobile services.
- Continued growth of fixed lines subscribers in 2005, to
over 1.1 million in Arriyadh City alone (3).
- A rapid increase of internet usage.
(1) Ministry of Economy and Planning – Eighth Development Plan 2005 - 2009(2) CDSI, Central Department for Statistics & Information Statistical Yearbook, Issue 41, 2005(3) Ibid(4) Ibid(5) Ibid
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Theme Four:
High Commission for the Development of
Arriyadh and its Role in Developing the City
Introduction:
The high Commission for the Development
of Arriyadh was established by virtue of a
resolution of the Council of Ministers dated
June 19, 1974. The responsibility of ADA
is to implement plans to develop the City
in economic, social, cultural, urban and
environmental areas. ADA sets up policies
that improve the level of services so as to
contribute to the welfare, and quality of life
for its citizens. ADA derives its legality and
authority from the Council of Ministers that
defined the basis of its role in a series of
resolutions including its founding resolution.
The major responsibility of ADA is to set
up comprehensive plans for the City and
emplace basic programs for implementation,
coordination and construction of projects.
Comprehensive Strategic Plan for Arriyadh
City
The most remarkable efforts of Arriyadh
Development Authority are in the area of
overall planning and development of the
City in the Comprehensive Strategic Plan.
It symbolizes integrated and renewable
organizational environment of a strategic
nature that organize and direct urban
activities in a way that accommodates future
requirements, benefit from modern facilities
and in general avoid the negative sides of
the growth of cities, particularly problems
arising from the fast growth of cities, as is the
case of Arriyadh City.
The Comprehensive Strategic Plan of Arriyadh
City comprises several elements as follows:
Element One: Future Outlook of the City which
aims at achieving the following objectives
- Introduce the City as the Capital of the
Kingdom
- A City of humanity, welfare and prosperity
- A modern oasis that lives in harmony
with the desert environment through
the optimum use of technology and
environmentally successful structural
planning
- A center of science and culture
enlightenment
- A financial and commercial center
- A beautiful City with distinguished and
stylish design, integrated with social and
cultural life, and a center for Islamic Arts &
Culture
Element Two: Arriyadh Urban Plan
The Urban Plan consists of several sub-plans
which serve as a mechanism for policy
implementation. The most important
features of these plans are:
- Structural Plan for Arriyadh City reflects
all the urban and functional aspects of
the objectives, strategies and different
urban policies which are incorporated in
the Comprehensive Strategic Plan. The
Plan defines distribution of land use,
major activities, business centers, city
transportation system, and a network of
public utilities. It specifies the environment
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protection areas, open areas, directions
and boundaries of urban development.
The Structural Plan covers all parts of
Arriyadh City within the boundaries of the
development protection having an area of
4,900 Km2 and forecasted population size
of 7.2 million by 2024 (1).
– Local Structural Plans which aim to clarify
policies and controls emplaced for certain areas
of great importance for sites. Most important
of these plans is the Structural Plan for the City
Center, Structural Plans for urban areas and
Structural Plans for hub centers.
– Land Usage Plan which is considered one of the
most important tools for the plans and policies
of the Comprehensive Strategic Plan. It defines
the current and future use of land up to 2021.
– Zoning Regulations: It divides the city into zones
in accordance with the Land Usage Plan and
sets up rules and regulations and recommends
development standards with respect to density,
height and other terms to ensure privacy and
protection of property, environment, heritage and
urban issues. It also lists several of procedures and
steps required for regulations related to planning
licenses, building licenses, and encouraging
distinguished construction designs.
Element Three: Transportation Plan
The objective of this Plan is to secure safe and
convenient transportation to accommodate
existing and future requirements, taking into
consideration the high rate of population
growth, provided transportation system is
integrated with the continued urban growth of
the City.
Element Four
Economic Development Plan: The objective is to
achieve a balanced socio-economic development
with a diversified economic base, increase the City’s
sources of revenue, limiting the flight of revenue,
take full advantage of the City’s characteristics and
competitiveness and enhance its role as a financial,
commercial and Information Technology center.
Element Five
Environment Management and Protection: It
aims to achieve a sustainable environment while
planning for the City of the future, preserve natural
resources, and improve environment quality. It
also aims to achieve an optimum use of resources
to accommodate needs of future generations.
Element Six
Housing Availability Plan: It sets up a mechanism
for development of the housing sector to
address increasing demand, improve residential
environment and make available basic needs of
the community.
Element Seven
Public Utility Plan: Upgrading the standards of
public utility (electricity, water, telephone and
sanitary waste) and applying the concept of
optimum management resources.
Element Eight
Urban Management Plan: Make arrangements
to develop existing systems to ensure a
well coordinated future growth of the City.
This will be achieved through integrated
planning, application of decentralization
of decisions to allow the private sector
and residents to participate in the decision
making process.
(1) ADA, Arriyadh Development Authority, Population Forecasts Study, Arriyadh City, 2004 - 2024
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The approval of the Comprehensive Plan
for Arriyadh City will undoubtedly reshape
the future of the City for the next 20 years.
There are several investment opportunities
available to the private sector, including
building materials, housing, transportation,
tourism & recreational services, health, and
educational services, etc.
Arriyadh Metropolitan Structure Plan 2021
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Theme Five: Arriyadh Chamber of Commerce and Industry & The Enhancement of Investment Climate
Arriyadh Chamber of Commerce &
Industry (RCCI) was established in 1961 to
maintain, protect and develop interests
of the private sector through integrated
set of services. The most important
services it provides are as follows:
- Highlight investment opportunities
within and without the Kingdom
- Highlight new investment fields and
recommend viable opportunities
- Publish directories and information
guides regarding activities of
the private sector and national
economy in general
- Provide legal advice, settle
commercial disputes and clarify
rules and regulations
- Prepare studies and specialized
researches and provide advice on
economic issues
The Chamber of Commerce & Industry
in Arriyadh, plays a vital role concerning
investment in Arriyadh City. The Chamber
has prepared a work strategy covering
the period 2005 - 2009 to improve
investment environment in Arriyadh. The
objective of the strategy is to motivate
the private sector to invest in sectors of
comparative advantage, and to improve
the investment environment in Arriyadh.
It provides services to its members
through a number of administrative and
technical units:
- Research and Studies Center
- Data Center
- Economic Data Bank
- Tools Center
- Small and Medium Business Center
The Chamber provides economic
related information and guidance to
businessmen on different investment
opportunities and the appropriate
communication channels with respect to
import and export from and to various
parts of the world. (1).
It actively participates with other
investment agencies in the Kingdom and
Arriyadh Region, in “Arriyadh Economic
Forum” held once every two years. The
second Economic Forum was held from
4 - 6 December 2005 on the basis of the
directives and auspices of the Forum,
the Custodian of the Two Holy Mosques,
King Abdulla Bin Abdulaziz, Chief of
the Supreme Economic Council. The
Forum calls for an enhanced role of the
private sector, who is a real partner and
stimulator of economic growth in the
face of the socio-economic challenges
that faces the Kingdom. Selective leading
businessmen participated in the Forum
to discuss critical issues and recommend
solutions. The discussed issues included
“ways to develop efficient public-
private sector partnership”, the theme
of “transparency and accountability
in the economic sector”, or the theme
of “high-tech industrial zones” or the
(1) For more information see RCCI’s Website, www.riyadhchamber.org.sa
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membership of the WTO and many other
themes which will promote awareness
among the business community.
Arriyadh Economic Forum produced a
set of recommendations which intend
to improve and promote the investment
environment in the Kingdom and Arriyadh
Region. Following are the most important
of these recommendations (1):
- The importance of enforcing agreements
signed between the Saudi Arabian General
Investment Authority “SAGIA” and other
government agencies to eliminate investment
obstacles discussed at the Forum
- Improve privatization process and assigning
it to a dedicated independent agency, which
would directly report to highest executive
authority to ensure efficient and speedy actions.
- Ensure complete transparency of the
privatization processes for the Private Sector,
and enforce regulations that encourage
competition and prevent monopoly.
- Invest in value-added basic industries
- Establish joint-stock companies for
cooperative & medical insurance, real
estate financing, courier services, and
electricity distribution.
The third session of the Economic Forum is
expected to be held in the fourth quarter
of 2007 to discuss critical issues, including
financial and human resources development,
development of infrastructure, legal process
and the private sector future role in the
development process.
(1) RCCI, 2nd Arriyadh Economic Forum, 4 – 6 December 2005
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State Budget
The actual revenues for fiscal year 2005 amounted
to SR 555 billion, compared to planned revenues
of SR 280 billion, i.e. a surplus of SR 275 billion.
The actual expenditures amounted to SR 341
billion, an increase of SR 61 billion from the
planned expenditures for the same year (1).
With respect to the 2006 fiscal year, public
revenues were estimated at SR 390 billion,
and the expenditures were estimated at SR
335 billion, while the expected surplus was
estimated at SR 55 billion. These figures exceed
the estimated revenues and expenditures of the
2005 budget by 39.3% and 19.6% respectively,
where a balanced budget of SR 280 billion for
both revenues and expenditure was estimated.
The state budget included new programs and
projects as well as new stages of approved
ongoing projects with total costs of SR 126
billion. Budgetary allocations amounted to
SR 87.2 billion for the education and human
resources sector, SR 31 billion for the health
sector, SR 11.6 billion for the municipal services
sector, SR 9.8 billion for communications
and transport sector and SR 22.5 billion
for the industrial, agriculture, water and
infrastructure sectors, and subsidized the Real
Estate Development Fund by SR 9 billion, the
Saudi Credit Bank by SR 3 billion and the Saudi
Industrial Fund (SIDF) by SR 13 billion(2).
As for Fiscal Year 2007 budget, public
revenues were estimated at SR 400 billion
and expenditures at SR 380 billion, which was
considered the highest ever in the Kingdom. It
allocated SR 96.7 billion for the education and
human resources sector, SR 39.5 billion for
the health and social services sector, SR 13.6
billion for the transport and communications
sector, SR 24.8 billion for agriculture and
water sectors, SR 15.5 billion for the municipal
services sector and SR 20 billion for the Public
Investment Fund (3).
Gross Domestic Product (GDP)
Preliminary figures show that there is
growth in GDP, at current prices (excluding
import duties), by 23.7% during fiscal year
2005, to SR 1,150.6 billion (4) compared
to growth of 16.8% during the previous
(1) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report 2005(2) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(3) "Asharq Alawast" Newspaper, Issue 10258, dated August 20, 2006; see also "Aleqtissadia" Newspaper, Issue 4817 dated August 19, 2006 (4) Central Department of Statistics & Information expects GDP to be about SR 1,301.2 billion in 2006
Distribution of Budget Allocations for Fiscal
Year 2006 by Major Sectors:
3.46%1.36%8.00%3.72%
2.93%
33.07%
18.75%2.53% 0.17%
26.03%
Theme One: The Kingdom’s Macro-Economic Indicators
Infrastructure Development
Municipal Services
Defence & National Security
Public Admistration, Facilities & General Items
Specialized Government LendingInstitutions
Subsidies
Human Resources Development
Trasportation
Economic Resources Development
Health & Social Development
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year. This is attributed mainly to the
growth of the oil sector by 42.8% during
the year, compared to 28.4% growth in the
previous year, as a result of improvement
in oil prices. Preliminary figures also show
growth of the non-oil sector to 7.8% during
the same year compared to 8.5% in the
previous year. Also, the private sector grew
by 8% compared to 7.5% in the previous
year, while the government sector grew to
7.5% during 2005 compared to 10.4% in the
previous year. Furthermore, the preliminary
Gross Domestic Product for the Period 2002 - 2005(2)
YearsValue (Billion Saudi Riyals)
At Current Prices At Constant Prices
2002 699.7 629.8
2003 796.6 678.2
2004 929.9 713.9
(2005) (Preliminary Figures) 1,150.6 760.5
Contribution of Some Economic Sectors to GDP At Current Prices
of 2005 (3)
Sector Share (%)
Industry 9.7
Agriculture 3.3
Mining and Quarrying 48.5
Construction 4.8
Electricity, Gas and Water 1.0
Services 34.2
Private Sector Contribution to GDP 30.1
figures show GDP growth, at fixed prices of
1999, (excluding import duties) by 6.5% in
2005, reaching SR 760.5 billion compared
to 5.3% in the previous year. The oil sector
declined to 5.9% compared to 6.7% in the
previous year. The non-oil sector also grew
by 8.6% in 2005, compared to 4.6% in the
previous year. With respect to the private
sector, it grew by 6.6% compared to 5.3%.
This sector contributed by 44.2% in the
GDP, thereby maintaining its share of the
previous year (1).
(1) SAMA, Saudi Arabian Monetary Agency- 42nd Annual Report, 2006 (2) Ibid (3) Ibid
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Balance of Payments
Preliminary figures show that the Saudi Balance of
Payments current account for the year 2005 achieved a
surplus of SR 340 billion, an increase of 74.6% compared
to the previous year, which represents about 29.3% of
the GDP (1).
The continuous surplus of the current account is
attributed mainly to the improvement of the oil exports.
Foreign Trade
The Kingdom’s total exports during fiscal year
2005(2) , amounted to SR 677.1 billion, i.e. an
increase of SR 204.7 billion or 43% compared to
the previous year 2004, where the value of total
exports stood at SR 472.5 billion. In terms of
quantity, total exports during this year amounted
to 469 million tons compared to 463.4 million
tons in 2004, with an increase of 5.9 million tons or
1%. On the other hand, imports during fiscal year
2005 amounted to SR 222.8 billion an increase
of SR 55.2 billion or 33% over the previous year
2004(3). In terms of quantity, the volume of total
imports amounted to 42 million tons compared
with 31.2 million tons in 2004, i.e. an increase of
10.8 million tons or 35%.
Major Non-Oil Exports in 2005 (4)
– Mineral Products: SR 606.4 billion, an increase
of 46% compared to the previous year. This
represents 98.6% of the total non-oil exports
– Chemical products: SR 42 billion, an increase of
35%, representing 6% of the total exports.
– Metal Products: about SR 5 billion, an increase
of 11%, representing 1% of the total exports
– Food stuff: SR 4.4 billion, an increase of 19%,
representing 0.1% of the total exports
Major Imports in 2005 (5)
– Machinery, Equipment and Electric Appliances:
SR 54.2 billion, or 24% of the imports, A change
of 46% from the previous year 2004
– Transport Equipment: SR 46.7 billion or 21% of
total imports, a change of 30% from the previous
year
– Food-stuff: SR 33 billion or 15% of total imports,
a change of 31% from the previous year
– Metals & Related Products: SR 23.8 billion or
11% of total imports, a change of 42% from the
previous year
– Chemical, Plastic & Rubber Products: SR 26.6
billion or 12% of total imports, a change of 24%
from the previous year
– Textiles and Clothing: SR 9.7 billion or 4% of total
imports, a change of 20% from the previous year.
Cost of Living Index
The Cost of Living Index for the whole population
of the Kingdom, including Arriyadh, amounted to
99.6 in 2005, according to the base year 1999,
an increase of 0.4%, compared with 98.9 in the
previous year 2004 (6).
Wholesale Price Index
The general Wholesale Price Index amounted
to 124.2 in 2005, using 1998 as the base year(7),
with an increase of 3.5 points compared to
the previous year. The Increase of the index is
attributed to increase in prices of all categories of
food items, live animals, raw materials except fuel,
animal and vegetable oils, chemical products and
manufactured goods.
This index measures the average change in the
prices of goods and services only in the Kingdom’s
primary markets. The index comprises a sample of
160 items distributed over 10 major categories
of the international classification codes related
to trade. Some items, such as weapons, and their
values were excluded from the total value of
(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(2) CDSI, Central Department of Statistics & Information, Foreign Trade Statistics, Exports, 2005 (3) CDSI, Central Department of Statistics and Information, Foreign Trade Statistics Imports, 2005 (4) CDSI, Central Department of Statistics and Information, Export Statistics(5) CDSI, Central Department for Statistics and Information, Imports Statistics (6) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(7) Ibid
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items. The value of the index amounted to 124.2
in 2005, compared to 120.7 in the previous year.
This represents an increase of 3.5 points or 2.9%
compared to 3.1 % in the previous year. This
increase is attributed to the increase in all major
categories of the index (1).
Per Capita Income
Preliminary figures show an increase in the per
capita income in the Kingdom by 20.5% in 2005,
to reach SR 50,227 compared with an increase of
14% in the previous year (2).
Labor Market Structure During 2005 (3)
- Total number of labour force in the Kingdom is
about 6.2 million workers.
- Total number of Government employees is about
783.2 thousand employees:
- Saudis (712.8 thousand): 91%
- Non-Saudis (70.4 thousand): 9%
- Total employees in the private sector:5.4 million
- Saudis (0.62 million): 11.6%
- Non-Saudis (4.74 million) 88.4%
- Employed by Construction & Building Sector
(1.9 million): 36.2%
- Employed by Wholesale & Retail Trade Sector
(1.4 million): 26.3%
- Employed by Social & Personal Services Sector
(0.6 million): 11.7%
- Employed by Electricity, Gas and Water Sector
(0.03 million) 0.6%
Transport & Telecommunications
Infrastructure
- Roads
The total length of paved roads network, which
meets a higher degree of safety and links all
cities and villages of the Kingdom, reached 44.8
thousand kilometers by the end of 2005.
- Railroads
Railroads in the Kingdom experienced remarkable
development. Advanced networks, as well as several
modern passenger stations, were established. Moreover,
high speed trains were introduced, leading to improved
passenger and freight services. It is noteworthy to note
the Council of Ministers approval for the establishment
of North-South Railroad Company, owned by the Public
Investment Fund, prior to the end of 2006, leading
to remarkable improvement in transport services (4).
Approval was also given regarding the establishment of
a Saudi Joint Stock Company under the name of Saudi
Railway Company (SAR) with a capital of one billion
Saudi Riyals (5).
The total number of train passengers in 2005, amounted
to about 1.1 million and the volume of freight to about
2.5 million tons during the same year (6).
- Airports and Air Transport:
The airports network in the Kingdom comprises
27 airports, including 3 international airports.
These are equipped with the most advanced
equipment and systems. The total number of
passengers through domestic airports amounted
to 27.5 million in 2005, while the total number
of passengers departing and arriving via the
international airports amounted to 3.8 million
and 3.3 million respectively (7).
(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(2) Ibid(3) Ministry Of Labor, as Stated in SAMA’s 42nd Annual Report, 2006(4) Alhayat Newspaper, Issue 4608, May 24, 2006(5) SAMA, Saudi Arabian Monetary Agency, Economic Development Report, Q2 2006(6) SGRRO, Saudi Government Rail Road Organization, 2005 Statistics (7) Saudi Arabian Airlines, Annual Report, 2005
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- Seaports
There are 8 commercial and industrial seaports
in the Kingdom. Large volumes of cargo are
handled annually at these ports. The total weight
of exported commodities in 2004 reached 76.5
million tons (excluding oil exports). The volume of
imported commodities amounted to 43.4 million
tons during the same year (1).
- Postal Services
The total number of working post offices in the
Kingdom in 2004, amounted to 478 main offices,
180 branch offices, 83 postal agencies, 4,933 points
for surface mail and 2,465 street mail boxes (2).
- Telephone Lines
Total number of working land telephone lines
in the Kingdom stood at about 3.8 million land
lines, according to 2005 statistics. The number of
working mobile telephone lines provided by Saudi
Telecom Company and Ettihad Itisalat, (Aljawal
and Mobily) exceeded 11.8 million mobile lines.
During the same year, the number of Internet
users reached more than 2.7 million (3).
Major Producing Sectors
- Agriculture
The Kingdom succeeded, during the preceding
years, in achieving self-sufficiency in basic crops.
Moreover, it started to export many agricultural
products such as wheat, dates, dairy products, eggs,
fish and animal products to some overseas markets.
- Industry
The cumulative number of operating factories in
the Kingdom amounted to 3,803 in 2005, with
total financing of SR 280 billion. These factories
employ around 373,400 workers. Moreover, the
Ministry of Commerce & Industry established 8
modern industrial parks in different Saudi cities.
These industrial parks are equipped with utilities,
and other facilities required for the establishment
and operation of these factories (4).
- Companies
The cumulative number of operating companies
in the Kingdom, based on licenses granted by
the Ministry of Commerce & Industry, amounted
to 13,539 in 2005. These include 131 joint stock
companies, 9,518 limited liability companies, 2,802
joint liability companies, 1,086 limited partnerships,
and 2 limited companies by shares (5).
- Banks
The Saudi Arabian Monetary Agency (SAMA)
plays the role of a central bank in the Kingdom.
There are 11 commercial banks operating in the
Kingdom. These are:
(1) Saudi Ports Authority, 2004 Statistics (2) Saudi Post Corporation, Annual Report, 2005(3) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(4) Ministry of Commerce & Industry, Unpublished Report, Department of Industrial Statistics, 2006(5) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report, 2005
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- National Commercial Bank
- Riyadh Bank
- Banque Saudi Fransi
- Samba Financial Group
- SABB
- Saudi Hollandi Bank
- Aljazira Bank
- Alrajhi Bank
- Arab National Bank
- Saudi Investment Bank
- Bank Albilad
Recently, Alenmaa Bank was founded in the first
quarter of 2006, but is still under formation. There
are also a number of branches of non-Saudi Banks,
such as: Emirates Bank, National Bank of Kuwait
and Gulf Bank. Moreover, branches will be opened
imminently for Muscat Bank and Deutsche Bank.
Performance & Future Outlook of the Saudi Economy
The Saudi economy represents more than one third
of the combined economies of all Arab countries.
The Kingdom is the major partner in the inter-
Arab trade and investment. It is also ranked the
first among Arab countries in terms of attracting
foreign investments. The Saudi economy witnessed
a marked improvement in its absorption capacity,
diversification of production base and creation of an
appropriate environment supporting attraction of
investments. The Kingdom’s accession to the World
Trade Organization (WTO) in 2005, upgrading of its
credit rating at the beginning of 2006, increase of
its competitiveness, which occupied the 38th rank
according to Doing Business Standards set by the
International Finance Institute of the World Bank,
which crowned the viable efforts of the Saudi
economy (1).
The Saudi economy continued to achieve high
rates of growth in all sectors during 2005. The
positive conditions in the world oil market as
well as persistent improvement of the domestic
investment environment have affected all
economic sectors. According to OPEC’s sources,
the average prices of Arab Light Crude increased
by 45.2% to reach US Dollar 50.15 per barrel
compared to US Dollar 34.53 per barrel in 2004.
Furthermore, relevant data provided by the
(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006
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Ministry of Petroleum and Mineral Resources shows
that there is a growth of average daily production
of oil in the Kingdom from 8.9 million barrels per
day in 2004 to about 9.35 million barrels per day in
2005, an increase of 5%. An increase in oil prices and
the quantity of production in 2005 has had tangible
impacts on all sectors of the Saudi economy. The rate
of GDP growth at current prices (excluding import
duties) increased by 23.7% to reach SR 1,150.6 billion.
Based on fixed prices, the GDP amounted to SR 760.5
billion with a growth rate of 6.5%, compared to 5.3%
in the previous year. Moreover, the State Budget
recorded a substantial surplus of SR 217.9 billion, or
18.8% of total nominal GDP.
The trade and industry sectors continued to achieve
remarkable growth rates. The Ministry of Commerce
& Industry has issued Commercial Registers for the
establishment of 1,321 new companies with total
capital of around SR 17.4 billion, compared to
about SR 10.5 billion in the previous year. The total
number of companies existing in the Kingdom
up to 2005 totaled about 14,800 company, with
combined capital of SR 239.4 billion, of which the
capital of the joint stock companies comprised
around SR51.5 billion.
In 2005, the Ministry of Commerce & Industry
issued Commercial Registers for 33,900 new
commercial establishments in different regions
of the Kingdom. The total production of cement
reached about 25.6 million tons, 1.1% more than
the previous year. The total area of industrial parks
(excluding Jubail and Yanbu) up to 2005 stood
at 47.4 million square meters. The number of
factories in these industrial parks amounted to
1,542 representing 40.5% of the total number of
factories in the Kingdom.
Total consumption of electricity increased
by 5.4% and the actual generating capacity
increased to about 29,051 MW. The number
of subscribers increased by 5.2% to more than
4.7 million, of which residential subscribers
represented about 82.5%.
Educational institutions continued to provide its
services to more than 5.1million male and female
students at different stages, including 4.4 million
students in public education and over 603,700
students in higher education, along with more than
74,100 students enrolled in General Organization
for Technical Education and Vocational Training
(GOTEVOT) colleges and institutes.
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The health sector registered growth in its human
and physical resources. The number of public and
private hospitals reached 364, which employed
about 43,000 physicians and more than 78,600
nurses. The number of hospital beds increased
to over 51,100, the number of public health care
centers increased to 1,848 and the private clinics
to 1,043 (1).
The Ministry of Labor’s (2) statistics for 2005
indicate that total employment in the private
sector reached around 5.4 million workers, of
which Saudis represent 11.6% and non-Saudis
88.4%.
Transportation activity in the Kingdom witnessed
a growth rate of 6.1% compared to 6.9% in
the previous year. The total number of SAUDIA
flights increased to 130,900 flights (domestic
and international) and the number of passengers
increased to about 16.9 million.
In the field of telecommunications, the number
of land telephone lines amounted to around
3.8 million, mobile telephones jumped to more
than 11.8 million and Internet users to over 2.7
million (3).
The government of the Kingdom continued its
economic reform program in order to achieve
sustainable economic development, create
job opportunities, enhance welfare of citizens,
encourage more participation by the private
sector in the development efforts, improve
foreign investment climate, develop the capital
market, maintain monetary and fiscal stability,
promote tourism, review labor law, continue the
privatization program and perform economic and
administrative restructuring following its accession
to the World Trade Organization (WTO).
Regarding future outlook of the Saudi economy,
the Eighth Development Plan (4) indicates increase
in economic growth, as well as investments of the
Government and Private Sector, and encouragement
of foreign capital investment. Accordingly, the
Plan calls for increasing total investment from SR
146.6 billion in 2004, to SR 243.9 billion by 2009,
increase of job opportunities and reduction of
unemployment through the creation of 1.2 million
job opportunities during the Plan period. Moreover,
the Plan anticipates diversification of economic
activities and sources of national revenue through
increased contribution of non-oil sectors to GDP.
The value added of these sectors is expected to
increase from about SR525.3 billion in 2004 to
around SR 677.2 billion in 2009. this is in addition
to expansion and development of public services
(health, education, housing, etc). By 2009, the
number of government hospitals will increase to
248 and the number of beds to 34,722, in addition
to increase of emergency health centers to 356
centers, support medical services, education and
housing. According to the Eighth Development
Plan, demand for housing is estimated to be around
one million units during the Plan period, and will
attempt to provide housing to needy families.
The future strategy of the Saudi economy
expects increase in the total value of crude oil
exports, from about SR 368.8 billion in 2004 to
about SR 398.5 billion in 2009, an average annual
growth rate of 1.56%. It also expects a surplus in
the trade balance as well as development in the
agriculture field (annual growth rate of 3.2%),
mining and quarrying (7.9%), petrochemicals (7.3%),
other manufacturing sectors (6.7%), electricity, gas
and water sector (4.2%), construction sector (6.7%),
real estate sector (5.8%) (5), as well as all other
economic sectors, which will grow in an integrated
manner leading to improvement in the standard
of living to citizens in conjunction with social and
economic stability.
(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(2) Ministry of Labor, Annual Report, 2005(3) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(4) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009 (5) Ibid
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Theme Two: Policies and Measures Supporting Investment in the Kingdom
The Saudi economy has entered a new stage
of economic development and progress that
accelerated growth rates during the last few
years. Even more, higher rates of growth are
expected in the coming years, in line with the
regulatory measures which aim at boosting
economic development process, increasing the
volume of domestic and foreign investments and
strengthening the capital market. The expected
higher growth rates are also in line with the sectoral
measures which aim at reorganizing a number
of economic sectors to participate effectively in
the development process. These sectors include
- inter alia - insurance sector, tourism sector, gas
sector and mining sector. Measures aiming to
boost economic growth also include restructuring
a number of government agencies to improve
their efficiency (restructure of the Public Pensions
Agency, the judiciary bodies, and modernization
of the Department of Zakat and Income Tax). This
aims also to support the privatization strategy in
order to raise production efficiency and to increase
the private sector role in economic activities and
development (privatization of the industrial parks,
postal services, etc.)
Economic Activities Planned for Privatization (1)
Privatization represents one of the most important
constituents of the economic policy in the
Kingdom. This policy comprises the following: _ Water and Sanitary Waste
_ Desalination of Sea Water_ Telecommunications _ Air Transport and Related Services _ Rail Roads
Roads, which include:_ Management, operation & maintenance of
express roads for which there are no alternative
roads
− Construction & operation of new express roads_ Airport services_ Postal services_ Grain Silos & Flour Mills_ Seaports services_ Industrial Parks services_ Government shares in joint stock companies,
including Saudi Electricity Company, banks, Saudi
Basic Industries Corporation (SABIC), Saudi Mining
Company (MAA`DEN), Saudi Telecom Company as
well as government shares in local refineries_ Government shares in the capital of joint Arab
and Islamic investment companies_ Government Hotels_ Sports Clubs
Municipal services, such as: _ Establishment and operation of abattoirs_ Establishment and operation of public markets
and sales centers_ Establishment, operation and maintenance of
public parks_ Transport services and collection of municipal revenue_ Cleaning and waste disposal services
Educational Services, such as: _ Construction & maintenance of educational
facilities_ Printing of textbooks_ School related transport_ Students boarding houses_ Leasing & operation of schools and universities
facilities
(1) For further information see: 8th Development Plan, SAMA’s 41st Annual Report & Achievements of 7th Plan
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Social services, such as: _ Management & operation of social care
institutions_ Services related to placement of Saudis in the
private sector
Agriculture services, such as: _ Services related to health quarantines, diagnostic
laboratories and veterinary clinics
Health services, such as:_ Construction & operation of health facilities_ Patients transportation services
Economic Freedom & the Enhancement of
Investment Climate
The Kingdom has embarked, during the last five years,
on implementing an ambitious program of economic
reform. This concerted effort aims at encouraging
foreign capital inflow into the Kingdom, creation
of adequate job opportunities for the growing
number of citizens as well as achieving tangible GDP
growth. Relevant statistics published by the Central
Department of Statistics and Information indicate a
growth in GDP of 6.5% at fixed prices and 22.7% at
current prices in 2005. GDP has, for the first time ever,
exceeded the level of SR1 trillion. This is attributed
to many factors, including the increase in oil prices
in the global markets, economic reform policy and
the ongoing improvement in the investment climate.
These factors contributed together to acceleration of
economic growth and increase of local and foreign
investments.
Growth prospects for the year 2006 inspire optimism.
The impact of the same factors is likely to prevail,
leading to further growth in all sectors of the Saudi
economy. Moreover, the private sector is expected
to be a major beneficiary from the improvement in
the local business environment. Such improvement
will also contribute to attraction of more foreign
investment, and will enhance the level of confidence,
which will, in turn, lead to increase in local investment.
Regarding economic freedom and its relationship with
the investment climate in the Kingdom, the Economic
Freedom Index (1), issued by Heritage Foundation,
indicates that the Kingdom has obtained an average
of 2.99 points, which means that the Saudi economy
is “Mostly Free”, as indicated by the report.
Investment is the main engine of economic growth.
It affects growth as it forms an integral part of the
aggregate demand. Investment has a direct impact on
stimulation of domestic production and contributes
to accumulation of productive assets required to
maintain production capacity of the economy and
enhance its competitiveness.
Successive development plans paid due attention to
encouragement of investment and growth of fixed
capital in order to achieve strategic goals represented
in diversifying economic base and realizing sustainable
development. Remarkable achievements were
realized in this regard. Foremost among these are the
policies of economic reform, economic liberalization,
privatization and transparency. This has supported
the role of the private sector in the development
process, where private non-oil investments, up to
2004, constituted about 75.6% (2) of total investments.
(1) SAGIA, Saudi Arabian General Investment Authority Annual Report, Investment Performance, 2005(2) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009
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Private Sector Companies by Major Activities 2004 (4)
Sector Number Percent of Total (%)
Wholesale and Retail Trade 330,638 48
Agriculture, Hunting and Fishing 95,593 14
Manufacturing 88,066 13
Hotels and Restaurants 64,245 9
Other Activities 114,284 16
Total 692,826 100
Hence it became the main pillar of national economy.
The growing role of the private sector in fixed capital
formation represents a positive phenomenon, which is
expected to continue in the future, particularly under
governmental policies which support the investment
climate and boost efforts of the private sector. The
Government was keen to provide a positive climate
and opportunity for maximizing the role of the private
sector. The best evidence for that is the privatization
strategy, which provides promising investment
opportunities for this sector and, in the meantime,
enhances its role in socio-economic development. The
main activities covered by the recent privatization
process include the following (1):
- Granting a license for a second operator in the field
of mobile telephone services in 2004, and identifying
2006 as the deadline for granting a license for
a second operator in the field of land telephone
services.
- ARAMCO concluded a contract with a private
company 2004, to build and operate four power
generation stations.
- Transforming the Saudi Mining Company (MAA’DEN)
into a joint stock company, where 50% of its projects
will be offered, completely and undivided, for public
subscription.
- Issuing the New Mining Code as per Royal Decree No.
M/47 in 2004. This decree reflects the consideration
paid by the Government to participation of the
private sector in this field. It provides attractive
incentives to encourage investment in the mineral
resources sector, for Saudi as well as foreign investors.
Such incentives include, inter alia, full exemption for
mining equipment from import duties.
- Issuing of the Council of Ministers Resolution No.
90 in 2004, regarding opening skies for domestic
air transport in an “Open Sky Policy” for national
companies. Accordingly, two domestic airlines were
established: NAS Airlines and SAMA Airlines.
- Offering 50% of Government shares in the
National Cooperative Insurance Company for public
subscription.
The investment climate in the Kingdom is further
enhanced by giving the private sector the leading role
in investment and economic development through
investment in various economic sectors.
SAGIA’s statistics indicate that the total number of
licensed private sector projects, up to 2004, amounted
to 2,247, with total financing of SR 57.5 billion (2), while
1,540 licenses were granted to foreign investors to
establish industrial, agricultural and services projects
with total capital of SR 39 billion (3). With respect to
joint Saudi / foreign investment, licenses were granted
to 707 projects with total financing of SR 18.5 billion,
as shown in the licensed projects table:
(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) SAGIA, Saudi Arabian General Investment Authority, Data Published by Investment Department(3) Ibid(4) CDSI, Central Department of Statistics & Information,, Establishments Survey Data, 2004
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Licensed Joint Saudi – Foreign Investment Projects 2004 (1)
Sector NumberTotal capital (SR, million) Share in Capital (%)
Saudi Foreign Total Saudi Foreign
Industry 306 8,348 6,777 15,125 55.2 44.8
Services 399 1,556 1,755 3,311 47.0 53.0
Agriculture 2 37 54 91 4.65 59.5
Total 707 9,941 8,586 18,527 53.66 46.34
The Saudi share in the industrial, agricultural and
services projects amounted to 17.3% with a value
of more than SR 9.9 billion, while the share of
foreign investors amounted to 82.7% with a value
of SR 47.5 billion. This enhances the role of the
investment strategy which aims to attract foreign
capital and encourage the Saudi private sector
to improve its efficiency and competitiveness
and keep abreast of the global economic
developments.
The Kingdom is still endeavoring to prepare
a comprehensive long-term strategy for
restructuring the economy. It has endorsed
the establishment of many regulatory bodies,
issued trade related laws, and negotiated aiming
at signing a number of bilateral agreements
concerning free trade, and coordination of
policies and trade regulations among GCC States.
All these efforts are directed towards facing
globalization challenges and reaping its fruits in
the 21st Century.
The Kingdom & World Trade Organization (WTO) (2)
The Kingdom signed the accession agreement to
join the World Trade Organization on November 11,
2005, to become officially member No. 149, after
more than ten years of negotiations. The Kingdom’s
accession to WTO aims to integrate the Kingdom
into the world economy and to shift the Saudi
economy from a local Arab economy to a global
one. The agreement comprises three sections;
all of them come under the accession protocol
document signed by the Minister of Commerce &
Industry on behalf of the Kingdom’s Government.
Signing of the agreement is considered as an official
endorsement by the Kingdom of accepting the
terms and conditions of accession stated in the table
of unified commitments concerning agricultural
and industrial commodities sector, which amounts
to 7,177 commodities representing the first section
of the agreement. The services sector includes 12
main activities, 155 sub-activities and 4 methods
for delivery of services, and represents the second
section. The report of the working team, which
includes 316 paragraphs that explain legislative,
legal, investment, economic, trade, financial,
technical, health and environmental policies in
the Kingdom represents the third section of the
agreement.
According to this agreement, the Kingdom obtained
59 exemptions, foremost among which are:
- Using the principle of gradual penetration to
markets in increasing foreign capital invested in
services (49% at the time of accession, increasing
to 51% after one year of accession and to 70%
after three years of accession).
- Exempting the Kingdom from implementing
the government procurements agreement. It
is an agreement of some parties (of specific
membership) and not a multilateral one. The
(1) SAGIA, Data Published by Investment Department(2) See Ministry of Commerce & Industry Website: www.commerce.gov.sa
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country has the right to purchase national
products of goods and services and is exempted
from the principle of national treatment.
- Continuing with provision of loans from industrial
and agricultural banks and maintaining exemption
of imported products from import duties.
This agreement will bring many benefits to the
Kingdom, the most significant among them are:
•The consumer is free to choose goods and
services available in the local market, which has
become an integral part of the global market. The
consumer is free to choose the products of the
highest quality at the minimum possible price.
•Consumer confidence in the available goods
and products will be free of commercial deceit
and manipulated prices. This is because local and
foreign goods will be subject to strict rules and
controls, such as meeting international standards,
health measures and the protection of intellectual
property rights.
•More opportunities for Saudi products to enter
into the markets of all WTO 148 member countries,
which enjoy low custom ceilings and open
economic and trade policies. Moreover, Saudi
exports will no longer be subjected to aggressive
measures from any country, as was the case prior
to accession to the WTO.
•Resorting to Trade Disputes Settlement Board
of the WTO which is characterized with its prompt
decisions and enforcement of the measures aiming
at achieving fairness to all member states.
The Impact of the Kingdom’s Accession to WTO
on the Saudi Economy (1)
The Kingdom’s accession to the WTO is clear
evidence of the adequacy of its economic, fiscal
and legislative environment. This accession is likely
to lead to marked enhancement of Kingdom’s
investment climate and higher value added to
the Saudi economy in general. In particular, this
accession will enhance the level of confidence
in the Saudi capital market and encourages
competent companies to enter this market,
particularly in the long run.
With respect to the capital market, accession to the
WTO represents an important event for the financial
services sector, mainly securities investment in
the Saudi Capital Market. Such importance stems
from the commitments resulting from accession, a
matter which will enhance the investment climate
in general. The commitments are in harmony
with general objectives set by the Capital Market
Law through activation of the section related to
opening the door for non-banking institutions to
practice important activities related to securities
in the Kingdom (such as activities of dealing and
administration). This is also consistent with the
strategic objectives set by the Capital Market
Authority in this regard.
Regarding the impact of accession to WTO
on tariff protection, industries depending on
continuity of such protection will be affected to
a limited degree. Custom duties will decrease for
396 commodities out of 458 currently protected
by the 20% category as well as 197 commodities
out of 492 currently protected by category 12%.
However, the decrease of tariffs will not be large,
since most of them were reduced from 20% to
15% and the protected ones from 12% to 10% or
to 6.5%. At the beginning of the accession, the
custom duties of some commodities protected
by 20%, such as sweets and chocolates, will be
reduced to 8%, lubricants to 10%, steel pipes to
8% and plastic products, paper, steel and furniture
to 15%. After three years of accession, computer
(1) See Ministry of Commerce & Industry Website: www.commerce.gov.sa
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sets and related accessories as well as telephone
sets (land and mobile) will be exempted, and after
five years from the date of accession, the custom
duties of the chemical materials protected by the
20% and 12% categories will be reduced to 6.5%.
Such materials include fertilizers, soap, perfumes
and plastic products.
As a result of the Kingdom’s accession to the WTO,
Saudi companies will face intensive competition
from multinational companies. This implies that
some small enterprises which used to operate
inefficiently in the past, despite high costs of
production and operation, just by benefiting from
protection policy, will be forced to exit the market
unless they merge with larger national or foreign
companies, or try to improve the level of efficiency
and competitiveness. Moreover, some goods
and services, which currently enjoy generous
government support, will no longer receive such
subsidies. Multiplying the productivity of the
economy and diversifying its activities, support
of foreign investment and its integration with
national investment, as well as other strategic
bases required for development of the economy
and community, will constitute the factors which
maintain the material and human resources of the
economy and to cope, in a flexible manner, with
changes resulting from accession to the WTO.
Saudi Capital Market (1)
The Arab Motor Company was the first joint stock
company in the Kingdom. It was founded in
1932, but was subsequently liquidated. The Arab
Cement Company, founded in 1954, was the first
Saudi joint stock company to be listed in the stock
market.
It was decided, in 1983, to trade securities through
commercial banks only. In 1984, SAMA issued a
circular explaining the methods and conditions of
trading shares.
To overcome the constraints which faced the
process of trading shares, the ESIE system was
adopted in 1990. This system was replaced by
TADAWUL system in 2001, which is based on
the latest international technologies. During
this period, non-Saudis residing in the Kingdom
were allowed to invest in the Saudi Capital
Market via mutual investment funds. The Royal
Decree No. 9 was issued in 2003, endorsing the
Capital Market Law. Royal Decree No. 114/A was
also issued in 2004, regarding formation of the
(1) SAMA, Saudi Arabian Monetary Agency, 4th Q Economic Development Report, 2005
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Development of the Saudi Capital Market (2)
Years General IndexNumber of
Transactions(Thousand)
Number of Shares(Million)
Value of Traded shares
(SR, billion)
2000 2258.3 489 555 56,3
2001 2430.1 605 692 83,6
2002 2518.1 1,033 1736 133,8
2003 4437.6 3,763 5,566 596,5
2004 8206.2 13,319 10,298 1,774
2005 16712.6 46,607 12,281 4,139
Capital Market Authority to be entrusted
with management and supervision of the
market. It is noteworthy that the Capital
Market Authority is an autonomous body.
The Saudi Capital Market is the largest Arab
market where daily average transactions
amount to about 300,000, with an average
value of SR 22 to 25 billion per day. Until
the third quarter of 2006, the number of
companies listed in the Market was 82,
including 10 companies in the banking
sector, 30 companies in the industrial
sector, 21 companies in the services
sector, 8 companies in the cement sector,
9 companies in the agricultural sector,
2 in the telecommunications sector, and
one company in each of electricity and
insurance sectors. The number of the listed
companies is expected to reach 86 by the
end of 2006.
The Saudi Capital Market witnessed
steady progress since 2002, due to many
stimulating factors, such as: increasing
oil prices, increased repatriation of Saudi
capital since the September 11, 2001
events, privatization programs, allowing
the private sector to invest in economic
sectors which were previously restricted
to the public sector, increased public
awareness regarding benefits of investing
in Saudi Capital Market, increased scope
for bank facilities provided to investors,
tendency by expatriates to invest in
mutual funds, steady growth of the GDP,
accession of the Kingdom to WTO as well
as increasing number of companies with
more family companies being transformed
into joint stock companies listed in the
capital market.
It is noteworthy to know that a total of 3.7
billion shares were traded in 2005 with a
total value of SR 1,483.8 billion. The market
value of the issued shares amounted to
SR 2,423 billion and the total number
of transactions reached 17.167 million(1)
during the same year. The following table
shows development of Saudi Capital
Market during the period 2000 - 2005. It
is noteworthy to note that the value of the
General Index (TASI) amounted to 20,600
points during the first month of 2006.
(1) SAMA, Saudi Arabian Monetary Agency, 4th Q Economic Development Report, 2005(2) SAMA, Saudi Arabian Monetary Agency, Statistical Review Circular, 2nd Q 2006
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Growth Rates of Corporate Profits for Major Sectors of the Capital Market (First nine months of 2005) (1)
Sector Rate of Growth of Profits (%)
Agriculture 97.87
Insurance 88.67
Banks 61.26
Services 53.85
Industry 51.17
Telecommunications 21.84
Electricity 17.86
Cement 2.34
The industrial sector showed a high degree of coherence during 2005 reflecting development and
expansion of projects pertaining to large companies in the oil, gas and petrochemical sectors, as well
as major regional industries such as steel and aluminum, along with cement and services sectors.
The following table shows corporate profit in the major sectors of the Saudi Capital Market during
the first half of 2005:
With respect to mutual funds of commercial
banks, the value of their total assets amounted
to SR 138 billion in 2005 with an annual growth
rate of 127.1%. The number of participants
was 663,000, with an annual growth rate of
186.5%, while the number of active funds
amounted to 199, with an annual growth rate
of 5.9 % (2).
The future prospects of the Saudi Capital
Market are promising. New joint stock
companies will be listed and government
shares in some companies will be sold. These
are in addition to reduction of the nominal
value of the share from SR 50 to SR 10, allowing
expatriates to trade shares in addition to
investment in mutual funds, allowing GCC
citizens to invest in the Saudi Capital Market,
and adopting the most advanced technology
in the market, as well as diversifying activities
for joint stock companies or others. All of this
was crowned by announcing the establishment
of “King Abdullah Financial Center” which will
provide an attractive working environment
for the increasing number of Saudis who
are expected to join the Financial Sector.
The Financial Center will include a Financial
Academy, offices, residences, corporate head
quarters for companies and banks in the
financial sector, in addition to various services.
The Financial Center will be constructed on
land North of Arriyadh City with an area of 1.6
m² and will cost between SR 25 - 35 billion
which is expected to be completed within a
period of three years (3)
The Kingdom obtained a credit rating of (A+),
based on its strong financial position of being
the world largest oil exporter, as stated in Fitch
Ratings report, which represents one of the five
international specialized agencies in credit
ratings. This report supports a previous report,
published by Standard & Poor sat the beginning of
(1) SAMBA Financial Group, SAMBA Local Mutual Funds, 4th Q Report, 2005(2) SAMA, Saudi Arabian Monetary Agency, Economic & Statistic Research Administration, 2005(3) Al-Hayat Newspaper, issue # 15741, May 10, 2006
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2006, which gave the Kingdom a rating of (A1) (1)
regarding the same rating in addition to a rating
(A) regarding Arriyadh’s commitment to foreign
currency. Upgrading of the Saudi credit rating is
attributed to many reasons, foremost among them
are: improvement of domestic and external
financial statements, continuity of economic
and structural reforms represented in the
accelerated pace of private sector growth,
and decreased local political risks.
Real Estate Investment & Companies
The Saudi Real Estate Sector is of particular
importance to national economy. This
is reflected in the provision of housing
units, edifices, shops, industrial parks and
recreational, health and educational facilities
required by society and the economy in
general. This Sector also participates in
provision of different government facilities.
The Real Estate Sector has forward and
backward linkages, with about 80 -100 sub-
sectors of the economy, particularly building
materials and contracting sectors.
The Real Estate Sector comprises two main
sub-sectors: Real Estate Bureaus and Real
Estate Companies. These are Saudi joint stock
companies, which are well known and enjoy
the confidence of different groups benefiting
from their services. They are managed by the
private sector and are specialized in real estate
investment and development. Some have
crossed the barriers of the Arab World, and
are present particularly in Dubai and Sharjah.
Others have crossed the borders of local and
Arab depth to regional and international levels
through concluding strategic partnerships
and coalitions with a number of the largest
international real estate companies.
The Real Estate Development Fund provides
easy term loans to support investment in this
sector. It is noteworthy to note in this respect,
to refer to the Royal directives regarding
increase of the Fund’s capital by SR 9 billion
from the State Budget’s surplus of 2006, to
enable the Fund meet the steady growth of
demand for loans. This will boost the role of
the Real Estate Sector and encourage relevant
companies and firms. Private companies
operating in this Sector will build, during the
Eighth Development Plan 2004 - 2009, about
875,000 housing units out of the total expected
demand of one million housing units. Around
280 million m² of residential land is likely to
be available for the Real Estate Sector so that
it can meet housing demands. The Real Estate
Development Fund will provide about 75,000
loans with a total value of SR 22,500 million for
construction of about 90,000 (2) housing units
in different regions of the Kingdom. Moreover,
relevant studies indicate that total demand
for housing is likely to reach about 2.4 million
units by 2020, that requires an investment of
SR 1.2 trillion to meet such demand (3) .
No doubt the Real Estate Sector in the
Kingdom is facing major challenges and
great responsibilities. Hence, it is imperative
for this Sector to concentrate on forming
joint stock real estate companies. This form is
considered the best for the economic activity
that believes in separation of ownership from
management. It also allows for the attraction
of substantial capital as well as coordination
with other related agencies such as banks,
real estate finance companies, contracting
companies, and real estate mortgage and
installments companies.
(1) Al-Hayat Newspaper, issue # 15841, August 18, 2006(2) All Figures are Derived from the 8th Development Plan, 2005 - 2009(3) Study by SAMBA Financial Group, April 2006
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10 times per person per year, due to holding large
amounts of cash at home.
The monetary policy aims at achieving stability
of prices, the exchange rate of the Saudi Riyal,
providing liquidity to all sectors of the economy
and ensuring the stability of the financial system.
The inter-bank interest rate in the Kingdom
increased markedly during 2005 as a result of the
monetary policy in effect and in line with rising
interest rates in the global markets. The inter-bank
interest rate (SIBOR) for a period of three months
amounted to 4.97% (3) during the fourth quarter
of 2005.
Total bank deposits during 2005 reached SR 482
billion. Total commercial banks liabilities (bank
credits and investments) amounted to SR 595.9
Development of the Banking System
The Kingdom of Saudi Arabia has a modern banking
system in terms of the quality of service and
efficiency of regulations. The banking sector in the
Kingdom comprises eleven national and joint banks
in addition to branches of Gulf banks such as: Gulf
Bank, Emirates Bank, Muscat Bank and Kuwait Bank,
in addition to several licenses granted for opening
branches of foreign banks. The total number of
bank branches in the Kingdom amounted to 1,282(2)
by the second quarter of 2006.
SPAN Cards are the most common used of all other
credit cards. They are used for direct withdrawal of
cash from the holder’s current account. However,
the use of cash machines (ATMs) may be as low as
(1) Ministry of Economy & Planning, Demand Analysis of the Eighth Development Plan, 2005 - 2009(2) Eight Development Plan, 2005 - 2009(3) SAMA, Research & Statistics Administration, Economic Development, 4th Q, 2005
Demand for Housing by Administrative Provinces and Type of Demand during the 8th Development Plan 2005 - 2009 (1)
Provinces
New DemandReplacement
DemandTotal
Number (Thousand)
%Number
(Thousand)%
Number (Thousand)
%
Riyadh 160 25.5 20 19.5 180 24.7
Makkah 170 27.0 25 24.4 195 26.7
Madinah 34 5.4 5 4.9 39 5.3
Qassim 20 3.2 5 4.9 25 3.4
Eastern Province 118 18.8 20 19.5 138 18.9
Assir 30 4.8 5 4.9 35 4.8
Tabuk 13.5 2.2 4 3.9 17.5 2.4
Hail 15 2.4 3 2.9 18 2.5
Northern Borders 7 1.1 1.5 1.5 8.5 1.2
Jazan 30 4.8 5 4.9 35 4.8
Najran 7 1.1 2 1.9 9 1.2
Baha 11 1.8 5 4.9 16 2.2
Jouf 12 1.9 2 1.9 14 1.9
Kingdom 627.5 100 102.5 100 730 100
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billion. Commercial banks claims on the private sector amounted to SR 435.9 billion. Total foreign assets
of commercial banks stood at SR 91.4 billion while total foreign liabilities amounted to SR 65 billion.
These figures, in general, are higher compared to the previous year, and reflect remarkable growth in the
credit and investment activities of banks (1).
The Saudi Arabian Inter-bank Express Transfers (SARIE) represents a great stride in the field of automated
banking services and trade transactions in the Kingdom. This system constitutes the foundation for a
number of payment and financial settlement systems. Since its adoption by the end of 1990, SARIE has
progressed steadily in terms of technology and techniques of banking. The National Bank of Kuwait was
linked to SARIE system in 2006 and Muscat Bank and Deutsche Bank are planning to join this system
shortly.
The Saudi Pay Network (SPAN) continued to witness good progress in terms of transactions made. The
number of ATMs amounted to 5,377 by the second quarter of 2006. The number of ATM cards issued by
local banks exceeded 9 million. Moreover, the number of points of sale continued its growth reaching
about 48,700 by the second quarter 2006 (2). The following table shows performance indicators of the
banking sector in 2005:
Performance Indicators of the Banking Sector 2005 (3)
ItemValue
(SR, billion)Annual Rate of Growth
(%)
Total Bank Deposits 482 12.0
Total Commercial Banks Liabilities 595.5 21.6
Total Claims on Government Semi Government 159.5 33.1
Total Claims on Private Sector 435.9 38.9
Total Foreign Assets of Commercial Banks 91.4 12.0
Total Foreign Liabilities of Commercial Banks 65 42.2
(1) SAMA, Research & Statistics Administration, Economic Development, 4th Q, 2005(2) SAMA, 2nd Quarterly Report, 2006 (3) Table Derived from SAMA's 4th Quarterly Economic Development Report, 2005
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of all industrial firms. The third component
is the Coastal Resort which is composed of
a number of hotels overlooking the sea as
well as super residential apartments. The
fourth component is the Financial Island, the
fifth is the residential district while the sixth
component is the educational zone, which will
include model schools for all levels of general
education, colleges, institutes and research
centers that will sponsor Saudi talented and
gifted students and direct the Saudi economy
towards new horizons.
King Abdullah Economic City will be the largest
joint venture ever seen by the Kingdom with a
total cost of SR 100 billion. After completion,
KAEC will be the largest integrated economic
city in the world to be implemented by the
private sector. KAEC is expected to provide
about one million job opportunities (2).
KAEC was listed in the Saudi Stock Market via a
joint stock company (EMMAR Economic City) in
July 2006, where 30% of the capital was offered
for subscription. It represents the first split
offer without subscription allowance. This is
the second Emirates investment in a joint stock
company as partner with the government; the
first being Etihad Itissalat (Mobily).
• Prince Abdulaziz Bin Mussaed Economic
City in Hail
This economic city will be established on
an area of 156 million m² with a total cost
of SR 30 billion over ten years. This economic
city is being developed by an investment
consortium under the supervision of SAGIA. The
city will provide about 30,000 job opportunities,
thereby contributing to economic development
of the region. It will also constitute a vital pillar
of development of national economy. The
Economic Cities
The economic strategy of the Government
includes, within the economic development
program, establishment of multi-activities
economic cities, which are more coherent with the
new position of the Saudi economy, particularly
after the Kingdom’s accession to WTO. That
entails the construction of more infrastructure for
the establishment of gigantic projects, attraction
of national and foreign expertise, attraction of
foreign investments as well as preparation of
an investment environment on scientific basis
to attract investors and value added industries.
Three economic cities were announced so far.
These are:
• King Abdullah Economic City (KAEC)
This is the first, and the most important,
economic city. It occupies a land area of 168
million m² along the Red Sea Coast and about
35 kilometers away from Rabigh Industrial City.
KAEC comprises six major components (1). The
first is the Sea Port which will be constructed
with state – of – the – art technology and stands
on an area of 2.6 million m². The second is the
industrial park which will occupy an area of 8
million m² and comprises a number of facilities
constructed especially to meet the needs
(1) Eastern Province Chamber of Commerce & Industry, Economic Magazine, Issue No.404, 2006(2) See SAGIAs Website www.sagia.gov.sa
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Center, Medical Studies and Biological Science
Complex as well as integrated health services,
residential areas and shopping centers (1).
The City comes into existence to keep abreast
of substantial economic progress experienced
by the Kingdom, support the information
sector in general, add new advantages to the
industrial sector in particular, and provide a
wide range of investment opportunities to
the Private Sector.
• Jazan Economic City (2)
Jazan Economic City (JEC) is located 50 kilometers
North of Jazan City on a total area of 100 million
m² on a coastal strip with a length of 12 Km and a
depth of 8 Km inland. More than SR 100 billion of
industrial, commercial and housing investments
are expected in JEC following completion of the
infrastructure of the city.
private sector will enjoy adequate investment
opportunities in this city, which will include
the establishment of an international airport,
a dry port, a center for supply and handling as
well as a station for road passengers. It will also
include the establishment of many districts for
educational, agricultural, industrial, mining,
tourism and housing services.
• City of Economic Knowledge in Madinah
This City is the first of its kind in the Kingdom.
It is based on knowledge industries and the
third of SAGIA’s series of economic cities
within its plan for repatriation of Saudi Capital
and the attraction of foreign investment.
The City will occupy an area of 4.8 million
m², of which the built area will be around
9 million m², including 250 thousand m2
of office space, 4,000 shops and stores and
30,000 housing units. The total value of
expected investment is about SR 25 billion.
This City, which is designed to accommodate
200,000 people, will provide around 20,000
job opportunities.
The City will comprise many major
components including Taiba Technology and
Knowledge Economy Complex, Advanced
Technological Studies Institute, Prophet’s
Sunna Museum, Islamic Civilization Studies
(1) See SAGIA's Website www.sagia.gov.sa (2) Al-Hayat Newspaper, Issue No. 15921, November 6, 2006
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Eventually, it will contribute to the creation of
about 500,000 jobs, directly and indirectly.
JEC will concentrate on heavy, energy-
intensive industries in which the Kingdom
enjoys unique comparative advantages. JEC
will benefit from its strategic location near the
most important shipping lines in the Red Sea
and near the Indian Ocean. This will facilitate
transportation of the industrial products of
this city to Asia, Africa and Europe. The City,
which enjoys integrated facilities, will meet
the requirements for the establishment of
different secondary industries, particularly
the support of agricultural and fishing
industries in line with the comparative
advantages of the Jazan Region. The City will
provide a large number of job opportunities
for the residents of Jazan region, assigning
special areas for activities related to
agricultural, animal and fish products. Such
areas include the Research & Development
and Support Zone and provision of specialist
services for these products.
Jazan Economic City also comprises the
establishment of a regional center for
distribution of iron ore and granules in the
Middle East Region. The Center will assist
in establishing basic and manufacturing
steel industries in the Economic City. It will,
furthermore, enhance the transport activity
in the seaport. The Center will be established
and operate in accordance with the latest
environment-friendly technologies.
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Theme Three:
Rules & Related Investment
Regulations in the Kingdom
Labor Law (1)
Royal Decree M / 21 was issued on November 15, 1969,
endorsing the Labor and Workmen’s Law, By-Laws, and
related decisions which regulate work in companies.
The Law identifies the duties of employers towards
workmen as well as the rights of workman. All issues
related to this law were assigned to the former Ministry
of Labor and Social Affairs.
As a result of development witnessed by the economic
companies and the need for substantial measures
regarding the law, following the transformation of the
Ministry of Labor & Social Affairs into two ministries
(Ministry of Labor & Ministry of Social Affairs), Royal
Decree M / 51 was issued on September 27, 2005,
endorsing the new labor law under supervision of
Ministry of Labor.
The provisions of this law apply to any contract under
which any person undertakes to work for an employer
and under his direction or supervision against
compensation. The law also applies to workmen in
government and public corporations including those
working in pastures or farming, charity institutions
and agricultural firms which employ ten workers or
more. It also applies to workers in agricultural facilities
processing their products, permanent operators of
agricultural machinery, part-time workers, within the
limits of safety, occupational hazards, and training
contracts regarding those not working with their
employer.
The following shall be exempted from the provisions
of this law: members of the employer’s family who
constitute the only employees of the firm, housemaids,
marine workers in vessels with capacities less than
500 tons, agricultural workers other than those
stated in Article 5 of the law and non-Saudi workers
recruited for a specific task for a duration not
more than two months, in addition to players and
directors of sports clubs.
Foreign Investment Law (2)
The Foreign Investment Law was issued as per Royal
Decree M / 1 on April 10, 2000, and relevant By-laws
were issued as per Council of Ministers’ Resolution
1 on April 10, 2000. Both are referred to as “Foreign
Investment Law”. According to this Law, foreigners
(other than Saudis and GCC nationals) are not allowed
to have any business or activity inside the Kingdom
without obtaining licenses therefrom. The main
objective of the Foreign Investment Law is to make
investment in the Kingdom more attractive and to
streamline licensing procedures.
SAGIA is responsible for granting licenses to foreign
investors, and is also responsible for granting licenses
for activities not listed in the “Negative List” (3) and
activities not subject to regulation by another law. The
Foreign Investment Law and the “Negative List” make
investment in the Kingdom clearer and represent a
framework regulation rather than a comprehensive
regulatory group.
Excerpts from the law allowing possession and
investment of real estate by foreigners, issued
as per Royal Decree M / 15 on July 19, 2000.
> The foreign investor, who obtains a license
to undertake a business, shall have the right to
possess the required real estate for operation
of his business and providing housing for
himself and his staff.
> In case the license includes purchase of
buildings or vacant land for construction of
buildings, then the total cost of the project
(1) Ministry of Labor, Labor Law, For More Information See www.mol.gov.sa(2) For more information re Foreign Investment Law & By-laws See SAGIA's Website: www.sagia.gov.sa . (3) Negative List: Activities Which Exclude Foreign Cos. from Investment in: e.g. Early Operation in Oil Activities (Exploration, Drilling,
& Production), Some Industrial Activities, e.g. Military Equipment Industry, Military Uniforms, etc. For more information re the negative list see SAGIA’s Website: www.sagia.gov.sa .
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should not be less than SR 30 million, while the
Council of Ministers has the right to reduce this
amount. However, the law stipulates that the
property should be utilized within five years.
> Non-Saudis, residing legally in the Kingdom
are allowed to possess real estate for private
residence as per a license granted by the
Ministry of Interior.
Main Features of the Foreign Investment Law
- All foreign investors in the Kingdom should obtain
licenses
- Foreign investors may enjoy 100% ownership of
projects they establish in the Kingdom
- SAGIA is fully responsible for attracting foreign
investment to the Kingdom and providing licenses
through its One-Stop-Shop
- SAGIA exerts utmost efforts to streamline foreign
investment licensing. It is committed to study and
review all applications within 30 days
- According to the new Law, all fields are open to
foreign investment except those clearly prohibited
- Licensed foreign investors shall enjoy the same
treatment enjoyed by national investors. This makes
them eligible for easy-term loans provided to specific
projects as well as for custom duty exemption
- With respect to expropriation, foreign investors
are treated on equal footing with national entities.
Expropriation or confiscation of foreign investments
shall not take place except in cases of public interest
and against fair compensation
- Foreign businesses in the Kingdom shall no longer
be in need for Saudi Sponsorship as per residence
regulation. They have the right to sponsor their
workers
- Reduction of corporate profit tax, which exceed
SR 100,000, from 45% to 20% and cancellation of
temporary tax exemptions. This allows the foreign
companies to carry forward their losses.
Capital Market Law
The Capital Market Law was issued by Royal Decree
M / 30 dated July 31, 2003. The Law provides legal and
institutional framework for the capital market, and
contributes to its development in accordance with
latest international standards, as well as enhancing the
efficiency of operation and trading systems.
Main Features of the Capital Market Law are (1):
- The establishment of the Capital Market Authority
(CMA) as an autonomous body which is financially
and administratively independent and reports directly
to the Council of Ministers. The CMA enjoys all
powers required to perform its tasks as stated in the
law
- The establishment of a market for trading of
securities in the Kingdom under the name of “Saudi
Capital Market” which is incorporated as a joint stock
company
- The establishment of the “Securities Deposit Center”
as the sole agency in the Kingdom which is
authorized to carry out transactions related to
deposit of securities traded in the Kingdom, as well as
marketing, clearing and registering their ownership.
It is also sole agency authorized to register property
rights of securities traded in the market
- The forming of a committee for settlement of disputes
related to securities as well as an appeals committee
- The consideration of liability for all practices which
are based on deceit and forgery or trading of shares
according to information given by insiders and
imposing penalties on any one who commits or helps
others to commit such practices
Corporate Law (2)
The Saudi Corporate Law was issued by Royal Decree
M / 6 dated July 22, 1965. The law is composed of
234 articles and was amended several times. The law
identifies the types of companies in the Kingdom as
follows:
(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) For more information see Ministry of Commerce & Industry Website: www.commerce.gov.sa
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Limited Liability Company
- Limited Liability Company is usually referred
to as a limited proprietary partnership
- Number of partners not less than 2 and not
more than 50
- Shares cannot be offered for public
subscription
- Not allowed to practice banking, insurance
or investment activities
- 100% foreign ownership is allowed according
to the new Foreign Investment Law as from
November 3, 2001
- Minimum amount of capital shared by
partners is SR 500,000 in the event all
partners are Saudis. In the event all or some
partners are non-Saudis, the minimum
amount of capital will depend on the type
of activity to be practiced by the company
Joint Stock Company
- The Joint Stock Company takes two forms:
Public or “Open” Joint Stock Company,
where the shares are offered for public
subscription; Private or “Closed” Joint Stock
Company which does not offer any shares
for public subscription
- Minimum subscribed capital is SR 10 million in
case shares are offered for public
subscription (This capital may be increased
by the Ministry of Commerce in certain
situations)
- Minimum subscribed capital is SR 2 million
in the case of a Closed company (This
amount may be increased by the Ministry of
Commerce in certain situations)
- 25% of the subscribed capital should be paid
upon incorporation of the company
- The number of shareholders should not be
less than 5
- The capital is divided into shares of equal
nominal value of SR10
- The legal liability of shareholders is limited
to the value of their shares
- This type of company is the only one allowed
to practice banking and insurance activities
in the Kingdom
- Every member of the Board of Directors
should possess shares with a minimum value
of SR 10,000
Joint Liability Partnership
- It is usually referred to as a joint liability
company.
- Two or more partners are responsible
severally or jointly for the debts of the
company even from their personal funds
- Not allowed to practice banking or insurance
activities or brokerage in gold or silver
- Not allowed to offer its shares for public
subscription
- Incorporated in the same manner as a limited
liability company
Simple Liability Partnership
- It is usually referred to as a mixed liability
company
- There is one partner at least who is
responsible for the debts of the company
even from his personal funds
- Not allowed to practice banking or insurance
activities or brokerage in gold or silver
- Incorporated in the same manner as a limited
liability company
In addition to the previous types, there are
other types of companies, which are seldom
incorporated. These are:
Limited Partnership by Shares
- There is one partner at least who is
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responsible for the debts of the company
even from his personal funds
- At least four sleeping partners
- The subscribed capital should not be less
than SR one million
- 50% of the capital should be paid in cash or
kind upon incorporation of the company.
Company with Variable Capital
- The capital might change according to
incorporation documents
Cooperative Company
- A limited liability company or a joint stock
cooperative company might be established to
achieve a specific purpose such as reduction
of prices for certain products or services
Joint Venture Company
- It is an anonymous company known only to
the partners. It does not enjoy any autonomy
and is not subject to required procedures
of disclosure or obtaining a commercial
register.
Foreigners are allowed ownership in these
types of companies.
Commercial Register Law (1)
The Saudi Commercial Register law was
issued as per Royal Decree M / 1 dated July 10,
1995. According to this law, every merchant
whose capital reaches SR 100,000 or more
is required to register within 30 days from
the date of opening a commercial store or
from the date of possessing a commercial
store, or from the date his capital reached the
said amount. He shall submit an application
to obtain a Commercial Register from the
nearest center whether it is a main office or a
branch office or an agency.
The law also stipulates that all companies
incorporated in the Kingdom shall obtain
a Commercial Register within 30 days from
validation of its articles by the Public Notary.
The same applies for the branches of the
company.
It is conditional to obtain a Commercial
Register that the firm must be a member of the
nearest Chamber of Commerce & Industry.
Trade Agencies Law (2)
The Saudi Trade Agencies Law was issued as
per Royal Decree M / 11 dated July 22, 1962.
This includes the amendments regulating
the relations with the trade agencies of the
companies which grant such agencies.
The law stipulates that the Trade Agent must
be Saudi, with a Commercial Register, that the
capital of the companies assuming the role of
the Trade Agencies must be fully owned by
Saudis, and that all members of the Board
of Directors of such companies and their
authorized signatories must be Saudis.
Trade Marks Law (3)
The Saudi Trade Marks Law was issued by
Royal Decree M / 5 dated February 5, 1984.
The law includes procedures for registering,
(1) For more information see Ministry of Commerce & Industry, CR Law, Website: www.commerce.gov.sa (2) Ibid(3) For more information see text of Royal Decree M/5 dated 5 / 2 / 1984 , or Website: www.arablaw.org
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publicizing, renewing, canceling, transferring
the ownership, mortgaging and placing a lien
on trade marks, as well as licensing contracts,
joint trade marks and relevant fees.
According to this law, any distinguished
names or signatures, words, letters, numbers,
pictures, stamps or any sign or combination
of signs are considered as trade marks if
they are suitable to differentiate industrial,
commercial, agricultural or handicraft
products or forests utilization projects or a
natural resource or to evidence that the item
which will carry the trade mark is owned by
the owner of the trade mark for the sake of
processing, purifying, inventing or trading or
as an evidence of providing a service.
According to this law, the following groups
are allowed to register trade marks:
- Natural or legal persons
- Foreigners residing in the Kingdom who have
permission to undertake trade or handicraft
works
- Foreigners nationals of countries which have
reciprocal relations with the Kingdom
The rights of the owner of the registered
Trade Mark continue for ten years and
may be extended to a similar period upon
requesting renewal. It should be noted that
this law superseded the former “Distinctive
Trade Marks Registration Regulation” issued
by Royal Decree 8763 dated September 12,
1939.
Customs Law (1)
The Saudi Customs policy has a religious and
security objective represented in preventing
the entry of items which are against Islamic
beliefs or Saudi traditions and values or
cause harm to the society and its stability. It
also has an economic objective represented
in imposing custom duties on the imported
goods according to identified tariff
categories, facilitating export procedures
and protecting national industries. Moreover,
the law has a social objective which aims at
exempting necessary goods from custom
duties or imposing a very low tariff rate on
the imported ordinary goods.
The Customs Department, in keeping abreast
of the modernization process, simplification
of customs procedures as well as provision of
necessary information to concerned parties
with respect to Customs Law, has issued the
following, in line with the Customs Law and
relevant By-laws (2):
- Customs Provisions
- Directory of temporary entry of imported
goods free of duties provided they are re-
exported
- Directory of unloading goods in the customs
zones
- Directory of customs release documents
- Directory of goods which are subject to
provisions particularly precious goods
- Directory of zones designated for depositing
imported and exported goods
It should be noted that the Kingdom is a
member of the World Customs Organization,
the Harmonized System of Custom Duties
since 1990, and the Custom Cooperation
Council in Brussels as per Royal Decree M /
68 dated February 2, 1973. The Kingdom also
concluded an agreement among the States
of the Arab League for facilitation of trade
exchange and organization of transit trade
since 1953. This is in addition to implementing
a unified tariff for all Arab countries.
(1) Ministry of Finance, Saudi Customs(2) See General Customs Directorate Website: www.custom.gov.sa
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Income Tax Law
The new Income Tax Law (1) was issued by
Royal Decree M / 1 dated March 6, 2004. The
relevant by-laws were issued by Ministerial
Resolution 1535 dated July 28, 2004. The
new law includes many direct and indirect
tax advantages with the aim of creating
an attractive investment climate in the
Kingdom, attracting foreign investments
and enhancing the role of the private sector
in economic development in light of local
and international developments. The main
features of the new Income Tax Law are as
follows:
- Clarity and transparency
- Adoption of moderate tax rates
- Carrying forward losses for unlimited
number of years
- Adoption of group & accelerated assets
depreciation approach
- Adoption of self allocation
- Endorsement of deduction tax for the first
time
- Clear identification of the rights and duties
of the tax department and tax payers
- Enhancing the mechanism of tax collection
(clear measures to prevent tax evasion and
irregular provision of tax declarations)
- Implementing the right of the tax payer to
appeal to the Grievance Board for the first
time in the Kingdom (2)
Standards & Measures Law (3)
The Saudi Weights and Measures Law was
issued by Royal Decree 29 on January 27,
1964. This law includes identification of
the standard decimal units adopted in the
Kingdom. These are:
- Units of Length: The Meter and its parts
- Units of Weight: The Kilogram and its parts
- Units of Volume: The Liter and its parts
- Units of Area: The Square Meter and its
parts
These units are related to corresponding
international standard units. The law stipulates
that all companies and firms, importing goods
to the Kingdom or producing goods in the
Kingdom or exhibiting goods for sale, shall
put these units on such goods or packages.
Insurance Law
The Saudi Insurance Law was issued per Royal
Decree M / 32 on July 31, 2003 (4). The law
aims at setting a regulatory framework for
the local insurance market which includes
health insurance, and insurance against
(1) Ministry of Finance, Informative Bulletin re the new Income Tax Law, 2004(2) For more information see Department of Zakat and Income Tax Website www.dzit.gov.sa (3) Ministry of Commerce & Industry Website: www.commerce.gov.sa (4) 8th Development Plan 2005 - 2009
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vehicle accidents, aviation accidents, fire,
engineering, goods as well as miscellaneous
accidents. The law also aims at enhancing
the regulatory role of SAMA in the field of
insurance, identifying management criteria
and requirements to ensure the quality
of environmental services and to protect
customers and investors of this sector.
This law will enhance competition in this
sector and achieve further improvement of
insurance services provided by specialized
companies, brokers, agents, consulting
bureaus and insurance auditing bureaus.
Social Insurance Law (1)
The Saudi Social Insurance Law was issued
by Royal Decree M / 2 dated November 15,
1969 and became effective in February
1973. The law was amended by Royal Decree
M / 33 on November 29, 2000 and became
effective as of March 25, 2001.
This law regulates two types of contributions
to the social insurance system:
- Occupational hazards, where the system
provides compensation in case of work
injuries (the employer pays 2% of the worker’s
wage irrespective of his nationality).
- Pensions, where the system provides
compensation in case of occupational
disability, old age and death (18% of the
wage equally between the worker and
employer on 50:50 basis and it is applied
for Saudis only). The insurance branches
may be expanded to provide other types
of compensation in line with the law.
The occupational hazards branch is
applied, on obligatory bases, on all workers,
irrespective of gender, age or nationality.
The pension branch is applied, on obligatory
basis, on all Saudi workers irrespective of
gender. However, worker’s age should be less
than sixty at the time of applying the law. (2)
General Environment Law (3)
This law aims to protect the environment
against pollution, public health;
conservation, and the development and
rational utilization of natural resources. It
also aims to make environmental planning
an integral part of the comprehensive
development planning in the industrial,
agricultural and urban fields. Besides, the
law intends to enhance environmental
awareness, to deepen the sense of
responsibility towards environment
protection on the part of individuals and
groups, and to enhance voluntary efforts in
this regard.
The law obliges everyone who undertakes
production or service activities or others
to take necessary measures to ensure
protection of the environment and not
to exceed the approved environmental
safety limits as stated in the by-laws. The
existing projects, at the time of issuance
of this law, will be given a grace period of
five years to rearrange their situations in
line with this law. In case it is proved that
this period was insufficient, it might be
extended by a decision made by the Council
of Ministers based on a recommendation
by the concerned Minister. Credit funds
are to adhere to environmental standards
as a prerequisite for financing any
project (Articles 15 & 16 of the General
Environmental Law).
(1) General Organization for Social Insurance (GOSI) - Social Insurance Law (2) For more information see GOSI Website: www.gosi.gov.sa (3) Presidency of Meteorology & Environment, General Environmental Law, for more information see PME Website: www.pme.gov.sa
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Theme Four:High & Related Major Investment Authorities in the Kingdom
Supreme Economic Council
The Supreme Economic Council represents the
highest economic authority in the Kingdom.
It is concerned with works and tasks needed to
enable the Council of Ministers to practice its
responsibilities and authorities. The Supreme
Economic Council is chaired by the Custodian
of the Two Holy Mosques with HRH the Crown
Prince as Vice Chairman. The membership of the
Council includes Ministers of Labor, Commerce &
Industry, Petroleum & Mineral Resources, Finance,
Economy & Planning, Water & Electricity & two
State Ministers in addition to Governor of SAMA.
The main authorities of the Council are:
- Preparation of the economic policy and
appropriate alternatives
- Coordination among Government agencies
whose works are directly related to national
economy
- Following up of economic policy
implementation and related Council of
Ministers resolutions regarding economic
affairs
- Study the general frame of the development
plan, fiscal policy, draft State Budget, trade
policies at local and external levels as well as
rules which govern labor and capital markets,
and policies related to improving investment
climate and competition
- Draft regulations and rules related to economic
affairs
The most important resolutions made by the
Supreme Economic Council during the period
2002 - 2004), are (1):
- Identification of rules which govern participation
of the private sector in Government electronic
transactions according to sharing of expected
income principle
- Approval of sale of all Government (Public
Investment Fund) shares totaling 50% in the
National Insurance Company
Major Resolutions Made in 2003
- Approval of North-South Railroad Project
- Approval of the draft Capital Market Law
- Approval regarding allowing joint stock
agricultural companies to deliver their wheat
production to the Grain Silos & Flour Mills
Organization
- Endorsement of the Income Tax Law
Major Resolutions Made in 2002
- Approval of privatization strategy
- Executive program for railroad expansion
- Approval of draft regulating the Saudi Post
Corporation
- Approval of bases & criteria for participation
of private sector in the saline water desalination
projects
- Approval to establish a holding joint stock
company in petroleum services (Petroleum Services
Company) as a public- private partnership
- Approval to increase the capital of Saudi Telecom
Company and sale of 30% of Government shares therein
- Endorse regulations related to disposal of
municipal properties
- Endorse list of facilities, activities and services to
be privatized
- Endorse list of activities exempted from foreign
investment
All these resolutions are directly related with the
investment climate in the Kingdom (2).
(1) Supreme Economic Council Resolutions, 2004(2) For more details see Supreme Economic Council Website www.sec.gov.sa
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Supreme Council for Petroleum & Mineral
Affairs (1):
The Supreme Council for Petroleum & Mineral
Affairs was formed per Royal Decree 212 / A
on January 3, 2000. The Council is concerned
with making decisions related to all affairs of
petroleum, gas and other hydrocarbons. In this
capacity, the Council’s authorities include:
- Identifying and endorsing strategies and
policies concerning oil, gas and other
hydrocarbons in light of prevailing circumstances
and national interests
- Setting the general policy for Saudi ARAMCO
- Deciding on all investment matters related
to all post-production stages. This includes
endorsement of all agreements and contracts
concluded with specialized companies. In
this context, Royal Decree M / 240 was issued
on February 14, 2000 entrusting the Council
to decide on works related to gas exploration
and other hydrocarbons except oil, including
their extraction and production. This also
includes approval of agreements and
contracts signed with specialized companies
- Deciding on all investment matters related
to oil, gas and other hydrocarbons. This also
includes exploration and production, approval
of agreements related to development and
operation and other investment contracts
with specialized companies
- Studying draft international agreements in
oil, gas, and minerals fields
- Follow-up implementation of these policies
and strategies and requesting any information
or reports from specialized agencies, if
deemed necessary for carrying out its tasks.
The Council is also responsible for studying
and approving general policies of mining and
reviewing related agreements and contracts.
In this context, Royal Decree M / 30 was issued
on November 1, 2000 endorsing the Council
of Ministers Resolution 177 dated October
17, 2000, which entrusts the Supreme
Council of Petroleum & Mineral Affairs to
assume duties of Supreme Council for Saudi
Arabian Oil Company (Saudi ARAMCO) as of
January 3, 2000.
The Council approved the gas strategy in the
Kingdom per Resolution No. 13 dated June
6, 2001. This strategy aims at ensuring gas
supplies from hydrocarbon sources as well
as achieving maximum economic and social
returns for the Kingdom from utilization of
its natural gas resources. This will be best
realized through a plan that aims to meet
local demand for gas and related liquids up to
2025. This strategy looks forward to develop
an integrated gas industry and provide gas
supplies to the Saudi economy at competitive
prices. That will assist in diversifying sources of
income through establishment of prosperous
industries, particularly petrochemical
industries, along with supply of electricity and
water in a manner that ensures the welfare of
the Saudi society.
The strategy calls for development of
gas supplies and intensifying exploration
operations to increase the Kingdom’s
gas reserves. It also aims at providing
all regions of the Kingdom with gas in a
gradual manner, using ethane and methane
in an optimal manner that ensures growth
of national economy and diversification of
income. According to the strategy, Saudi
ARAMCO will continue exploration works
in its zone of operations as well as operation
(1) Supreme Council for Petroleum & Minerals, General Secretariat, Special Report from Secretary General to the Council 2006
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of gas networks. Furthermore, the strategy
recommends opening the door to investors
for exploration and development of non-
associated gas outside the operations zone
of Saudi ARAMCO, as well as attraction of
foreign investments to the gas sector and
downstream operations of the oil sector.
Saudi Arabian General Investment
Authority (SAGIA)
The Saudi Arabian General Investment
Authority (SAGIA) was established in 2000, to
achieve the goal of taking care of investment
affairs in the Kingdom, including foreign
investment, as well as preparing Government
policies related to local and foreign
investment, proposing executive plans
and regulations required for providing an
adequate investment climate, follow-up and
evaluation of local and foreign investments,
and defining investment opportunities in
various economic sectors.
The investment climate has improved
markedly since the establishment of
SAGIA. The Foreign Investment Law was
promulgated to provide foreign investors
with the following incentives (1):
- Allow foreign investors full ownership
(100%) of their investment projects
- Provide foreign investments with same
benefits, incentives and guarantees
provided to national investments
- Reduce Corporate Tax from 45% to 20%
- Allow foreign investors to repatriate their
invested capital, profits and accrued interest
to their countries of origin
- Partners in any foreign investment project
have the right to waive their shares amongst
themselves and others
- Licensed foreign investment projects have
the right to obtain industrial loans at easy
terms from the Saudi Industrial Development
Fund and other credit institutions
- Licensed foreign investment projects
have the right to possess commercial and
residential buildings needed to implement
their licensed industrial activities
- Foreign investors have the right to make
use of bilateral agreements of investment
protection and promotion signed with the
Government
- It is forbidden to confiscate or expropriate
any investment, wholly or partially, except
upon a decision made by a court of law and
after payment of fair compensation
- Foreign investors may obtain more than
one license for practice of the same activity
or different activities
- Licensed projects may sponsor foreigners
working in the project
- SAGIA, as an agency responsible for
encouraging investment, is responsible for
improvement of investment climate and
quality of investment services
To streamline the procedures of licensing,
SAGIA identified a period of not more than 30
days for granting the license, provided that
all requirements are met in the application.
SAGIA also endeavors to review and improve
investment climate to make it more
competitive relative to other countries.
This includes identification and removal
of constraints which impede investment
activities, increasing degree of transparency,
providing relevant information to investors
and simplifying procedures. All these
contribute effectively to the increase
of investment licenses. Total value of
(1) Arab Investment Journal, Issue 8, October.2005, Interview with HE Governor of SAGIA
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investments licensed by SAGIA, since its
establishment and up to July 17, 2005,
amounted to about SR 143 billion (1).
During the last two years, SAGIA concentrated
on achieving a balance in its activities so as to
attract local as well as foreign investments,
putting in mind the fact that large sums of
Saudi capital (around US$ 700 billion to US
Dollar one trillion) are invested abroad. This
amount which averages around US Dollar
850 billion represents a major concern for
SAGIA which is exerting utmost efforts for
this amount to be repatriated.
In light of directives by the Custodian
of the Two Holy Mosques, King Abdullah
Bin Abdulaziz Al-Saud, to achieve further
improvements in investment climate of
the Kingdom, the list of the constraints
was reduced in 2005 from 126 to only
15.(2). SAGIA’s Directors are endeavoring to
overcome the remaining constraints which
impede investment in the Kingdom.
SAGIA surveyed the actual Foreign Direct
Investment (FDI) made during 2005 (3). The
preliminary findings of the survey indicated
that the cumulative FDI in the Kingdom up to
the end of 2005 reached about SR 97.7 billion
(excluding investments related to exploration
of oil, gas and minerals). Total foreign and
joint investments in 2005 amounted to
about SR 30.4 billion up 95% in comparison
with 2004, where actual investments stood
at SR 15.6 billion. Japan came at the top of
countries investing in the Kingdom with total
value of SR 8.7 billion followed by the United
Arab Emirates, Bahrain, and the United
(1) Arab Investment Journal, Issue 8 October.2005, Interview with HE Governor of SAGIA(2) Arab Investment Journal, Issue.8, October.2005(3) SAGIA: Preliminary Survey Results of Direct Foreign Investment in the Kingdom 2005.
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States of America. It should be noted that
most foreign investments in the Kingdom
are concentrated in the industrial sector (1).
SAGIA also prepared a work strategy, for
the period 2005 – 2010, which comprised
six initiatives: Services, Marketing,
Regional Development, Attraction of new
investors, Development of sectors that have
comparative advantages, and Improvement
of investment climate. The strategy is based
on many criteria, such as the effective
economic impact, the possibility of fast
implementation, low costs, removal of any
complications related to implementation
and the ability to ensure human resources.
In its strategy for the coming period, SAGIA
concentrates on attracting foreign and local
investments for three major sectors selected
according to comparative advantages, size,
and diversity of economic impacts. These
sectors are energy, transport and information
technology.
Total number of projects granted licenses
by SAGIA up to 2005 amounted to 3,343
projects, with total capital of SR 279.6
billion. The total number of industrial
projects increased to 1,324 projects with
total value of SR 129.6 billion, total services
projects to 2,010 with a total value of
SR 149.5 billion, while total number of
agricultural projects reached 9 with a total
value of SR 0.5 billion (2).
It is noteworthy to know that SAGIA has
recently published “Think Magazine”
which aims at promotion of investment
opportunities in the Kingdom. The Magazine
is distributed to heads of 500 large
companies throughout the world (3).
(1) Riyadh Chamber of Commerce & Industry, Riyadh Trade Journal, Issue 523, April 2006, Interview with HE Governor of SAGIA(2) SAGIA, Saudi Arabian General Investment Authority, Investment Performance Annual Report, 2005(3) See SAGIA’s Website: www.sagia.gov.sa
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Value of Foreign Direct Investments (FDI) in the Kingdom by Major Countries up to the end of 2005 (1)
No. Country Number of Projects
FDI(SR million)
FDI(USD million)
1. USA 265 35,341 9,424
2. Japan 35 17,154 4,575
3. UAE 85 11,677 3,114
4. Netherland 48 4,870 1,299
5. Kuwait 101 3,162 843
6. UK 128 2,291 611
7. Bahrain 72 2,280 608
8. Jordan 349 2,211 589
9. Taiwan 5 1,407 375
10. France 79 1,366 364
11. Syria 336 1,314 350
12. Lebanon 242 1,287 343
13. Switzerland 46 1,195 319
14. Italy 34 1,137 303
15. Germany 90 1,057 282
16. Finland 10 1,017 271
17. Sweden 15 884 236
18. Palestine 251 826 220
19. Pakistan 136 799 213
20. Yemen 146 676 180
21. Egypt 187 604 161
22. Canada 74 313 84
23. India 56 304 81
24. Cayman Island 24 301 80
25. R. of Korea 38 233 62
26. Norway 10 181 48
27. Denmark 8 162 43
28. Singapore 5 107 29
29. Turkey 32 98 28
30. Belgium 11 94 25
31. Others 219 3,398 906
Total Value of Investment 97,747 26,066
(1) SAGIA, Saudi Arabian General Investment Authority, Annual Report, 2005
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Supreme Commission for Tourism (SCT)
The Supreme Commission for Tourism
(SCT) was established in 2000, as an
autonomous body entrusted with
tourism affairs in the Kingdom, including
development of tourism, increasing role
of the private sector in tourism, and
removing constraints which impede
development of tourism. Tourism is
considered a major contributor to
national economy, and the private sector
plays a major role in establishing tourism
investment facilities.
The vision of the Commission is to achieve
(unique, valuable tourism development
which produces social, cultural, economic,
and environmental benefits based on
Islamic values)(1), transforming the tourism
sector into a producing sector capable of
attracting Saudi citizens to tour within
the Kingdom, increasing investment
opportunities, developing national
manpower, and provide job opportunities
for Saudis. Accordingly, tourism
development would be considered a
national economic project.
This vision is translated into action
through a scientific approach adopted
by the Commission. This approach
aims at achieving an integrated project
for national tourism development
and institutional development of the
tourism sector, developing tourism
regulations (draft national tourism
security regulation, draft general tourism
regulation), establishing effective
partnership and cooperation with related
agencies, developing and marketing
of tourism related products (Tourism
Promotion and Marketing Strategy)
such as festivals and tourism events,
post-Umrah tourism, tourism guidance,
etc. The approach also aims at training
Saudis and providing job opportunities
in the tourism sector, preparing a social
tourism strategy (tourism awareness
programs, tourism and society, tourism
culture in the educational process),
enhancing international tourism relation
(Arab e-tourism project), representing the
Kingdom in World Tourism Organization
and other organizations, preparing
a tourism information strategy, and
preparation a glossary of tourism
terms. Moreover, an adequate tourism
investment climate will be created
through instruments which encourage
investment, such as tourism development
companies, tourism business services
centers, liberalization of the tourism
services markets and establishment of an
e- tourism market.
In the context of implementation of the
strategic tourism policies in the Kingdom,
the School Tourism Education Program
(SMILE) was launched in September 2005
in collaboration with the Ministry of
Education. This program aims at spreading
tourism culture in schools.
Moreover, in December 2005, an
agreement was reached with the
Ministry of Interior to issue tourism visas.
Furthermore, Jeddah Satellite Channel
was launched as the first Saudi Channel
specialized in tourism affairs. This channel
aims at encouraging domestic tourism.
(1) Supreme Commission for Tourism, SCT Manual of Methodology & Initiatives for Implementation of the National Tourism Strategy.
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Capital Market Authority (CMA)
The Capital Market Authority (CMA) is an
autonomous Government agency reporting
directly to the Chairman of the Council of Ministers.
CMA is responsible for supervision, regulation
and development of the capital market as well as
issuing rules, regulations and directives required
for enforcement of the provisions of the Capital
Market Law in order to create a sound investment
climate in the Market and to enhance trust and
confidence in it. CMA is also responsible for
ensuring adequate disclosure and transparency
for the companies listed in the Market as well as
protecting investors and traders of securities.
CMA has the authority of regulating and
developing the Capital Market, developing
systems and techniques of agencies dealing with
securities trading and protecting investors from
illegal practices, forgery and deceit, and from
trading according to insider information. By doing
so, CMA aims at achieving efficiency, justice and
transparency of trading securities and developing
measures and controls needed to reduce risks
related to trading. It also aims at regulating
issue of shares, controlling activities of agencies
under its supervision and regulating disclosure
of information related to securities and issuing
agencies. CMA is managed by a Board of Directors
composed of five full-time members appointed by
Royal Decree.
In its first action, CMA issued rules organizing the
Market on December 14, 2003 (2). These are:
- Market Conduct Rules, including measures for
prevention of market deception and manipulation,
prohibition of trading based on information
provided by insiders, measures related to
responsibility of incorrect data, controls related to
behavior and conduct of the licensed party, etc.
- Rules of Offers of securities (public and private)
as well as exempt offers and the responsibility
regarding invalidity of documents, etc.
- Rules of Registration and listing provisions and
abiding by such provisions and other measures
which regulate the process of registration for
those willing to register their securities in the
official list
CMA has listed a number of joint stock companies,
operating in various economic fields, in the Capital
Encouraging Tourism Investment as Seen by the Commission (1)
InitiativeDate of Start
Date ofCompletion
% ofAchievement
Identifying and Addressing Tourism Investment Constraints 2001 2005 100
Proposed Tourism Development Companies 2004 2007 35
Tourism Business Services Centers 2003 2005 25
Development of Tourism Destinations 2002 2007 20
Study the Possibility of Financing Tourism Development 2003 2005 20
Review & Update Investment Regulation in the Tourism sector 2002 2007 Ongoing
Liberalize Tourism Services Market 2002 2007 60
Study e-Tourism Market Project (SETS) 2003 2005 50
(1) Supreme Commission for Tourism, SCT Manual of Methodology & Initiatives for Implementation of the National Tourism Strategy.(2) Al Eqtissadia Newspaper, Issue 4071, December 2004
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Market. It also reduced the nominal value of the shares
of the listed companies from SR 50 to SR10 thereby
splitting each share into five shares and allowing non-
Saudis residing in the Kingdom to trade in shares. CMA is
exerting maximum efforts to develop rules and measures
which protect the rights of shareholders and to make the
market one of the most effective economic tools in the
process of economic development in the Kingdom.
Communications & Information Technology
Commission (CITC) (1):
The Communications & Information Technology
Commission (CITC) is a Government organization that
was founded in 2001. It is responsible for regulation of the
telecommunications and information technology sector
in the Kingdom so as to provide high quality services at
affordable costs. CITC endeavors to create an adequate
environment for the growth of communications and
information technology market and to encourage fair
competition.
CITC also protects interests of service users, controls
performance of licensed service providers, and
endeavors to provide an adequate climate for investment
in communications and information technology sector.
The major tasks of CITC are:
- Encouraging investment in communications and
information technology services
- Granting licenses for provision of communications and
internet services
- Protecting interests of users and controlling licensed
service providers
- Encouraging free market for provision of services
- Implementing policies, plans and programs approved
for development of the communications and
information technology sector
The Major achievements made by CITC during 2005,
include the following:
- Prepare specialized studies on communications and
information technology market in the Kingdom and
studying optimal ways for opening the market for
competition
- Grant licenses for new and other existing activities
(such as, a second license for provision of mobile
telephone services, two licenses for provision of third
generation (3G) services, two licenses for provision
of data as well as additional licenses for provision of
internet and SMS services)
- Prepare the National Digitalization Plan
- Prepare the policy of universal service and the right of
universal use, and many other achievements.
The Number of land telephone subscribers amounted to
about 4 million up to 2005
The number of mobile telephone subscribers exceeded 13
million up to 2005, with a penetration rate of 57% of the
population
The number of internet users exceeded 3 million with a
penetration rate of 13% of population
The share or contribution of the communications and
information technology sector to GDP amounted to about 6%.
Communications & Information Technology Commission
(CITC)
It is noteworthy to note that the Kingdom’s
experience regarding liberalization of this sector
comprised the following stages (2):
- Stage One: Transforming the telecommunications
agency in 1998 into a business oriented
company named Saudi Telecom
Company (STC)
- Stage Two: Restructuring and regulating the sector
through issuance of the
telecommunications law and
relevant by-laws in addition
to establishment of CITC in 2001
- Stage Three: Partial privatization of STC by offering
30% of its shares at the beginning of
2003 through public subscription
(1) CITC, Communication & Information Technology Commission, Introductory Bulletin, See: www.citc,gov.sa (2) Ibid
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- Stage Four: Starting liberalization of the market
and allowing competition by granting
new licenses for provision
of communication services via
V Sat, granting a second license
for provision of mobile telephone
services (GSM) in addition to licenses
granted for (3G) services in the fourth
quarter of 2004
- Stage Five: Achieving full liberalization of the
market (licenses for establishment
of networks and provision of
communication and
information technology services
according to best international practices
Royal Commission for Jubail & Yanbu:
The Royal Commission for Jubail and Yanbu was established in
1975. Its headquarters is located in Arriyadh. The Commission
is governed by a Board of Directors responsible for preparation
of policies and manage their implementation through two
General Directorates located in Jubail and Yanbu Industrial
Cities. The Commission was entrusted with the responsibility
of implementing physical and social infrastructure required for
the development of Jubail and Yanbu regions and transforming
them into two industrial cities. The major missions of the
Commission are:
- To promote, assist, service and encourage the development of
basic, downstream and light industries that would utilize the
Kingdom’s natural resources to produce value added products
for local consumption and export
- To plan, develop, construct, operate and maintain various
infrastructure and services needed for these industries
- To urge these industries to employ Saudi nationals and upgrade
their skills and capabilities
- To maintain balance between industrial development and
protection of the environment
- To encourage Saudi and foreign private sectors to invest in the
two cities
- To coordinate with other related agencies such as Saudi
ARAMCO, Seaports Authority and others to facilitate supply of
feedstock and services needed by such industries
An amount of SR 84 billion was invested for
development of Jubail and Yanbu Industrial
Cities. The result was establishment of 233
industries with total investments of around SR
244 billion. This brings total investments in the
Royal Commission to about SR 328 billion and
total job opportunities to more than 107,000.
Moreover, the populations of the two cities,
which amount to around 154 thousand persons,
enjoy the most modern life style.
“Chairman, Royal Commission for Jubail &
Yanbu”
The Royal Commission received many local,
regional and international prizes in recognition of
its efforts exerted in different fields (environment
protection, city planning, and plantation).
The share of the two industrial cities in the GDP
amounts to SR 58,202 billion or 8.06%, and their
share of the non-oil GDP is 12.5%. The share of
the two cities of the industrial production of the
Kingdom is 60% and their share of total non-oil
exports is 80%. They employ about 19 % (1) of the
total industrial employment of the Kingdom.
The most important investment opportunities in
Jubail and Yanbu Industrial Cities are:
- Industrial investment opportunities:
establishment of joint industrial ventures with
foreign companies
- Commercial investment opportunities:
provision of developed commercial land to
companies
- Residential investment opportunities:
establishment of housing projects to meet the needs
of the two cities
It should be noted that total investments
made by the Royal Commission and the private sector
(1) Royal Commission for Jubail & Yanbu , Website: www.rcjy.gov.sa
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in the two cities increased markedly by the end of 2005
recording about SR 12.2 billion including
SR 7.9 billion invested by the Commission and
SR 4.3 billion by the private sector. The total number of
industrial projects amounted to 358 including 40 basic
industries, 70 secondary industries and 248 support
industries (1).
The most eminent investment projects of the Royal
Commission, at present, are Jubail 2 and Yanbu 2
projects with total costs of about SR 14 billion for Jubail
project of which SR 3.5 billion is for stage 1 which
is expected to be completed by 2007 .The project
is likely to attract around SR 210 billion. The cost of
Yanbu 2 project is about SR 50 billion and it comprises
many investment opportunities in the fields of studies
and design, services, construction, operation and
maintenance, and others. The project is expected to
be completed by the beginning of 2009 (2). Moreover,
upon completion, Yanbu 2 project is expected to
attract about SR 115 billion of investments leading to
establishment of 34 basic and secondary industries and
224 light industries. Hence, total investments in Yanbu
Industrial City, after completion of Yanbu 2 project by
2019, will exceed SR 200 billion and will provide about
116,000 job opportunities in the next few years (3).
Saudi Organization for Industrial Estates & Technology
Zones (4)
The Basic legislation to set up the Saudi Organization
for Industrial Estates & Technology Zones was endorsed
by Council of Ministers Resolution 235 on November 13,
2001.
The Organization took over the tasks of administering
the industrial estates from the Ministry of Commerce
& Industry on April 27, 2005 per Council of Ministers
Resolution 265 dated November 28, 2004.
Since then, the Organization commenced preparation
of its future plans in line with long-term objectives and
strategies of industrial development adopted by the
Government, and on the basis of offering additional
projects for development of industrial land to the
private sector to meet the growing demand for and
services thereto. The Organization also started to
establish technology zones which employ the findings
of research, innovations and high tech industries that
enjoy high value added, in addition to rehabilitation
of the existing industrial estates. The plans of the
Organization are:
> Projects of new industrial estates development:
These include the following:
- Part 1 of phase 1 of Sudair Industrial Estate with a total
land area of 10 million m². Nov. 2005 - Nov. 2008
- Phase 1 of Jeddah 2nd Industrial Estate, with land area
of 3.5 million m² Jan. 2006 - Oct. 2007
- Phase 4 of Dammam 2nd Industrial Estate, with land
area of 4 million m² Oct. 2006 - Oct. 2009
- Phase 1 of Jazan Industrial Estate, with land area of 2.6
million m² Oct. 2006 - July 2008
> Rehabilitation of five projects, including improvement
of water and sanitary waste in the existing industrial
estates in Arriyadh, Jeddah, Dammam, Hassa & Qassim.
These will be implemented by the private sector on
BOT basis, with a total cost of about SR 160 million July
2006 - May 2009
> Undertaking operation and maintenance projects of
existing industrial estates by the private sector on
leasing contracts following the end of the present
contracts of SR 40 million per year financed by the
Government
(1) Royal Commission for Jubail & Yanbu, Planning & Investment Department, Internal Bulletin, 2006(2) Ibid (3) Royal Commission for Jubail & Yanbu, Website: www.rcjy.gov.sa (4) Saudi Organization for Industrial Estates & Technology Zones, Projects Report, 2006
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> Implementing 8 projects related to supply of electricity
services to the new industrial estates of Sudair, south
of Jeddah, Dammam, Jazan, Najran, Hail, Jouf and
Tabuk with a total capacity of 310 MW and total cost
of SR 350 million.
> Establishing technology zones in various regions of the
Kingdom, including:
- Industrial Technology Zone for Information,
Telecommunications and Electronics at King Khaled
International Airport
- Information Technology Zone of the Public Pensions
Agency in Alnakhil Quarter, Arriyadh.
The total cost required for establishment of technology
zones in the Kingdom during the Eighth Development
Plan 2005 - 2009 is about SR 766 million, and the
total cost of the Organization’s projects pertaining
to expansion in industrial estates and rehabilitation
of the existing ones together with establishment of
the technology zones is SR 2,656 million during the
Eighth Development Plan (1) .
Saudi ARAMCO
The Arabian American Oil Company (ARAMCO) was
established in 1933, when it undertook the concession
of oil exploration. The company became wholly
owned by the Government of Saudi Arabia in 1980,
and in 1988, undertook management and operational
responsibilities. A Royal Decree was issued in 1993,
which stipulated the merging of all refineries and oil
producing facilities in Saudi ARAMCO, which undertook
responsibilities regarding most of the Kingdom’s works
in gas and petroleum sectors, starting with exploration
and production, up to refining, transportation and
marketing.
Saudi ARAMCO is considered a major pillar of the Saudi
economy. It obviously contributes towards the GDP
growth and provision of Government revenues as well
as export proceeds.
Saudi ARAMCO operates 92 oil fields and 13 gas fields
throughout the Kingdom, including the Red Sea region.
The proven extractable reserves in fields operated and
supervised by Saudi ARAMCO stood at 264.2 billion
barrels in 2005. These reserves constitute about 23% (2)
of total world reserves.
The Company ranks the fourth in the world regarding
gas reserves, which accounts for 243.6 trillion m³
according to the company’s estimations for 2006 (3). The
Company ranks eighth in terms of refining capacity. The
Company owns and operates the second largest fleet of
tankers in the world. It ranks first among oil companies
in the world for the sixth consecutive year, according to
the Petroleum Intelligence Weekly Bulletin.
– Saudi ARAMCO owns the second largest fleet
of tankers in the world
– Saudi ARAMCO employs about 54,500
employees 87% of which are Saudis
– The Company is 100% owned by the
Government of Saudi Arabia
– The Company has affiliates, joint ventures,
offices and companies in China, Egypt,
Greece, Japan, Netherlands, Philippines,
South Korea, Singapore, UAE, UK and USA.
Saudi ARAMCO and Sumitomo Chemical Ltd.
Of Japan signed a partnership agreement to
establish a joint venture to develop a huge
and integrated complex in the field of refining
and petrochemical products at Rabigh on the
Western coast of the Kingdom in 2005
– The main refineries are: Ras Tannura Refinery
with a capacity of 325,000 bpd and 200 barrels
condensates; Jeddah Refinery with a capacity
of 84,000 bpd; Riyadh Refinery with a capacity
of 122,000 bpd; Yanbu Refinery with a capacity
of 235,000 bpd, and Rabigh Refinery with a
capacity of 370,000(4) bpd
– Headquarters: Dhahran, Kingdom of Saudi Arabia
(1) Saudi Organization for Industrial Estates & Technology Zones, Projects Report, 2006(2) Ministry of Economy & Planning, Achievements of Development Plans, Facts & Figures, 23rd Issue 1970 - 2006(3) Ibid(4) Ibid
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Production laboratories were launched in Qatif and
Abu Saafa with production capacity of 800,000
bpd of crude oil, in addition to production of huge
quantities of accompanying gas of 370 million
standard cubic feet per day according to the
company’s statistics for 2004 (1). Furthermore, the
largest oil field in the world was discovered, which
is Al-Ghawar oil field, in the Eastern Province. In
addition the largest submerged oil field in the
world was discovered, which is Al-Safanyah oil
field, in the Arabian Gulf. Investment opportunities
in the Company are reflected in domestic joint
ventures refineries projects such as:
- Saudi ARAMCO / Exxon Mobil Refinery (SAMREF),
a joint venture owned on 50:50 bases with Exxon
Mobil Company, 400,000 bpd
- Saudi ARAMCO / Shell Refinery (SASREF), a joint
venture owned on 50:50 bases with Royal Dutch
Shell, 305,000 bpd
- Saudi ARAMCO Petroleum Lubricating Oil
Refining Company (Luberef): Saudi ARAMCO
owns 70% while Exxon Mobil owns the remaining
shares, 4.4 thousand bpd
- Saudi ARAMCO Petroleum Lubricating Oil
Company (Petrolube): Saudi ARAMCO owns 71%
while Exxon Mobil owns the remaining shares,
6.5 million barrels/day.
- The Company enjoys diversification of its
investment opportunities represented by
international joint ventures reflected in its
partnership with five international ventures
which are:
- Petron Corporation which is the Philippine
National Oil Company. Saudi ARAMCO owns
40% of Petron since 1994
- Motiva Enterprise: This is a joint venture
between Saudi ARAMCO (32.5%), Texaco of
the USA (32.5%), and Shell (35%). Operations
of this joint venture are concentrated on the
Gulf and Eastern Coasts of the United States.
The Company owns four refineries
- S. Oil Corporation, a South Korean oil refining
company. Saudi ARAMCO owns 35% of this
company’s shares.
- Motor Oil Hellas and Avin Oil: a Greek refining
and marketing company. Saudi ARAMCO
owns 50% of the company’s refineries.
Saudi Basic Industries Corporation (SABIC)
SABIC is the largest non-oil industrial
company in the Middle East. It ranks tenth in
the list of the top international petrochemical
companies. SABIC was established in 1976 (2)
to invest the Kingdom’s natural hydrocarbon
and mineral resources. Its Head Quarters
is located in Arriyadh. SABIC’s production
network in the Kingdom encompasses 17
industrial companies, most of which are
in Jubail Industrial City on the Arabian Gulf
Coast, while the others are in Yanbu Industrial
City on the Red Sea Coast. Dammam City
in the Eastern Province hosts one of these
companies. In 2006, a SABIC affiliated
company was established in Yanbu Industrial
City, which is Yanbu National Petrochemicals
Company (YANSAB). SABIC owns SABIC Europe
Petrochemicals Company, with two major
manufacturing locations in Geleen in the
Netherlands and Gelsenkirchen in Germany,
in addition to three industrial complexes in
Bahrain with joint Gulf capital funding.
- The Government of the Kingdom owns 70% of
SABIC while the remaining shares are owned
by Saudi and other GCC nationals. SABIC’s
products account for some 80% of the
petrochemicals exports at present
(1) Saudi ARAMCO, Website: www.saudiaramco.com (2) SABIC, Saudi Basic Industries Corporation Annual Report, 2004
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- SABIC ranks Second in the list of the largest
international companies in the production of ethylene
glycol, methanol, MTBE, ranks Third in production of
polyethylene, fourth in production of poly olefins,
and sixth in production of poly propylene
- SABIC owns a 20% share of the Bahrain
Aluminum Company, 31.3% of Gulf Aluminum
Rolling Company, 20% of the National Chemicals
Transportation Company, 25% of the Jubail Yanbu
Utility Company, 20% of TAP - Line, and 16.67% of
A.R.G.
This production network comprises a high tech system
to develop technology and applications, provide
actual support services to product consumers, in the
form of (SABIC Industrial Research & Development
Complex) in Arriyadh City, hi tech centers in Jubail
Industrial City, India, Holland, and the United States,
in addition to an advanced marketing network
spread, with its branches, offices and warehouses
around the world establishing long term ownership
relationships with consumers in various continents.
SABIC manages its operations through a group of
specialized working strategy units, which are: basic
chemicals, intermediaries, poly olefins, poly chloride
phenyl, polyester, fertilizers and minerals, in addition
to Joint Services Unit, which offers services to various
units including other centralized units.
In 2005, the Company achieved huge profits that
amounted to SR 19.2 billion in comparison with
SR 14.2 million in 2004, since production increased
to 46.7 million tons, an increase of 9%, and sales
volume to 36.6 million tons, an increase of 9% also.
Among the most significant achievements of SABIC
in 2005 was that it obtained a credit rating (A) as well
as offering YANSAB shares for public subscription,
which are traded in the domestic stock exchange, in
addition to the completion of Al- Fanar project in the
third quarter of 2005 (1).
SABIC’s plan is to achieve total annual production
capacity of 60 million MT in 2008, and total
investments in its on-going and planned projects to
more than SR 30 billion (2).
Saudi Arabian Mining Company (MA’ADEN)
The Ministry of Petroleum and Mineral Resources
supervises mining activities in Saudi Arabia
including those of MA’ADEN, that was established
in accordance with the Royal Decree M / 17 dated
March 22, 1997, with a capital of SR 3.8 billion and
is wholly owned by the State. The Ministry also
encourages investment in the domain of mining
and provides possible services and consultation
to support this activity. Furthermore, the Ministry
supervises issuance of mining licenses and deeds in
line with pertinent adopted rules and regulations.
During 2004, the new Mining Investment
Law was issued by Royal Decree M / 47 dated
October 4, 2004 to regulate investment in the
field of mining in Saudi Arabia.
By the end of 2004, the number of valid mining
licenses reached 1,179 licenses, including 43
survey permits, 28 exploration licenses, 31 small
mines licenses and 32 mining concessions,
including 15 concessions for exploration of
cement ore and 17 mining concession for
utilization of precious metals, basic metals and
industrial metals, 1,045 permits for building
materials, which utilized about 233.9 million
tons of various metal ores such as limestone,
silica, salt, gypsum etc (3).
The activity of MA’ADEN constitutes part of the
mining activities related with the Deputy Ministry
for Petroleum and Mineral Resources.
The Company owns four mines for production
of gold, which are Mahd Al-Dahab, the first gold
producing mine in the Kingdom, Al Hajar Mine,
Sukhaibrat Mine and Balgha Mine.
(1) SABIC, Saudi Basic Industries Corporation, Annual Report, 2005(2) Ibid (3) Deputy Ministry for Petroleum and Mineral Resources, Special Report on MA’ADEN, 2005
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MA’ADEN has four projects under development, Al-Amar
Gold Mine (Riyadh Region), Al-Ghazala Governorate
Magnesite Mine (Hail Region), Phosphate Project
(Northern Frontiers), Al-Zubaira Bauxite Project (Qassim
and Hail Regions).
The Company has obtained 16 exploration licenses
for various sites throughout the Kingdom. It also
possesses 5 concessions for gold mining and one
concession for magnesite. In 2003, the Company
obtained two new licenses for exploration of
precious and associated metals as well as one
survey permit. The Company announced its
intention to offer 50% of all of its shares in projects
for public subscription (2) soon after the issuance
of the Council of Ministers’ Resolution 109 of May
24, 2004, calling for the privatization of MA’ADEN.
Among the most significant developments to be
realized in the field of mining during the coming
years is the establishment of (Ras Al-Zour Mining
City) to become the first integrated mining city in
the Kingdom.
Saudi Ports Authority
Established in 1965, the Saudi Ports Authority
started to take active measures to realize its
objectives. The Authority re-organized ports,
qualified them and upgraded their efficiency. It
implemented a series of projects, thus ensuring
an integrated set of ports, the number of which
reached 8 (6 Commercial and 2 Industrial Ports)
on the Red Sea and Arabian Gulf. These ports
encompass 186 berths at a depth of 11 - 32 meters
with an annual capacity of 266 million tons. These
ports are provided with state-of–the art handling
equipment and marine craft, as well as pertinent
supporting services (3).
Following completion of necessary infrastructure
in all ports, the Authority followed two paths to
keep abreast of new developments in the marine
arena, as ports shifted from mere commodity
handling facilities to economic entities with direct
impact on the economy and trade simultaneously,
and as a result of the changing trade patterns and
systems:
First: On-going development of the ports
capabilities through increasing depth at the
entrances and basins of berths in main ports to
receive various size vessels.
Second: Providing new services consistent with
contemporary developments as well as a keenness
to upgrade the standard of performance and
improve productivity in general.
Production of MA’ ADEN during 2000 - 2004 (1)
Year Type Gold
(Thousand Ounces)Silver
(Thousand Ounces)Copper
(ton)Zinc(ton)
2000 116.7 279.7 804 2,520
2001 139.2 321.1 839 1,911
2002 147.5 384.5 587 1,209
2003 282 559.5 627 1,797
2004 265.8 466 652 -
(1) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report 2005(2) Al Eqtisadiah Newspaper, Issue 4515 of February 20, 2006 (3) Saudi Ports Authority, King Fahad Port, Jubail Industrial City, Introductory Bulletin
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Theme Five:
Financial Services & Credit Funds In
The Kingdom
Saudi Industrial Development Fund (SIDF) (1)
The Saudi Industrial Development Fund (SIDF)
was established in accordance with a Royal
Decree in 1973 as a government financing and
developmental body linked with the Ministry
of Finance. SIDF assumes a key role in the
support and realization of the objectives of
the country’s five – year development plans in
the field of industrial development, through
supporting projects in this sector and creating
investment awareness in the Kingdom. This
support is represented by providing medium
and long term soft loans to the private sector
as well as providing consulting services
in technical, administrative, financial and
marketing domains.
SIDF started operation with a capital of SR 500
million. Due to the growing and high demand
by the private sector for the Fund’s loans, its
capital was increased to SR 20 billion after
allocation of SR 13 billion from the budget of
fiscal year 2006, in accordance with a Royal
decree issued by the Custodian of the Two
Holly Mosques. Accordingly, SIDF has raised the
maximum limit of industrial projects loans to
SR 600 million, instead of SR 400 million.
The following are the most important strategic
objectives SIDF seeks to accomplish in the
context of supporting industrial development
process in the Kingdom:
- Enhance competitiveness and expand the
industrial base of the private sector
- Realize industrial integration among various
sectors
- Encourage and develop the role of small and
medium enterprises (SMEs)
- Attract foreign capital and ensure technology
transfer and assimilation
The policies and measures adopted by SIDF
regarding provision of loans are reflected in
providing such loans to industrial projects
carried out by the private sector (including
projects with foreign partners), encouraging
intensive linkages and making use of other
economic sectors, such as adherence to using
local materials and procurement of locally
produced building materials, and awarding
work tenders (engineering, accounting,
consulting etc) to Saudi firms which possess the
necessary experience.
Following are the main policies pertaining to
the SIDF’s lending rules:
- Individuals, national and foreign companies
with industrial licenses in Saudi Arabia can
request loans form the Fund.
- The terms of loans provided by the Fund shall
not exceed 15 years. The loans are repaid in
accordance with specific maturity schedules
consistent with expected cash flows of the
projects enjoying such loans.
- The Fund finances industrial projects at a rate
that reaches up to 50% of the costs of fixed
assets, start-up expenses and working
capital, provided that not more than one
year has passed since the start of commercial
production. The Fund does not finance
purchase of used machinery.
- The Fund mortgages fixed assets of the project
as well as ensuring personal guarantees from
partners in limited liability companies.
(1) Saudi Industrial Development Fund, SIDF Report on Activities, Achievements, Programs & Tasks 2006
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- The Fund stipulates contribution of projects’
owners that they finance not less than 25% of
their projects’ costs.
- Approved loans shall be disbursed in accordance
with actual implementation of projects and in
line with supporting documents.
In order to ensure continued growth of the
industrial sector, SIDF allocated SR 500 million
to finance development of infrastructure of
industrial estates and technology zones which
are established on land owned by the Saudi
Organization for Industrial Estates & Technology
Zones, as well as land owned by the private
sector. In the context of its efforts to support
small and medium enterprises, SIDF adopted
Kafala SMEs Finance Program with a view to
overcome problems of obtaining adequate
financing for such enterprises.
This program was established with a capital
of SR 200 million with contributions from local
banks and Ministry of Finance. The program
depends on the guarantee mechanism as it
guarantees 75% of the value of the finance not
exceeding SR 2 million, provided that properties
of the enterprise shall be mortgaged in favor
of the funding body until the whole finance
amount is repaid.
Following are the program’s procedures:
- The small or medium enterprise interested
in investment shall submit a request to a
commercial bank to obtain financing. In
the event the firm does not have sufficient
collateral, then it requests financing under the
Kafala Program.
- The bank submits an application to the Kafala
Program to guarantee the finance requuired.
- Kafala Program administered by SIDF shall
review the request in accordance with
principles adopted for issuance of the Kafala
(Guarantee) in favor of the bank financing the
firm.
The total number of industrial projects
that benefited from SIDF’s loans since its
establishment up to the end of 2005, fiscal year
reached 1,942 industrial project, with total
allocations valued at about SR 52 billion of
which SR 35.2 billion has already been disbursed.
The remaining amount will be disbursed as per
time schedules adopted for implementation of
projects, for loans which are already approved.
The total amounts repaid to SIDF stands at SR
25.4 billion (1), reflecting the significant success
of industrial development and the response
of investors as well as their understanding
of the role SIDF plays in boosting industrial
development process in the Kingdom.
(1) Saudi Industrial Development Fund, SIDF Report on Activities, Achievements, Programs & Tasks, 2006(2) Saudi Industrial Development Fund, SIDF Management Special, Report 2006
Number & Volume of Accumulated Approved Loans by Industrial Sector since Establishmentof the Fund up to 2005 (2)
Sector Number of projects Size of loans (SR million)
Consumer Industries 550 10,773
Chemical Industries 473 18,610
Cement Industry 22 6,176
Building Materials Industry 299 5,180
Engineering Industries 561 10,775
Other Industries 37 495
Total 1,942 51,973
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Real Estate Development Fund (REDF)
The Real Estate Development Fund was established in accordance with the Royal Decree 27 of July 1, 1974,
to provide loans to citizens in order to help them establish their own houses as well as for investment
purposes. The Fund started its tasks with a capital of SR 250 million.
The Fund provides exemption of 10% for accelerated repayments only. REDF was subsidized from the 2006
budget by SR 9 billion. The value of total loans provided by REDF since its inception up to the end of 2004,
amounted to about SR 127.6 billion, while the total value of outstanding loans by the end of the same year
reached SR 69 billion.
In 2004, REDF provided loans valued at about SR 1.8 billion, while repayments stood at about SR 2.1
billion.
Public Investment Fund (PIF)
The Public Investment Fund (PIF) was established by Royal Decree M / 24 of August 17, 1971, to finance
some business oriented production projects due to their significant importance to the development of
national economy. The Fund provides the basic factors of such projects, which the private sector cannot
solely provide, due to insufficient experience, capital, or both.
The Fund provides loans to local refinery projects, manufacturing of lubricants, petroleum products
storage facilities, crude oil and petroleum products distribution pipelines, export refineries, steel
factories, fertilizers and petrochemicals factories as well as loans for purchasing planes for SAUDIA, water
and electricity companies, holy sites projects, etc.
It also holds shares in the capitals of such companies as cement, electricity, insurance, public transport,
agriculture, gas, petrochemicals, services and real estate.
The Fund also holds shares, in the name of the Government, in several joint Arab companies as well as
Arab bilateral companies.
The value of total loans provided by the Fund, up to the end of 2004, stood at about SR 64.6 billion, while
repayments reached about SR 48.7 billion, while the value of outstanding loans amounted to SR 15.9
billion. The value of actual total disbursement of loans declined by 37.8% compared with the previous
year, to reach SR 0.84 billion. Furthermore, repayment of loans reached about SR 11.4 billion, a significant
increase of 2096.6 % (2).
Saudi Fund for Development (SFD)
The Saudi Fund for Development was established in accordance with Royal Decree M / 48 of September 1,
1974 and started operation on March 11, 1975. The objective behind establishment of this Fund is to provide
(1) Table derived from the 41st Statistical Yearbook, of Central Department. of Statistics & Information, 2005(2) Saudi Arabian Monetary Agency, 41st Annual Report, Plus Website of Ministry of Finance regarding the Public Investment Fund www.mof.gov.sa
Activity of REDF (SR million) (1)
Item 2003 2004 % of Change
Actual Expenditure 2,261 1,773 -21.6
Repayments 2,117 2,097 -9
Outstanding Loans 69,408 68,996 -6
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soft loans to the governments of developing
countries with a view to contribute in financing
priority development projects. In 2001, the Fund
assumed the task of financing national exports
to contribute towards diversification of national
income sources through provision of facilities
regarding finance and guarantees necessary for
the development of Saudi non-oil exports, along
with supporting developmental projects needs
for national products and increasing the volume
of trade exchange with friendly countries.
The finance insurance and export guarantee
service actually started at the beginning of
September 2003 by launching its first product
represented in the export finance guarantee
document to Saudi exporters, with a view to
meeting their needs for carrying out export
operations and encouraging them to compete
with others in external markets to win export deals
and various projects. Up to the end of 2004, the
Fund issued 13 Saudi export finance guarantee
documents for 172 importers, with an export
value of SR 221.62 million (1).
Saudi Arabian Agricultural Bank (SAAB)
The Saudi Arabian Agricultural Bank (SAAB) was
established by Royal Decree 58 of April 30, 1963 as
a public credit institution specialized in providing
finance for various agricultural activities in all
regions of the Kingdom. The Bank also assists in
the development of the agriculture sector and
enhancement of its production efficiency by
introducing the best and state–of–the art scientific
and technical methods through providing interest-
free soft loans to farmers to enable them to secure
such industry prerequisites as machinery, irrigation
pumps, agricultural equipment, livestock, poultry,
fish and aviary farming equipment, etc. The Bank’s
capital totaled SR 10,838,621,000.
SAAB provides loans and credit facilities to help
in the development, promotion and activation of
the agricultural sector, including the following (2):
- Growing, storing and marketing agricultural and
forestry products as well as livestock and poultry
breeding and fish farming.
- Land reclamation.
- Credit facilities for providing water supply
required for above purposes.
SAAB’s loans are concentrated on the following
two types:
1. Ordinary Agricultural Loans
These loans are extended to finance cultivation
of field crops of all sorts, operation of fruit farms,
honey bee keeping projects, fishing boats and
agricultural equipment.
2. Specialized Agricultural Loans
These are for commercial projects in which large-
scale economic resources are invested in order to
build organized, well established and economically
feasible production projects such as: egg-laying
poultry farms, meat fattening poultry farms, meat
fattening and egg-laying mother poultry farms,
dairy products processing farms, agriculture
projects using air-conditioned green houses, sheep
breeding and fattening projects, fish and shrimp
breeding projects.
The value of total loans approved by the SAAB(3)
since its inception in 1966, up to 2004, reached
about SR 37.1 billion, allocated to fund 416,800
loans that contributed to activating and
modernizing the agricultural sector, as well as the
establishment of specialized agricultural projects.
During 2004, the amount of loans approved by
the Bank amounted to about SR 1,044 million,
compared with SR 612.2 million in the previous
year, an increase of SR 431.7 million, or 70.5%.
These amounts were allocated for funding 5,136
medium and long term loans compared to 2,259
(1) Saudi Fund for Development, Annual Report, 2004, see also SFD Website www.sfd.gov.sa(2) SAAB, Saudi Arabian Agriculture Bank, Informative bulletin(3) Ibid
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loans in the previous year, an increase of 2,877 loans, or 127.4%.
The amount of total subsidies provided by the Bank since inception of its subsidy activities in 1974 up to
the end of 2004 reached about SR 12.5 billion, to encourage farmers to use mechanization and modern
science in their agricultural business. The total amount of subsidies rendered during 2004 stood at about
SR 246.2 million, compared with about SR 249.7 million in the previous year (1).
Saudi Credit Bank (SCB)
The Saudi Credit Bank (SCB) was established by Royal Decree M / 44 on November 9, 1971 (4). According to the
provisions of its articles of association, the Bank was established as a financially and legally independent entity,
eligible for acquisition, disposal and litigation. The Bank was established to extend interest free loans to Saudi citizens
with limited financial resources, to help them overcome their financial difficulties. Its loans are extended in return for
sufficient mortgage or acceptable guarantee from a creditworthy individual or firm to ensure repayment of the loan.
The Bank extends loans, the value of each not exceeding SR 20,000, according to specific conditions such as:
(1) SAAB, Saudi Arabian Agriculture Bank, Annual Report, 2004(2) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report, copied from SAAB(3) SAAB, Saudi Arabian Agriculture Bank, Annual Report, 2004(4) Ministry of Finance, Saudi Credit Bank, Informative Bulletin
Distribution of Subsidies Approved by SAAB by Fields During2003 & 2004 (SR million) (3)
Purpose2003 2004
Value (%) Value (%)
Machines and Pumps 148.8 59.6 145.6 59.1
Agricultural Machinery 99.3 39.8 97.4 39.6
Poultry Breeding Equipment 1.6 0.6 2 0.8
Transport of Imported Cattle 0.0 0.0 1.2 0.5
Total 249.7 100 246.2 100
Distribution of loans Approved by SAABby Purpose During 2004 (SR million) (2)
Purpose2003 2004
Value (%) Value (%)
Agricultural Projects 216.6 35.4 152.5 14.36
Well Drilling 67.5 11 83.7 8
Agri. Machinery 85.1 13.9 225.2 21.6
Pumps 39 6.4 95 9.1
Palm Seedling 22.8 3.7 68.5 6.6
Irrigation Equipment 46 7.5 116 11.1
Machines 32.8 5.4 76 7.3
Sort-term Loans 17 2.8 7.9 0.8
Other 85.5 14 219.2 21
Total 612.3 100 1,044 100
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– A loan applicant must be in actual need of the loan.
– His annual income should not exceed SR 36,000
– He should not have outstanding loans from SCB.
– Submitted guarantee should conform to SCB’s by-laws and relevant regulations.
SCB provides loans for purposes such as marriage, home repair and other social loans including family loans,
vocational loans (not exceeding SR 200,000) and taxi drivers loans which commenced in May 2002. Since its
inception and up to the end of 2004, the bank provided about 509,900 loans with a total value of SR 8.4 billion, of
which about 20,900 loans were disbursed during 2004. The volume of outstanding loans by the end of the same
year reached about SR 1 billion (1) .
The value of repaid loans by the end of 2004 reached about SR 403 million, an increase of about 9.1% compared
to 2003 (3).
Human Resources Development Fund (HRDF) (4)
The establishment of the Human Resources Development Fund, as an administratively and financially independent
entity, came as a result of a clear vision for a strategic Saudi objective, the attainment of which represent an
unprecedented challenge reflected in Saudization of the private sector’s jobs. The establishment of the Fund
came as an effective mechanism to contribute towards providing qualified and well trained Saudi youth (both
male and female) with a view to realize the strategic objective which will provide the nation with social, security
and economic benefits.
The Fund was established per Council of Ministers’ Resolution 107 of July 31, 2000 and Royal Decree M / 18 dated
August 5, 2000, as an administratively, financially and legally independent entity located in Riyadh, to translate
the efforts of those responsible for the country’s policy into actions on the ground, by enabling Saudi youth to
acquire knowledge and skills necessary to occupy the private sector’s jobs, thus bringing about positive impacts
on national economy. In order to realize its general objective of training and employment of national manpower
in the private sector, the Fund carries out the following activities:-
- Rendering assistance with a view to train and employ national manpower in the private sector.
- Contribution in the costs of training national manpower to join the private sector.
- Shouldering a percentage of the salaries of those employed in the private sector firms after training them.
(1) Saudi Credit Bank, Annual Report, 2004(2) Ibid(3) Ibid(4) Human Resources Development Fund, Annual Reports, 2004
Performance of SCB During 2004 (2)
Type of Loan No. Value (SR million)
Social Loans: 20,121 396.4
- Marriage 16,992 336.6
- Home Repair 2,676 52.2
- Family 453 7.6
- Vocational 27 1.8
- Taxi Loans 793 53.2
Total 20,941 451.4
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commercial banks increased by 36.3%, to reach about
SR 16.6 billion (2).
It is noteworthy to note that commercial banks tended,
since 1999, to expand relatively in extending consumer
loans to individuals for purposes of real estate finance,
purchase of cars, equipment and other purposes (3).
The private sector enjoyed the largest portion of the
banks’ credit expansion process. According to the
classification of the bank credit extended to this sector
by economic activity in 2004, the credit extended to
sectors of various activities increased by about SR 40.6
billion, or 49.4%, to reach SR 122.7 billion, an increase
of 9.9% than the previous year(4).
Most of these increases are attributed to increased
credit extended for consumption loans. Furthermore,
credit extended to the finance sector went up by about
SR 22 billion, or by 184.9%, to reach SR 33.8 billion and
the credit extended to the trade sector grew by about
SR 10.9 billion, while credit extended to services and
construction sectors increased by about SR 3.5 billion
and 1.1 billion respectively (5).
Since 2005, work started on implementing the
project of generalizing employment requirements
for the leading posts of commercial banks as well
as developing regulatory legislation to set limits for
extending credit facilities to finance subscription
in initial public offerings. Licenses were issued for
establishment of following: Muscat Bank in Arriyadh,
a Saudi Joint Stock Company named Al-Bilad Bank,
Deutsche Bank, BNP Parisbas Bank, and J.P. Morgan
Chase Bank, to open branches in the Kingdom and
commence banking activities. The Custodian of
Two Holy Mosques King Abdullah Bin Abdulaziz also
directed in the second half of 2006 to establish Al-
Enma`a Bank with a capital of SR 15 billion, of which
70% is to be offered for public subscription.
According to data from banks’ unified financial position
for 2005, the commercial banks continued to realize good
performance in terms of increased assets and deposits as
- Supporting the finance of field programs, plans and
studies aimed at the employment of Saudis to
replace foreign labor.
- Providing loans to firms involved in training national
manpower.
- Conducting research and studies related to its
activities in the field of national manpower training.
Centennial Fund (1)
The Centennial Fund was established by Royal decree on
July 7, 2004, as a Saudi private charity foundation. The
Fund aims at rendering assistance to Saudi youth of both
genders to establish their own commercial projects as a
source of living, and hence run their own business.
The Fund provides interest free loans ranging between
SR 50,000 and SR 200,000, to be repaid as of the sixth
month of commencement of commercial operations.
The loan is repaid in monthly installments over five years.
The Fund also provides counseling services for three years
as of the start of commercial operations. This is done
through volunteer businessmen or businesswomen with
outstanding practical experience who support emerging
investors. The Fund also streamlines Government
procedures regarding establishment of commercial
projects in collaboration with SAGIA, which signed a
memo of cooperation with the Fund.
Commercial Banks & Bank Financing
Commercial banks are among the finance agencies
which support investment activities in the Kingdom.
The Banking sector in the Kingdom realized tangible
development during 2005, when the Saudi Banks’
assets increased by 20.2% to reach SR 655.4 billion.
The total number of bank deposits went up by 18.5%
to reach SR 422.3 billion while banks’ claims from
both public and private sectors increased by 20.9%
to reach SR 490.2 billion. Foreign assets of local
banks increased by 14.4% to about SR 92.8 billion,
or increased by SR 11.7 billion in 2004. Profits of
(1) Eastern Province Chamber of Commerce & Industry, SME 3rd Forum, Paper by The Fund’s Director General, 2005 (2) SAMA, Saudi Arabian Monetary Agency, 41st , Annual Report 2005(3) Ibid(4) Ibid(5) Ibid
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Theme Six:
Eighth Development Plan and
Investment Outlook In The Kingdom:
The Eighth Development Plan is expected
to achieve preparation and approval of
more important national strategies, such as:
long term strategy for Saudi Economy up to
2024; National Strategy for Post Secondary
Education; National strategy for Export
Development and National Strategy for
Eradication of Poverty. In light of the above,
general indicators of national economy are
reflected in increased economic growth
rates, increased employment rates, growth of
private sector’s contribution to the economy
and national income, diversification of the
economic base, improvement of the balance of
payments in favor of Saudi Arabia, realization
of a high degree of economic equilibrium and
price stability, and achievement of balanced
development in all regions of the Kingdom.
Furthermore, these indicators will be reflected
in the increased integration among GCC
States and enhancement of Arab economic
cooperation and accelerated integration in
national and international economy.
General Objectives and Strategic Bases of the
Eighth Development Plan 2005 - 2009 (1),
is illustrated in the following:
Objectives Strategic Bases
• Safeguard Islamic teachings and values,enhance national unity, enhance the security and social stability and deepen the Arab and Islamic identity of the Kingdom.
• Continue to improve services providedto Hajj and Umrah pilgrims, to ensure performance of religious rites with ease and convenience
• Raise the standard of living, improvethe quality of life and provide job opportunities to citizens, through acceleration of the development process and increasing the rates of economic growth, as well as qualitative and quantitative expansion of education, health and social services.
• Increase the share of Saudi manpowerin total employment in various sectors, pay attention to upgrading their efficiency and productivity through training and re-training, and continue to substitute Saudi manpower for non-Saudis.
• Place emphasis on the welfare of
women, upgrade their capabilities and remove constraints which impede their participation in development activities, in line with Islamic values and teachings.
• Expand the provision of health care and social welfare services.
(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009
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Objectives Strategic Bases
• Develop human resources, upgradecompetency and enhance their contribution to meet requirements of national economy.
• Diversify the economic base with dueemphasis on promising areas, such as manufacturing industries, particularly energy intensive industries and their derivatives, in addition to mining, tourism and information technology industries.
• Improve productivity of the nationaleconomy, enhance its competitiveness and make it adaptable and flexible while facing economic changes and developments at the national, regional and international levels.
• Enhance the private sector’sparticipation in socio-economic development.
• Achieve a balanced developmentthroughout all regions of the Kingdom and reduce the development gap among them.
• Develop science and technology,concentrate on information, support and encourage scientific research and technology development with a view to enhancing the efficiency of the Saudi economy, and keeping abreast of the knowledge economy.
• Conserve and develop water resourcesand ensure rational utilization.
• Take care of needy groups of citizensand pay attention to management and reduction of poverty by concentrating on economic policies and programs which lead to higher economic growth along with achieving balanced development in all regions of the Kingdom.
• Develop all aspects of education andtraining systems. Upgrade their output in conformity with changing needs of society, labor market and requirements of development process. In addition, keep abreast of advances in knowledge and technology, and pay attention to the promotion and dissemination of culture.
• Improve the quality of public servicesand increase their supply in line with the growing needs of the population along with improving performance of the responsible agencies.
• Enhance the utilization of economic resources with due emphasis on rationalization as a basic factor as well as improve performance of responsible agencies.
• Continue to build infrastructure inline with growing demand, improve performance and place emphasis on maintenance and replacement of areas in disrepair.
• Continue to pay attention to preparinga climate conducive to boosting private sector participation in socio-economic development, while intensifying government initiatives to encourage private, domestic and foreign investments and bolstering competitiveness of domestic products.
• Privatize additional public facilities,
activities and services. Consideration should be given to raising citizens’ share in the ownership of assets within
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Objectives Strategic Bases
• Protect the environment and developsuitable systems within the context of sustainable development requirements.
• Continue to strengthen and promotethe Kingdom’s relations with Arab, Islamic and friendly countries.
the framework of competition and transparency.
• Develop tourism and improve associatedservices and facilities along with conserving the environment and national heritage.
• Adopt a population policy that takesinto consideration the quantitative and qualitative changes of the population and their geographical distribution, and enhances correlation between demographic changes and directions of sustainable development.
• Distribute resources and services amongthe Kingdom’s regions in a manner that would ensure reduction of development disparities among them and enhance their comparative and competitive advantages.
• Create a strong foundation for nationalscience and technology capable of innovation, expand Information & Telecommunications Technology (ITT) applications and improve data bases to support the national economy.
• Continue with the process of administrative development and creation of a regulatory environment conducive to economic development and efficiency.
• Adopt fiscal and monetary policies thatcontribute to accelerating economic growth, realizing a higher employment level and enhancing economic stability.
• Reduce public debt to reasonable levelsand develop appropriate mechanisms to realize financial stability in the long run.
• Adopt an integrated management of water resources and optimize utilization of these resources, while emphasizing their rational use and developing their sources and conservation techniques.
• Encourage private firms, enterprises and individualsto participate in benevolent and voluntary activities in the social, health and educational domains, along with inculcating the concept and significance of these activities and improving their methods and performance techniques.
• Continue to pay due attention to protection ofthe environment against pollution. Develop sound environmental protection regulations, protect and promote wildlife, and ensure conservation of natural resources and rationalize their utilization.
• Promote integration among the Gulf Cooperation Council (GCC) States and strengthen the Kingdom’s relations with Arab, Islamic and friendly countries as well as international economic blocks.
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Eighth Development Plan & Economic Policy
The Kingdom adopts the market economy principle.
However, Government economic policies remain
significantly in place to ensure that economic activities
are within the framework of approved development
strategy to deal with unexpected and unfavorable
economic events. Thus, the Eighth Development Plan
demonstrates the significance of integrated function of
macro-economic policies as well as the importance of
economic reform policies aimed at enhancing market
economy mechanisms. The Plan also highlights the
importance of encouraging the private sector in carrying
out its tasks in the context of boosting economic growth
as well as the importance of Government investment in
infrastructure projects with a view to improve economic
climate in general and investment environment in
particular, thereby raising economic growth rates, job
opportunities and improving standards of living. In light
of the above, the State’s economic role encompasses
regulating general economic equilibrium through
macro-economic policies, a matter which was adopted
by the Eighth Development Plan through maintaining
price inflation within 0.6% (1) as an annual rate over the
coming five years.
It is noteworthy to note that stability is expected to
continue regarding exchange rates of the Saudi Riyal
to support economic stability. Growth, rationalization
and restructuring of public expenditures are also
expected to continue with a view to effectively meet
the requirements of socio-economic development in
light of high population growth, and to be financed
in a growing manner through actual oil and non-oil
finance sources. In the domain of investment policy,
the Eighth Development Plan aims at ensuring an
adequate investment climate for Saudi and foreign
private sectors along with raising Government
investment in vital development projects.
Eighth Development Plan & Private Sector
Investments
The Kingdom’s development plans, including the
Eighth Development Plan, adopted the strategy of
paving the way for the private sector to assume many
economic activities. This policy has had its impact on
supporting the activity of the private sector, boosting
its importance in the economy, developing its
capabilities and improving its economic efficiency in
its investment and production concept. This has not
only enabled the private sector to mobilize capital to
finance projects, but also to use modern management
methods and adopt advanced technologies.
The Government policies have been keen to ensure
a favorable economic climate and opportunities
necessary for boosting the developmental role of the
private sector. Thus, the private sector witnessed a
real average annual growth rate of 4.3% as well as an
increased contribution in GDP from 52.4% to 54.6%
by the end of 2004 (2).
Main Indicators of the Private Sector’s Role in the National Economy 2004 (3)
Indicator Value
Value Added (SR billion) 390.2
Share in GDP (%) 54.6
Total Private Sector Investments (SR billion) 110.3
Number of Companies 194,745
Number of Operating Factories 3,652
Size of Work Force In Private Sector (1000 Workers) 7,076
Size of Saudi Work Force (1000 Workers) 2,512
Percentage of Private Sector Work Force To Total Work Force (%) 85.4
Percentage of Saudi Workforce At The Private Sector (%) 35.5
(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) Ibid(3) Table derived from the 8th Development Plan, 2005 - 2009
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The share of the private sector in GDP for 2004, accounted for 27.3% in the oil and gas sector, 18.7% in the
non-oil Government sector and 54% in the non-oil sector. The Eighth Development Plan’s development
strategy aims at enhancing the private sector’s efforts and contribution to the diversification of economic
base, boosting its future role in production activities through improving investment climate, and raising
the contribution of the process of development. This strategy also aims at boosting its consultation
channels and partnership between the public and private sectors, along with removal of any contradiction
between existing regulations and investment laws, increasing the share of the private sector in boards of
directors of public institutions, and development of a comprehensive base for investment affairs, as well
as finalization of the organizational and control framework supporting the privatization strategy. In light
of the above, the private sector is expected to achieve the following growth rates:
Eighth Development Plan & Investment Requirements
The investment strategy of the Kingdom is based on several key pillars such as (2):
- Ensuring integration of Government and private investments.
- Increasing non-oil Government revenues to the level of financing a significant part of operational
expenditures and Government services away from oil revenues.
- Reducing operational expenditures (current) through privatization and expanding cooperation between
the public and private sectors.
- Increasing savings and Government investments and adopting an investment plan not influenced by
fluctuations of oil revenues.
Against the above background, the general strategic objectives of development in the Kingdom are
reflected in increase of the rate of private and public domestic savings, increase of net Government capital
formation and repatriation of Saudi savings and investments from abroad, as well as encouragement of
Foreign Direct Investment investment(FDI).
Growth Rates of the Private Sector During the Eighth Plan 2005 - 2009 (1)
Description Rate %
Increasing Real GDP514.3
(billion SR)
Increasing Relative Contribution in GDP 57.5
Growth of Private Consumption (Average Annual Rate) 3.5
Growth of Private Investment Consumption (Average Annual Rate) 10.4
Growth of Petrochemicals Sector (Average Annual Rate) 7.3
Growth of other Manufacturing Industries Sector (Average Annual Rate) 6.7
Growth of Trade Sector (Average Annual Rate) 5.2
Growth of Finance Sector (Average Annual Rate) 6.1
Growth of Total Manpower (Average Annual Rate) 2.2
Growth of Saudi Manpower (Average Annual Rate) 7.2
(1) Table derived from the 8th Development Plan, 2005 - 2009(2) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009
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Figures and ratios are rounded to the nearest decimal point
(1) Ministry of Economy & Planning, Macro-economic Forecasts
Targeled Investments During the 8th Plan at Fixed Prices in 1999 (1)
Item
7th Development Plan 2000 - 2004
8th Development Plan Target 2005 - 2009
Value (Actual)
(SR billion)
%Value
(Expected)(SR billion)
%
A. Non-Oil sectors 598.1 89.6 920.3 88.1
1. Producing sectors 277.1 41.5 438.7 42.0
1.1 Agriculture, Forests and Fisheries 18.8 2.8 32.5 3.1
1.2 Non-oil Mining- Quarries 1.4 0.2 3.5 0.3
1.3 Manufacturing Industries 94.0 14.1 178.7 17.1
1.3.1 Oil Refining 8.9 1.3 12.1 1.2
13.2 Petrochemicals 52.0 7.8 101.5 9.7
1.3.3 Other Conversion Industries 33.1 5.0 65.0 6.2
1.4 Electricity, Gas and Water 154.4 23.1 207.8 19.9
1.5 Construction 8.5 1.3 16.4 1.6
2 Private Sector 227.4 34.1 365.2 35.0
2.1 Trade, Restaurants and Hotels 25.6 3.8 35.7 3.4
2.2 Transport and Communications 24.7 3.7 45.3 4.3
2.3 Finance, Insurance, Business and Real Estate Services 166.7 25.0 262.6 25.1
2.3.1 Real Estate services 145.7 21.8 227.3 21.7
2.3.2 Finance, Business and Insurance Services 21.0 3.1 35.3 3.4
2.4 Community and Personal services 10.4 1.6 21.5 2.1
Total non-oil Private sector 504.5 75.6 803.9 77.0
3. Government Services 93.6 14.0 116.4 11.1
B. Crude Oil and Natural Gas 69.0 10.4 124.5 11.9
Total Investments 667.1 100 1044.8 100
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Following are the strategic projects in the Eighth Development Plan which are expected to be implemented by both the public and private sectors, and constitute basic investment activities in the these fields as well as other integrated fields.
(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009
Strategic Projects in the Eighth Development Plan (1)
Activity Size/Outputs
1. Gas Projects
Agreements were concluded for four major projects regarding exploration and production of natural gas with the participation of international firms, to be implemented during the 8th Development Plan
Exploration area is about 330,700 m²
2. Expansion of Saudi ARAMCO’s production
capacity
Expansion of crude oil production capacity Addition of 1.5 million bpd to the production capacity
3. Expansion & development of refining capacity.
Renovation of Rabigh refinery with a foreign partner
Increase refining capacity by 30% during the plan period
Development of Rabigh refinery to an integrated complex for refining & petrochemicals
4. Petrochemical projectsThe increased availability of natural gas will lead to new opportunities for the growth of petrochemical industries. This has resulted in the announcement of a considerable number of new investment projects to be undertaken by SABIC, as well as private domestic and international companies
Establishment of a new complex in Yanbu for ـ production of:
- 1.3 million tons of ethylene- 800 thousand tons of polyethylene- 700 thousand tons of ethylene glycol
Establishment of a new ethylene glycol plant at ـJubail, by SABIC, with a production capacity of 625 thousand tons/year
Establishment of a Butane-1 plant with ـ a production capacity of 130,000 tons/year in Jubail, by PETROCHEMYA, a subsidiary of SABIC. The International Methanol Company will establish ـ a 970,000 tons/year methanol plant in Jubail.The National Petrochemical Industrialization ـ
Company will establish a plant for production of 500,000 tons of acetic acid, 275,000 tons of vinyl and 1.8 million tons of methanol
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5. Railway Projects
Work is underway on the integrated plan for expansion of the railway finalization of a network with the participation of the private sector.
- Construction of a 1,683 Km railway to connect phosphate and bauxite mines in the Northern Part of the Kingdom to Jubail Industrial City.- Construction of a 946 Km railway linking Jeddah with Dammam, and passing through Riyadh.- Connection of Makkah with Madinah via Jeddah along with a link to Yanbu city.- Connection of Dammam with Jubail industrial city (115 Km)
6. Mining Projects
During the 8th Development Plan period, work is expected to commence on implementation of major phosphate and bauxite projects with the involvement of foreign investors, and are linked with the railway projects
Establishment of an integrated phosphate ـ fertilizer project with a capacity of 2.9 million tons/year including four sulphuric acid plants, three phosphoric acid plants and three DAP plantsCompletion of the bauxite project which ـ includes development of Al-Zubairah Bauxite mine with a production capacity of 3.3 million tons/yearEstablishment of an ammonium refinery with a ـ capacity of 1.4 million tons/year and an ammonia melting furnace at Ras Zour North of Jubail City
7. Telecommunications & Information Technology More mobile and land telephone services will be ـ provided during the 8th Development Plan so that the number of subscribers will reach about 13 million for mobile telephone and about 7 million for land telephone by the end of the Plan
8. Electricity Generation and Water Desalination
The Water & Electricity Company was established to promote establishment of several independent water desalination and power generation projects. During the 8th Development Plan period, several power generation and transmission projects will be launched on (BOT) and (BOO) basis
Establishment of power generation plants ـ which will contribute about 10,996 MW as well as 1,330 MW expected to be provided in coordination with desalination plantsEstablishment of power transmission lines to ـ provide electricity to 1,126 villages and hamlets and to add about 1,163.2 thousand customers
9. Water & Waste Water Projects
Expansion of water distribution and waste water networks and increasing waste-water treatment plants
Expansion of water distribution network to ـ increase coverage rate to 80 percentExpansion of waste water networks to increase ـ coverage rate to 50 percentIncreasing the rate of waste-water treatment to ـ about 40 percent of waste-water volumeIncreasing desalination capacity from 1,070 ـ million m³ per year to 1,650 million m³ per year
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Theme One: Investment Opportunities Provided by Government and Other Agencies
Arriyadh is a strategic center for national and
foreign investments, and one of the important
commercial centers in the Middle East. Arriyadh
is looking to become a world class financial
center.
In addition to its strategic location, Arriyadh’s
position is further enhanced by other merits,
among them is being the Administrative Capital of
the Kingdom Saudi Arabia, where all investment
agencies are located. The administrative and
legal procedures were developed to improve
the investment environment. In this regard,
custom exemptions procedures were developed
and simplified to ensure faster transactions
within no more than one month, and other
encouraging factors such as: electronic share
of information project, facilities provided by
the Saudi Fund for Development to subsidize
export financing, and granting facilities by
Saudi Industrial Development Fund. In addition
visa procedures were simplified allowing
easy entry to businessmen visiting Saudi
Arabia, and setting-up of offices for the Saudi
Arabian General Investment Authority (SAGIA)
in Saudi Embassies abroad, not to mention
that the Kingdom’s Strategic Investment Plan
implemented through SAGIA aims at achieving
the ambitious objective to become one of the
world’s top ten competitive countries included
in the “Doing Business Competitiveness Report “
published by the World Economic Forum (1).
Arriyadh Development Authority (ADA)
Development of Historical Dereya:
Dereya is the capital of the first Saudi State
and the starting point of Sheikh Mohammed
bin Abdulwahab call “dawaa”. The City lies on
the bank of Wadi Hanifa and contains valuable
national heritage elements. Therefore, Arriyadh
Development Authority has approved a program
to develop Historical Dereya, aiming to preserve
the historical urban texture of the City and take
advantage of this heritage to serve various activities,
provide basis for cultural and socio-economic
development of the region, encourage dependence
on local expertise in economic development and
promote private sector investments in this urban
and economic development.
The development of Historical Dereya (2) is an
important theme which aims at taking full
advantage of the economic potential of Dereya
in the areas of local and international tourism,
cultural and national heritage services. The
program will take advantage of the rural and
historical features of Dereya, to develop and
modernize its economy and integrate it into
the modern economy of Arriyadh. The program
includes plans to rehabilitate the infrastructure,
public services, development of land to ensure a
sustainable development.
The program will be integrated with Wadi Hanifa
development program and adjoins in its economic
side with the development of recreational and
open zones, environment and resources protection,
recycling of resources, development of the agro-
economy in order to upgrade the urban value of
the entire region.
The economic development process will produce
a number of small and large scale investment
projects in the areas of tourism services, recreation,
cultural, commercial and real estate, etc.
(1) Saudi Arabian General Investment Agency, SAGIA’s Strategy, 2005 - 2010(2) ADA, Tatweer Bulletin, Issue 43, 2006
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07Investment Opportunities Offered by Development of Historical Dereya Project
Type of Business Description
Hotels
- Turaif Heritage Hotel (Boutique)
- Bujairy Heritage Hotel (Boutique)
- Four Stars Hotel
- Turaif Hotel and Resort
Each hotel contains 24 rooms which provide luxury accommodation to families and individuals
Located at Al-Dhahra quarter to serve businessmen
The resort will consist of (120 - 150) rooms with gardens, squares and unique view overlooking Turaif quarter
Residences & Apartments
New Apartments
Service Apartments
Apartment Buildings at Al-Bujairy and Al-Dhahra quarters. Each Building consists of 40 apartments
Consisting of 10 apartments for the residence of families and businessmen at the farms area
Restaurants & Cafés
Traditional Saudi Restaurant
Qasr Moudi Restaurant
Street Cafés (Cafés Trottoirs)
A restaurant with inner & outer open spaces at Turaif quarter which will serve traditional Saudi dishes
A restaurant at Turaif quarter which will provide high quality service to families and individuals
A street with a number of cafés and cafeterias with spacious balconies at Al-Bujairy and Al-Dhahra quarters
Shopping Centers
Agricultural Products Market (Souk)
Oriental & Western Commercial Outlets at the Central Area
Administrative buildings (Business Oasis)
Market for vegetables, meat, & organic products with a few restaurants and cafeterias
Sells daily needs of residents and visitors
Office buildings surrounded by green areas at Al-Dhahra quarter. It includes H.Q. of companies and hi-tech industries such as computers, fashion, demonstrative design, and jewelry. The objective of the Oasis is to offer a convenient and unique business environment within the natural environment of Al-Dereya.
Recreational Activities & Parks
Health Club & Traditional Bath (Turkish)
Horses Museum & Center
Restore & use Turaif traditimol bath It is a city in the Wadi area which provides training in horse and camel riding. It also includes a museum which provides information on the history and traditions of Arabian horses
Tourism Services
Turaif Sector
Commercial Tourism Office
Mobile Fast Food Buffets
Snack Bars Kiosks
Mini buses with (20 - 25) seats run in two lanes which provide tours in Turaif area. It serves ordinary people as well as VIP’s and residents of hotels
Office space for tourism companies, rent-a-car and other commercial services at Al-Dhahra quarter
Mobile carts which provides snacks and soft drinks to visitors at Turaif and Bujairy quarters
Fixed units where fast food and soft drinks are sold, spread all over Turaif, Bujairy and Al-Dhahra quarters
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Wadi Hanifa Development Project (1)
Wadi Hanifah (Hanifah Valley) the longest and most
important valley near Arriyadh, is a unique natural
feature, and extends over 120 kilometers in length
through the City. It runs North-West to South-East
of the City. The valley, which is fed by over forty
tributaries, contains the remaining features of the
traditional environment in the area, i.e. villages,
gardens and farms. The valley is rich with agricultural,
heritage and recreational resources. Therefore,
development of the valley would offer potential
recreational and agricultural resources to the City
residents.
Since 1986, Arriyadh Development Authority (ADA)
has set up strategies to develop the Valley and
preserve its natural environment. The Valley was
declared a protected natural zone. In 1998 ADA
formed a committee to prepare an integrated
project to develop the Valley within a predetermined
timeframe.
The development project of the strategic master
plan offers great investment opportunities to the
private sector:
− Implementing the water canal project
− Establishing permanent monitoring stations
− Fencing public land and protected environmental
zones
− Establishing natural water treatment projects
− Establishing models of promotional pockets
− Establishing a set of observation points, pedestrian
walkways and landscape the site
− Establish a main road at the Valley, side roads and
roads that link promotional pockets
− Establishing landscaping project
The project, which is sponsored by Arriyadh
Development Authority aims to raise the urban
value of the surroundings of the Valley and to stop
environmental destruction, find a source of water
for irrigation purposes and provide additional
recreational space to the people of Arriyadh. The
project will also create employment opportunities to
city inhabitants, and will attract public-private sector
investments in tourism, recreation and agriculture
activities. The Land Usage Plan designated land for
parks, recreation areas, gardens, tourism, cultural
events, camping facilities, and new agricultural sites
along the 120 Km length of Wadi Hanifa Oasis. ADA has
approved the development plan and accompanying
projects. Work on the project was divided into three
major phases: Phase I started in 2003, and covers the
area from Wadi Hanifa Dam to Al-Hayer which is now
completed. Phase II started in 2004 for the part of
Valley form Amariya Road up to the Dam. Costs of the
two phases were estimated at SR 359 million (2).
Electric Train System Project (3)
Arriyadh Development Authority in its Public
Transport Plan approved the project of an electric
rail network in the City, which offers an investment
opportunity to the private sector. Preliminary
engineering design and technical specifications for
the first phase of the project are completed. The first
phase contains two primary axis which are: Olaya Rail,
which will start from the North of the Northern Ring
Road and extend South to the Public Transportation
Center (Depot) on the Southern Ring Road, with a
total length of 25 Km. The axis of King Abdullah Road
which will start from King Khalid Road at King Saud
University and extend East to Khalid Bin Al-Waleed
Street with a total length of 16 Km. There will be 34
(1) Arriyadh City Website – www.arriyadh.com (2) Arriyadh Development Authority, Comprehensive Strategic Plan for the Development of Wadi Hanifa (3) Arriyadh Development Authority
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stations along the two routes, including five main
stations for switching from buses to train.
The train will be equipped with advanced, convenient
and air-conditioned wagons, with different service
categories, one of which will be dedicated to
families. Wagons will be provided with telephone
and internet services, and instructions facilities to
passengers from admin and control.
The feasibility study of the project shows that the
operation of the train on King Abdullah and Olaya
routes will result in large benefits, which will exceed
project cost by six times. It offers great benefits
such as cutting the daily trips of vehicles by around
250,000 trips. It will also cut the total distance
traveled by private vehicles by 4.48 million Km / day,
cut the vehicles travel time by 89,000 hours / day. The
project will save 400,000 liters of gasoline / day and
will therefore, reduce the emission of air pollution
and improve the quality of air and will reduce the
average of road accidents by 21 accidents / day.
The project will produce the following investment
opportunities:
− Operation phase (national and international
professional operation and maintenance companies)
− Move passengers to train stations
− Develop projects alongside the railway (housing,
commercial and recreational projects)
− Expansion projects (connect rail service to King Khalid
Airport, industrial zones, railway station and Saudi
Public Transport Co. (SAPTCO) depot, etc) (1).
New Suburbs of Arriyadh
It is natural for suburbs to develop around large
modern cities like Arriyadh. Therefore, Arriyadh
Development Authority sponsored the idea of
planning model suburbs as independent cities to
create investment opportunities to the private sector,
starting with feasibility studies of infrastructure
projects and ending with different services projects.
ADA commenced with two suburbs to the East and
North of the City, where structural master plans
were prepared by specialized bureaus. The North
suburb which will be on an area of 163 Km² will
include diversified economic activities, including a
technology zone, university, medical city and suburb
center. The suburb population is expected to be
around 675,000 by 2028, and will generate 133,000
job opportunities.
The Eastern suburb will occupy 184 Km², will include
a dry port, industrial services, suburb centers, a
recreation city, and a public services zone (university
and medical city). The population is expected to
grow to 500,000 by 2028. The suburb will generate
100,000 job opportunities (2).
New Urban Centers of Arriyadh
The structural plan of Arriyadh City which was
prepared by ADA was approved to develop
Arriyadh City to convert in the future from a unified
central system to multi central systems, achieving
decentralization by constructing urban / auxiliary
centers in every sector of the City contributing in
distribution of economic activities and admin and
residential services on new residential areas.
Each of these urban centers serves a sector of the City
and represents a pole to concentrate activities and
basic services of high caliber necessary for residents
of these sectors, within a circle whose radius is 10
Km. It is expected that these urban centers would
have the ability to absorb the needs of residents in its
vicinity, which are estimated to be between 600,000
and 1 million.
These centers shall encompass public and private
duties to include admin and Government centers,
economic activities, edifices, corporations, banks,
shopping centers, and social, cultural and recreational
services. They will also include residential compounds
with high population density.
(1) Arriyadh Development Authority, Special Report on the Electric Train System(2) Arriyadh Development Authority, Special Report, 2004
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ADA has recently approved standards and planning
controls, and structural reliefs for the urban
centers. ADA publicized the centers in the media,
issued necessary marketing pamphlets, and made
available to proprietors, developers and investors.
ADA also prepared clear competition standards
regarding these centers, since it is expected
to offer these standards soon to proprietors,
developers and investors to choose the urban
centers sites and develop them (1) .
Thumamah Park
Thamamah Park is in the center of the
Comprehensive Strategic Plan for the city
of Arriyadh, where an implementation plan
was developed by ADA to attract private
investment in the project.
At its meeting of November 18, 2006 (2), ADA
requested Riyadh Chamber of Commerce &
Industry to provide a visionary plan for the
development of Thumamah park with the
participation of investors from promotion
centers, financing companies and banks.
Development of Al-Dhahira Area
Dhahira area lies in the heart of Arriyadh City, an
area of 750,000 m² and surrounded by main roads
with flourishing commercial activities, where the
most prominent commercial centers are located.
Due to its strategic location in the heart of the
City and the center of the administrative hub,
ADA approved the formation of a consortium
which includes Riyadh Development Company,
Public Pension Agency, and General Organization
for Social Insurance (GOSI), Al-Meaqlia Company
and other interested land and real estate owners
in the area, investors and real estate companies.
The task of this new consortium is to develop Al-
Dhahira, specifically to set up development plans,
suggest a mechanism to work with multi-owners of
land and real estate in the targeted area, develop
infrastructure, develop parts of the area as pioneer
projects which may motivate other companies. It
aims too to mobilize other developers to complete
the project, purchase and develop the remaining
parts. All work will be carried out under the direct
supervision of ADA. The developer will be allowed
to suggest any building heights and usage.
However, this will be subject to comprehensive
urban and traffic studies. After the development
process is complete, the area will be appropriate
for several urban activities such as:
− Headquarters for large companies and banks
− First class shopping centers
− First class housing accommodation
− A network of open squares and pedestrian
walkways to link the area
These activities represent a great investment
opportunity to both the private and foreign
investors (3) .
Public Pension Agency
Information Technology & Telecommunications
City Project
The Information Technology & Telecommunications
City Project is currently being implemented by
the Public Pension Agency in North Arriyadh, in an
area of 800,000 m², and offers a great investment
opportunity to the private sector.
The project includes activities which are
directly related to information technology and
telecommunications (ITT), e.g. administrative
buildings to ITT companies, production facilities
for software production and maintenance
companies, research and development “R&D”
facilities. The project will foster technology
and research laboratories, manufacturing and
assembly of hi-tech models, in addition to support
(1) Arriyadh Development Authority(2) Ibid(3) Ibid
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services facilities, .e.g. hotels, restaurants,
recreation, auditoriums, Government services
buildings and housing for management and
professional workers. The project is part of
the Comprehensive Strategic Plan which was
prepared by ADA. Additionally, ADA together
with Arriyadh Chamber of Commerce &
Industry set up a proposed executive plan, the
core of which is to establish the Information
Technology and Telecommunications City. (1)
The city will attract foreign investments and
large ITT companies, and will eventually
produce other technology services to Saudi
Arabia’s business sector and will contribute
positively to the GDP and offer added value
to the national economy.
King Abdullah Financial Center
Saudi Arabia’s financial sector witnessed rapid
development, particularly, after joining the World
Trade Organization (WTO), allowing foreign
financial companies and banks to invest in the
Kingdom. Arriyadh City constitutes an important
financial center, offering good investment
environment in financial activities. King Abdullah
Financial Center, which will be similar to London’s
Canary Wharf Financial Center, was announced on
May 16, 2006. The objective is to offer a world class
business environment and house all companies
that work within the financial sector and related
industries under one roof.
The Center was designed to accommodate
existing and potential demand for class “A”
business offices equipped with high-tech state-
of-the-art buildings. The Center will be located
in North Arriyadh having an area of 1.6 million
m² and will include a world standard financial
academy to provide training for Saudi youth in
all financial disciplines. The Center will host the
headquarters of the Capital Market Authority,
stock market companies and other financial
services companies, e.g. insurance, banks, financial
(1) Arriyadh Development Authority, Tatweer Bulletin, Issue 45, 2006
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services, accounting and auditing and law offices,
assessment offices, consulting firms, IT companies
and support service offices (education, trading, etc).
King Abdullah Financial Center will be completed and
ready for business in three years. The Center will be
the Middle East financial capital, and the first in terms
of size, organization and technological specifications.
Construction work is expected to start in 2007. The
Public Pension Agency will be the leading investor
in the project, where a dedicated company owned
by the Agency will be established (1). The Center will
attract other investments, and will offer employment
opportunities to the national workforce. The project
will be a real addition to the urban development in
the City, and will offer good investment opportunities
to the private sector.
Supreme Commission for Tourism (SCT)
The Supreme Commission for Tourism took the initiative
to develop tourism with a special focus on resolution of
the problems that obstruct investment in this sector,
and is offering inducements to attract more investment,
by liberalizing tourism services markets, review of the
laws that control investments in the sector.
The most important investment opportunities offered
by the Supreme Commission for tourism are (2):
- Tourism development companies which motivate
the private sector to invest tourism facilities and services
- Tourism services centers that provides comprehensive
services for tourism investment and promotion of
investment opportunities in the tourism industry
– Electronic tourism marketing (SETS) which provides
a good opportunity for the private sector to develop
tourism products and present information to
tourists. It can be electronically sold.
– Tourism marketing and promotion programs
which are exclusively or partially offered by the
private sector in association with the public sector,
e.g. festivals and tourism events.
– Tourism markets which accompany business
tourism
such as conferences, cultural, sports, arts and
special events, in addition to tourism education and
training. These activities bring opportunities to the
private sector.
– Development of tourism sites: There are 168
tourism sites available for development, 28 of
which are inside the tourism development zones.
They offer investment opportunities to the private
sector. There are other investment opportunities,
e.g. tourism villages projects, skating facilities,
women’s recreational centers, restaurants, picnics
organization centers, etc (3).
Information Initiatives & Tourism Research
- The Supreme Commission for Tourism, set in 2001
a website on the Internet for its General Secretariat,
which is updated daily: www.sct.gov.sa
- In 2003 SCT developed portals for national
tourism
on the Internet to be the basic referral site to the
tourist in matters of tourism in the Kingdom:
www.sauditourism.gov.sa
- Set-up and operate the Tourism & Information
Research Center (MAS) to become the main referral
center with respect of collating and providing
tourism information, preserving and documenting
them, and publication of tourism studies, reports
and statistics, accurately and regularly
Saudi Electricity Company
As part of the privatization strategy, the Saudi
Electricity Company offers projects and investment
opportunities to the private sector throughout
the Kingdom. The most important of these
opportunities in Arriyadh is the establishment of
gas electricity generation plants in some of Arriyadh
quarters and provinces. Some of these opportunities
(1) Arriyadh Development Authority, Tatweer Bulletin, Issue 45, 2006 (2) SCT, Supreme Commission for Tourism, Guide & Initiative of SCT to Implement the General Strategy to Develop National Tourism(3) See SAGIA, Investment Opportunities in the Kingdom, 2006 for more information or refer to SAGIA’s Website www.sagia.gov.sa
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are Al-Mezahmiya power station, Salboukh, Al-Ashera,
overhead electricity distribution lines and many other
projects with costs up to tens of billions Saudi Riyals (1) .
The volume of investments in electricity generation
and distribution during the next ten years is
estimated at SR 53 billion of which SR 8 billion is for
the distribution sector. Accordingly, the electricity
company has opened several investment projects to
the private sector at an estimated cost of SR 48 billion
during the period 2006 - 2017 (2).
Arriyadh Region Municipality
Arriyadh Region Municipality offers several projects
and opportunities to the private sector. The following
are the most important investment opportunities
which were launched during 2006 (3):
– Collection of paper and cardboard waste project
– Fifty eight sites are available for lease and
installation of advertisements signboards
(Uni Ball)
– Lease of 20 sites to be used for ads. Signboards on
the barriers of buildings under construction
– Lease of 200 light poles to be used for illuminated ads
– Lease of 15 sites on pedestrian bridges to be used
as advertisement boards
– Lease of 100 sites on bridges and tunnels to be
used as advertisement boards
– Lease of 50 sites as advertisement boards on the
backside of street names
Arriyadh Chamber of Commerce & Industry
Arriyadh Chamber of Commerce & Industry
endeavors to boost national and joint venture
investments and make new investment opportunities
available to small and medium enterprises. As part
of this effort, the Chamber published an investment
opportunities directory including 91 investment
opportunities, 53 of which are in Arriyadh City, while
the remaining opportunities are in the Arriyadh
Region. The investment projects were selected
and prepared in coordination with consulting
firms. The Chamber takes into account selection
of projects that will make the highest returns for
investors and the national economy and to comply
with requirements of foreign capital investment.
Investment opportunities are concentrated in the
following categories (4):
– Building Materials
– Medical Preparations
– Garments, Textiles and Shoes
– Electronic Industries
– Adverting & Promotion Agencies, and Travel
& Tourism Agencies
– Auto Leasing Offices
– Auto Spare Parts & Tires Sale Centers
– Training & Recruiting Girls as Security Guards
For further information, please refer to Riyadh
Chamber of Commerce & Industry, Web Site:
www.riyadhchamber.org.sa
(1) See SAGIA, Available Investment Opportunities in the Kingdom, 2006 (2) SAGIA, Annual Report on Investment Performance, 2005(3) Arriyadh Region Municipality, Speech by Deputy Mayor on Developments & Projects, 2006(4) Riyadh Chamber of Commerce & Industry, Directory of Investment Opportunities, Small Service Projects 2006
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Theme Two: Investment Opportunities in Various Economic & Service Sectors
Industrial Investment Opportunities in
Arriyadh City
Factories in Arriyadh Region, as in other parts of
the Kingdom, enjoy a number of concessions and
benefits offered by the State, including provision
of land at nominal prices, raw materials, machinery
and spare parts custom exempted, supply of
electricity at reduced prices, the possibility of
obtaining concessionary loans to finance new, or
expand existing, factories and support of exports.
The Saudi Organization for Industrial Estates and
Technology Zones recently concluded studies
which approve specifications for development and
operation of industrial cities by the private sector.
Investment opportunities in the development
and operation of industrial cities will be offered
to the private sector during the course of this year.
Arriyadh is currently working on the development
of Part 2 of Phase 4 of the Second Industrial
Zone which will produce several investment
opportunities to the private sector. Moreover, the
development and operation of Sudair Industrial
City, 120 Km from Arriyadh City will be offered
on competition basis. Sudair Industrial City is
a good industrial location due to its excellent
geographical location, not far from Arriyadh City,
availability of electricity supply and finally the
Jubail – Arriyadh natural gas pipeline, which feeds
Arriyadh City, passes through the city of Sudair.
Studies were conducted on how to develop the
industrial city of Sudair and attract private sector’s
investment in light of the Strategic Regional Plan
of Arriyadh City. Arriyadh Development Authority
approved the following: (1)
• 100 million m² of total space will be allocated to the
industrial city, provided that a general structural
plan for the industrial estate will be set up,
and land will only be allocated for industrial
purposes and related services including: technical
education, industrial research, commercial services
and housing, business services, transportation
facilities, e.g. train stations (passengers and cargo)
and support services.
• The remaining 160 million m² will be developed
and allocated to an economic development project
with several economic activities. This should be
coordinated with concerned agencies, .e.g. The
Saudi Organization for Industrial Estates and
Technology Zones, SAGIA, Arriyadh Development
Authority, Riyadh Chamber of Commerce and
Industry and others.
• A special development strategy will be
implemented, taking into consideration offering
concessions to attract investments and to
enhance the role of the industrial sector and
other economic sectors in increasing revenues
of the region, provision of job opportunities and
exploitation of natural resources.
• The Saudi Organization for Industrial Estates
and Technology Zones will continue to carry on
the development works of Part 1 of Phase 1 of the
project (10 million m2) which will connect Sudair
to the electricity network.
The industrial city of Al-Kharj, 80 Km from Arriyadh
City (2) has a total area of 99,000 m2 (3). It is currently
under study for construction and development. It
will offer investment opportunity to the private
sector to integrate with other opportunities in
Arriyadh City.
Several industrial investment opportunities available
(1) Arriyadh Development Authority (2) Arriyadh Development Authority, Investment Climate in Arriyadh City, 2005(3) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005
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to the private sector in Arriyadh, are offered to both national
and foreign investors, such as:
– Vehicle tires
– Medicines, vaccines, antibiotics, and other support
medical accessories
– Household refrigerators
– Pottery and reflective and colored glass industries
– Plastic sanitary ware
– Water and gas meters
– Garments, threads, blankets and beddings
– Elevators and refrigerators and air-conditioning
compressors
Detailed information on the above opportunities such as
the production capacity of each project, total cost, and
expected revenue, etc. can be found at the website of SAGIA,
where 400 investment opportunities, mostly industrial, are
featured. Some of the projects are available in Arriyadh.
Commercial Investment Opportunities in Arriyadh City
Commercial works in the area of distribution of
goods, wholesale and retail trade, pharmacies,
distribution of medicines, commercial agency
services, except concession rights, are exclusively
for Saudi investors. The State has enacted a
number of rules and regulations that control
trading activities. Wholesale and retail trade
dominates the commercial activity in Arriyadh,
where there were 189,599 CRs in 2005 (1).
In addition to the permits issued by Arriyadh
Region Municipality that offer several investment
opportunities in wholesale and retail trade to
small and medium size enterprises, as follows:
− Computers and accessories
− Electric appliances
− Sanitary ware, plumbing accessories, paints and
electrical materials
− Garments and fabrics
− Industrial hardware, tools and equipment
− Building materials
− Office and home furniture
Real Estate Investment Opportunities in
Arriyadh City
The Real Estate Sector in Arriyadh is characterized
as rich investment opportunities, as the City faces
a shortage of houses which can be purchased by
low and medium income groups. The City also
faces a shortage of apartments for rent, and a
shortage of business offices in the City Center.
Various parts of Arriyadh City, particularly the
North and North West of the City, are witnessing
a construction boom. New office space is being
built in the City Center. GDP of the private sector
is expected to grow by over 5% (3) in the next five
years. This growth will multiply demand for office
space of high quality, which is currently limited
in number. In general, Arriyadh is expected to
attract more businesses and capital during the
coming few years, which will increase the demand
for office buildings and housing in the City and
its suburbs. This will offer excellent investment
opportunities in the real estate sector. Building
and construction investments are expected to
amount to SR 150 billion by 2010 (4).
According to studies released by Arriyadh
Development Authority, the City will have a need
for 495,000 housing units by 2024, an annual
Commercial Establishments in Arriyadh Region 1999 - 2005 (2)
Year Number
1999 4,402
2000 6,742
2001 9,323
2002 11,540
2003 11,158
2004 12,748
2005 11,502
(1) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005(2) Ibid(3) AlHayat Newspaper, Economy Page, Issue 15724, April 23, 2006 (4) Eastern Province Chamber of Commerce & Industry, Eqtesad Magazine, Issue 40, 2006
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growth rate of 27,500 units (1). Studies conducted by a real estate company estimated Arriyadh demand
for new housing units to grow to 482,000 units during the period 2004 – 2024 (2). Commercial buildings,
large and medium residential compounds, residential and commercial towers will represent good
investment opportunities in Arriyadh’s Real Estate Sector.
Arriyadh Development Authority recently approved new standards and regulations for buildings
in certain areas of Arriyadh City. The building codes and regulations were upgraded for the City
Hub (the area between King Fahad Road and Olaya Street) and also along King Fahad Road and
Olaya Street. According to the new standards, restrictions for height of buildings at the Hub, and
the West bank of King Fahad Road were removed, whereas the heights of buildings East of Olaya
Street were doubled.
Proprietors and developers will have the choice to apply the new or the old building codes.
Estimated Demand for New Housing in Arriyadh 2005/2024 (3)
Period Estimated Units %
2004 - 2009 104,375 21.65
2009 - 2014 113,126 23.46
2014 - 2019 124,965 25.91
2019 - 2024 139,759 28.98
Total 482,225 100.00
Educational Investment Opportunities in
Arriyadh City
Investment in human development is the corner
stone of a nation’s growth and prosperity.
During the past years, the Government of
Saudi Arabia has spent billions of Riyals on the
education sector. SR 66.8 billion was allocated to
the education sector in the 2005 budget (4). The
Government continues to encourage the private
sector to invest in the education sector where
rules and regulations were established for this
purpose. Licenses for private educational facilities
are issued by a number of agencies, as follows:
− Primary, Intermediate and Secondary schools are
licensed and supervised by the Ministry of
Education.
− Technical Colleges and Vocational Training
Centers are licensed and supervised by GOTEVOT.
− Universities and University Colleges are licensed
and supervised by the Ministry of Higher
Education.
The Government offers the private sector the
opportunity to build and furnish schools for lease
to the State. At the end of the lease period the
Government will own the building. There are also
investment opportunities in the area of printing
school books, transportation and housing for
students. The Government is expected to allocate
over US Dollar 8 billion (5) during the next ten
years in support of higher education projects
and make this available to the private sector
which will motivate investors to respond to the
(1) ADA, Arriyadh Development Authority, Population Study of Arriyadh City, 2004(2) AlEqtesad Newspaper, Real Estate Page, Issue 4552, March 2006 (3) Ibid(4) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005(5) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009
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market requirements for private universities and
colleges.
The demand for private university education for
both genders and the inability of Government
universities to accommodate the current students
will attract private sector investment. Statistics of
the Eighth Development Plan show that, by the
end of 2009 Arriyadh Region will have a capacity
for 55,584 Kindergarten students, 102,616 Primary
school students, 41,000 High Education students(1).
This will require educational infrastructure and
offer a good investment opportunity to the private
sector.
The establishment of Human Resources
Development Fund is true evidence of the
Government’s commitment to the expansion of
education and training towards a higher level
of employment among the Saudi citizens. Huge
financial concessions are available to national
and foreign investors, particularly to those able
to bring new experiences and advanced hi-tech
educational aids and instructional materials. The
private sector is currently establishing education
and training companies in light of the General
Organization for Technical Education & Vocational
Training (GOTEVOT) estimates that over 16,000
students will join technical colleges and over
14,000 will join training institutes during the
period 2005 - 2009 (2).
Moreover, colleges, institutes and schools owned
by foreign investors will generate investment
opportunities in the area of transportation of
students and printing of books. A mega project
will be jointly implemented by a group of
investors, to build 3,000 schools on BOT basis at
a total cost of SR 13 billion (US Dollar 3.4 billion).
(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) GOTEVOT, as stated in the 8th Development Plan, 2005 - 2009
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The private sector will continue to establish joint
stock companies which will serve in the education
sector (primary, secondary and higher education)
as an investment in the knowledge-based industry
to supply skilled workforce which is critical to
economic growth and social coherence. Existing
investment opportunities in Arriyadh are as
follows:
– Information Technology College
– Tourism and Hotels College
– Talent Development Centers (children & youth)
– Vocational Training Centers
And many other investment opportunities (1)
Health Investment Opportunities in Arriyadh City
The health sector of the Kingdom of Saudi Arabia
is the largest in the region with respect to volume,
activity and opportunities, with an average
annual expenditure of SR 30 billion, 80% of
which is public sector and 20% private sector(2). A
world class health infrastructure of hospitals and
medical centers was implemented during the past
years throughout the Kingdom.
The private health sector in Arriyadh is expected to
grow in terms of medical facilities which provide
medical treatment and diagnosis, or cooperative
medical insurance. The latter is expected to
experience rapid growth, benefiting from the
Royal Decree M / 10 dated August 12, 1999(3) which
mandates the medical insurance coverage of
resident foreigners. The decree formed a council
of medical insurance headed by the Minister
of Health. The council will be responsible for
qualifying cooperative insurance companies and
approve medical facilities which will be selected to
provide medical treatment to insured patients. The
By-laws of the medical insurance were issued via
Minister of Health Resolution 460/23/S dated June
7, 2002 (4). In support of these measures, the Saudi
Government had already transferred ownership of
some public hospitals to the private sector. The
Comprehensive Health Care Program is currently
being prepared. It is expected to produce a series
of opportunities to national and foreign investors
in the area of medical equipment, medical care,
pharmaceutical industries, management and
consultations, in addition to establishing and
operation of medical facilities which will in turn
generate more opportunities to the private
sector. The Eighth Development Plan 2005 - 2009
estimates Arriyadh requirements at 235 primary
health care centers, 8 hospitals, 5 health colleges
and 98 emergency centers (5). In addition, there
are other investment opportunities available in
fitness, weight loss, cosmetic surgery, medical
rehabilitation, care of persons with special needs,
and other opportunities (6) .
(1) SAGIA – Available Investment Opportunities, 2006(2) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(3) Ministry of Health Website: www.moh.gov.sa (4) Arriyadh Trade Magazine, Terms of Medical Cooperative Insurance By-laws, Issue 479, 2002(5) Ministry of Economy and Planning, 8th Development Plan, 2005 - 2009(6) See SAGIA’s Website for more Available Opportunities in the Health Sector
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Investment Opportunities in Personal Services
In addition to large scale investment
opportunities and the mega projects which
require large capital investments and
sophisticated technologies, stated within
the chapters of this report, there are several
investment projects available to individuals
or small to medium enterprises. Despite the
absence of studies which provide detailed
information on the actual requirements of the
City, there is clear evidence that the need for
personal and household services does exist.
Examples are:
• The urban development and expansion during
the last three decades of the former century was
not accompanied by equal growth of modern
establishments which provide personal services
to residents
• Whilst there are a fair number of sophisticated
firms of medium size which provide personal
services to Arriyadh City residents, the vast
majority of firms still offer modest services due
to the small volume of its services, provided in
the traditional way by firms owned and managed
by individuals.
• Implementation of the Eighth Development Plan,
will lead to further expansion in the City’s
facilities, in addition to mega projects which are
currently being established such as the Financial
Quarter in Arriyadh. This will increase the demand
for personal services and will therefore open
the door for new investments in these services.
Accordingly, there will be a need for sophisticated
firms which are capable of providing high quality
services, particularly in, but not limited to, the
following areas:
− Auto Repair Workshops and Cars wash
Except for workshops of auto dealers, the
vast majority of workshops are of individual
nature and modest services. The City
provides several investment opportunities to
set up state-of-the-art integrated workshops,
which possess huge capabilities to provide
full repair and maintenance services, e.g.
mechanical, electrical, body repairs, paints,
washing, car polish, calibrating and tires
replacement, oil change, parts sales, towing
off-road vehicles, with the available option
to offer maintenance services on contract
basis.
− Car Parks
Due to the increased number of vehicles and
the lack of adequate parking lots, the City
is currently in need of multi-storey parking,
particularly in areas with commercial
activities, providing parking services on
temporary basis or long term during
vacations.
− Household Maintenance Services
A vast majority of Arriyadh households will
require periodic maintenance services in
areas of electricity, air-conditioning, water
networks, sanitary connections etc. Such
services are mostly provided by individually
owned establishments, which provide only
one type of maintenance of poor quality by
personnel of questionable qualifications.
Arriyadh City provides great investment
opportunities where qualified household
maintenance companies can be established
to provide professional maintenance services
by qualified technicians, guaranteed and
with fixed prices.
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− Laundry Services
Although laundry shops are available throughout
Arriyadh, few of them provide good quality
service. There is a need for companies that
can provide good services, collect and deliver
laundry from / to homes.
− Personal Services Offered to Ladies
Although there are large numbers of modest
establishments which provide personal services
to ladies, e.g. hair dressing, preparing brides,
sewing women’s clothes, still the City has a
requirement for modern and integrated beauty
services.
− Taxi Services with Paging System
Despite the large number of taxis and limousine
services operating in Arriyadh City, there is still
a need for establishing taxi companies which
can receive customers request and contact
the nearest car to head to the customer.
Such companies could also provide school
transportation services.
− Family Restaurants
Arriyadh City has a large number of restaurants
which serve fast food, traditional, Oriental and
Western dishes. However, Arriyadh still provides
excellent investment opportunities in this line
of business. Demand exists for restaurants that
provide good service to customers, a family
ambiance, with diversified menus, parking lots
and children’s playgrounds.
− Gas Stations
The majority of gas stations still request cash
payments. A chain of gas stations that will accept
credit card payments and offer, in addition to
gasoline, other services, such washing, oil change,
etc. will be a welcome addition to Arriyadh City. It
is obvious that there is a need for more enterprises
that provide services of personal nature.
125
PageDescriptionS/N
128Distribution of Population by Gender in Arriyadh City, 20061
128Job Opportunities by Economic Activity in Arriyadh City2
128Private Sector’s Workforce as Shown in GOSI Records In Arriyadh City, 20043
129Operating Factories in Arriyadh City as of 20054
129Industrial Projects Financed by SIDF as of 20045
129Existing Industrial Cities in Arriyadh City as of 20046
129Area of Used and Unused Land in Arriyadh City by End of 20047
130Cultivated Land and Total Production in Arriyadh City as of 20048
130Commercial Registrations of Businesswomen by Activity in Arriyadh City as of 20049
130Building Licenses Issued in Arriyadh City During 200410
131Lengths of Existing, Under Construction & Proposed Roads in Arriyadh City as of End of 200411
131Licenses of Commercial Activities Issued in Arriyadh City During 200412
131Total Telephone Lines in Arriyadh City as of 200413
131Network of Mail Services as of 200414
132Air traffic at King Khalid International Airport (KKIA) 200515
132Numbers of Foreigners Arriving and Leaving Through (KKIA) 200516
132Electricity Consumption and Number of Customers in the Central Region During 200417
132Medical Services and Facilities of the Ministry of Health in Arriyadh City as of 200418
133Private Medical Facilities and Health Services in Arriyadh City as of 200519
133General and High Education Indicators in Arriyadh City as of 200520
133Selected Economic Indicators of the Kingdom21
Statistical Tables Index
126
Table No. 1Distribution of Population by Gender in Arriyadh City 2006
Nationality Gender Male Female Total
Number % Number % Number %
Saudi 1,569,436 53 1,410,086 47 2,979,522 100
Non-Saudi 947,778 62 571,845 38 1,519,620 100
Total 2,517,214 56 1,981,931 44 4,499,142 100
Table No. 3Private Sector’s Workforce as Stated in GOSI Records in Arriyadh City 2004
(2)
Economic Activity Workforce Arriyadh Kingdom % to Kingdom
Posts & Communications 28,588 78,501 36.42
Trade 238,699 957,124 24.94
Building and construction 235,301 834,079 28.21
Mining and quarry 3,346 75,543 4.43
Social services 133,149 368,782 36.11
Agriculture and fishing 13,521 40,214 33.62
Manufacturing Industries 89,596 311,163 28.79
Electricity & Water 19,449 54,987 35.37
Finance & Real Estate 33,637 72,158 46.62
Other Activities 5 1,206 0.41
Total 795,291 2,793,757 28.47
Table No. 2Job Opportunities by Economic Activity in Arriyadh City(1)
Economic Activity Growth Ratio% 2004 2005
Productive Sectors 4.40 124,422 307,607
Agriculture, Forestry & Fishing 1.26 54,572 7,013
Mining and Quarries 3.93 231 745
Industry 6.84 31,170 125,050
Electricity, Water and Gas 6.55 3,079 11,669
Building Sector 5.04 35,269 99,130
Services Sector 4.48 275,289 69,655
Private Sector Services Sector 5.19 122,122 353,328
Retail, Wholesale, Restaurants & Hotels 5.29 50,777 149,968
Transportation, Storage and Communications 6.55 9,427 35,722
Financial Sector, Insurance & Real Estate 6.89 11,799 47,786
Social and Personal Services 4.73 13,694 36,153
Household Services 4.04 36,425 83,698
Public Sectors 5.02 42,266 118,286
Education 4.81 32,061 85,957
Social and Health Services 5.64 10,204 32,328
Government Services 3.29 110,902 219,042
Total Employment Opportunities (Workforce) 4.45 963,709 1,783,137
(1) ADA, Arriyadh Development Authority, Tatweer Bulletin, Issue 45, 2006(2) (GOSI) General Organization for Social Insurance, Annual Statistical Book Issue 26, 2004
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Table No. 4Operating Factories in Arriyadh City as of 2005 (1)
Industrial Activity No. of Factories WorkforceTotal Financing
(SR million)
Foodstuff and beverages 116 14,012 4134.76
Textiles, Garments and Leather 85 11,476 2077.60
Wood products and furniture 82 6,952 1173.59
Paper Printing & Publishing 85 7,326 2496.93
Chemical Industries & Plastic Products 258 23,153 8132.92
Building material, chinaware, Ceramics & Glass 163 17,723 7197.26
Basic metal industries 65 6,339 1674.56
Metal products, machinery and equipment 344 32,942 9727.89
Miscellaneous industries 31 3,267 481.57
Total 1,229 123,190 37097.08
Table No. 7 Area of Used and Unused Lands in Arriyadh City by End of 2004 (4) Hectares
Type of Use Type of Land Used Developed Undeveloped Total
Residential & Commercial 77,607.26 79,522.36 33,337.85 190,467.47
Industrial 27,273.89 27,354.87 12,131.30 66,760.06
Agricultural 3,819.00 3,819.00 7,181.00 14,819
Greenland and Parks 4,001.90 4,001.90 8,998.10 17,001.9
Others 4,647.60 4,641.60 9,758.40 19,047.6
Total 117,349.65 119,339.73 71,406.65 308,096.03
Table No. 5Industrial Projects Financed by SIDF as of 2004 (2)
Sector Number Loan Value (SR million)
Chemical Products 154 2,409.4
Plastic Products 166 2,516.8
Cement 3 1157.3
Building Material 91 3113.9
Engineering Products 228 1573.4
Others 21 167.1
Total 663 10,937.9
Table No. 6Existing Industrial Cities in Arriyadh City as of 2004 (3)
Industrial City PhaseArea
(1000 m2)Project Value(SR million)
Implementation Status
Number of Productive Factories
First One 451 35 Developed 51
Second
First 5,080 196 Developed
662
Second 6,920 296 Developed
Part 1 of phase 3 1,300 76 Developed
Part 2 of phase 3 2,486 10.6 Being developed
Fourth 891 48 Being developed
Housing 2,109 -Some facilities are
complete Total 19,237 661.6
(1) Ministry of Commerce & Industry, Industrial Database, Information Center, Special Bulletin(2) SIDF, Annual Report, 2004(3) Ministry of Commerce & Industry, 20 Years of Achievements(4) MOMRA, Ministry of Municipal & Rural Affairs, Municipal Statistics, Issue 55, 2004
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Table No. 8Cultivated Lands & Total Production in Arriyadh City as of 2004 (1)
Description
Kingdom Arriyadh % to Kingdom
AreaHectares
ProductionTons
AreaHectares
ProductionTons
AreaHectares
ProductionTons
Grains 685,350 3,195,002 129,864 624,354 18. 95 19.54
Vegetables 110,618 2,479,487 56,588 1,235,897 51. 16 49.84
Fodder 168,198 2,633,106 84,689 1,312,105 50. 35 49.83
Fruits 208,577 1,454,318 43,124 266,110 20. 68 18.30
Total 1,172,743 9,761,913 314,265 3,438,466 26. 80 35.22
Table No. 9Commercial Registrations of Businesswomen By Activity In Arriyadh City as of 2004 (2).
Activity Number of Commercial Registrations %
Agriculture and Animal Products 444 2.22
Foodstuff and beverages 1,930 9.63
Fabrics and ready made clothes 3,124 15.59
Home and Office Furniture 564 2.81
Leather Products 993 4.96
Household appliances 2,871 14.33
Building materials and metals 1,346 6.72
Hardware, machinery and equipment 2,466 12.31
Vehicles and spare parts 515 2.57
Fuel, chemical materials and insecticides 72 0.36
Perfumes, cosmetics and medicines 2,686 13.40
Jewelry and precious material 45 0.22
Photography equipment, decorations and frames 1,122 5.60
Watches and watches parts 149 0.74
Optical glasses 35 0.17
Children toys 310 1.55
Other activities 1,367 6.82
Total 20,039 100.00
Table No. 10Building Licenses Issued in Arriyadh During 2004 (3)
Type of Use LicensesLand space
(m2)
Built Space
(m2)
Building levels
Level space
(m2)
Length of Walls (meters)
Commercial/ Residential 8,483 9,177,150 1,946,049 33,348 8,389,939 269,831
Commercial / Industrial 868 2,463,237 735,615 1,261 793,454 45,615
Education/Health/Mosque 255 951,467 88,091 622 251,875 8,914
Social / Government - - - - - 0
Total 9,606 12,591,854 2,769,755 35,231 9,435,268 324,360
(1) Ministry of Agriculture, Department of Statistics, 2004(2) Arriyadh Chamber of Commerce & Industry, Directory of Available Investment Department Opportunities, Small Business 2006 (3) Ministry of Municipal & Rural Affairs, Municipal Statistics, Issue 55, 2004
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Table No. 12License of Commercial Activities Issued in Arriyadh City During 2004 (2)
Type of Activity License New Renewal Total Kingdom % to Kingdom
Grocery 2,310 11,481 13,791 55,757 24.73
Supermarket 288 845 1,133 2,542 44.57
Commercial Establishments. 1,256 1,712 2,968 27,649 10.73
Industrial workshops 535 1,013 1,548 5,645 27.42
Furniture & Decoration 745 1,684 2,429 9,142 26.57
Maintenance of appliances 1,142 2,687 3,829 10,987 34.85
Auto repairs 513 1,907 2,420 14,892 16.25
Plumbing 350 820 1,170 6,187 18.91
Fuel and auto service 194 950 1,144 6,165 18.56
Personal services 758 2,765 3,523 26,676 13.21
Others 4,362 17,763 22,125 55,334 39.98
Total 12,453 43,627 56,080 220,976 25.38
Table No. 11Lengths of Existing, Under Construction & Proposed Roads in Arriyadh City as of End of 2004 Km (1)
Type Activity Asphalt, tree-lined roads with street lights
Asphalt only Number of Light Poles
Existing Roads 1,115,000 5,715,000 72,000
Motorways Under Construction 95,000 2,355,000 1,460
Proposed Roads 280,000 185,000 7,500
Total 1,490,000 8,255,000 80,960
Table No. 14 Network of Mail Services as of 2004(4)
Description Arriyadh Kingdom % Arriyadh/Kingdom
Primary Post Offices 93 478 19.5
Branch Posts Offices 16 180 0.89
Posts agencies 36 83 43.37
Points of Surface mail 955 4,933 19.36
Street Post Boxes 561 2,465 22.75
Customers Post Office Boxes 130,244 423,795 30.73
Post Agencies Boxes 59,000 114,968 51.32
Table No. 13 Total Telephone Lines in Arriyadh as of 2005 (3)
Description Arriyadh Kingdom % to Kingdom
Total Capacity 1,470,316 5,359,945 27.43
Working lines 1,112,162 3,844,484 28.93
Mobile phones 1,106,174 3,863,061 28.63
(1) MOMRA, Ministry of Municipalities & Rural Affairs, Municipal Statistics, Issue 55, 2004(2) Ibid(3) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005(4) Ibid
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Table No. 15Air Traffic at King Khalid International Airport (KKIA) (2005) (1)
DescriptionFlights Passengers Cargo (Tons)
SAUDIAForeign Airlines
SAUDIAForeign Airlines
SAUDIAForeign Airlines
Arrivals 27,853 5,685 4,108,903 899,171 90,683 31,279
Departures 27,853 5,685 4,073,769 899,319 61,330 5,956
Table No. 16Numbers of Aliens Arriving & Departing Through (KKIA) (2005) (2)
Description Number %
Arrivals 1,062,425 32.93
Departures 1,079,323 45.96
Table No. 18Medical Services and Faculties of the Ministry of Health In Arriyadh as of 2004 (4)
Description Arriyadh City Kingdom %
Number of Hospitals 39 213 18.31
Beds 6,025 30,020 20.07
Health Care Centers 349 1,848 18.89
Physicians 3,308 18,621 17.76
Nurses 7,055 41,356 17.06
Pharmacists 199 1,167 17.05
Medical Assistants 3,676 21,802 16.87
Technical Non-Medical Staff 1,239 6,402 19.35
Administrative 1,667 10,018 16.64
Employees 6,730 42,114 15.98
Doctors / 100 beds = 38.7
Nurses / 100 Doctors = 224.1
(1) Table Derived from Central Department of Statisties & Information, Statistical Yearbook, Issue (41)2005 (2) Table Derived from Ministry of Economy & Planning, & CDSI, Issue 41, 2005 (3) Table Derived from SAMA, Annual Report, Issue 41, 2005 (4) Ministry of Health, Statistical Yearbook, 2004
Table No. 17Electricity Consumption & Number of Subscribers, Central Region During 2004 (3)
CategoryCustomers Consumption
Number 78% Kilowatt/Hour %
Residential 1,080,269 78.71 22,232,365 55.87
Commercial 207,231 15.10 4,216,071 10.60
Government 31,948 2.33 6,441,817 16.19
Agriculture 27,552 2.01 1,922,447 4.83
Industrial 2,801 0.20 2,864,838 7.20
Street lights 5,976 0.44 667,724 1.68
Mosques 15,004 1.09 481,728 1.21
Hospitals 1,305 0.09 872,199 2.19
Charity Organization, 414 0.03 90,097 0.23
Total 1,372,500 100 39,789,286 100
Total Kingdom 4,491,717 142,194,458
Central Region % 32.2 28
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Table No. (21)Selected Economic Indicators on the Kingdom
(3)
2001 2002 2003 2004 2005
Population Estimates (million) 20.98 21.49 22.02 22.67 23.1
GDP in Current Prices (SR billion) 686.3 707.1 804.6 938.8 1160.7
GDP in Fixed Prices (SR billion) 1999 = 100 636.4 637.2 686.0 722.2 769.5
Retraction Ratio of Non-Oil GDP Prices 99.7 99.0 102.1 105.9 106.9
Inflation Rate (Consumer Prices) -1.1 0.2 0.6 0.4 0.7
Total Money Supply (M3) (SR billion) 340.2 390.4 417.5 496.1 553.7
Average Oil Prices / Barrel, Arabian Light (US$) 23.06 24.32 27.69 34.53 50.15
Average of Riyal Exchange Rate of the SR (Year 2000=100) 102.3 90.0 89.1 84.4 82.3
Currency Circulated to Total Money Supply 14.5 13.4 13.3 12.1 11.6
Deposits to Total Money Supply 85.5 86.6 86.7 87.9 88.4
Net Foreign Assets at Local Banks (SR billion) 39.8 52.5 41.0 47.1 26.4
Interest Rates, Average 3 Months Deposits (Local Currency) 3.92 2.23 1.63 1.73 3.75
Banks Capital Adequacy Ratio (Basel Standards) 20.3 21.3 19.4 17.8 17.8
Actual Public Revenues (SR billion) 228.2 213.0 293.0 392.3 564.3
Actual Public Expenditures (SR billion) 255.1 233.5 257.0 285.2 346.5
Budget Surplus or Deficit to GDP -4.0 -2.9 4.5 11.4 18.8
Commodity Exports (SR billion) (*) 254.9 271.7 349.7 472.5 680.4
Imports (CIF) (SR billion) 116.9 121.0 138.4 167.8 222.8
Current Account Surplus to GDP 5.1 6.3 13.1 20.7 29.3
Current Account (SR billion) 35.1 44.5 105.2 194.7 340.0
Local Stock Market Index (1985 = 1000) 2,430.1 2,518.1 4,437.6 8,206.2 16,712.6
Table No. 19Private Medical Facilities and Health Services in Arriyadh as of 2005
(1)
Descriptions Arriyadh Kingdom % to Kingdom
Number of Hospitals 19 113 16.81
Number of beds 2460 11,135 22.09
Number of dispensaries 383 1,043 36.72
Private clinics 511 1,285 39.77
Number of laboratories 22 81 27.16
Physiotherapy centers 14 38 36.84
Optical shops 452 1,359 33.26
Dentures facilities 15 114 13.16
Drug stores 199 384 51.82
Pharmacies 1,170 4,314 27.12
Scientific offices 42 56 75
Doctors * 2,337 12,788 18.27
Nursing staff 2,104 17,810 11.81
Pharmacists 169 1,056 16
Medical Assistants 494 6,985 7.07
Technical Non-Medical Staff 317 3,636 8.72
Administrative 1,434 9,634 14.88
Employees 846 9,710 8.71
Table No. 20General and High Education Indicators in Arriyadh as of 2005 (2)
Descriptions Number of Students
General Education (under the supervision of Ministry of Education 392,497
General Education (Girls Education Affairs) 396,288
King Saud University (enrolled students) 60,868
Imam Mohammed bin Saud Islamic University (enrolled students) 28,401
(1) Table Derived from Ministry of Health Statistical `Yearbook, 2004
* Includes Dentists (2) Table Derived from both Ministries of Education & Higher Education Statistics, Academic Year 2004 / 2005 (3) SAMA, Saudi Arabian Monetary Agency, Annual Report, Issue 42, 2006
* Includes oil and non-oil exports, re-exports and ships fuel
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S/N Address Telephone Fax Mailing Address
1 Presidency of National Guards 4912222 4916928 Arriyadh 11173
2 Ministry of Defense & Aviation 478900 4026457 Arriyadh 111565
3 Ministry of Interior 4011111 4069279 Arriyadh 11134
4 Ministry of Foreign Affairs 4055000 4023707 Arriyadh 11124
5 Ministry of Justice 4057777 4059716P.O. Box 7775Arriyadh 11472
6 Ministry of Culture & Information 4068888 4350794P.O. Box 5705Arriyadh 11161
7 Ministry of Telecommunications & IT 4522222 4522608 Arriyadh 11112
8 Ministry of Petroleum & Mineral Resources 4787777 4761123P.O. Box 247Arriyadh 11191
9 Ministry of Municipal & Rural Affairs 4569999 4563196P.O. Box 955Arriyadh 11136
10 Ministry of Commerce & Industry 4012222 4038421 Arriyadh 11162
11 Ministry of Economy & Planning 4011444 4052051P.O. Box 358Arriyadh 11182
12 Ministry of Higher Education 4415555 4419004 Arriyadh 11153
13 Ministry of Health 4015555 4026395 Arriyadh 11176
14 Ministry of Labor 4778888 4789175 Arriyadh 11157
15 Ministry of Finance 4050000 4033130 Arriyadh 11177
16 Ministry of Education 4046666 4037229 Arriyadh 11148
17 Ministry of Transport 4043000 4035743 Arriyadh 11178
18 Ministry of Agriculture 4016666 4044592 Arriyadh 11195
19 Ministry of Water & Electricity 2056666 2052749 Arriyadh 11233
20 Ministry of Civil Service 4026666 4035665P.O. Box 94737Arriyadh 11416
21 Ministry of Social Affairs 4778888 4789175 Arriyadh 11157
22 Supreme Economic Council 4801052 4803750 Arriyadh 11272
23 Supreme Council for Petroleum & Mineral Affairs 4883331 4829331P O Box 66680Arriyadh 11432
24 Secretariat General of the National Plan for IT Project
4625004 4625003P.O. Box 5964Arriyadh 11432
25 Supreme Commission for Tourism 4808850 4808844P.O. Box1267Arriyadh 11431
26 Arriyadh Development Authority (ADA) 4831444 4833085P.O. Box 94501Arriyadh 11614
27 Saudi Arabia General Investment Authority (SAGIA)
4484533 4481234P.O. Box 3437Arriyadh 11471
28 Saudi Arabian Standards Organization (SASO)
4520000 4520086P.O. Box 8218Arriyadh 11482
Addresses of Some Public & Private Authorities
133
S/N Address Telephone Fax Mailing Address
29 Royal Commission for Jubail & Yanbu 4794445 4793275P.O. Box 84214Arriyadh 11671
30 Saudi Commission for Industrial Estates & Technology Zones 2831331 4775235
P.O. Box 84214Arriyadh 11671
31 Communications & Information Technology Commission (CITC) 4618000 4618002
P.O. Box 75606Arriyadh 11588
32 Capital Market Authority (CMA) 2797777 2797770P.O. Box 25022Arriyadh 11311
33 Arriyadh Region Municipality 4112222 4118686 Arriyadh 11146
34 General Organization for Social Insurance (GOSI) 4777735 Ext. 1200P.O. Box 878Arriyadh 11421
35 Saudi Arabian Monetary Agency (SAMA) 4662200 1662439P.O. Box2992Arriyadh 11169
36 Public Pension Agency 4025100 4053645P.O. Box18364Arriyadh 11168
37 Grain Silos & Flour Mills Organization 4643500 4631943P.O. Box3402Arriyadh 11471
38 Saudi Government Rail Road Organization (SGRRO)
4480811 4489400P.O. Box 40471Arriyadh 11499
39 Saudi Ports Authority 4050005 4082739P.O. Box 5162Arriyadh 11188
40 General Organization for Technical Education and Vocational Training (GOTEVOT)
4052770 4065876P.O. Box 7823Arriyadh 11472
41 Saudi Water Conversion Corporation (SWCC) 4631111 4641630P.O. Box 5968Arriyadh 11422
42 Saudi Exports Promotion Center 4053200 4065196P.O. Box 16683Arriyadh 11474
43 King Abdulaziz City for Science & Technology (KACST)
4883555 4883756P.O. Box 6086Arriyadh 11442
44 Saudi Customs 4013334 4043412P.O. Box 3483Arriyadh 11197
45 Central Department of Statistics & Information (CDS)
4014138 4059493P.O. Box 3735Arriyadh 11481
46 Grievance Board 4021724 4034296P.O. Box 1138Arriyadh 11138
47 Saudi Arabian Airlines 4500000 4569383P.O. Box 2836Arriyadh 11461
48 Saudi Fund for Development 4640292 4627450P.O. Box 1887Arriyadh 11149
49 Saudi Industrial Development Fund (SIDF) 4774002 4775138P.O. Box 4143Arriyadh 11149
50 Real Estate Development Fund 4792222 4786232P.O. Box 67778Arriyadh 11517
51 Human Resources Development Fund 2790804 2790803P.O. Box 67778Arriyadh 11517
52 Higher Education Fund 2180260 2180255P.O. Box 295654Arriyadh 11351
53 Saudi Arabian Agricultural Bank 2118888 2198013 Arriyadh 11126
54 Saudi Credit Bank 4797200 4797204P.O. Box 1138Arriyadh 11138
55 Saudi Press Agency (SPA) 4193333 4193492 P.O. Box 7186
56 King Saud University 4670000 4678126P.O. Box 2454Arriyadh 11451
134
S/N Address Telephone Fax Mailing Address
57 Imam Mohammed bin Saud Islamic University 2580000 2580707P.O. Box571Arriyadh 11432
58 Nayef Security Sciences Arab University
2463444 2464713P.O. Box 6830Arriyadh 11452
59 Prince Sultan Private University 4548489 4548317P.O. Box 66833Arriyadh 11586
60 Institute of Public Administration 4768888 4768878P.O. Box 205Arriyadh 11141
61 General Presidency for Youth Welfare 4018888 4010376P.O. Box 956Arriyadh 11185
62 General Audit Bureau 4056770 4032057P.O. Box7185Arriyadh 11128
63 Saudi Arabian Red Crescent 4740027 4740430 Arriyadh 11129
64 General Presidency for Environment Protection and Meteorology
2211584 2211581P.O. Box 1158Jeddah 21431
65 Saudi Arabian Basic Industries (SABIC) 2258000 4013831P.O. Box 5101Arriyadh 11422
66 National Shipping Company of Saudi Arabia 4785454 4777478P.O. Box 8931Arriyadh 11492
67 Saudi Arabian Mining Company (Ma’aden) 4740857 4721333P.O. Box 68861Arriyadh 11537
68 Saudi Telecom Company 4527000 4525229P.O. Box 87912Arriyadh 11652
69 Ittihad Itisalat Company 2735050 0560316677P.O. Box 9979Arriyadh 11423
70 Saudi ARAMCO 4410200 038738190-P.O. Box 5000Dhahran 31311
71 National Company for Cooperative Insurance 2180100 2180102P.O. Box 86959Arriyadh 11632
72 Council of Saudi Chambers of Commerce & Industry
4053200 4024747P.O. Box 1183Arriyadh 11474
73 Riyadh Chamber of Commerce & Industry 4040044 4020110P.O. Box 596Arriyadh 11421
74 Al-Rajhi Bank 4601000 4776781P.O. Box 28Arriyadh 11481
75 Al-Bilad Bank 4798888 2916069P.O. Box 140Arriyadh 11411
76 National Commercial Bank
6493333 Jeddah4787877 Arriyadh
P.O. Box 3555Jeddah 21481
77 Al-Jazira Bank 61580702/ 65332782/P.O. Box 6277Jeddah 21442
78 Arab National Bank40235034029000
4027747P.O. Box 56921Arriyadh 11564
79 Riyad Bank 4013030 404207P.O. Box 22622Arriyadh 11416
80 Saudi Investment Bank 4778433 4776781P.O. Box 3533Arriyadh 11481
81 SAMBA Financial Group 4774770 Ext. 1200P.O. Box 833Arriyadh 11421
82 SABB 4050677 Ext. 4632P.O. Box 9084Arriyadh 11413
83 Banque Saudi Fransi 4042222 4042311P.O. Box 56006Arriyadh 11554
84 Saudi Hollandi Bank 40102884067888Ext. 656
P.O. Box 1467Arriyadh 11431
135
Name of Organization Web Address
Ministry of Water & Electricity www.mowe.gov.sa
Ministry of Economy & Planning www.planning.gov.sa
Ministry of Higher Education www.mohe.gov.sa
Ministry of Education www.moe.gov.sa
Ministry of Foreign Affairs www.mofa.gov.sa
Ministry of Civil Service www.mcs.gov.sa
Ministry of Petroleum & Mineral Resources www.mopm.gov.sa
Ministry of Labor www.mol.gov.sa
Ministry of Social Affairs www.mosa.gov.sa
Ministry of Information & Culture www.saudinf.com
Ministry of Commerce & Industry www.commerce.gov.sa
Ministry of Justice www.moj.gov.sa
Ministry of Health www.moh.gov.sa
Ministry of Agriculture www.agrwat.gov.sa
Ministry of Transportation www.mot.gov.sa
Ministry of Finance www.mof.gov.sa
Ministry of Interior – General Security www.security.gov.sa
Ministry of Municipal & Rural Affairs www.momra.gov.sa
Shura Council www.shura.gov.sa
Governorates
Governorate of Arriyadh www.riyadh.gov.sa
Governorate of Eastern Province www.easternemara.gov.sa
Governorate of Madinah www.imaratalmadinah.gov.sa
Governorate of Tabuk www.tabuk.gov.sa
Governorate of Hail www.hail.gov.sa
Governorate of Al-Baha www.albaha.gov.sa
Governorate of Makkah www.makkah.gov.sa
Governorate of Aseer www.emartaseer.gov.sa
Web Addresses of Selective Organizations
136
Government OrganizationsName of Organization Web Address
Supreme Commission for Tourism www.sct.gov.sa
Arriyadh Development Authority www.arriyadh.com
Saudi Arabian General Investment Authority (SAGIA) www.sagia.gov.sa
Royal Commission for Jubail & Yanbu www.rcjubail.gov.sa
Communications & IT Commission (CITC) www.citc.gov.sa
Saudi Arabian Standards Organization (SASO) www.saso.org.sa
Saudi Geological Survey www.sgs.org.sa
Saudi Commission for Health Specialties www.scfhs.org
Capital Market Authority (CMA) www.cma.org.sa
National Commission for Wildlife Conservation & Development www.ncwed.gov.sa
Saudi Organization of Certified Public Accountants (SOCPA) www.socpa.org.sa
National Shipping Company of Saudi Arabia www.nscsa.com
Public Pension Agency www.pension,gov.sa
Saudi Ports Authority www.ports.gov.sa
Saudi Arabian Monetary Agency (SAMA) www.sama.gov.sa
General Organization for Social Insurance (GOSI) www.gosi.gov.sa
Saudi Fund for Development www.sfd.gov.sa
Saudi Industrial Development Fund (SIDF) www.sidf.gov.sa
Real Estate Development Fund www.redf.gov.sa
General Presidency for Environment Protection & Meteorology www.mepa.org.sa
Saudi Customs www.customs.gov.sa
King Abdulaziz City for Science & Technology (KACST) www.kacst.edu.sa
General Audit Bureau www.gab.gov.sa
General Directorate for Passports www.passport.gov.sa
Saudi Arabian Agricultural Bank www.saab.gov.sa
King Abdulaziz Foundation for Research & Archive www.darh.org.sa
Arriyadh Traffic Department www.r-t.gov.sa
Department of Zakat & Income Tax (DZIT) www.dzit.gov.sa
Saudi Stock Market www.tadawul.com.sa
Saudi Money & Business Directory www.allsaudi.com/defaultara.asp
Saudi Press Agency (SPA) www.spa.gov.sa
Saudi Arabian Airlines www.saudiairlines.com
Presidency of Civil Aviation www.pca.gov.sa
137
Government OrganizationsName of Organization Web Address
Supreme Commission for Tourism www.sct.gov.sa
Arriyadh Development Authority www.arriyadh.com
Saudi Arabian General Investment Authority (SAGIA) www.sagia.gov.sa
Royal Commission for Jubail & Yanbu www.rcjubail.gov.sa
Communications & IT Commission (CITC) www.citc.gov.sa
Saudi Arabian Standards Organization (SASO) www.saso.org.sa
Saudi Geological Survey www.sgs.org.sa
Saudi Commission for Health Specialties www.scfhs.org
Capital Market Authority (CMA) www.cma.org.sa
National Commission for Wildlife Conservation & Development www.ncwed.gov.sa
Saudi Organization of Certified Public Accountants (SOCPA) www.socpa.org.sa
National Shipping Company of Saudi Arabia www.nscsa.com
Public Pension Agency www.pension,gov.sa
Saudi Ports Authority www.ports.gov.sa
Saudi Arabian Monetary Agency (SAMA) www.sama.gov.sa
General Organization for Social Insurance (GOSI) www.gosi.gov.sa
Saudi Fund for Development www.sfd.gov.sa
Saudi Industrial Development Fund (SIDF) www.sidf.gov.sa
Real Estate Development Fund www.redf.gov.sa
General Presidency for Environment Protection & Meteorology www.mepa.org.sa
Saudi Customs www.customs.gov.sa
King Abdulaziz City for Science & Technology (KACST) www.kacst.edu.sa
General Audit Bureau www.gab.gov.sa
General Directorate for Passports www.passport.gov.sa
Saudi Arabian Agricultural Bank www.saab.gov.sa
King Abdulaziz Foundation for Research & Archive www.darh.org.sa
Arriyadh Traffic Department www.r-t.gov.sa
Department of Zakat & Income Tax (DZIT) www.dzit.gov.sa
Saudi Stock Market www.tadawul.com.sa
Saudi Money & Business Directory www.allsaudi.com/defaultara.asp
Saudi Press Agency (SPA) www.spa.gov.sa
Saudi Arabian Airlines www.saudiairlines.com
Presidency of Civil Aviation www.pca.gov.sa
Name of Organization Web Address
Chambers of Commerce
Council of Saudi Chambers of Commerce & Industry www.saudichambers.org.sa
Riyadh Chamber of Commerce & Industry www.riyadhchamber.org.sa
Chamber of Commerce & Industry – Eastern Province www.chamber.org.sa
Chamber of Commerce & Industry – Madinah www.madcci.org.sa
Chamber of Commerce & Industry- Jeddah www.jcci.org.sa
Chamber of Commerce & Industry - Makkah www.makcci.com
Saudi Daily Newspapers
Riyadh Newspaper www.alriyadh-np.com
Al-Jazeera Newspaper www.al-jazirah.com
Al-Watan Newspaper www.alwatan.com.sa
Al-Eqtisadiya Newspaper www.aleqt.com
Al-Youm Newspaper www.alyaum.com
Arab News www.arabnews.com
Okaz Newspaper www.okaz.com.sa
Saudi Gazette www.saudigazette.com.sa
Local Banks
Al-Rajhi Bank www.alrajhibank.com.sa
Al-Bilad Bank www.bankalbilad.com.sa
National Commercial Bank www.alahli.com
Riyad Bank www.riyadhbank.com
SAMBA Financial Group www.samba.com.
Arab National Bank www.anb.com.sa
SAAB www.sabb.com.
Al-Jazira Bank www.baj.com.sa
Banque Saudi Fransi www.alfransi.com.sa
Saudi Investment Bank www.saib.com.sa
Saudi Hollandi Bank www.shb.com.sa
This Report was Prepared By
MIDDLE EAST CONSULTING CENTER
Change Management Experts
P.O Box 27925 Riyadh 11427Tel +966 -1- 216 8740 / 216 8840
Fax: + 966 - 1 - 216 8730 [email protected]
Dar Alarkan Company was established in 1994. In 2005 ,the Company changed
into a closed stock company with total capital of R.S 5.4 million. The Company
had a strong start having one objective in mind: to be a first home provider
for middle class Saudi families.
Company’s Vision and Mission
Dar Alarkan is an innovator in the field of modern and future real estate. This
pioneering role relies on our vision which mainly depends upon securing the
most suitable housing for the Middle income class and helping them to get
convenient financing schemes.
Objectives
To become a leading regional real estate development company, and to
develop residential units to satisfy society’s demand.
Projects
Dar Alarkan today is the leading Real Estate Development Company in KSA.
In the beginning of 2005, the Company had an objective to build 65,000
residential units distributed among the major regions in the Kingdom. Dar
Alarkan today is the leading Real Estate Development Company in KSA.
Dar Alarkan branches are spread over Riyadh, Khobar, Makkah, Jeddah,
Madinah, and Yanbu.
For any further clarification and information
please contact:
Head Office .Riyadh, Maazer Street, adjacent
to Marriott Hotel
Toll Free number: 800 - 123 - 3333
Fax: 00966 1 206 - 9898
TEL 00966 1 206 - 9888
P.O. Box 105633, Riyadh 11656
Kingdom of Saudi Arabia
Web Site: www.alarakan.com
E-Mail : Info@alarakan .com