GTTV – Saudi Arabia 1
The emerging powerhouse – episode 1
Located in a strategic spot between East and West, in the heart of the 3 continents linking Asia, Europe and Africa, lays the kingdom of Saudi Arabia. It is the largest country in the Middle East and ideally positioned along major international shipping routes.
The country is surrounded by the largest markets in the Middle East and North Africa region, offering investors a market size of over 250 million customers within a 3-hour flying radius. Saudi Arabia also has the world’s largest reserves of oil.
Under its ruler, The Custodian of the Two Holy Mosques, King Abdullah bin Abdul Aziz Al Saud, Saudi Arabia has a bold vision for the future. His Majesty King Adbullah came to the throne in August 2005, following the death of his brother King Fahd. His Majesty King Adbullah has continued to champion economic reform through diversification away from oil, supported the development of the private sector, and focused on debt reduction. Municipal elections have been introduced, and trade missions have been sent to the US. He is a constant supporter of peace and mutual respect among nations, condemning terrorism, and is an appreciated ally of the US.
Saudi Arabia is currently experiencing a major economic boom, thanks to the high oil prices, a steadily growing private sector, and the focus of public spending on human infrastructure. A free market policy is practised, and nearly half the GDP of the country is contributed by the private sector.
Economic reform in the country is expected to accelerate in 2008. The kingdom is aware that its future success lies in a more diversified and liberalised economy in order to ensure sustainability.
The country has undertaken a variety of reforms to its economic system. The reforms over the last 10 years have led to a more efficient and effective public bureaucracy and an investment environment regulated and monitored to international standards.
In 2005, Saudi Arabia joined the World Trade Organisation as the 149th member, with 38 bilateral market access agreements. The country has committed to level the playing field, and honour the principles of transparency, predictability and due process.
The World Bank has recognised Saudi Arabia as one of the world’s top reformers and one of the easiest countries in which to conduct business. The kingdom jumped 15 places ahead to rank 23 out of 178 countries, placing it above all Middle Eastern countries and even ahead of some mature economies such as France and Austria.
Under a direct mandate from His Majesty King Adbullah, Saudi Arabia has embarked upon its most ambitious project to date: the 10 x 10. The country has pledged to become one of the top 10 most competitive economies in the world by 2010 and has set in motion the mechanisms necessary to reach this target.
The strong economic outlook for the kingdom and a positive macroeconomic backdrop means that profit growth is likely to average 10 to 15% per year. With further reform expected, the continuing high prices of oil, and a supportive global backdrop, the country looks set for its strongest period of non-oil growth since the 1970s.
Living in Saudi Arabia
Saudi Arabia has the third largest population in the region. More than 26 million people live in the kingdom, occupying just 2% of the land space. The population is expanding rapidly and has been forecast to reach 36 million by 2020.
The country has world class logistics infrastructure. Where previously most residents had used international courier services for sending and receiving any form of mail, these days the Saudi Post is a dependable option. With the privatisation of Saudi Post in 2002, the previously irregular postal services have now been consolidated into a regular and systematic form of mail delivery. Where previously the mail system had relied solely on humans, now the latest technologies and modern techniques are employed to ensure world-class service standards to its customers.
New projects concerned with assigning comprehensive addresses and zip codes enabling efficient post delivery to business and residential areas have been put in place. One of the latest innovations is a system called Wasel, an electronic zip code registration system. Each residence or business is provided with a unique postal address, which can then be located using the new geographic information systems.
In 2007, Saudi Post received 5 major international awards for its ground-breaking achievements in new postal technologies and services. With the booming economy, Saudi Post is confident that it can offer even more services in the future, such as GPRS, E-commerce and Money Transfer.
The kingdom also offers some of the finest education options in the Gulf region. With more than 40 world-class universities in the country, expatriate families can choose from the numerous international options available in every major city.
Healthcare facilities and services are readily available across the country at all levels. Hospitals, clinics and laboratories are equipped with state-of-the-art equipment, and managed according to the highest international standards. Medical personnel are of many nationalities and are trained and qualified to high standards.
Visitors to the country can also rest assured, Saudi Arabia is a very safe place to be and conduct business.
At present, foreigners account for about a third of the total inhabitants in the country, and make up nearly 75% of the work force. Accommodation in Saudi Arabia is top-class and suitable for most budgets. Long-term residents in the country can choose from a wide array of dwelling choices. In addition to increased security, modern apartments in housing compounds offer facilities such as supermarkets, swimming pools as well as other entertainment outlets.
For short-term travellers, there are a multitude of four and five star international hotel chains in every major city, as well as executive apartments.
Economic Cities
Saudi Arabia has developed an Economic Cities concept. 60 of the world’s most successful free zones were studied in order to develop this concept which is an ultimate innovation in public-private-partnership. These cities are comprehensive, fully-integrated developments that feature a “live, work and play” design.
They are expected to contribute between a quarter and a third of the aspired national growth rate, to create over a million jobs, and to become home to about 5 million residents by 2020.
A total of 4 integrated economic cities have already been launched in Rabigh, Hail, Madinah and Jazan. There are plans to launch another economic city in Tabuk as well as one in the kingdom’s eastern region.
The King Abdullah Economic City in Rabigh is the single largest private sector project in the region developed by Emaar, and is expected to usher in a new era of economic prosperity for Saudi Arabia. It has the potential to create 1 million jobs and house 2 million residents. It will also have 6 different zones catering to various needs such as the port, the industrial district, education and residential.
Located 725 kilometres south of Jeddah, Jazan Economic City is expected to create about 500,000 new jobs and attract more than 27 billion USD in investment. Ideally placed at the mouth of the Red Sea, and offering top-notch processing and manufacturing facilities, the economic city is expected to service markets in Europe, Asia and East Africa.
The Knowledge Economic City at Madinah will be purpose-built to serve the needs of the educational sector in the country. The project is expected to add 20,000 new jobs and attract an investment of 7 billion USD.
Investment Opportunities
Throughout this period of expansion, the country is focused on empowering its population to meet the increasingly complex challenges of the modern Saudi economy.
One company that offers a picture of what it’s like to be successful in Saudi Arabia is Astra. Well-established, and diversified, this expanding industrial conglomerate started its operations about half a century ago. Today, it is a well-known brand name throughout the kingdom. With varied interests ranging from agriculture to trading, and from pharmaceuticals to steel, Astra is now the second-largest privately-owned group in the kingdom. The company boasts an excellent reputation based on its mission plan, objectives and strategic direction. Astra also plays an active role in supporting the communities within which it operates, for example by building universities and hospitals. As a strongly-established company with several subsidies throughout the Gulf region, Astra also presents itself as a solid partner for any venture in the region.
The government has already allocated 26% of the budget to education. Private sector involvements in the sector, including foreign investments, are encouraged.
The health sector in the country is one of the regionally largest sectors in terms of size, activity and potential. The country already boasts one of the most sophisticated and technologically advanced medical sectors in the Middle East.
Leveraging its unmatched strategic position at the crossroads of Europe, Asia and Africa, Saudi Arabia has embarked upon a mission to transform itself into a global transport hub. The government has already launched large-scale investment projects in the sector, and has recognised the value of public-private initiatives in developing this crucial sector.
The government’s decision to streamline the decision-making process, diversify the economic base and strengthen the role of the private sector, serves to create a favourable investment climate in the kingdom. Further, recent integration into the world economy via regional and trade groupings further lend to the attractiveness of the country as an investment destination with potentially high returns.
Gerelateerde video's:
