With the third-highest average GDP growth rate in the G20 in the five years to 2012, at 6.25%, and by far the group’s fiscally healthiest member – with the highest current account balance and lowest gross government debt – Saudi Arabia has achieved an enviable place among the world’s top nations. The IMF predicts that growth will accelerate to 4.4% in 2014, up from 3.6% in 2013. Saudi Arabia in figures Well-oiled machine: Hydrocarbons wealth supports diversification efforts Interview: Prince Turki bin Abdullah bin Abdulaziz Al Saud, Governor, Riyadh Region Interview: Prince Saud bin Nayef bin Abdulaziz Al Saud, Governor of Eastern Province Viewpoint: Enda Kenny, Prime Minister of Ireland Interview: Abdul Latif Al Zayani, Secretary-General, GCC 26 29 35 45 46 47 49 51 55 58 60 Linking the region: Rail investments in the GCC Growth story: The non-oil-and-gas economy takes the lead Global player: Healthy growth and oil revenues back state efforts to diversify the economy Viewpoint: Ibrahim Al Assaf, Minister of Finance Interview: Abdel Fakeih, Minister of Labour A full plate: A growing population is creating demand for innovative technologies Interview: Lim Hng Kiang, Singapore Minister for Trade and Industry Complementary investments: Defence offset programmes boost GDP and employment Starting small: Opening doors for local SMEs International partner: The benefits of healthy trade ties with leading players Thinking ahead: Government spending must account for both short- and long-term factors 62 65 71 76 78 79 81 84 86 90 97 99 100 101 102 103 104 105 106 108 112 All aboard: Rail links will help connect the peninsula economically and socially Bright ideas: New programmes for young Saudis More to come: Building long-term potential Viewpoint: Fahad Al Mubarak, Governor, Saudi Arabian Monetary Agency Interview: Bernd van Linder, CEO, Saudi Hollandi Bank Good things come in small packages: Government initiatives target SME growth Globally interconnected: The international workforce offers remittance potential Flexibility in loans: A new mortgage law Savvy solutions: Technology upgrades provide new services and look to boost penetration Loosening grip: Control over capital markets set be liberalised to attract foreign investment Opening the market: When current plans are finalised, foreign capital is poised for action Interview: Adel Al Ghamdi, CEO, Saudi Stock Exchange Interview: Jamal Al Kishi, CEO, Deutsche Securities Saudi Arabia Stocks & bonds Share analysis & data provided by Deutsche Securities Saudi Arabia Al Rajhi Bank: Banking Dar Al Arkan: Real estate Othaim: Retail Riyad Bank: Banking SABIC: Industry YANSAB: Industry Evolution and growth: From banking to insurance, the sector has potential for expansion An attractive alternative: Islamic bonds are an increasingly popular way of obtaining financing 117 121 122 124 126 130 137 138 139 A transitional point: Cooperative coverage is taking hold, but consolidation is needed Interview: Abdullah Al Sharif, Secretary-General, Council of Cooperative Health Insurance Mixed results: Price wars are hurting viability Compulsory coverage: Mandatory health and motor lines bring opportunities and challenges Cross-selling: The potential of bancassurance Across the board: Expanding capacity to accommodate growth in population and visitors Moving the masses: The new metro is set to transform the city’s public transport Interview: Osama Al Bar, Mayor of Makkah Capacity boost: Hotel projects in the works Already the world’s largest oil producer and second largest repository of reserves, Saudi Arabia is now looking to boost output of natural gas, partly to curb the effects of rising domestic consumption on oil exports. Total oil production in 2013 was 11.53m barrels a day, down 1.1% on the 2012 record figure but still amounting to 13.1% of global output.
142 148 149 150 152 157 160 166 167 171 175 180 181 182 187 Getting up to speed: Authorities focus on transport infrastructure and urban regeneration Interview: Mazen Batterjee, Vice-Chairman, Jeddah Chamber of Commerce and Industry Build them big: Multi-use mega-projects to come Infrastructure improvements: Roadways, water and waste management are priorities Industrial promise: New projects to bolster the province’s status as centre for heavy industry A time for building: Growing investor interest could help remedy the housing deficit Top of the heap: The leader in oil exports is looking towards unconventional resources Viewpoint: Ali Al Naimi, Minister of Petroleum and Mineral Resources A fine art: A focus on increasing refining capacity Thinking outside the box: New technologies Smarter investments: Investing in power projects while encouraging efficiency Interview: Arja Talakar, CEO, Siemens Saudi Arabia Key alternatives: Setting goals to diversify energy Meeting demand: The electricity sector expands More than petrochemicals: Segments other than petchems and heavy industry are on the rise 193 194 195 197 201 204 213 220 221 223 225 227 232 238 242 243 246 254 256 258 264 Interview: Abdulrahman Al Zamil, Chairman, Riyadh Chamber of Commerce and Industry Interview: Saleh Al Rasheed, Director-General, Saudi Industrial Property Authority Vital nutrients: Expanding production capacity of fertilisers and phosphates Healthy growth: New production facilities for pharmaceuticals are in the pipeline Towards a larger base: Investments are accelerating growth in manufacturing activity A promising market: Spending power is rising as consumer preferences shift to formal retailing Added connections: Investment projects to help move more people and goods Interview: Prince Fahd bin Abdullah, President, General Authority of Civil Aviation Flying high: Keeping up with demand in aviation Shared services: Expanding urban transport Keeping things moving: Logistics upgrade Change is in the air: A major merger and several potential IPOs look set to reshape the sector Healthy demand: Measures to support home ownership and boost the housing supply A new era: Transformative mortgage laws Strong assets: Property funds grow in popularity Room to rent: A large increase in office space Taking the fast road: Infrastructure upgrades boost long-term prospects Meeting demand: By streamlining regulation the government aims to accelerate home building Valuing labour: Weighing up employment reform Focus on sustainability: Shifting production to less-water-intensive and higher-value crops Interview: Fahd Balghunaim, Minister of Agriculture 265 266 Changing tactics: Winding down domestic wheat production and scaling up storage capacity Bringing science to the fields: Agricultural research, innovation and conservation efforts 271 276 277 278 283 292 294 296 298 300 303 307 309 310 311 312 313 321 323 324 326 332 333 336 Transformation agenda: A better budget Interview: Ahmed bin Abdullah Al Shoaibi, Director-General, Institute of Public Administration The right skills: Partnerships are key to training Innovative solutions: Updating the school system Better services for all: Leveraging local human capital and foreign expertise Building up: New facilities boost capacity Spin-offs: Turning discoveries into businesses Market for medical goods: Rules and regulations Putting technology to use: Supporting research and rolling out new treatment options Going high-tech: Advanced systems improve care Hold the phone: Data, growth and competition Creating new niches: Mobile sources of revenue Interview: Mohamed Jamil bin Ahmed Mulla, Minister of Communications & IT Interview: Abdulaziz Al Sugair, Chairman, Saudi Telecoms Company Making connections: Internet services expand Interview: Hassan Kabbani, CEO, Zain Saudi Arabia Silver lining: The sector looks at cloud computing Securing the systems: Cybersecurity Big market in small business: Take-up of new technology by SMEs offers growth potential Interview: Bejad Al Harbi, Chairman, Technology Control Company Sustaining growth: Innovative strategies Interview: Prince Sultan bin Salman bin Abdulaziz Al Saud, Chairman and President, Saudi Commission for Tourism and Antiquities Stay for a while: New rules for Umrah pilgrims Working together: Public-private partnerships 339 346 349 354 356 358 362 364 PwC Stable environment: Guide for potential investors Viewpoint: Jacques Fakhoury, KSA Country Leader, PwC Law Office of Salman M. Al-Sudairi in Association with Latham & Watkins Informed investing: A run-down on regulations Improved transparency: Corporate governance Viewpoint: Salman Al Sudairi, Managing Partner of Riyadh Office, the Law Office of Salman M. Al-Sudairi in Association with Latham & Watkins A good night’s rest: Hotels Listings: Key phone numbers Facts for visitors: Useful information Faced with increasing consumer demand, the water and power sector is receiving a $37.5bn injection of state funding in 2014. These projects, chiefly in power generation, will be accompanied by a restructuring of the mostly state-owned power company that accounts for 85% of public supply. Electricity subsidies remain in place, with consumer prices near production costs. In line with plans to make the Kingdom a regional centre for logistics and trade, the 2014 budget put $17.76bn towards transport and infrastructure, the third-highest allocation. Plans for upgrades across all elements of the transport network will help position Saudi Arabia as a viable base for logistics operations in the region, especially for the crucial Europe-Asia cargo route.
Following two years of double-digit industrial growth in 2010 and 2011, non-oil output rose by 4.9% in 2012 and 4.7% in 2013. The Kingdom may still have a negative trade balance for industry – with exports of $35.08bn and imports of $103.35bn in 2012 – but with access to raw materials set to rise, foreign investors are showing interest in lighter segments. As one of the first countries in the Gulf to launch LTE, Saudi Arabia is preparing to roll out even more advanced infrastructure. Services like fibre-to-the-home will soon be on offer, as smartphone ownership rises, data drives revenue growth and the Kingdom takes a leading regional role in IT.
