Economy
From The Report: Saudi Arabia 2014
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Fuelled by the ongoing state infrastructure investment drive, non-oil private sector growth was estimated at 9.4% in 2013. The Kingdom posted a budget surplus of $54.9bn in 2013, or 7.4% of GDP, driven largely by oil exports, which averaged 7.54m bpd over the course of 2013. Efforts are under way to boost the employment of nationals and make the most of Saudi Arabia’s young population, and healthy trade ties with countries around the world continue to benefit the economy. Improving access to finance for SMEs remains a priority. This chapter contains a viewpoint from Ibrahim Al Assaf, Minister of Finance, and interviews with Adel Fakeih, Minister of Labour, and Lim Hng Kiang, Singapore Minister for Trade and Industry.
Articles from this Chapter
Global player: Backed by healthy growth and oil revenues, the government is seeking to diversify the economy
Global player: Backed by healthy growth and oil revenues, the government is seeking to diversify the economyOBGplus
While some Western countries may be seeing a return to cautious optimism and leading emerging economies are weighing the potential impact on capital flows of tapering in the US Federal Reserve’s quantitative easing programme, Saudi Arabia is seeing sustained growth buoyed by high global oil prices and internal investment in its own infrastructure. Some 15 years after Saudi Arabia attended the inaugural meeting of G20 countries, its key economic indicators make it the envy of many other member…
Staying ahead: Ibrahim Al Assaf, Minister of Finance, on the mid-term outlookOBGplus
Economic performance has been strong in the last decade and Saudi Arabia has been one of the best-performing G20 economies in recent years. Real GDP growth averaged 7% per year in 2010-12, second only to China. Following strong growth of 8.6% in 2011, spurred by higher oil output and large fiscal spending packages, the economy grew at a slower, albeit still robust, rate of 5.1% in 2012 as oil output and government spending growth moderated. The Central Department of Statistics & Information…
Building the workforce: OBG talks to Adel Fakeih, Minister of LabourOBGplus
To what extent can the Saudiisation programme ensure that nationals are employed in a productive manner rather than being hired to fulfil a quota? FAKEIH: The Ministry of Labour has endeavoured to create job opportunities for nationals that meet their needs while also contributing more broadly to the economy. To accomplish this, the ministry is working with various stakeholders to develop training programmes so that a well-prepared national can easily replace his foreign counterpart, fully…
A full plate: The need to feed a growing population is creating demand for innovative and sustainable technologiesOBGplus
While its hydrocarbons resources provide Saudi Arabia and its citizens with prosperity and the prospect of continued economic growth, its climate and hydrology mean the Kingdom cannot hope to sustain its growing population with food grown within its borders. Attempts to do so have to be offset against considerable environmental risks. GRAIN DRAIN: Faced with concerns about a possible US-led grain embargo against OPEC in the 1970s, Saudi Arabia set about growing wheat in the desert with ingenuity…
A full plate: The need to feed a growing population is creating demand for innovative and sustainable technologiesOBGplus
While its hydrocarbons resources provide Saudi Arabia and its citizens with prosperity and the prospect of continued economic growth, its climate and hydrology mean the Kingdom cannot hope to sustain its growing population with food grown within its borders. Attempts to do so have to be offset against considerable environmental risks. GRAIN DRAIN: Faced with concerns about a possible US-led grain embargo against OPEC in the 1970s, Saudi Arabia set about growing wheat in the desert with ingenuity…
Mutual aspirations: OBG talks to Lim Hng Kiang, Singapore Minister for Trade and IndustryOBGplus
What is the current state of GCC-Singapore economic relations? LIM: Our relations are growing from strength to strength. The GCC and Singapore have long-standing ties that stretch many generations. As we move into the 21st century, our relations, including economic ties, are growing stronger. Indeed, Singapore traded more than $50.4bn worth of goods with the GCC in 2013, making the GCC states our fifth-largest trading partner. This is not surprising given the GCC’s oil wealth, as well as…
Complementary investments: Defence offset programmes bolster the economy and boost employment and training prospectsOBGplus
Saudi Arabia was declared the world’s fourth-largest defence spender after the US, China and Russia in the International Institute for Strategic Studies (IISS) 2014 “Military Balance” report. It estimated the Kingdom’s defence budget for 2013 was $59.6bn, putting it ahead of the UK, France, Japan and Germany. According to the Saudi Arabian Monetary Agency, the 2013 budget for defence and security was SR251.3bn, ($67bn), equivalent to 8% of GDP and accounting for 30.6% of the total budget…
Complementary investments: Defence offset programmes bolster the economy and boost employment and training prospectsOBGplus
Saudi Arabia was declared the world’s fourth-largest defence spender after the US, China and Russia in the International Institute for Strategic Studies (IISS) 2014 “Military Balance” report. It estimated the Kingdom’s defence budget for 2013 was $59.6bn, putting it ahead of the UK, France, Japan and Germany. According to the Saudi Arabian Monetary Agency, the 2013 budget for defence and security was SR251.3bn, ($67bn), equivalent to 8% of GDP and accounting for 30.6% of the total budget…
Starting small: Given the large number of local SMEs, opening up financing and opportunities is keyOBGplus
In an economy dominated by hydrocarbons, there is no doubt that the big business in Saudi Arabia is oil, but the Kingdom is also home to 1.8m small and medium-sized enterprises (SMEs), according to the International Finance Corporation (IFC). The role of SMEs in promoting diversification, innovation and employment is recognised globally, and efforts to enhance the sector are common throughout GCC member countries, where the reliance on hydrocarbons has mitigated the need for SMEs in the past.…
Starting small: Given the large number of local SMEs, opening up financing and opportunities is keyOBGplus
In an economy dominated by hydrocarbons, there is no doubt that the big business in Saudi Arabia is oil, but the Kingdom is also home to 1.8m small and medium-sized enterprises (SMEs), according to the International Finance Corporation (IFC). The role of SMEs in promoting diversification, innovation and employment is recognised globally, and efforts to enhance the sector are common throughout GCC member countries, where the reliance on hydrocarbons has mitigated the need for SMEs in the past.…
International partner: The country benefits from healthy trade ties with leading playersOBGplus
In January 2014 China’s government officials declared that in 2013 its annual trade in goods passed the $4trn mark, knocking the US off the top spot in international trade, and this shift in the axis of commerce is reflected in Saudi Arabia’s own trade relations. However, although the dramatic growth of China and other Asian economies has altered the balance, the Kingdom’s trade ties with Western Europe and the US remain strong. From Riyadh, the flying time to Beijing or Washington is roughly…
International partner: The country benefits from healthy trade ties with leading playersOBGplus
In January 2014 China’s government officials declared that in 2013 its annual trade in goods passed the $4trn mark, knocking the US off the top spot in international trade, and this shift in the axis of commerce is reflected in Saudi Arabia’s own trade relations. However, although the dramatic growth of China and other Asian economies has altered the balance, the Kingdom’s trade ties with Western Europe and the US remain strong. From Riyadh, the flying time to Beijing or Washington is roughly…
Thinking ahead: Government spending must take into account numerous short- and long-term factorsOBGplus
With a balanced budget for 2014, Saudi Arabia plans to spend everything it expects to earn. However, the biggest influence on revenue is the price that the Saudi Arabian Oil Company is able to charge for a barrel of its oil, meaning there is a significant margin for error in fiscal planning. In 2013 the government earned more and spent more than it had planned. The SR855bn ($228bn) it plans to spend in 2014 is 4% higher than the SR820bn ($219bn) it budgeted for 2013, and in line with the IMF’s…
Thinking ahead: Government spending must take into account numerous short- and long-term factorsOBGplus
With a balanced budget for 2014, Saudi Arabia plans to spend everything it expects to earn. However, the biggest influence on revenue is the price that the Saudi Arabian Oil Company is able to charge for a barrel of its oil, meaning there is a significant margin for error in fiscal planning. In 2013 the government earned more and spent more than it had planned. The SR855bn ($228bn) it plans to spend in 2014 is 4% higher than the SR820bn ($219bn) it budgeted for 2013, and in line with the IMF’s…
All aboard: Rail links will help connect the peninsula economically and sociallyOBGplus
With just four years to go until the target date for the opening of a rail network carrying passengers and freight around the six countries of the GCC, its member states are looking forward to the economic and strategic benefits that this new connectivity will bring, but they also face some more immediate practical challenges in the short term. BY THE NUMBERS: The GCC countries are united by language, religion, culture and geography and have all been able to use revenue from hydrocarbons to…
All aboard: Rail links will help connect the peninsula economically and sociallyOBGplus
With just four years to go until the target date for the opening of a rail network carrying passengers and freight around the six countries of the GCC, its member states are looking forward to the economic and strategic benefits that this new connectivity will bring, but they also face some more immediate practical challenges in the short term. BY THE NUMBERS: The GCC countries are united by language, religion, culture and geography and have all been able to use revenue from hydrocarbons to…
Bright ideas: New programmes seek to facilitate and utilise the potential of young Saudi nationalsOBGplus
Central to the Kingdom’s goals to diversify its economy and to transition from an investment-driven model to an innovation-driven approach to business by 2020 are its plans for its growing population of young people. The government envisages highly educated young Saudis pursuing private sector careers in Jeddah, Riyadh or one of the four economic cities that are being built in Rabigh, Hail, Medina and Jizan. The government also acknowledges that to nurture Saudi businesses built on innovation,…
Bright ideas: New programmes seek to facilitate and utilise the potential of young Saudi nationalsOBGplus
Central to the Kingdom’s goals to diversify its economy and to transition from an investment-driven model to an innovation-driven approach to business by 2020 are its plans for its growing population of young people. The government envisages highly educated young Saudis pursuing private sector careers in Jeddah, Riyadh or one of the four economic cities that are being built in Rabigh, Hail, Medina and Jizan. The government also acknowledges that to nurture Saudi businesses built on innovation,…
