Economy
From The Report: Saudi Arabia 2015
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While hydrocarbons continue to form the bulk of Saudi Arabia’s revenues, the government has placed an increasing emphasis on economic diversification in recent times. Indeed the Kingdom’s economic growth is now being driven primarily by the non-oil sector, which expanded at a rate of 5% in the decade to 2014. Although low oil prices and the government’s commitment to maintaining spending levels mean the country is expected to run a fiscal deficit in 2015, Saudi Arabia’s ample fiscal reserves suggest it is well positioned to ride out the dip over the medium term. In the meantime, diversification drives will continue, with Saudi Arabia’s 10th Development Plan placing renewed emphasis on education and private sector development. Foreign companies are expected to benefit from the roll-out of e-government in public tendering, which authorities hope will make the system more efficient for foreign investors.

This chapter contains interviews with Prince Turki bin Saud bin Mohammad Al Saud, President, King Abdulaziz City for Science and Technology (KACST); Mofarrej Al Haqbani, Minister of Labour; and Ibrahim Al Hunaishel, Director-General, Saudi Credit and Savings Bank (SCSB).

Articles from this Chapter

Overview

Forward thinking: Pursuing the twin goals of economic diversification and the creation of a knowledge economy
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The Saudi economy has been on an upward growth trajectory in recent years, expanding by 2.7% in 2013 and 3.6% in 2014. This has been primarily driven by the non-oil sector, which has grown at a rate of at least 5% per year in the decade to 2014. For its part, the oil and gas sector also saw modest improvement in 2014, expanding by 0.8% year-on-year (y-o-y). While the Kingdom entered the period of lower oil prices in the second half of 2014 with virtually no debt and plentiful foreign reserves, the…

Interview

Nurturing talent: OBG talks to Prince Turki bin Saud bin Mohammad Al Saud, President, King Abdulaziz City for Science and Technology (KACST)
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Interview:Prince Turki bin Saud bin Mohammad Al Saud How will the achievements of the first phase of the National Plan for Science, Technology and Innovation (MAARIFAH) affect the second five-year phase? PRINCE TURKI BIN MOHAMMAD AL SAUD: MAARIFAH-I was focused on establishing the infrastructure for science, technology and innovation (STI) in the Kingdom, and achieved several milestones, including allocating funding of SR8bn ($2.13bn) to support more than 2000 projects in the development…

Analysis

Breathing room: Low debt and ample fiscal reserves provide insulation from market forces
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The drop in oil prices that began in the second half of 2014 has raised questions about how oil-dependent economies like Russia, Nigeria and Venezuela would cope. However, in the case of Saudi Arabia, large fiscal reserves and low levels of debt have enabled the Kingdom to avert the sort of crisis triggered by oil shocks in the past. The Saudi government has adopted a policy of resolutely defending its share of the oil market – an approach that, as of mid-2015, appeared to be yielding the desired…

Interview

Building the workforce: OBG talks to Mofarrej Al Haqbani, Minister of Labour
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Interview:Mofarrej Al Haqbani To what extent have the measures put in place by the ministry alongside the private sector to encourage sustainable job growth been successful? MOFARREJ AL HAQBANI: Despite the fact that many important initiatives are still in their early stages of implementation, there is clear evidence that measures taken by the ministry have already had a significant impact on key labour market indicators. Labour-force participation has increased from 51% to 55.7%, partly…

Interview

Seedling, sapling, tree: OBG talks to Ibrahim Al Hunaishel, Director-General, Saudi Credit and Savings Bank (SCSB)
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Interview:Ibrahim Al Hunaishel How can linking small and medium-sized enterprises (SMEs) to large companies help localise skills and know-how? What is being done to support this? IBRAHIM AL HUNAISHEL: We have introduced the Business Linkages Programme, whose main goal is to promote the creation of durable and mutually beneficial partnerships between SMEs and affiliates of multi-national corporations or large domestic companies. The aim is to enhance the productive capacity, efficiency, competitiveness…

Analysis

The long game: New development plan shows clear commitment to education and the private sector
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Charting a course for government policy over the next five years, the Kingdom’s 10th Development Plan, which runs from 2015 to 2019, places renewed emphasis on education and private sector development as the keys to economic diversification. In this regard, the plan represents the next step towards achieving the government’s long-term vision for the country. As Osama Mansouri, advisor to the minister of economy and planning, told OBG, “The first five years of the 10th Development Plan mark…