Economy of Saudi Arabia
|This article needs additional citations for verification. (February 2009)|
|Economy of Saudi|
|Currency||Saudi Riyal (harr, SR)|
|WTO, OPEC, G-20 major economies, BIS, ICS, IOS, WCO, GCC, World Bank IMF|
$906.8 billion (PPP; 19th)$745.273 billion (nominal; 19th)
GDP per capita
|$53,780 (PPP; 8th)|
GDP by sector
|agriculture: 3.2%; industry: 60.4%; services: 36.4% (2009 est.)|
|7.63 million (2009 est.) note: about 80% of the labor force is non-national|
Labour force by occupation
|agriculture: 6.7%; industry: 21.4%; services: 71.9% (2005 est.)|
|crude oil production, petroleum refining, basic petrochemicals, ammonia, industrial gases, sodium hydroxide (caustic soda), cement, fertilizer, plastics, metals, commercial ship repair, commercial aircraft repair, construction|
|Exports||$381.5 billion (2012 est.)|
|petroleum and petroleum products 90%|
Main export partners
| United States 14.3%
South Korea 9.9%
Singapore 4.3% (2012 est.)
|Imports||$136.8 billion (2012 est.)|
|machinery and equipment, foodstuffs, chemicals, motor vehicles, textiles|
Main import partners
| China 13.5%
United States 13.2%
South Korea 6.7%
Japan 6.0% (2012 est.)
Gross external debt
|$127.4 billion (31 December 2012 est.)|
|9.4% of GDP (2009 est.)|
|Revenues||$293.1 billion (2010 est.)|
|Expenses||$210.6 billion (2010 est.)|
|Economic aid||(Donor) $100 million in 1993 to Lebanon; since 2000, Saudi Arabia has committed $307 million to Palestinians; pledged $240 million to Afghanistan; pledged $1 billion in export guarantees and soft loans to Iraq.|
|Standard & Poor's:
AA+ (T&C Assessment)
Saudi Arabia has an oil-based economy with strong government control over major economic activities. Saudi Arabia possesses 18% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and played a leading role in OPEC for many years. The petroleum sector accounts for almost all of Saudi government revenues, and export earnings. Most workers, particularly in the private sector, are foreigners.
- 1 Economic overview
- 2 History
- 3 Employment
- 4 Non-Petroleum sector
- 5 Private sector
- 6 Trade
- 7 Challenges
- 8 Investment
- 9 References
- 10 External links
Saudi oil reserves are the second largest in the world, and Saudi Arabia is the world's leading oil exporter and second largest producer. Proven reserves, according to figures provided by the Saudi government, are estimated to be 260 billion barrels (41 km3), about one-quarter of world oil reserves. Petroleum in Saudi is not only plentiful but under pressure and close to the earth's surface. This makes it far cheaper and thus far more profitable to extract than oil at many other fields. The petroleum sector accounts for roughly 92.5% of Saudi budget revenues, 90% of export earnings, and 55% of GDP.
Another 40% of GDP comes from the private sector. An estimated 7.5 (2013) million foreigner work legally in Saudi, playing a crucial role in the Saudi economy, for example, in the oil and service sectors. The government has encouraged private sector growth for many years to lessen the kingdom's dependence on oil, and to increase employment opportunities for the swelling Saudi population. In recent decades the government has begun to permit private sector and foreign investor participation in sectors such as power generation and telecom, and acceded to the WTO. During much of the 2000s, high oil prices enabled the government to post budget surpluses, boost spending on job training and education, infrastructure development, and government salaries. More than 95% of all Saudi oil is produced on behalf of the Saudi Government by the parastatal giant Saudi Aramco, and the remaining 5% by similar parastatal companies as of 2002.
With its absolute monarchy system of government, large state sector and supply of welfare benefits, the Saudi economy has been described as
a bewildering (at least to outsiders) combination of a feudal fealty system and a more modern political patronage one. At every level in every sphere of activity, Saudis maneuver through life manipulating individual privileges, favors, obligations, and connections. By the same token, the government bureaucracy is a maze of overlapping or conflicting power center under the patronage of various royal princes with their own priorities and agendas to pursue and dependents to satisfy.
The gross domestic product of Saudi Arabia fluctuates dramatically according to the price of oil (see below).
|Year||Gross Domestic Product
(in millions of Saudi Riyals (SR))
|US Dollar Exchange||Inflation Index
|Per Capita Income
(as % of USA)
|1970||22,565||4.50 Saudi Arabian Riyals||5.8|
|1975||163,670||3.52 Saudi Arabian Riyals||7.3|
|1980||546,602||3.59 Saudi Arabian Riyals||95||9.8||43.84|
|1985||376,318||3.62 Saudi Arabian Riyals||92||13||49.33|
|1990||437,334||3.74 Saudi Arabian Riyals||91||16.1||33.13|
|1995||533,504||3.74 Saudi Arabian Riyals||101||19||28.29|
|2000||706,657||3.74 Saudi Arabian Riyals||100||20.0||26.50|
|2005||1,152,600||3.74 Saudi Arabian Riyals||100||24.5||32.53|
(Market prices estimated by the International Monetary Fund and other sources, with figures in millions of Saudi Arabian Riyals (SR)).). For purchasing power parity comparisons, the U.S. dollar is exchanged at 3.75 Saudi Arabian Riyals only. Mean wages were $14.74 per man-hour in 2009. Population from FAO aqaustat, UN World Population Prospects: The 2010 Revision)
As of August 2009 it was reported that Saudi Arabia is the strongest Arab economy, according to World Bank.
Saudi Arabia was a subsistence economy until the 1930s. During the 1973 oil crisis Saudi began to grow rapidly and peaked around 1980. In the mid 1980s the oil price dropped from a high of US$40 per barrel to around US$5, and the county built up a massive overseas debt. From 2002 to mid-2008 oil prices recovered, allowing the government to post budget surpluses, and boost spending.
Saudi Arabia was an economy based on subsistence agriculture by a population that was largely nomadic and very poor until the discovery of oil in the 1930s. To raise the price of oil, Saudi Arabia and several other major exporters (Venezuela, Iraq, Iran and Kuwait) founded the Organisation of the Petroleum Exporting Countries (OPEC), to regulate production. The first five-year "Development Plan" was started in 1970, and these have continued sequentially so that 2015 will be the first year of the tenth plan.
During the 1973 oil crisis OPEC production cuts raised the price of petroleum from $3 per barrel to nearly $12. Saudi became one of the fastest-growing economies in the world. It enjoyed a substantial surplus in its overall trade with other countries; imports increased rapidly; and ample government revenues were available for development, defense, and aid to other Arab and Islamic countries. Another price jolt around 1980 during the Iran-Iraq War brought Saudi Arabia to what has (so far) been its economic peak (in terms of per capita income).
But higher oil prices led to development of more oil fields around the world and reduced global consumption. The result, beginning in the mid-1980s, was a worldwide oil glut, with the oil price dropping from a high of US$40 per barrel to a low point of around US$5. This introduced an element of planning uncertainty for the first time in a decade. Saudi oil production, which had increased to almost 10 million barrels (1,600,000 m3) per day during 1980–81, dropped to about 2 million barrels per day (320,000 m3/d) in 1985. Budgetary deficits developed, and the government drew down its foreign assets. Responding to financial pressures, Saudi Arabia gave up its role as the "swing producer" within OPEC in the summer of 1985 and accepted a production quota. Since then, Saudi oil policy has been guided by a desire to maintain market and quota shares.
In June 1993, Saudi Aramco absorbed the state marketing and refining company (SAMAREC), becoming the world's largest fully integrated oil company. Most Saudi oil exports move by tanker from oil terminals at Ras Tanura and Ju'aymah in the Persian Gulf. The remaining oil exports are transported via the east-west pipeline across the kingdom to the Red Sea port of Yanbu. A major new gas initiative promises to bring significant investment by U.S. and European oil companies to develop non-associated gas fields in three separate parts of Saudi Arabia. Following final technical agreements with concession awardees in December 2001, development should begin in 2002.
However, beginning in late 1997, Saudi Arabia again faced the challenge of low oil prices. Due to a combination of factors—the East Asian economic crises, a warm winter in the West caused by El Niño, and an increase in non-OPEC oil production—demand for oil slowed and pulled oil prices down by more than one-third.
Saudi Arabia was a key player in coordinating the successful 1999 campaign of OPEC and other oil-producing countries to raise the price of oil to its highest level since the (Persian) Gulf War by managing production and supply of petroleum. That same year, Saudi Arabia established the Supreme Economic Council to formulate and better coordinate economic development policies in order to accelerate institutional and industrial reform.
Saudi Arabia acceded to the WTO in 2005 after many years of negotiations.
The mid-1980s was also the time that foreign ownership of business was allowed. In the mid-1990s, foreign ownership rules were relaxed again, with investment sought in telecommunications, utilities, and financial services. In 2000, 100% foreign-owned businesses were allowed in the kingdom.
Diversification and the Development Plans
The government has sought to allocate its petroleum income to transform its relatively undeveloped, oil-based economy into that of a modern industrial state while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed rapidly. Oil wealth has increased the standard of living of most Saudis. However, significant population growth has strained the government's ability to finance further improvements in the country's standard of living. Heavy dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. The mismatch between the job skills of Saudi graduates and the needs of the private job market at all levels remains the principal obstacle to economic diversification and development; about 4.6 million non-Saudis are employed in the economy.
Saudi first began to diversify its economy to reduce dependency on oil in the 1970s as part of its first five-year development plan. Basic petrochemical industries using petroleum as feedstock were developed. The fishing villages of al-Jubail on the Gulf and Yanbu on the Red Sea were developed. However, their affect on Saudi's national accounts has been small.
Saudi Arabia's first two development plans, covering the 1970s, emphasized infrastructure. The results were impressive—the total length of paved highways tripled, power generation increased by a multiple of 28, and the capacity of the seaports grew tenfold. For the third plan (1980–85), the emphasis changed. Spending on infrastructure declined, but it rose markedly on education, health, and social services. The share for diversifying and expanding productive sectors of the economy (primarily industry) did not rise as planned, but the two industrial cities of Jubail and Yanbu—built around the use of the country's oil and gas to produce steel, petrochemicals, fertilizer, and refined oil products—were largely completed.
In the fourth plan (1985–90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. The private sector became more important, rising to 70% of non-oil GDP by 1987. While still concentrated in trade and commerce, private investment increased in industry, agriculture, banking, and construction companies. These private investments were supported by generous government financing and incentive programs. The objective was for the private sector to have 70% to 90% ownership in most joint venture enterprises.
The fifth plan (1990–95) emphasized consolidation of the country's defenses; improved and more efficient government social services; regional development; and, most importantly, creating greater private-sector employment opportunities for Saudis by reducing the number of foreign workers.
The sixth plan (1996–2000) focused on lowering the cost of government services without cutting them and sought to expand educational training programs. The plan called for reducing the kingdom's dependence on the petroleum sector by diversifying economic activity, particularly in the private sector, with special emphasis on industry and agriculture. It also continued the effort to "Saudiize" the labor force.
The seventh plan (2000–2004) focuses more on economic diversification and a greater role of the private sector in the Saudi economy. For 2000–04, the government aims at an average GDP growth rate of 3.16% each year, with projected growths of 5.04% for the private sector and 4.01% for the non-oil sector. The government also has set a target of creating 817,300 new jobs for Saudi nationals.
Advertising expenditures have reached new peaks due to emphasis on value-added manufacturing.
As part of its diversification, Saudi Arabia has been inking major refinery contracts with Chinese and other companies.
Saudi Arabia has announced plans to invest about $46 billion in three of the world’s largest and most ambitious petrochemical projects. These include the $27 billion Ras Tanura integrated refinery and petrochemical project, the $9 billion Saudi Kayan at the Wayback Machine (archived March 15, 2009) petrochemical complex at Jubail Industrial City, and the $10 billion Petro Rabigh refinery upgrade project. Together, the three projects will employ more than 150,000 technicians and engineers working around the clock. Upon completion in 2015–16, the Ras Tanura integrated refinery and petrochemicals project will become the world’s largest petrochemical facility of its kind with a combined production capacity of 11 million tons per year of different petrochemical and chemical products. The products will include ethylene, propylene, aromatics, polyethylene, ethylene oxide, chlorine derivatives, and glycol.
Saudi Arabia had plans to launch six "economic cities" (e.g. King Abdullah Economic City, to be completed by 2020, in an effort to diversify the economy and provide jobs. They are being built at a cost of $60bn (2013)and are "expected to contribute $150bn to the economy". As of 2013 four cities were being developed.
As of 2008, roughly two thirds of workers employed in Saudi Arabia were foreigners, and in the private sector approximately 90%. In January 2014 the Saudi government claimed it had lowered the 90% rate, doubling the number of Saudi citizens working in the private sector employment to 1.5 million. (This compares to 10 million foreign expatriates working in the kingdom.)
According to Reuters, economists "estimate only 30-40 percent of working-age Saudis hold jobs or actively seek work," although the official employment rate is only around 12 percent. Most Saudis with jobs are employed by the government, but the International Monetary Fund has warned the government cannot support such a large wage bill in the long term.  The government has announced a succession of plans since 2000 to deal with the imbalance by `Saudizing` the economy, However, the foreign workforce and unemployment among Saudis has continued to grow.
One obstacle is social resistance to certain types of employment. Jobs in service and sales are considered totally unacceptable for citizens of Saudi Arabia—both potential employees and customers.
Saudi Arabia has natural resources other than oil, including small mineral deposits of gold, silver, iron copper, zinc, manganese, tungsten, lead, sulphur, phosphate, soapstone and feldspar. The country has a small agricultural sector, primarily in the southwest where annual rainfall averages 400 mm (16"). The country is one of the world's largest producers of dates. For some years it grew very expensive wheat using desalinated water for irrigation, but plans to stop by 2016. As of 2009, livestock population amounted to 7.4 million sheep, 4.2 million goats, half a million camels and a quarter of a million cattle.
Although jobs created by the roughly two million annual hajj pilgrims do not last long, the hajj employs more people than the oil industry - 40,000 temporary jobs (butchers, barbers, coach drivers, etc.) -- and US$2–3 billion in revenue.
Saudi Arabia's private sector is dominated by a handful of big businesses in the service sector, primarily in construction and real estate—Bin Laden, Olayan, Zamil, Mahfouz, and Al Rajhi. These firms are "heavily dependent on government spending", which is dependent on oil revenues.
From 2003-2013 "several key services" were privatized—municipal water supply, electricity, telecommunications—and parts of education and health care, traffic control and car accident reporting were also privatized. According to Arab News columnist Abdel Aziz Aluwaisheg, "in almost every one of these areas, consumers have raised serious concerns about the performance of these privatized entities."
In recent years, Saudi Arabia sought to join the World Trade Organization. Negotiations have focused on the degree to which Saudi Arabia is willing to increase market access to foreign goods and services and the timeframe for becoming fully compliant with World Trade Organization obligations. In April 2000, the government established the Saudi Arabian General Investment Authority to encourage foreign direct investment in Saudi Arabia. Saudi Arabia maintains a negative list of sectors in which foreign investment is prohibited, but the government plans to open some closed sectors such as telecommunications, insurance, and power transmission/distribution over time. As of November 2005, Saudi Arabia was officially approved to enter World Trade Organization.
List of trade organizations
- World Trade Organization (WTO)
- International Monetary Fund (IMF)
- International Chamber of Commerce (ICC)
- International Organization for Standardization (IOS)
- World Customs Organization (WCO)
- Gulf Cooperation Council (GCC)
Among the challenges to Saudi economy include halting or reversing the decline in per capita income, improving education to prepare youth for the workforce and providing them with employment, diversifying the economy, stimulating the private sector and housing construction, diminishing corruption and inequality. In answer to the question of why the Saudi economy is so dependent on foreign labour, the UN Arab Human Development Report blamed stunted social and economic development inhibited by lack of personal freedom, poor education and government hiring based on factors other than merit, and exclusion of women.
- Income drop
Despite possessing the largest petroleum reserves in the world, per capita income dropped from approximately $18,000 at the height of the oil boom (1981) to $7000 in 2001, according to one estimate. As of 2013, per capita income in Saudi was "a fraction of that of smaller Persian Gulf neighbors", even less than petroleum-poor Bahrain.
Unlike most developed countries where gross domestic product growth is a function of increases in productivity and inputs such as employment, in Saudi the fluctuation of oil prices is the most important factor in the growth or decline of domestic production. "Saudi reserves are steadily being depleted, and no significant new discoveries have been found to replace them," according to Middle East journalist Karen House. Saudi population grew sevenfold from 1960 to 2010, and petrol prices are subsidized and cost users less than equivalent quantities of bottled water.  With production stagnant, growth in population and domestic energy consumption means a decline in per capita income unless oil prices rise to match that growth.
Saudi population is young. About 51% are under the age of 25 (as of Feb 2012). According to a 2013 report by the International Monetary Fund, up to 1.6 million young nationals of the Gulf countries (of which Saudi Arabia is the largest) will enter the workforce from 2013 to 2018, but the economies of those countries will have jobs in the private sector for less than half (approximately 600,000).
According to The Economist magazine, the Saudi government has attempted in years past to raise employment by forcing "companies to fill at least 30% of their positions" with Saudi citizens. However, "employers complained bitterly about the lack of skills among young locals; years of rote-learning and religious instruction fail to prepare them for the job market." As a consequence, "the quota has now been dropped and replaced with a more flexible system."
According to another source (scholar David Commins), the kingdom depends "on huge numbers of expatriates workers to fill technical and administrative positions" in part because of an educational system that in spite of "generous budgets", has suffered from "poorly trained teachers, low retention rates, lack of rigorous standards, weak scientific and technical instruction and excessive attention to religious subjects".  
Another statistic conducted by Bayt.com shows that Over a quarter (28%) of professionals believe that there is a skills shortage in their country of residence. This belief is more prominent among respondents in Saudi Arabia (39%).
Saudi has not been a hotbed of technological innovation. The number of Saudi patents registered in the United States between 1977 and 2010 came to 382—less than twelve per year—compared to 84,840 patents for South Korea or 20,620 for Israel during that period. Saudi hopes to increase technological innovation, particularly with the King Abdullah University of Science and Technology, and thus to stimulate the economy.
- Legal system
Saudi Arabia's legal system is based on shariah (traditional Islamic) law and many of the "matters the law has to interpret were not in existence when the basis of the law" (the Quran) was revealed in the 7th century AD. Thus, according to some unbelievers (Harvey Tripp and Peter North)
when one considers what wasn't around when the Prophet lived his life — running water, sewerage, cars, telephones, paper and so on— it is some minor miracle that modern society run to the rules of Shariah Law can operate at all.
It is also unique and—according to some—an obstacle to doing business in the kingdom because of its lack of predictability and its prohibition on interest payments. There is no uniform legal code and no concept of legal precedent. According to Oxford Business Group, "it is not always possible to reach a conclusion on how a Saudi court or judicial committee would view a particular case" because "decisions of a court or a judicial committee have no binding authority with respect to another case," and "in general there is also no system of court reporting in the Kingdom."
The author of a book on the Saudi legal system (Frank Vogel) bemoaned the
"unpredictability of decisions; obscure if not occult doctrine; dissonance between many Saudi commercial norms and those prevailing nearly everywhere else ... huge costs on the Saudi economy. That the king and government have not been inclined, or able, to impose a solution to this widely known difficulty is an apt measure of the cultural and political influence of fiqh and ulama and of the centrality of the shari'a ideal for Saudi life public and private."
A business journalist (Karen House) criticizing the Saudi bureaucracy complained that someone seeking to start a business in Saudi Arabia
has to complete innumerable applications and documents at multiple layers of multiple ministries, which invariably requires seeking favors from various patronage networks and accumulating obligations along the way, most probably including having to hire less-than-competent dependents of his patrons. Then, for any business of any size, government contracts, not private competition, are the financial lifeblood. So this means more patrons, more favors, and more obligations. Not surprisingly, Saudi businesses that can compete outside the protected Saudi market are few.
The cost of maintaining the Royal Family is estimated by some to be about US$10 billion per year. A 2005 survey by the Riyadh Chamber of Commerce found 77% of businessmen polled felt they had to `bypass` the law to conduct their operations. Since then "businessmen say it has only gotten worse."
Estimates of the number of Saudis below the poverty line range from between 12.7% and 25%. Press reports and private estimates as of 2013 "suggest that between 2 million and 4 million" of the country's native Saudis live on "less than about $530 a month" – about $17 a day – considered the poverty line in Saudi Arabia. In contrast, Forbes magazine estimates King Abdullah's personal fortune at $18 billion.
The Saudi state discourages calling attention to or complaining about poverty. In December 2011, days after the Arab Spring uprisings, the Saudi interior ministry detained reporter Feros Boqna and two colleagues (Hussam al-Drewesh and Khaled al-Rasheed) and held them for almost two weeks for questioning after they uploaded a 10-minute video on the topic (Mal3ob 3alena, or 'We are being cheated') to YouTube. Authors of the video claim that 22% of Saudis are considered to be poor (2009) and 70% of Saudis do not own their houses. Statistics on the issue are not available through the UN resources because the Saudi government does not issue poverty figures. Observers researching the issue prefer to stay anonymous because of the risk of being arrested, like Feras Boqna.
Only 30% of Saudi Arabia's citizens own their own home, compared to the international average rate of 70% ownership. In 2011, analysts estimated 500,000 new homes/year were needed to match the growth in Saudi population, but as of early 2014 only 300,000 to 400,000 houses/year were being built.
One problem is that the government Real Estate Development Fund (REDF) -- which provides 81% of all loans for housing—had a 18-year waiting list for loans due to pent-up demand. Another is that the REDF's maximum loan is 500,000 SR ($133,000), while in 2012 the average price for a small free-standing home in in Riyadh is more than double that—1.23 million SR ($328,000).
A major reason for the high cost of housing is the high cost of land. In urban areas the price of land has been bid up because nearly all of it is owned by the Saudi elite (members of the royal family or other wealthy Saudis), who have lobbied the government for land "giveaways". Landlords have seen prices rocket by 50% from 2011 to 2013. The owners benefit from these price increases as they hold the land for future development.  To deal with the key "land banking" issue the Housing Minister suggested in 2013 that landowners of vacant within city limits could be subject to a tax. However, no firm plans for any tax have been unveiled.
- Further diversification
According to journalist Karen House, "every" Saudi five-year plan "since the first one in 1970" has called for diversifying the economy beyond oil, but with marginal success.
As of 2007, manufacturing outside of the petroleum industry contributed 10% to Saudi Arabian GDP and less than 6% of total employment.
Saudi Arabia has one stock exchange, the Tadawul, whose financial markets are regulated by the Capital Market Authority. The stock market capitalisation of listed companies in Saudi Arabia was valued at $646 billion in 2005 by the World Bank.
The Kingdom of Saudi Arabia has been rated as the 22nd most economically competitive country in the world, according to the International Finance Corporation (IFC)-World Bank's annual "Doing Business" report issued for 2013. Since 2004, the Kingdom has advanced its overall Doing Business rankings, from 67th to 22nd.
Saudi Arabian companies dominate 2009's "MEED 100", with companies listed on the Tadawul, accounting for 29 out of the region’s 100 biggest publicly quoted companies ranked by market capitalisation. Just three of the 20 companies that have dropped out of the top 100 over the past year are listed on the Saudi stock exchange.
Foreigners are allowed to wholly own limited liability companies in the majority of industries. Non-Saudi nationals are required to obtain a foreign capital investment license from the Saudi Arabian General Investment Authority (SAGIA).
Saudi Aramco (officially the Saudi Arabian Oil Co.), is a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to US$10 trillion in the Financial Times, making it the world's most valuable company. (ARAMCO is state-owned and unlisted.)
Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels (4.1×1010 m3), and largest daily oil production. Headquartered in Dhahran, Saudi Arabia, Saudi Aramco operates the world's largest single hydrocarbon network, the Master Gas System. Its yearly production is 3.479 billion barrels (553,100,000 m3), and it managed over 100 oil and gas fields in Saudi Arabia, including 284.8 trillion standard cubic feet (scf) of natural gas reserves. Saudi Aramco owns the Ghawar Field, the world's largest oil field, and the Shaybah Field, another one of the world's largest oil fields.
The Saudi Arabian Basic Industries Corporation SABIC was established by a royal decree in 1976 to produce chemicals, polymers, and fertilizers. In 2008, SABIC was Asia's largest (in terms of market capitalization) and most profitable publicly listed non-oil company, the world's fourth-largest petrochemical company, ranked 186th as world's largest corporation on the Fortune Global 500 for 2009, the second largest producer of ethylene glycol and methanol in the world, the third largest producer of polyethylene and overall the fourth-largest producer of polypropylene and polyolefin. Standard & Poor's and Fitch Ratings claimed SABIC to be the world's largest producer of polymers and the Persian Gulf region's largest steel producer for 2005 and assigned SABIC an "A" corporate credit rating. In 2008, Fortune 500 ranking records SABIC revenues at $40.2 billion, profits at $5.8 billion and assets standing at $72.4 billion.
Ma'aden was formed as a Saudi joint stock company on 23 March 1997 for the purpose of facilitating the development of Saudi Arabia’s mineral resources. Ma'aden's activities have focused on its active gold business which has grown in recent years to include the operation of five gold mines: Mahd Ad Dahab, Al Hajar, Sukhaybarat, Bulghah, and Al Amar. Ma'aden is now expanding its activities beyond its gold business with the development of phosphates, aluminum, and other projects. In addition, since its formation, Ma'aden (through the Ministry of Petroleum and Mineral Resources) has collaborated with the government and local legislators to develop a regulatory framework for the governance of the mining industry.
Saudi Arabia is currently enjoying a massive boom in its personal computer industry since the deregulation of 2002. PC per capita has exploded to nearly 43% of the population in 2005 from just 13% in 2002 leapfrogging over the rest of West Asia. The electrical and electronics market was estimated to be around $3.5 billion in 2004.
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Over the past decade, the government has announced one plan after another to `Saudize` the economy, but to no avail. The foreign workforce grows, and so does unemployment among Saudis. .... The previous plan called for slashing unemployment to 2.8% only to see it rise to 10.5% in 2009, the end of that plan period. Government plans in Saudi are like those in the old Soviet Union, grandiose but unmet. (Also, as in the old Soviet Union, nearly all Saudi official statistics are unreliable, so economists believe the real Saudi unemployment rate is closer to 40%)
- House, Karen Elliott (2012). On Saudi Arabia : Its People, past, Religion, Fault Lines and Future. Knopf. p. 172.
[At one department store, Al Haram, of] 150 employees, only 25 ... are Saudi. All the Saudis are either cashiers or managers. The store manager, Ali al Qahtani, a Saudi, insists that even if a Saudi asked to work in sales (and none has ...) he would not permit it. `I would put him at reception or cashier,` he says, `because Saudi society wouldn't accept a Saudi sales person.` Indeed, a Saudi intellectual who lives in the kingdom but travels often to Europe and the United State recounts his embarrassment at being served by a Saudi waiter in a restaurant. `... I didn't know what to do, it was so embarrassing.`
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Despite Saudi control of the largest petroleum reserves in the world, decades of rapid population growth have reduced per capita income to a fraction of that of smaller Persian Gulf neighbors. Event the people of Bahrain, a country with little oil that has roiled with unrest since early 2011, are wealthier.
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- House, Karen Elliott (2012). On Saudi Arabia : Its People, past, Religion, Fault Lines and Future. Knopf. p. 245.
"In a country where a gallon of gasoline at roughly 53 cents is cheaper than bottled water and government energy subsidies are roughly $35 billion annually, Saudi energy consumption is rising at what one energy official calls an `alarming rate.`
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Observers also note that in spite of generous budgets, Saudi education has been plagued by numerous problems: poorly trained teachers, low retention rates, lack of rigorous standards, weak scientific and technical instruction and excessive attention to religious subjects. Consequently, the kingdom has continued to depend on huge numbers of expatriates workers to fill technical and administrative positions.
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The slow and arcane workings of the judicial system are often cited as one of the most frustrating barriers to doing business effectively in Saudi Arabia. Central bank chief reaps his rewards
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In a country with vast oil wealth and lavish royalty, an estimated quarter of Saudis live below the poverty line
- A 2003 survey by the Ministry of Social Affairs found 40% of all Saudi citizens live on less than 3000 Saudi riyals ($850) a month, (source:House, Karen Elliott (2012). On Saudi Arabia : Its People, past, Religion, Fault Lines and Future. Knopf. p. 159.), while 19% of Saudis live on less than 1800 SR (Saudi riyals) ($480) a month. (source: House, Karen Elliott (2012). On Saudi Arabia : Its People, past, Religion, Fault Lines and Future. Knopf. p. 179.
... according to a 2003 survey by the Ministry of Social Affairs.)
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A second youth video, Monopoly, highlighted the near impossibility of owning a home in Saudi Arabia because a monopoly on landownership by royals and other wealthy Saudi has put the price of land out of reach of a majority of Saudis. It struck a responsive chord in the population.
- House, Karen Elliott (2012). On Saudi Arabia : Its People, Past, Religion, Fault Lines and Future. Knopf. p. 151.
In or around population centers, much of the open land is owned by various princes or a few wealthy families who are holding it for future development and profit.
- House, Karen Elliot (2012). On Saudi Arabia: Its People, Past, Religion, Fault Lines-- and Future. Alfred A. Knopf. p. 163. Retrieved 13 February 2015.
every five-year plan since the first one in 1970 has called for diversifying the economy beyond oil, but oil is still supreme
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