Download presentation
Presentation is loading. Please wait.
Published byPrudence Davidson Modified over 9 years ago
1
1 An Overview of Saudi economy: challenges ahead KING FAHD UNIVERSITY OF PETROLUME & MINERALS DHAHRAN 31261 SAUDI ARABIA
2
2 Saudi Arabia: Major Challenges Despite diversification of economic base, still reliant on oil and oil-related products for exports, Despite massive expenditure on education, yet mismatch between market needs and graduate output, Despite massive government subsidies, yet so little on internal R&D to develop a knowledge based, sustainable economic infrastructure. But there is a light at the end of the tunnel.
3
3 Table 1 Achievements and Directions
4
4 Table 2 Achievements and Directions (Continue)
5
5
6
6 Table 3 Conditions for growth
7
7 Table 4 Conditions for growth (Continue) Adapted from the Arab World Competitiveness Report 2005
8
8 Table 5 The changing face of the Saudi capital market
9
9 Legal System Observations Judicial System Consists of both general courts and specialized tribunals. Courts may consist of a combination of judges and non-judges. Decisions can be quick or lengthy. Decisions may be appealed. Jurisdiction Sharia’h courts are courts of general jurisdiction. Sharia’h judges preside over almost any disputes, unless Saudi law provides otherwise. Sharia’h judges apply Islamic law to decide a case. Decisions may be appealed. Board of Grievance Has exclusive power to decide disputes over Saudi government contracts and may decide some types of commercial disputes. Unlike Sharia’h, the board observes a system of precedent. Decisions may be appealed. Civil Rights Directorate Responsible for enforcing judgement of Saudi courts or tribunals. Negotiable Instruments Committee Decides on cases involving bills of exchange, promissory notes and checks. The SAMA Committee Resolves disputes between banks and clients Conciliation Committee At the Saudi Chambers of Commerce, assisting in problems between foreign partners and Saudi companies, especially in agency matters. Preliminary Committee for Settlement of Labour Disputes Hears all matters related to labour and employee relations. Table 6 Saudi Arabia: Legal, commercial and dispute settlement system
10
10 The SME Sector: Previously neglected, concentration on capital intensive, high technology industry. Available financial resources – state/private Limited managerial experience High foreign labor utilization But they are powerful employment generators. WTO uncertainties for big industries.
11
11 Saudi Family Businesses: A powerful positive and potentially negative economic force. Hold around SR 250 billion in domestic investment, with 200 family companies dominating commercial life. Majority of franchises and agencies owned by no more than 100 of the top Saudi companies. Time for change
12
12 Saudi Women and the National Economy: More urgency on this matter. Government sympathetic as long as in conformity with Islamic principles. Substantial women’s investment in domestic economy and impact: - 60% of bank account - Deposits SR 62 billion - 20% corporate shares - 15% of private companies - 10% real estate
13
13 Table 7 Saudi businesswomen’s operating barriers:
14
14 Table 8 Private sector challenges and solutions
15
15 Table 9 Foreign direct investment: Saudi Arabia stock sheet
16
16 Table 9 (Continued)
17
17 Table 9 (Continued)
18
18 Table 11 Saudization impact on selected Saudi industries Source: National Commercial Bank, 2005, SAMA, 2005.
19
19 Saudi economy indicators (2006) GGGGNP for 2006 is $ 373.00 billion dollars (ranking # 20 world wide). HHHHard currency reserves up to 2006 is 269 billion dollars SSSSaudi economy ranks # 12 in the volume of exports and # 20 in the volume of import world wide according to SAMA statistics (2005). 88880 % of Saudi income comes from sales of crude oil TTTThe Growth rate of Saudi economy is in the range of 3.5 to 4 % EEEEmerging lucrative market in stocks & real state: OOOOver 500 billion dollars in Saudi stock market OOOOver 250 billion dollars in Saudi real state market
20
20 Why to invest in Saudi Arabia Saudi Arabia is a full member of WTO since 2005 Political stability Free economy system Excellent infrastructure Availability of reasonably cheap labor (Mainly from Egypt, India, Pakistan, and Philippine). Genuine government support they target to have Saudi Arabia among the top 10 countries to attract F.D.I. by 2010 Saudi Arabia ranks # 38 out of 177 countries in the most favored nations for investment opportunities according to world bank 2006 Low inflation rate (1% in 2006 & expect to be 2.2% by end of 2007) Government spending in the next few years for already approved & under execution projects are as follows: 69 billion dollars in oil & gas section 45 billion dollars in petrochemicals 43 billion dollars in infrastructure
21
21 Key indications on Saudi labor movement 60 % of Saudi population are below 50 years old 24 % of the Saudis labor force work in the industry sector 31 % of the Saudi labor force work in the commerce sector 350,000 Saudis enter the labor market every year The unemployment rate is considerably high among Saudis. Approximately one million Saudis work in government agencies, out of which 400,000 are women. About 1.8 million Saudis work in private sector, out of which 20 % are women.
22
22 Challenges Facing the education system High growth rate (3.4%) of Saudi population currently 20 millions The co density of the population is scattered all over the country (2.1 million K. square) The cost of education is reasonably high compared to industrial countries (9% of G.N.P. vs. 5% in developed countries). Lack of certain skills that are needed in the private sector Slowness in updating the school books. 50% of the higher education are in non-engineering disciplines
23
23 But, As I said there is a light at the end of the tunnel Thanks
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.