Great Economic Opportunities in Saudi Arabia.

Discussion in 'Chit Chat' started by SouthAmerica, Jun 15, 2007.

  1. .

    June 15, 2007

    SouthAmerica: On Wednesday, June 13, 2007 I did spend the entire day attending a seminar in New York City regarding the current economic development that is under way in Saudi Arabia.

    I attended the seminar as a guest of the Saudi government, and the seminar was about the 6 industrial cities that the government of Saudi Arabia is in the process of building right now – they are supposed to be state-of-the-art intelligent cities including the latest in all kinds of technologies.

    The Saudi government is trying to diversify their economy and create new jobs for the large amount of young Saudis who will be looking for a job in the near future. (Around 50 percent of the Saudi population is under 20 years old and the unemployment rate is already very high and estimates range from 16 percent and some go as high as 25 percent based on estimates by various sources.)

    The Saudis are estimating that oil prices will have a floor price in the coming years around $50.00 per barrel, and they expect to have a cash flow of at least $ 13 trillion dollars for the period 2007 to 2030.

    And the estimated cash flow from oil for all the Gulf States it is estimated to be around $ 24 trillion dollars for the same time period. In another words, there will be a lot of business opportunities in that area of the world year after year.

    The Saudi government has a large industrial development fund to help bring in foreign investors into Saudi Arabia particularly in the Manufacturing industry, and includes:

    Exemption from customs duties on machinery and equipment for industrial use.

    Soft loans from government lending agencies.

    No personal income tax.

    Full ownership of investment projects by foreign investors.

    Indefinite carrying forward of financial loss.

    20 percent ceiling of corporate income tax from the first profitable year.

    Full repatriation of capital, profits and dividends by foreign investors.

    And much more…..

    Anyone who is interested in getting further information you can get at:

    or at

    Saudi Arabian General Investment Authority (SAGIA)
    SAGIA Unveils Vision for Saudi Arabia to Be in Top 10 Most Competitive Countries by 2010.

    Basically, the Saudi government is trying very hard to provide all kinds of incentives for companies to set up shop in Saudi Arabia and help them create jobs for the Saudi population. And also help them diversify their economy.

    It seems to me that there are lots of opportunities for people to make money in Saudi Arabia in the coming years.

  2. I dont see why unemployment should be that high, when you consider the historical reliance on guest workers and foreign labour capital.
  3. .

    June 15, 2007

    SouthAmerica: Reply to Acronym

    The reality is that Saudi Arabia has a high unemployment rate of Saudi citizens, and at the same time they also have a large percentage of the total labor force that is made up of expatriates - about 55.8 percent of the total labor force are expatriates according to a September 2005 UN report.

    I can't find a reasonable answer for your question, by the way, it does not make sense to me either - high unemployment of local citizens and at the same time extremely high rate of expatriates working legally on the labor force.


    Information about Saudi Arabia from the CIA 2007 Factbook

    Population: 27,601,038
    note: includes 5,576,076 non-nationals (July 2007 est.)

    Age structure:

    0-14 years: 38.2% (male 5,369,285/female 5,162,585)
    15-64 years: 59.4% (male 9,316,694/female 7,089,370)
    65 years and over: 2.4% (male 348,827/female 314,277) (2007 est.)

    Population growth rate: 2.06% (2007 est.)

    Labor force: 7.125 million
    note: more than 35% of the population in the 15-64 age group is non-national (2006 est.)

    Unemployment rate: 13% among Saudi males only (local bank estimate; some estimates range as high as 25%) (2004 est.)

    Public debt: 32.5% of GDP (2006 est.)

    The country remains a leading producer of oil and natural gas and holds approximately 25% of the world's proven oil reserves. The government continues to pursue economic reform and diversification, particularly since Saudi Arabia's accession to the WTO in December 2005, and promotes foreign investment in the kingdom.


    Quoted from the September 2005 UN report.

    Unemployment in Saudi Arabia, the largest GCC country, had increased to about 13% among all males in 2004 and is estimated to be as high as 35% among the youth aged 20-24 (Wall Street Journal, April 1, 2004, pg A1).

    Male unemployment rate went up progressively from 7.6 % in 1999 to 9 % in 2000, 10.5 % in 2001, 11.9 % in 2002 and 12.5 % in 2003 (Arab News, April 15, 2004). The country is also faced with a demographic tidal wave of those 56% aged less than 20 who are expected to enter the labor force in the next two decades, amounting to a total of about 100,000 new jobs required per year ((Arab News (Saudi Arabia), Feb 5, 2004).

    …In Saudi Arabia, millions of dollars are being spent on job-training, technical schools and cash incentives for Saudi companies to hire Saudi citizens. In some cases the government is paying half the salary in order to encourage private sector employers to hire national workers.

    The high price of oil in the last few years has resulted in a budget surplus part of which is earmarked go to the Human Resource Development Fund, which subsidizes the salaries of as many as 30,000 Saudis each year as an incentive for companies to hire them.

    It is also planned that technical and vocational training institutes will build 59 new campuses, doubling the number of annual graduates in fields such as cosmetology, computer programming, meat cutting, and plumbing. Nearly all jobs in the above fields are currently manned by foreigners (The Washington Post, August 31, 2004). In 2004, only about 13 % of the private-sector workforce in Saudi Arabia consisted of nationals even though the goal was to have 45 % nationals composing the private sector. The slow pace of implementation has therefore led to the realization of stricter enforcement of the laws to make room for an ever increasing inflow of youths entering the labor force. Policies similar to the ones in Saudi Arabia are also being implemented in other GCC countries.

    …In Saudi Arabia, 25 occupations designed for phasing out expatriates have been identified, including travel, gold and jewelry shops, grocery stores etc. (Wall Street Journal, April 1, 2004, pg A1). The government is extremely serious in implementing these policies judging from the enforcement raids that are being launched to ensure that the guidelines for employment of Saudis are being followed. In Jeddah, it was found that 60% of the gold shops are owned by expatriates and many remained closed when the law came into effect (Arab News (Saudi Arabia), Feb, 24, 2004).

    … While the intentions for restricting the inflow of foreign workers are clear and unequivocal and policies aimed at achieving this continue to emerge regularly, the recorded effectiveness of such policies presents a mixed picture.

    The Saudi government, for example, typically announces that foreigners can no longer be employed in certain sectors, it stages a few raids (such as on the jewelry shops mentioned above) and then backs off when private businesses complain they cannot operate with only Saudis (Migrant News, December 2005). In the travel sector, for example, Saudi Arabia was looking to achieve 81 percent Saudization in a period of three years starting in April 2004. However, the response of the travel agencies to submit plans for Saudization, or face closure, did not initially produce a good compliance from the travel agencies (Arab News (Saudi Arabia), April 13, 2004).

    Nevertheless, the government is determined to push ahead with a process which it says is the key to delivering jobs to more than 100,000 Saudis joining the labor force every year (gulfnews, March 12, 2004).

    One indicator of the limited effectiveness of policies is the increase in the expatriate population in Saudi Arabia from 5.02 to 5.7 million during 1999 to early 2004 (Arab News, April 15, 2004). The above trend may have started to reverse, however, as claimed by the Minister of Labor at a press conference held on September 8, 2005. According to the Minister, the recruitment of foreign workers in the Kingdom declined by 20.6 % while that of Saudis increased by 16 % in the first half of 2005 compared to the year before (AMN, September 15, 2005).

    SAUDI ARABIA - Labor force: 7,176,000 people
    expatriate = 55.8 %

    Population Division
    Department of Economic and Social Affairs
    United Nations Secretariat
    Mexico City, 31 August – 2 September 2005

  4. .

    “Economic cities to create 1.3m jobs in Saudi Arabia”
    By Mariam Al Hakeem, Staff Reporter
    GulfNews – SA
    Published: 14/06/2007

    Riyadh: New economic cities in Saudi Arabia will create some 1.3 million new jobs, according to Amro Al Dabbagh, governor of the Saudi Arabian General Investment Authority (Sagia).

    Sagia yesterday signed a memorandum of understanding (MoU) with the General Organisation for Technical Education and Vocational Training (Gotevt). The MoU aims at establishing necessary plans to qualify Saudi nationals to work at the projects of the six economic cities in the kingdom.

    "There are promising sectors at the economic cities which need well-trained and qualified cadres and this agreement will enable Saudi youths to take up job opportunities made available by these cities," Al Dabbagh said.

    He said that hiring Saudi women at these cities is open as long as it runs in conformity with Islamic laws. Ali Al Ghofais, Gotevt governor, said that more than 85 per cent of the organisation graduates would be employed by the economic cities.

    Meanwhile, the Saudi Human Resources Development Fund (HRDF) is planning to employ more than 18,000 Saudi women in the private sector and the new economic cities. HRDF has trained thousands of Saudi females through special programmes that qualify them to work in the private sector.

    The programmes were organised in cooperation with private training institutes in more than 15 provinces of the kingdom.

    Hesham Linqawi, the director of HRDF branch in Makkah said in a statement that there is a high turnout of women to join the training programmes set up by the fund. The fund so far has supported the creation of more than 11,0000 jobs in the country.


    "Aramco builds refineries in Saudi"
    Press TV - Mon, 18 Jun 2007

    The state oil company 'Saudi Aramco' will be refining 400,000 barrel per day at its new Ras Tanura plant, to feed the rapidly growing domestic consumption.

    An Aramco spokesman said that the refinery is set to provide the domestic fuel consumption.

    Aramco agreed with France's Total and US ConocoPhillips last year, to build two export-oriented 400,000 bpd refineries in the kingdom. It is not known if Aramco would totally own the new refineries or if foreign or other domestic companies would also be offered a stake.

    Saudi Arabia's fuel consumption is rising rapidly as the economy expands on the back of record revenues from crude exports. The world's largest oil exporter's nominal GDP has roughly doubled since 2001, while oil prices have more than tripled.

    Saudi domestic fuel demand rose over 6 percent last year to over 2 million bpd, according to BP's latest annual statistical review. Saudi Arabia has 5 state refineries and a 50 percent stake in two more that gives it a domestic refining capacity of 2.098 million bpd. Saudi Aramco's share of that capacity is 1.746 million bpd.

    Including the facility at Ras Tanura, Aramco plans to build four new refineries and upgrade the existing plants that could take the kingdom's capacity to around 3.8 million bpd.

    Saudi Arabia has moved quickly to show that it is determined to tackle a worldwide refining crunch that played a part in the 10-month high oil prices on Friday. London Brent crude touched $71.88 a barrel on Friday that is the highest since August 2006.

  5. .

    “Pakistan and Saudi Arabia Enter Nuclear Pact”
    The REAL TRUTH, OH - Jun 15, 2007

    A reliable Pakistani source has informed The Washington Times that the result of a 26-hour state visit to Pakistan by Saudi Crown Prince Abdullah bin Abdulaziz is a “secret” agreement on nuclear cooperation that will provide the Saudis with nuclear weapons in exchange for inexpensive oil. Despite claims to the contrary, the CIA believes Pakistan is already actively involved in the export of its nuclear technology, most recently with North Korea in exchange for missile technology.

    The Pakistani source indicates that both Pakistan and Saudi Arabia believe the world is moving from non-proliferation of nuclear weapons to proliferation. Saudi Arabia, a Sunni Muslim nation, is concerned with Iran's (a Shiite Muslim nation) nuclear capability, and Pakistan is concerned with India's recent military agreement with Israel, a long-time nuclear power with a suspected inventory of 200-400 weapons. In addition, the Saudis, with the absence of American forces in their country for protection, are increasingly concerned about the vulnerability of their oil fields.

    In a recent paper, Simon Henderson, an analyst with the Washington Institute for Near East Policy, stated, “Apart from proliferation concerns, Washington likely harbors more general fears about what would happen if either of the regimes in Riyadh or Islamabad became radically Islamic.”

    Such fears create a giant sink for American money, as the CIA and U.S. State Department will dedicate available resources to try and ensure that those fears do not become a reality.

    Source: The Washington Times

  6. .

    June 26, 2007

    SouthAmerica: Here is a great economic opportunity for people to make money.


    “Saudis seek help to build high-tech cities”
    Malaysia Star, Malaysia – June 26, 2007

    KUALA LUMPUR: Saudi Arabia is developing four economic cities in Riyadh, Jeddah, Hail and Jizan,…

    …"Infrastructure in the kingdom has not changed for the past 25 years ... and now we are going into eGovernment," he said.

    The kingdom has US$3.5bil (RM12.3bil) to spend on the information technology part of the development project, he said.

    The new economic cities will be built from the ground up and will be full driven by ICT (information and communications technology), which will include wireless Internet connections via WiMAX (Worldwide Interoperability for Microwave Access) technology.

    Construction work will begin in September or October, and is expected to be completed in three years….


    “Finnish group to deliver sulphuric acid plants to Saudi Arabia”
    Earth Times - Mon, 25 Jun 2007

    Helsinki - Finnish-based group Outotec said Monday it had signed a deal to deliver three sulphuric acid plants to the Saudi Arabian Mining Company. The project, described as the world's largest sulphuric acid production facility, was estimated to cost 370 million euros (498 million dollars) of which Outotec's share was some 270 million euros.

    The project was to be located at Ras Az Zawr. Daily production from the three plants was estimated at 13,500 tons when the plants become operational in 2010, the group said.

    The production would be used by the Saudi Arabian Mining Company to manufacture phosphate-based fertilizer.

    Outotec chief executive Tapani Jarvinen said the deal showed the "Middle East's growing importance in large chemical and metallurgical plant investments due to the availability of competitive energy and robust financial structures."


    HELSINKI (Thomson Financial) - Outotec said it has won an order to supply what will be the world's largest sulphuric acid production facility to Saudi firm Ma'aden.

    Ma'aden is investing some 370 mln eur in the project, with contracts worth 270 mln going to Outotec.

    The Finnish firm confirmed to Thomson Financial News in May it had secured a deal with Ma'aden.

    The complex, comprising three plants, is to be built in the Ras al-Zour area on the east coast of Saudi Arabia and will produce some 13,500 tonnes per day of sulphuric acid when it comes onstream in 2010.

    Outotec has chosen an unnamed construction firm to carry out the local portion of the work under a separate contract.


    “Saudi Arabia: Six Consortia Allowed to Bid for Rail Project”
    By Faiz Al-Mazrouei
    Arab News – June 25, 2007

    DAMMAM, 25 June 2007 – The Saudi Railway Organization (SRO) declared that six consortia, out of seven, which applied for the construction of the railway project to link the two holy cities of Makkah and Madinah are eligible to compete for the contract, a statement from the steering committee of the Saudi Railway’s expansion projects said yesterday.

    The approved consortia are the Al-Rajhi Consortium, the Saudi Binladin Group, the Saudi Oger, the Saudi Japanese Consortium, Al-Sholah Consortium and the OHL International, the statement said. The SRO issued the approval after receiving a technical report on these consortia from the UBS Bank, National Commercial Bank and the French firm SNCFI.

    Transport Minister Dr. Jabara Al-Seraisry, chairman of SRO, said in a press meeting in Dammam yesterday that the six qualified consortia had submitted their applications sufficiently in advance supplying all the details about the expertise and financial position of the companies that comprised their consortia.

    "These consortia will be invited to submit their tenders in a few months," Al-Seraisry said. The tenders will be evaluated on the basis of their technical preparedness and the financial strength to undertake the work fulfilling international specifications. Only the tenders that fulfill the technical specifications will be considered for the final work tender, the minister said.

    The SRO is seeking a technically advanced transportation solution for the Haj and Umrah pilgrims traveling between Makkah and Madinah, which is economic to construct, easy to maintain and at the same time meets the requirements of passenger comfort, safety and environment.

    The proposed railway is intended to transport the majority of more than 3 million pilgrims during Hajj period between the Holy Cities of Makkah and Madinah, apart from the Umrah pilgrims and visitors in other months. The Kingdom's railway organization has sought tenders from national and international companies to build the 444-km Makkah-Madinah rail link via Jeddah. The rail link, as reported, is meant exclusively for the passenger transportation and will not be used to carry cargo. In addition to the Makkah-Madinah line, the SRO is considering a rail project to link the holy sites of Mina and Arafat with Makkah.

  7. I started reading that and then dozed off mid way thru.. J k.!!
  8. .

    RyanHall: I started reading that and then dozed off mid way thru..


    June 26, 2007

    SouthAmerica: These postings are about the old way of making money - you actually had to build, produce, or create something - then you made some money.

  9. .

    “Saudi economy loses $16b in investments”
    30 June 2007
    Khaleej Times – United Arab Emirates

    JEDDAH — Saudi economy loses SR60 billion ($16 billion) in investments and more than 120,000 jobs annually as a result of bureaucratic practices in addition to other reasons that obstruct the implementation of vital projects, according to a senior official at Saudi Arabian General Investment Authority (SAGIA).

    "The main challenges facing investors are the nature of regulations and the internal procedures in addition to a lack of infrastructure," explained Dr Awad bin Saleh Al Awad, deputy governor of SAGIA.

    He claimed that Saudi Arabia would soon achieve10th position among world countries in terms of economic competitiveness. "SAGIA will not accept less than the 30th position this year in terms of economic competitiveness and we expect the kingdom will reach the 10th position by 2010," he said. At present the kingdom is in 38th position.

    He said that with the support of government departments, the kingdom could become a major attraction for foreign investments. He added that a lack of infrastructure in sectors such as transportation and the decline in private sector productivity were some of the major challenges facing the kingdom.

    "In advanced countries, individual productivity is $40,000 to $45,000 annually while in the Kingdom, it is between $18,000 and $20,000," he said.

    Al Awad said that representatives of SAGIA's overseas offices were making tremendous efforts to promote investments in the kingdom as the best place for investment in the Middle East.

    Recently a SAGIA delegation visited the United States offering investment opportunities worth more than $500 billion to American investors.

    Saudi Arabia has launched four mega-economic cities in Rabigh, Hail, Madinah and Jizan during the past two years and the four are expected to attract SR300 billion in domestic and foreign investments and also to create more than a million jobs.

    Al Awad stressed the need for the authorities to make continuous evaluations of the kingdom's investment environment. "The efforts made by the government to overcome investment challenges will remain weak and ineffective unless they continue on a regular and ongoing basis," he stressed.

    Saudi Arabia has many advantages in strategic sectors at regional and global levels which make it attractive for international investments. The kingdom is ranked first regarding prices of energy provided for investment projects. Investments in the kingdom realise high profit ratios for local, foreign and shared projects with low risk exposures, and a simple form of tax and property registration fees.

    Business performance reports 2006-07 issued by the World Bank show Saudi Arabia occupying fifth position regarding taxes and fourth in property registration costs. According to a study published by Forbes Arabia magazine assessing the performance of 1,616 joint stock companies in the Arab world last year, the first three positions were held by Saudi companies and among the top 50 companies, 22 were Saudi.

    Saudi Arabia has made rapid strides in banking services and Saudi banks figure on the list of the world's biggest 1,000 banks. The three biggest banks in the Arab world are Saudi.

    Saudi Arabia, which holds a quarter of the world's oil reserves, is the biggest free economic market in the Middle East, with 25 per cent of gross national Arab product that exceeds $300 billion.

  10. .

    “$2bn Saudi bank set to promote tourism”
    Gulf Daily News – Bahrain - July 9, 2007

    JEDDAH: A $2-billion bank has been set up in Saudi Arabia to promote regional tourism projects.

    An agreement for the establishment of The Arab Tourism Bank was signed on July 4 at Hilton Hotel in Jeddah between the local Arab Tourism Organisation and Siraj Capital of Lebanon.

    The ceremony was attended by Prince Sultan Bin Salman Bin Abdul Aziz, the secretary general for the Supreme Commission for Tourism in Saudi Arabia, and Joseph Sarkis, Lebanon's Minister of Tourism.

    The two firms will carry out market and feasibility studies, financial and regulatory structuring work and the preparation of a private placement memorandum for the bank's initial paid up capital.

    "Siraj will lead this initiative in partnership with Osus Company to identify the most appropriate model for the operation of the bank based on similar international existing models and to locate the strategic partners that would add the most value to the bank at its inception and later once it becomes operational," chairman of Siraj Capital Dr Ghassan Al Sulaiman said.

    "The results of recent research and studies have underlined the importance of the establishment of The Arab Tourism Bank as a central focus point for supporting the development of the tourism sector throughout the Arab countries, where tourism is one of the fastest growing sectors," president of the Arab Tourism Organisation, Bandar Fahed Al Fehaid said.

    The tourism investment bank will be capitalised at $2 billion and serve all Arab countries. Siraj and its partners will set up investment funds focusing on specific tourism sectors such as hotels, travel services, restaurants, sports tourism, entertainment and touristic venues, and health and religious tourism.

    #10     Jul 9, 2007