[78], In 2008, the "Initiative for Saudi Agricultural Investment Abroad" was launched, leading to extensive billion-dollar purchases of large tracts of land around the world: Ethiopia, Indonesia, Mali, Senegal, Sudan and others. This aims at opening the real estate market to a wide range of investor. ", "Africa up for grabs, Saudi Arabia takes its share", "Land grabbers: Africa's hidden revolution", "King Abdullah's Initiative for Saudi Agricultural Investment Abroad: A way of enhancing Saudi food security", "What you should know about Saudi investment in African farmland", "KSA Business: Saudi REITs market worth over $2bn in Q1", "Value of Saudi real estate deals drops 24%", "Real Estate Ownership and Investment in Saudi Arabia", "Overview of Saudi Real Estate Laws and Practice", "Knight Frank expands reach with opening of Saudi Arabian office", "Real Estate Investment Traded Funds – REITs", "Cabinet gives go-ahead for businesses to open 24/7 in Saudi Arabia", "New head of foreign trade thanks King for his trust", "Saudi Arabia nominates candidate to head WTO: document", "SAUDI ARABIA –MEASURES CONCERNINGTHE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS", "WTO Urged To Reject Saudi Arabia's Nominee For Director General", "Nigerian, South Korean make last round of WTO chief race – sources", "Kingdom of Saudi Arabia - Member information", "Membership of Key Economies in International Organisations", "The Cooperation Council for the Arab States of The Gulf – Secretariat General", "Longform's Picks of the Week [Will Saudi Arabia Ever Change? The economy of Saudi Arabia is one of the top twenty economies in the world, and the largest economy in the Arab world and the Middle East. These adverse outcomes would be partially offset by the boost to non-oil private sector activity from rising government spending. A report released by the Financial Action Task Force on 24 September 2018, says, "Saudi Arabia is not effectively investigating and prosecuting individuals involved in larger scale or professional [money laundering] activity" and is "not effectively confiscating the proceeds of crime". 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. Ownership of land property in Saudi Arabia is generally restricted to Saudis, but this is subject to certain qualifications. The oil prices have gone up by double since the government began to consider the program in 2015. Almost two-thirds of Saudi nationals work in the public sector, while the private sector continues to struggle to create jobs for locals despite new policies of expat levies and expat-dependent fees aimed at encouraging Saudization. Saudi Arabia sits on approximately 20% of the planet's known oil reserves, and it is this oil that constitutes the bulk of the kingdom's natural … As changes occur at a breakneck pace, the drive towards diversification has been anchored on the kingdom's natural strengths and assets. These include the $27 billion Ras Tanura integrated refinery and petrochemical project, the $9 billion Saudi Kayan[63] petrochemical complex at Jubail Industrial City, and the $10 billion Petro Rabigh refinery upgrade project. Taken as a whole, this means that consumer prices in the GCC overall fell into deflation for the first time since 2000 and are in the steepest period of decline in … Saudi Arabia will chair the G-20 in 2020; this increased global profile is likely to stimulate progress on structural reforms. [87][85] The REITs consist of units representing the ownership of the underlying real estate. [100] On October 7, 2020, Al-Tuwaijri along with other nominees from the UK and Kenya, lost the bid for WTO due to lack of support for their bids, as compared to the nominees from Nigeria and South Korea who qualified for the final round of selection.[101]. [97], In early July 2020, Saudi Arabia announced the nomination of its former Minister of Economy and Saudi royal court adviser, Mohammad Al-Tuwaijri, for the role of WTO’s director-general. source: World Bank. In 2000, 100% foreign-owned businesses were allowed in the kingdom.[45]. Saudi Arabia is the largest economy in the Middle East and the wealthiest Arab country in the region. Officially the Republic of China, participates as ", This page was last edited on 1 December 2020, at 06:41. Non-Saudi nationals are required to obtain a foreign capital investment license from the Saudi Arabian General Investment Authority (SAGIA). The products will include ethylene, propylene, aromatics, polyethylene, ethylene oxide, chlorine derivatives, and glycol. 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. OPEC production cuts and the drone attack against Saudi refinery facilities in 2019 were estimated to bring down GDP growth to 0.3%, against 2.4% in 2018. The country jumped 30 places to rank 62nd in ease of doing business compared to the last year. The 2020 budget will include a deficit of 187 billion riyals. [50], In January 2019 itself the kingdom sold bonds worth $7.5 billion. [citation needed], 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. These firms are "heavily dependent on government spending", which is dependent on oil revenues. Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). She said that while Saudi fiscal policy is more expansionary in 2019, leading to a pick-up in the non-oil sector, overall the OPEC cuts had a downward impact on the Kingdom’s economy. [55], In the fourth plan (1985–90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. [61], In 2019, Financial Times reported that the plans to float state-owned oil beneficiary Saudi Aramco were stranded between the company's attachment to the ministry and the need to meet the International standards. 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. "[116], 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". Firming oil prices and an expansionary budget have resulted in a positive outlook for Saudi Arabia for 2019, with the IMF lifting the Kingdom’s GDP growth prediction for 2019 by 0.5% to … "Saudi reserves are steadily being depleted, and no significant new discoveries have been found to replace them," according to Middle East journalist Karen House. The Gross Domestic Product (GDP) in Saudi Arabia was worth 792.97 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics. Basic petrochemical industries using petroleum byproducts as feedstock were developed. Delay in Aramco's initial public offering further highlights the less urgency in privatization, even though in July 2018, the International Monetary Fund urged to accelerate the process. Together, the three projects will employ more than 150,000 technicians and engineers working around the clock. Development of oil fields continued in Saudi Arabia, managed mainly by Aramco, company formed by the partnership of Texaco and Chevron. [157] Since 2013, the Kingdom has declined in the overall Doing Business rankings, from 22nd to 92nd. Inflation should remain subdued as growth remains below potential. [150][151] The stock market capitalisation of listed companies in Saudi Arabia was valued at $646 billion in 2005 by the World Bank. [160], With a total of 291 foreign investor licenses were issued in the second quarter of 2019, the Kingdom has witnessed an increase in international investment, reflecting the economic reforms under the Saudi Vision 2030. The mid-1980s was also the time that foreign ownership of business was allowed. 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. 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. [46] In the first quarter of 2018, net capital outflows were running at approximately 5% of GDP, compared to less than 2% of GDP in late 2016. Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. The firm also cut down oil pricing for its US buyers following wavering demand for fuel due to global relapse of the coronavirus pandemic. [55], Advertising expenditures have reached new peaks due to emphasis on value-added manufacturing. Saudi Arabia signed 35 economic cooperation agreements with China worth a total of $28bn at a joint investment forum during the visit, according to Saudi Arabia… [60], As Saudi Arabia became a member of the World Trade Organization (WTO)  in 2005, an improvement took place in the overall environment of foreign investment in Saudi Arabia due to many reasons including, the stable economy, the fact that the kingdom has the largest oil reserves worldwide, the high power of expenditure, the good infrastructure system, reinforced finance and a good banking system. The objective was for the private sector to have 70% to 90% ownership in most joint venture enterprises. Moreover, foreign investment has been highly encouraged recently with the announcement of The Saudi vision 2030 as it promises of a better economic diversification. In answer to the question of why the Saudi economy is so dependent on foreign labor, 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. From The Report: Saudi Arabia 2019 A welcome improvement was seen in the Kingdom’s economic fortunes in 2018, with GDP growth of 1.2% in the first quarter marking the first expansion of the national economy after five consecutive quarters of contraction. In 2012, ICT sector spending was recorded at SAR 94 billion, with 13.9% annual growth, and reached approximately SAR 102 billion in 2013, with approximately 14% annual growth. Competing industrialising nations with food security problems in the quest for agricultural land are China, South Korea and India as well as the Gulf States Kuwait, Qatar and the UAE.[79][80][81][82][83]. By 1949 Saudi oil production reached 500,000 barrels per day (bpd), and r… 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. However, the economy of Saudi Arabia is almost entirely based on oil, with GDP growth being closely linked to real oil growth. The private sector became more important, rising to 70% of non-oil GDP by 1987. [75], One obstacle is social resistance to certain types of employment. [130][131], The Saudi state discourages calling attention to or complaining about poverty. [99] The nomination of al-Tuwaijri received criticism from human rights groups in mid-August 2020, demanding the rejection of the Saudi nominee due to the kingdom’s violation of human rights in addition to his silence over it. [citation needed]. In 2016 the Saudi Government launched its Saudi Vision 2030 to reduce the country's dependency on oil and diversify its economic resources. ]", World Population Prospects: The 2010 Revision, "Saudi Arabia's Youth and the Kingdom's Future", "Saudi Arabia needs private sector growth to stem youth unemployment, business leaders say", "Saudi Arabia leads Arab world in patents", "KSA ranks 23rd in number of patents granted by the US Patent and Trademark Office", "Saudi Arabia Granted 664 Patents in 2017; Double of All Arab Countries Combined", "Saudi Arabia Accused of Turning A Blind Eye To International Terrorism Financing By Global Watchdog", "Saudi Arabia has tenth lowest poverty rate worldwide, says World Bank", "Saudi Arabia's riches conceal a growing problem of poverty", "Saudi dissidents turn to YouTube to air their frustrations", "Mal3ob 3alena: Poverty in Saudi Arabia English Version", "A foreign Saudi plot to expose foreign poverty in foreign Saudi", "Poverty Hides Amid Saudi Arabia's Oil Wealth", "Poverty exists in Saudi Arabia too | The Observers", "Saudi film-makers enter second week of detention", "Nearly 50% citizens own houses in Saudi Arabia", "New mortgages to boost home ownership in Saudi Arabia", "Manufacturing booms in Saudi Arabia | Saudi Arabia News", "Rising Oil Prices Are Bad News for Saudi Arabia", "Saudi Arabia's Big Dreams and Easy Living Hit a Wall", "Saudis Reduce Oil Pricing in Sign Demand Recovery Struggling", "Saudi Arabia most improved economy for business", "Saudi Arabia sees most improvement in ease of doing business: World Bank", "Doing Business 2020: Saudi Arabia Accelerated Business Climate Reforms, Joins Ranks of 10 Most Improved", "Special Report: MEED 100 – The Middle East's top 100 listed companies in 2009 | Special Report", "Saudi Arabia issued 5 new foreign investor licenses a day in Q2", "Saudi Aramco to sell billions of dollars in international bonds", "Saudi Aramco plans debt market comeback with multi-tranche bond deal", "Saudi electronic market reaches $3.5 billion", Saudi Arabia Export, Import, Trade Balance, Council of Economic and Development Affairs, Saudi Arabian Monetary Agency (central bank), Organization of the Petroleum Exporting Countries, Trade-Related Aspects of Intellectual Property Rights, Special administrative regions of the People's Republic of China, Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, https://en.wikipedia.org/w/index.php?title=Economy_of_Saudi_Arabia&oldid=991670980, CS1 maint: BOT: original-url status unknown, Articles needing additional references from February 2009, All articles needing additional references, Wikipedia articles needing rewrite from June 2020, Articles with multiple maintenance issues, All Wikipedia articles written in American English, Short description is different from Wikidata, Articles with unsourced statements from September 2017, Articles with unsourced statements from June 2020, Creative Commons Attribution-ShareAlike License, petroleum and petroleum products 90% (2012 est.
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