KINGDOM OF SAUDI ARABIA
ARRIYADH DEVELOPMENT AUTHORITY
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Co-sponsored this report
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Thanks be to Allah, the Almighty, our blessed country is enjoying prosperity and infinite
blessings. Security and stability in all domains prevail throughout the country and
these nurture continued political, intellectual, social and economic development. Such
remarkable development and economic stability, themselves essential pillars of our
country’s stability, can only be achieved in conditions of security.
The prosperity and growth witnessed by the economic sectors in the Kingdom of
Saudi Arabia are reflected in the various economic activities in the prosperous city
of Arriyadh. Allah willing, the many strategic factors provide it with strength and the
ability to absorb economic shocks occurring in a fluctuating world economy. At the
same time, they provide the capacity to seize opportunities as well as to open doors
to new horizons, latest technologies and resources that can be added to the economic
inventory of Arriyadh City.
Most prominent of these strategic components, for all cities in the Kingdom and for
Arriyadh City in particular, are the abundance of strategic resources that Allah has
bestowed on this blessed region. The diversity of fields of economic development
in Arriyadh City includes all sectors: service, commercial, industrial and agricultural
activities and endeavors. All these fields compete in the promotion of the city’s economy,
and are themselves promising investment areas that are based on feasibility, availability
of resources, abundant financial resources, the growing demand of the market and the
overall stability and security of future economic indicators.
State investment in the constituent projects, society building and rehabilitation are
essential to the city’s economy. These contribute an essential long-term strategic
advantage of integrated, comprehensive development and focus on human resource
development in terms of modern requirements. They all represent important elements
for Arriyadh’s development and simultaneously seek to strengthen and improve the
city’s future economic environment and add to economic feasibility and thus investment
attractiveness.
All institutions involved in the development of Arriyadh’s economy and its management
need to be mindful and aware of the search for new economic areas and opportunities
as well as the continued development of existing ones to compete in all fields with
other world economies. At the same time, they need to take into account changing
circumstances, emerging opportunities and continue to focus on the real and meaningful
elements of renaissance for the good of the country and our beloved citizens.
H.R.H. Prince Salman Bin Abdulaziz
Chairman, High Commission for the Development of Arriyadh
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The city of Arriyadh is like a basket that is filled with economic blessings and viable investment
opportunities. This is a blessing from Allah. The many development programs witnessed in
the city are supported by a number of privileges and rich resources that help regularly renew
its attractiveness despite the changing global economic conditions.
The steady growth of the city’s population and the nature of the population that features such
qualitative characteristics as academic qualifications, income levels and the demographic
preponderance of youth provide a strategic hub upon which many significant economic
sectors depend. These provide and replenish opportunities and stimulate investments
that meet the population needs for high quality housing, transportation and facilities and
the needs for services, education, health and other necessities of life. Furthermore, it is an
effective incubator for investments and provision of future needs, as well as a main pillar for
the growth of the economy, which in turn needs an abundance of qualified personnel for the
many and versatile economic sectors.
Arriyadh enjoys many privileges: the city is strategically located at the center of the
administrative regions of the country, is endowed with rich agricultural lands and areas of
mineral wealth, is a hub of transportation networks and the headquarters of government.
And in addition to what Allah has bestowed by way of natural resources, it still possesses
enormous potential which can provide the city with significant economic advantages and
attract diverse strategic projects. Strategic projects adopted by the Government of the
Custodian of the Two Holy Mosques – may Allah support him in the Eighth Development Plan
– play a pivotal role in developing the city’s economy. The strategy is based on comprehensive
and balanced development throughout all regions and cities in the Kingdom, as well as the
completion of infrastructure projects. It focuses on the comprehensive development of the
individual, applied technology, varied resources and strategic investment projects. This will
have a positive impact on the future economic capacity of Arriyadh. It will provide the city
with opportunities to specialize in economic fields that contribute to providing the city with
the underlying capacity of qualitative strategic projects.
It is with Allah’s help that future strategic needs for the urban development of Arriyadh,
such as public transport, new suburbs, environmental development, sub-centers, and the
organization of land use will take all economic factors into consideration. All these projects
constitute a broad area of investment opportunities that are based on sound investment
rules and attractive returns that will renovate available resources and provide for new future
roles that will in turn result in varied and significant development benefits.
H.E. Abdullatif Bin Abdulmalik Alshaikh
Member of the High Commission for the Development of Arriyadh
President of Arriyadh Development Authority
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Contents
This Report.
13
Kingdom of Saudi Arabia: General Information.
16
Arriyadh City: Ongoing and Promising Investment Opportunities
19
Theme One: Arriyadh City: General Features
20
Theme Two: Infrastructure in Arriyadh City
24
Roads and Communications
24
Airports
24
Ports and Railroads
24
Communications and Information Technology
25
Post
25
Electricity
26
Water and Sanitary Waste
26
Theme Three: Economic and Service Sectors in Arriyadh City
28
Industrial Sector
28
Agricultural Sector
28
Trade Sector
30
Construction (Contracting) Sector
31
Real Estate Sector
32
Insurance Service Sector
32
Education Sector
33
Tourism Sector
34
Health Sector
36
Financial and Banking Services Sector
37
Communication and Information Technology Sector
37
Theme Four: The Role of the High Commission for the Development of Arriyadh in
Developing the City
39
Introduction to the High commission for the Development of Arriyadh
39
The Comprehensive Strategic Plan for the City of Arriyadh
39
Theme Five: Riyadh Chamber of Commerce and Industry and Enhancement of
Investment Climate
44
8
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Kingdom of Saudi Arabia and Enhancement of the Investment Climate
47
Theme One: Economic Indicators of the Kingdom of Saudi Arabia
48
State Budget
48
Gross Domestic Product
49
Balance of Payments
49
Foreign Trade
50
Cost of Living Index
50
Wholesale Price Index
51
Per Capita Income
51
Labor Market Structure
51
Transport Infrastructure and Communication
52
Major Producing Sectors
53
Performance and Future Outlook of the Saudi Economy
53
Theme Two: Policies and Measures Supporting Investment In the Kingdom of Saudi Arabia
56
Economic Activities Planned for Privatization
56
Economic Freedom and Enhancement of Investment Climate
56
The Kingdom and the World Trade Organization
59
Saudi Capital Market
62
Real Estate Investment and Companies
67
Development of the Banking System
68
The Economic Cities
70
Theme Three: Finance Services and Credit Funds in the Kingdom
72
Labor Law
72
Foreign Investment Law
72
Capital Market Law
73
Corporate Law
73
Commercial Register Law
75
Trade Agencies Law
75
Trade Marks Law
75
Customs Law
75
Income Tax Law
76
Measures and Weights Law
76
Insurance Law
76
9
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Contents
Social Insurance Law
76
General Environmental Law
77
Theme Four: High and Major Authorities Related to Investment in the Kingdom
78
The Supreme Economic Council
78
The Supreme Council for Petroleum and Minerals
78
Saudi Arabian General Investment Authority (SAGIA)
80
Saudi Commission for Tourism and Antiquities
80
Capital Market Authority
82
Communications and Information Technology Commission
83
Royal Commission for Jubail and Yanbu
84
Saudi Organization for Industrial Estates and Technology Zones
85
Saudi Aramco
86
Saudi Basic Industries Corporation (SABIC)
89
Saudi Arabian Mining Company (MAA’DEN)
90
Saudi Ports Authority
91
Theme Five: Finance Services and Credit Funds in the Kingdom of Saudi Arabia
93
Saudi Industrial Development Fund
93
Real Estate Development Fund
93
Public Investment Fund
95
Saudi Fund for Development
95
Saudi Arabian Agriculture Bank
96
Saudi Credit Bank
98
Human Resources Development Fund
99
The Centennial Fund
100
Commercial Banks and Banking Finance
101
Theme Six: The Eighth Development Plan and the Investment Outlook in the Kingdom of
Saudi Arabia
102
General Objectives and Strategic Bases of the Eighth Development Plan
103
The Eighth Development Plan and the Economic Policy
105
The Eighth Development Plan and Private Sector Investment
105
The Eighth Development Plan and Investment Requirements
105
10
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Investment Opportunities in Arriyadh City
109
Theme One: Investment Opportunities Provided by Other Government Authorities
and Agencies
110
Investment Opportunities Issuing from Government and Other Agencies
110
Investment Opportunities of Riyadh Chamber of Commerce and Industry
118
Theme Two: Investment Opportunities in the Various Economic and Service Sectors
120
Industrial Investment Opportunities in Arriyadh City
120
Commercial Investment Opportunities in Arriyadh City
120
Real Estate Investment Opportunities in Arriyadh City
121
Educational Investment Opportunities in Arriyadh City
122
Health Investment Opportunities in Arriyadh City
123
Personal Services Investment Opportunities in Arriyadh City
124
Statistical Tables
129
Websites of Some Public Agencies and Private Companies
142
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This Report
This edition of investment climate in Arriyadh City is published by the Arriyadh Development
Authority to provide local and foreign businessmen and investors with guidelines and information on
policies and procedures, responsible agencies, and the range of investment opportunities available
in Arriyadh City.
The 2009 edition comprises four parts.
Part One provides background information on the Kingdom of Saudi Arabia.
Part Two presents background information on Arriyadh City, including infrastructure, economic
and service sectors, and the role of Arriyadh Development Authority in the economic development
of the City.
Part Three discusses economic indicators for the Kingdom of Saudi Arabia, and policies and
procedures at the national and local levels that enhance investment climate and promote
investment opportunities, including the recent Labor, Foreign Investment and Capital Market rules
and regulations. Further, this part covers government agencies in the investment domain in the
Kingdom and Arriyadh City, such as the Supreme Economic Council, Supreme Council for Petroleum
and Minerals, Saudi Arabian General Investment Authority, Saudi Commission for Tourism and
Antiquities, Telecommunication and Information Technology Commission, etc., and also includes
the agencies which provide funding and investment support, such as Saudi Industrial Development
Fund, Real Estate Development Fund, Saudi Fund for Development, Public Investment Fund as well as
commercial banks. In addition, this part covers the investment outlook for the Kingdom, the Eighth
Development Plan and the proposed investment opportunities covered by this plan.
Part Four handles investment opportunities in Arriyadh City which are provided by various public
agencies such as Arriyadh Development Authority, Saudi Commission for Tourism and Antiquities
and other agencies. Further, it includes information on investment opportunities in various private
economic and service sectors.
The INVESTMENT CLIMATE Report concludes with various statistical tables that review the essential
economic, service and social indicators in the Kingdom in general and Arriyadh City in particular
accompanied by a list of websites and other useful information on the most important public and
private sector organizations involved in investment, administrative and legal procedures activities
in Arriyadh City.
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Annual Report 2009 (Eng) .indd 14
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KINGDOM OF SAUDI ARABIA
GENERAL INFORMATION
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The High Commission for the Development of Arriyadh
10.
11.
World Bank
International Monetary Fund
Administrative Regions (Provinces)
The Kingdom consists of 13 administrative provinces.
Each province consists of a number of governorates.
The total number of governorates in the Kingdom
amounts to 43 class A and 61 class B.
Capital: Arriyadh City
Main Cities: Makkah, Madinah, Jeddah, Dammam,
and Taif
Religion: Islam
Official Language: Arabic
Geographic Features
Kingdom of Saudi Arabia: General Information
The Kingdom of Saudi Arabia is an Arab Islamic
countr y, applying Islamic Sharia law in its
judicial system. The constitution of the Kingdom
is based on the Holy Qur’an and the Sunna of
the Prophet (peace be upon him).
The political system is based on absolute
monarchy. The executive and legislative powers are
exercised by the King and the Council of Ministers
in accordance with the teachings of Islam. The
Consultative Council was established to provide
advice to the King and the Council of Ministers
in matters of relevance to the Government and
its policies. Regional Municipal Councils (of
whom half are elected) were also established to
participate in the decision making process.
The King of the Kingdom and Prime Minister:
The Custodian of the Two Holy Mosques, King
Abdullah bin Abdulaziz Al-Saud.
Membership in International Economic and
Trade Organizations
The Kingdom of Saudi Arabia is a member of many
trade, economic and international organizations,
such as:
1.
Organization of Islamic Conference
2.
Arab League
3.
Gulf Cooperation Council
4.
Islamic Development Bank
5.
United Nations
6.
World Trade Organization
7.
Arab Monetary Fund
8.
Arab Investment Guarantee Corporation
9.
Greater Arab Free Trade Organization
Location: The Kingdom of Saudi Arabia lies in the
southernmost part of western Asia. It is bordered by
the Red Sea on the west; the Arabian Gulf, the United
Arab Emirates and Qatar on the east; Kuwait, Iraq
and Jordan on the north and Yemen and Sultanate
of Oman on the south.
Area: The Kingdom occupies about 80% of the
Arabian Peninsula, with a total land area of around
2,250,000 sq km.
Terrain: There are various types of terrain in the
Kingdom resulting from its vast geographical area.
In the west is a narrow coastal plain paralleled by
a mountainous chain sloping eastwards to the
Arabian Gulf. There are also the Empty Quarter and
Annufoud Deserts, which occupy the south-eastern
and northern parts of the Kingdom respectively.
Climate: The climate of the Kingdom varies from
region to region, depending on the type of terrain. In
general, it is continental, i.e. hot during summer and
cold during the winter, with a low level of rainfall.
However, the climate is moderate in the western and
south-western highlands. In the central region, the
climate is dry and hot in summer and dry and cold in
winter. The coastal areas are generally characterized
by high degrees of humidity.
Working Hours
- Government Sector: 7:30 a.m. to 2:30 p.m.
- Banking Sector: 9:30 a.m. to 4: 30 p.m. (Saturday
to Wednesday)
- Private Sector: Varies, depending on company and location.
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Foreign Exchange Control
Besides the weekends (Thursdays and Fridays),
the following official holidays are customary:
- Eid Al-Fitr: 25th of Ramadan to 5th of Shawal*
- Eid Al-Adha: 5th to 15th of Dhil Hijja*
- National Day: 23rd of September
There is no restriction on currency transfer in
or out the Kingdom. The exchange rate of the
Saudi Riyal is SR 3.75 = 1 US Dollar.
Measures and Weights
Official Time
The Kingdom adopts the metric system in
measures and kilograms in weights.
The Kingdom’s official local time is three hours
ahead of Greenwich Mean Time.
Power Voltage
Both 110 and 220 Volts are used.
Currency
The currency unit of the Kingdom is the Saudi
Riyal, which is divided into 100 Halalas. The
main banknote denominations are: 1 riyal, 5
riyals, 10 riyals, 20 riyals, 50 riyals, 100 riyals,
200 riyals and 500 riyals. With main coinage
denominations are: 1 riyal, 50 Halalas, 25
Halalas, 10 and 5 Halalas.
Custom duty on most imported items is 5%.
International Telephone Code
+ 966 + Area Code (Arriyadh 1, Jeddah 2, and
Dammam, Dhahran and Al Khobar 3).
Investment Climate in Arriyadh 2009
Official Holidays
Population According to 2007 Population Survey
Total Population
23.98 million
Population Growth Rate
2.3%
Distribution by Gender
Male
13.31 million
(55.5%)
Female 10.67 million
(44.5 %)
17.49 million
(73%)
6.49 million
(27%)
Distribution by Nationality
Saudi Non-Saudi
Distribution by Age Groups
14 years and below
32.5%
15 – 64 years
64.7%
65 +
2.8%
Percentage of Support
69%
Distribution of Population by Provinces
Arriyadh City
5.8 million
Makkah
6.1 million
Eastern Province
3.5 million
Asir
1.7 million
Madinah
1.6 million
Others
5.2 million
(*) Duration of holidays in the private sector varies from one firm to another.
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ARRIYADH CITY
CONTINUOUS DEVELOPMENT AND
PROMISING INVESTMENT OPPORTUNITIES
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The High Commission for the Development of Arriyadh
Theme One:
Arriyadh City: General Features
History of Arriyadh (1)
Arriyadh is the plural of the Arabic word ‘rawdah’,
which means ‘garden’ or ‘meadow’. The city might
have taken this name since it was one of the few
green areas amid the desert. Historians indicate
that it was a vast area with numerous farms and
water springs. The City has risen on the ruins of the
ancient city (Hajar) atop the highlands rising either
side of the small basin formed by the Wadi Watr
(Bathaa), a tributary of Wadi Hanifa. The name
‘Arriyadh’ was first used about 300 years ago.
Economically, trade and animal grazing acquired
special importance in Najd Highlands, in the centre
of which Arriyadh City is located. The City used to
be a commercial center linking east-west and northsouth areas of the Arabian Peninsula. Politically,
Arriyadh City played a prominent role in the history
of Najd. It was the capital of the area during the era
of Imam Turki Bin Abdullah, during the rise of the
second Saudi State in the early 1800s. Arriyadh City
regained its glory when it was recaptured by the late
King Abdulaziz on January 15, 1902.
Location
Arriyadh lies within Latitude 38.24°N and
Longitude 43.46° E and is about 600 meters above
sea level. It is strategically located in the heart of
the Kingdom and Arabian Peninsula, and which is
itself situated in the east of the Arabian Pensinsula
at a the major crossroads of the continents of the
world.
Area
Within a mere half-century, Arriyadh City was
transformed from a small village surrounded by
walls into a modern city. The two developed areas
of Arriyadh City are about 1.782 sq km – larger
than most countries and, for example, three times
the size of Singapore. The first developed area
covers about 632 sq km, the second covers about
1.150 sq km, and the recently developed area
amounts to 950 sq km. This expansion of beyond
its walls has resulted in Arriyadh City becoming
20
(1) Arriyadh City website www.arriyadh.com.
(2) Ibid.
(3) See Arriyadh Development Authority website www.ada.gov.sa.
(4) Ibid.
(5) Population and Housing features in the Kingdom of Saudi Arabia
according to population survey (2007) Ministry of Economy and Planning,
Central Department of Statistics.
Annual Report 2009 (Eng) .indd 20
one of the three largest metropolitan areas in the
Kingdom, together with Makkah and Jeddah and
the conurbation of Dhahran, Dammam and Al
Khobar in the Eastern Region(2). The City includes
13 municipalities in addition to Dereya District, as
well as 209 quarters (3).
Climate
The Arriyadh climate is marked by extremes of
temperature, with low humidity throughout
the year, particularly in the summer season. The
temperature varies greatly between night and
day. In summer, the highest average temperature
ranges between 40oC - 43oC. Humidity ranges from
10% to 13%. In winter it is cold, with the highest
temperature ranging between 20oC and 28oC, and
the lowest between 8oC and 14oC. The temperature
occasionally declines to -2oC, while the humidity
ranges between 40% and 49%. Rainfall ranges from
10 cm to 13.1 cm (approximately four inches)(4).
Composition of Population
According to the Department of Statistics and
Information, the Kingdom’s population reached
23.98 million in 2007, comprising 17.5 million
Saudi nationals (73%) and 6.5 million non-Saudi
(27%) (5).
Arriyadh City is one of the world’s fastest growing
cities, and its population has risen steadily at a rate
of 4.2% during the period 1990 to 2004(6),
In the early 1950s the population of the City was
no more than 100,000, mostly of common heritage
and following a pattern of life characterized by
unified activities, but it now accommodates over 4.6
million people from more than 50 different cultures,
languages and interests (7).
The increase in population has been responsible
for the growth of other sectors that seek to meet
people’s needs. From an annual increase of 8% in
the mid-20th century, since the 1980s population
growth has doubled to 16%, with a consequent
change to the way of life(8).
According to a population survey for 2007 carried out
by Arriyadh Development Authority, the population
of Arriyadh City stood at 4.6 million compared with
only 3.1 million in 2006. A similar survey in the same
year showed the population of Saudi Arabia at three
million – 1.7 million male and 1.3 million female. The
non-Saudi population is made up about 1.5 million,
one million male and half a million female(9).
(6) Arriyadh Development Authority, Arriyadh City population estimates 2004-24.
(7) Arriyadh Development Authority website www.ada.gov.sa.
(8) Ibid.
(9) Arriyadh City website www.arriyadh.com.
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Number of Population
4,622,421
Illiteracy Rate
Housing Rate of Growth
4.20%
Population Density
Immigration Rate
1.20%
Average Family Members
8%
1,686 individual/km2
6.3
Males
56%
Labor Force
Females
44%
Rate of Home Ownership
56%
Saudis
67%
Number of Housing Units
748,000
Non-Saudis
33%
The Rate of Vacant Units
6%
Population under 15
34%
Number of Cars per Family
Saudi Middle Age
Enrollment in Various Education
Stages (6-22) years
18
92%
Number of Traffic Trips
Average Trip Time/Minute
1,692,925
1.72
6 million trips/day
Investment Climate in Arriyadh 2009
Urban Indicators of Arriyadh City (1)
19
(1) Arriyadh City website www.arriyadh.com.
21
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The High Commission for the Development of Arriyadh
Population Pyramid (1)
Young people make up the majority of the
Arriyadh City population. Those below 15 years
of age constitutes about 34% of the total, as
shown below, thus the base of the pyramid is
wide due to the growing number of youth.
This will lead to an increased labor force in the
future, and necessitate economic programs and
projects in order to increase job opportunities.
The Saudi population as a whole is typically
younger compared to other countries. The
under-15s make up 40% for Saudis and 23% for
non-Saudis (as shown below).
Saudi Population Pyramid
75+
74-70
69-65
64-60
59-55
54-50
49-45
44-40
39-35
34-30
29-25
24-20
19-15
14-10
09-05
04-00
Female
Male
300000
200000
100000
0
100000
200000
300000
Non- Saudi Population Pyramid
75+
74-70
69-65
64-60
59-55
54-50
49-45
44-40
39-35
34-30
29-25
24-20
19-15
14-10
09-05
04-00
Female
Male
150000
100000
50000
0
50000
100000
150000
22
Gender
Saudi residents of Arriyadh City have high fertility
rates and produce roughly equivalent numbers
of male and female offspring (2 million and 1.97
million respectively (2)). In contrast, the ratio of
male to female non-Saudis is approximately
three to one. The distribution and classification
of non-Saudis with respect to age and gender
is explained by the fact that the majority of
expatriates are in the country to work.
Households
There are two types of households in the
Arriyadh region: the nuclear family, consisting
of one couple and their children, and the
extended family, consisting of married couples
and their relatives. The changing pattern of
Saudi households shows an increase in numbers
of nuclear families – 75% in 2004, compared
to 67% in 1996. The percentage of extended
family reached 21% in 2004.(3) According to the
population survey of 2007 (4), the number of
residences reached 1.02 million private houses,
villas and flats, the majority of flats (368,000)
being occupied by non-Saudi residents.
The number of residences occupied by Saudi families
in the Arriyadh region reached approximately
657,162 out of a total of 1.02 million, divided
between private houses, villas, and flats within villas
or other flats. The total of residences occupied by
Saudis reached 657,162, of which 269,979 were
villas. The home ownership rate stood at 56%.(5)
(1) See Arriyadh City website www.arriyadh.com
(2) CDSI, Central Department of Statistics and Information, Statistical Yearbook, Issue 40, 2004.
(3) Arriyadh Development Authority, population study of Arriyadh City, 2004.
(4)Housing and population features in the Kingdom of Saudi Arabia according to population survey (2007).
(5) Ibid.
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Labor Force
In 2007, a healthy growth in employment
was noticed in the Kingdom, reaching 3.2%,
compared to 2.1% in the previous year. There
were 7.5 million laborers in 2006 and 7.8 million
in 2007, 95.4 % of the potential labor force. The
growth of local employment by 4.5% played a
part in increasing national employment figures
in the government sector, which reached 10.4%
(969,200 workers) in 2007, compared to 878,000
in the previous year. In the private sector, local
employment increased from 2,554,000 in 2006
to 2,616,000 in 2007, an average growth rate of
2.4%, while the foreign employment rate was
only 2%.
This progress led to local employment reaching
3.6 million workers in 2007 compared to
3.4 million in the previous year, reflecting
the importance of local labor in the overall
employment structure. (1)
In Arriyadh City (2), the total labor force aged
over 15 reached 2.1 million of whom 1.9 million
were male and 373,000 were female. The
unemployment figure stood at approximately
1.74 million – 507,000 male and 1.24 million
female
The overall number of Saudi employees aged
over 15 reached 996,300 in 2007, 832,000 male
and 164,000 female, while unemployed Saudis
of 15 and over reached 15 million males and
451,000 females.
Unemployed residents of Arriyadh are generally
dependents, retired or financially independent.
Of unemployed residents 688,000 are students.
The breakdown of Saudi nationals in Arriyadh
City by career, of a total of 2.1 million employees,
show, only 661,000 working in the service sector,
459,000 in the main engineering professions
and approximately 215,000 as technicians in
human, artistic and scientific fields, whereas
211,000 are salespersons and the rest either
managers, businessmen, or those employed in
agriculture, livestock and fish breeding, or other
chemical or industrial jobs.
Cost of Living
In 2007, the general cost of living index for the
Kingdom, including Arriyadh City, increased by
4.1% compared to 2.2 % in the previous year –
from 101.8 in 2006 to 106.0 in 2007. Most of the
increases were in the categories of rent, water,
restoration works (8.1%), food and beverages
(7%), other goods and services (5.3%), and
medical care (4.2%). In contrast, the average
price of clothing and footwear, transportation
and telecommunications decreased to 2.4% and
0.9% respectively. Education and luxury items
remained at the same level of the previous year,
at an average of 0.2%.(3)
(1) SAMA, 44th Annual Report, 2008, p 28.
(2) Ministry of Economy & Planning, Central Department of Statistics, labor force bulletin, 2007.
(3) Ministry of Economy & Planning, Economic bulletin,2007
Annual Report 2009 (Eng) .indd 23
Investment Climate in Arriyadh 2009
The number of Saudi families in Arriyadh Region
reached approximately 657,000, most living in
residences with between four and six rooms.
The average number for each family is 6.3
individuals.
Inflation Growth and Its Related Causal Factors
25
20
15
10
5
0
2004
2005
2006
2007
Inflation Ratio.
The Percentage of Commodity imports of the GDP
(gross domestic product).
Domestic Liquidity growth.
23
12/21/09 8:48:56 AM
The High Commission for the Development of Arriyadh
24
Theme Two:
Infrastructure in Arriyadh City
Roads and Communications
The Arriyadh Development Authority has
developed a strategy for the development of
the transport system within the framework of
the City’s comprehensive strategic plan. This
strategy encompasses several elements, including
upgrading and extending the road network
and establishing priorities to meet existing and
anticipated transport requirements. The total
length of main roads reached 320 km, with 500
km of main arteries. The number of main crossings
reached 44, while the number of highway
interchanges reached 54. Many elements of the
road network were implemented during the First
Five-Year Plan at a total cost of SR 2.6 billion. Work
has started on the Second Five-Year Plan. It will
include the implementation and improvement of
28 main roads during the period 2007-12(1).
Traffic studies have unsurprisingly revaealed that
traffic movement in Arriyadh City is increasing
to keep pace with the growing population. The
number of daily car trips reached six million (with
an average duration of 19 minutes) compared to
five million daily trips in 2006 and approximately
one million in 1987. In 2007, urban indicators
estimated an average ownership of 1.72 cars for
each family(2).
Increases are attributed to the rapid population
growth, rising income levels and modern
society’s requirement for mobility. The road
network is being constantly developed and
improved to meet the needs of the City, using
modern technology to achieve high levels of
safety.
Arriyadh City is linked to various parts of the
Kingdom via a network of expressways, putting
Arriyadh at the center of land transportation.
The Arriyadh Development Authority’s
comprehensive strategy (3) aims to apply a
comprehensive and integrated plan to develop
the transport system in the City, a strategy with
looks 20 years ahead.
There are 28 elements to the Second Five-Year
Plan, the most outstanding being: implementing
roads network inside Arriyadh’s old airport,
developing Prince Salman bin Abdulaziz
road, developing Alolayya Street, Al Bathaa
Street, Takhasosi Street, King Abdulaziz Road,
finishing the second Ring Road and studying
the implementation of the third Ring Road. The
Plan aims to end the current congestion on the
roads.
Thanks to the building boom in Arriyadh, the
City achieved four awards from international
bodies. These awards recognize excellence
in environmental improvement, architecture,
building, heritage and planning and reflect
the level of the progress of Arriyadh and its
outstanding, world-class projects(4).
Airports
Arriyadh City’s huge King Khaled International
Airport links it with the outside world and with
other airports in the Kingdom. The airport
was initiated by King Fahd bin Abdulaziz, the
Custodian of the Two Holy Mosques, in 1984. The
airport lies 35 km north of Arriyadh City, covers
225 sq km and is capable of serving 18 million
passengers annually. Related accommodation
houses more than 2,000 staff and their families.
In constructing the airport, Arabic and Islamic
heritage were taken into consideration(5). The
data of the Statistical Yearbook (2007)(6) issued
by the General Authority of Civil Aviation (GACA)
shows a significant increase in both international
and domestic flights: the average number of
the flights in 2007 increased by 6.8% over 2006.
International flights increased by 8.2%, and
domestic flights by 5.9% . The total number of
passengers amounted to more than 11.7 million
in 2007 compared to 11 million in 2006.
Ports and Railroads
Arriyadh City is linked with the Eastern Province
(Dammam and Al-Hasa) by a 556 km-long
railroad, and a recently-built stretch with a length
of 449 km. The Saudi Government Railroad
Organization (SGRO) provides passenger and
goods transport services to Arriyadh Dry Port,
making it an extension of Dammam Port.
Customs clearance and storage take place in this
Dry Port(7). Despite the decrease in passenger
numbers within the Kingdom, and throughout
(1) Arriyadh Development Authority, Transport Unit.
(2) Tatweer magazine, Arriyadh Development Authority, 2008, issue 51.
(3) Arriyadh Development Authority website www.ada.gov.sa
(4) Tatweer magazine , Arriyadh Development Authority, 2007, issue 50.
(5) Arriyadh Governorate website http://www.riyadh.gov.sa/RiyadhCity.asp.
(6) Statistical Yearbook 2007, GACA.
(7) SGRO, Annual Report, 2004
Annual Report 2009 (Eng) .indd 24
12/21/09 8:48:56 AM
(1) SAMA, Annual Report, 2007, p.191.
(2) Middle East Commercial Essence Information, http://www.ameinfo.com/ar.
(3) Saudi Post Corporation, Annual Report , 2007.
Annual Report 2009 (Eng) .indd 25
Completion Of The Final Phase
Russian Railroads Corporation has tendered
the lowest bid to erect the fourth and final
part of the railroad, which is dedicated to
transporting metals and linking north with
south. The project involves constructing a new
railroad of 500 km linking Al Zubair city with
King Khaled International Airport in Arriyadh.
Contracts were granted for the first three parts
of 2,400 km railroad in 2007. According to
SGRO’s strategic plans, new lines are expected
to operate between Arriyadh and Jeddah, and
Riyadh, Jeddah and Makkah. The private sector
will contribute to the implementation of these
new projects.
Investment Climate in Arriyadh 2009
the line linking Arriyadh City and the Eastern
Province (118.3 passengers in 2006, or a 9.6%
decrease), the company’s revenue amounted
to SR 233.1 million in 2006, compared to SR
210 million the previous year, an increase of
11% which was due to increased fares, and an
increase in cargo carried – 110.4 tons in 2006,
up 6.8% on the previous year(1).
The development of the Kingdom’s railroads
gained impetus when SGRO offered an award
for the best strategic planner of railroads linking
Jeddah and Dammam, via Arriyadh, with the aim
of linking north and south and to serve the new
phosphate and aluminum plants. A recentlyawarded contract aims to provide express trains
transporting pilgrims from Jeddah taking 30
minutes to Makkah and two hours to Al Madinah
and is under study.
The SGRO is currently undertaking a feasibility
study for planned routes linking Jeddah with
Jizan and Taif with Khamis Mushayt. The last
resolution of the Council of Ministers has
made progress in regard to granting licenses
to railroad service providers who will meet the
high technical standards required(2).
The proposed US $5 billion land bridge linking
Jeddah and Dammam has been held up by legal
issues owing to a dispute over ownership of
the land on which the railroads are to be built.
Four companies have tendered for this project,
which comprises building and operating a 945
km-long railroad connecting Jeddah Islamic
port with the Arabian Gulf, as well as another of
115 km linking Dammam Port and the industrial
city of Jubail. The new routes will be capable
of transporting containers between Jeddah
and Dammam in only 18 hours ­– instead of the
four or five days sea route around the Arabian
Peninsula – and is expected to attract cargoes
currently moved through other Gulf ports.
Diesel trains with a 400-container capacity will
run on this new line at speeds reaching 120
kph, in addition to passenger trains running at
twice the previous speed. The assets of SGRO
as well as 1,600 staff will be transferred to the
new operator. The concession will be valid for
not less than 30 years, and could cover the two
existing railroads linking Dammam, Riyadh
and Hofuf. Granting licenses for passenger
transport is also envisaged on completion of
this project.
Telecommunications and Information
Technology
Arriyadh City hosts the headquarters of the
Arab Satellite Communications Organization
(Arabsat). Various telecommunications services
are provided through landlines, mobile
telephones, and data transmission services, etc.
in Arriyadh City by Saudi Telecom Company
(STC) and Etihad Itisalat (Mobily) Company (a
Saudi-UAE Joint Stock Company), and, most
recently, Zain company (a Saudi-Kuwaiti Joint
Stock Company).
Post
The Saudi Post Corporation (SPC) provides all
types of postal services in Arriyadh City, such
as parcel post, express mail service (EMS),
commercial mail, promotional mail, and postal
agencies. SPC also supervises mail services
provided to customers. The private sector
contributes in providing these services through
investments in postal agencies, which provide
mail services to citizens. The number of post
offices in Arriyadh, according to 2006 statistics,
reached 93 main offices and 28 express mail
offices and 36 postal agencies.
The number of street mail boxes reached 561,
and the number of subscribers’ post office
boxes reached more than 130,000 in addition
to 59,500(3) postal agencies boxes. Since early
2006, SPC started offering home mail delivery
services through subscription to this service.
The mail box is placed in a location determined
by the subscriber. Furthermore, mail services
are provided by private companies such as
25
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The High Commission for the Development of Arriyadh
DHL, ARAMEX, FedEx, UPS and others, which
offer express mail service in Arriyadh City,
domestically and internationally.
The total of all kinds of postal services reached
7,421 locations. In 2006, 858.1 million items
were delivered, of which letters accounted
for 99.6%. The balance was divided between
express mail and parcel post(1).
Electricity
The development of electricity, water and
sanitary waste services is an important indicator
of quality of life to most citizens. All three have
shown improvement in the Kingdom in recent
years. Generated electrical power increased
from 188,318 million kilowatt/hours in 2006 to
190,544 million kilowatt/hours in 2007, with
greater coverage.
In 2007, the Saudi electrical sector witnessed
great improvement(2). According to the Saudi
Electricity Company (3), the actual generated
capacities grew by an average of 7.6%. Available
generated capacity grew by 6.1% and the
power transmission network expanded by 3.6%.
Eelectrical distribution networks grew by 4.8%,
while consumers’ connections grew by 4.2% and
the peak loads grew by 11.9% . During the same
period, sold electrical units grew by 4.1%, while
the number of consumers increased by 4.6%.
The number of electrified settlements grew by
2.2% and overall electricity consumption in the
different areas of the Kingdom grew by 3.8 % in
2007 (4).
6
195
190
5
185
180
4
175
170
3
165
160
2
155
150
1
145
140
2004
2005
2006
2007
0
Numbers of Subscribers.
Electrisity Generation Point.
26
Nine electricity generation plants are operating
in Arriyadh. The proportional distribution of
the Central sector of generating unions in
the Kingdom increased to by 25.5% in 2007.
The sector’s share reached 22.6% of the total
available capacity, and 32.8% of the total
transmission network Kingdom-wide, 29.9% for
the total transformers of power transmission,
and 28.8% of the proportional distribution of
these transformers. The Central sector’s share of
the total and proportional distribution for the
new consumers amounted to 29.8% and about
31.4% of the total consumers. In 2007, the
Central sector’s share of the sold power reached
30.7% of the total sold power in the Kingdom.
Growth of Sales by Saudi Electricity Company
(Central Region) of Electrical Energy during
2005/2007 (5)
Year
Average Energy Sold
2005
44,099.6
2006
48,503.4
2007
52,096.2
Rate of Change in 2007 = 3.8 %
Water and Sanitary Waste
The General Water Directorate in Arriyadh
Region supervises provision of potable water
and sanitary waste water services in the
Province. It exerts on-going efforts to meet
the growing needs for these services in the
various development sectors. Drinking water
is delivered to the city from two main sources.
The first is from desalinated seawater through
special pipes from desalination plants in Jubail
on the Arabian Gulf, which represents 60% of
water feeding the city. The second source is
from local artesian wells making up 40% of the
total water supply. The extent of coverage of
water networks reached 73% of the population
in 2007, and sanitary waste water about 38.4%
during that year(6). According to Saudi Arabian
Monetary Agency, the daily amount of water
consumed in Arriyadh City during 2006 reached
1.35 million m3 compared to 1,75 million m3
in 2005. Annual consumption increased from
480.2 million m3 in 2005 to 622.5 million m3
in 2006(7).
(1) SAMA, 43rd Annual Report, 2007, p.192.
(2) Ministry of Economy & Planning, Central Department of Statistics.
(3) Saudi Electricity Company, Annual Report, 2007.
(4) SAMA, 44th Annual Report, 2008, p.177.
(5) Saudi Electricity Company, statistical datum, 2007.
(6) Economic Bulletin, 2008, Ministry of Economy & Planning.
(7) SAMA, 43rd Statistical Yearbook, 2007.
Annual Report 2009 (Eng) .indd 26
12/21/09 8:48:58 AM
fourth and final stage will begin in 2021 with an
expected cost of SR 9.06 billion.
SR2 billion(1) is allocated to 55 water and sanitary
waste projects in Arriyadh. They include:
implementing new water networks, enhancing
the existing network, implementing new lines
and drilling wells, exchanging the existing
water networks, in addition to other projects of
expanding the recent water treatment plants.
Twenty-five projects have been completed
and of the 30 unfinished, most are in the final
stage.
The Annual Report of the Saudi Arabian Monetary
Agency (issue 44) showed that advisory contracts
were prepared in order to present a contract to
specification of Arriyadh water and establish a
local water supply company. In December 2006,
advisory companies initiated work and deeds of
partnerships were signed with the private sector
in the first quarter of 2007(2).
(1) SR 2 billion is allocated for water projects, mostly in the final stages. Arriyadh daily newspaper, 22 September, 2008, issue 14700.
(2) SAMA, 44th Annual Report, 2008, p.176.
Annual Report 2009 (Eng) .indd 27
Investment Climate in Arriyadh 2009
According to the guiding program, the
provision of treated sanitary waste water to the
population of Arriyadh will cease. Solutions will
be implemented in order to expand the coming
network to cope with the geographical and
population growth of the city in a time-line of
four stages, with a cost reaching SR 25.04 billion.
Each stage will take five years in order to cover the
sanitary waste services of the total constructed
area of Arriyadh. In 2005 all necessary designs
for the first stage were prepared at a cost of
SR 5.20 billion. Other executive contracts were
also prepared. Some of these projects have
been completed, and 45 projects with a total
cost of SR 3.32 billion are being carried out.
Special designs related to areas located inside
the second stage of the city’s constructed area
will be implemented according to the level of
financial support. In 2010 the second stage will
begin at a total cost of SR 5.20 billion, the third
in 2015 at a total cost of SR 5.60 billion, and the
27
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The High Commission for the Development of Arriyadh
Theme Three:
Economic and Service Sectors in
Arriyadh City
Industrial Sector
As the political, commercial and financial
capital of the Kingdom, Arriyadh City is
witnessing growth rates higher than those of
other cities. The strength of its economy can be
explained by its population growth, increasing
job opportunities, which sustain the growth
of demand for goods and services, as well as
its strategic location at the center of a large
regional market represented by the GCC States
and other neighboring countries. Arriyadh
has also become a financial hub, home to the
headquarters of the country’s commercial banks,
the Saudi Arabian Monetary Agency (SAMA),
the Capital Market Authority (CMA) in addition
to other government credit and financial
institutions. The private sector, with its growing
number of industrial and manufacturing plants,
has likewise played a part in the success of the
City.
Arriyadh City houses two Industrial Cities, both
supervised by the Ministry of Commerce and
Industry(1). The total area of the first Industrial
City, which lies in the center of Arriyadh City,
is 451,000 m2 and includes 58 factories. The
second, with an area of 18.8 million m2, lies
on the southern outskirts of Arriyadh City and
includes 730 factories(2).
The Saudi Industrial Property Authority oversees
the planning and construction of industrial
sites in Arriyadh City. The demand for new sites
is estimated at 75% of the entire Kingdom’s
requirements (3).
The Saudi Industrial Development Fund (SIDF)
finances industrial projects through provision
of loans to various projects. The total number
of loans by SIDF in Arriyadh reached 1,080 to
finance 764 projects, representing 27% of the
Fund’s total loans from its establishment to
the end of 2007. This places Arriyadh Region as
first in terms of the number of approved loans
and second in terms of accredited loans whose
value reached SR 15 billion, representing 23% of
the total accredited value of the Fund.
In 2007, the fund financed 29 loans for projects
located in Arriyadh Region, 30% of the accredited
loans during that year. These loans were granted
for the purpose of constructing 19 new industrial
projects and expanding 10 existing industrial
projects. In terms of accredited loans, Arriyadh
Region comes in the second place, with SR 1.3
billion and 16% of the total accredited loans of
the fund in 2007(4).
Agricultural Sector
The Agricultural sector in Arriyadh Region is
of major importance, constituting 35% of the
Kingdom’s agricultural production. Arriyadh lies
at the center of the main agricultural areas in
the Kingdom. This, and its proximity to Al-Kharj
Governorate, the largest agricultural region,
makes the City pivotal in the distribution of
produce(5). Statistics for 2003 indicate that
the total arable land in the Arriyadh Region
decreased from 344,438 hectares to 314,264
hectares in 2004, then to 286,264 hectares in
2005 and 275,982 hectares in 2006. However,
the total area for all crops increased in 2007 to
283,717 hectares, as follows:
28
(1) 257 km² were allocated to the Sudair Industrial City in Arriyadh Region, which is still in the design phase.
(2) Saudi Organization for Industrial Estates and Technology Zones, www.soietz.gov.sa.
(3) Tatweer magazine, issue 52, ADA, 2008, p.23.
(4) Saudi Industrial Development Fund, Annual Report, 2006/2007.
(5) Ministry of Agriculture, Agricultural Statistics 2003/2004.
Annual Report 2009 (Eng) .indd 28
12/21/09 8:48:59 AM
2003
2004
2005
2006
2007
344,438
314,264
286,264
275,982
283,717
All winter crop areas gradually decreased from 168,695 hectares in 2003 to 126,500 hectares in
2006. In 2007, it rose to 126,896 hectares. General production decreased from 2003 to 2007, from
148,691 hectares in 2003 to 111,904 hectares by the end of 2007. As a consequence, Arriyadh
production of grains decreased from 659,952 tons in 2003 to 541,318 by the end of 2007, as shown
in the following table:
An Estimation of the Assigned Area and Production of Grains in Arriyadh (2) (Hectare/Ton)
2003
2004
2005
2006
2007
Area
Production
Area
Production
Area
Production
Area
Production
Area
Production
148,619
659,952
129,237
622,349
114,544
555,448
112,260
541,540
111,904
541,318
(1) Ministry of Agriculture, Annual Statistical Report, 2008, available on the Ministry of Agriculture website.
(2) Ibid.
Annual Report 2009 (Eng) .indd 29
Investment Climate in Arriyadh 2009
Estimation of the Arable Land for all Crops in Arriyadh (1) (Hectares/Ton)
29
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The High Commission for the Development of Arriyadh
30
Annual statistics from the Ministry of Agriculture
showed a slight decrease in the number camels
in Arriyadh, from 122,252 in 2006 to 121,095
in 2007. However; numbers are still higher
compared to those of 2004 and 2005 when they
were recorded as 99,123 and 95,600 respectively.
The number of sheep in Arriyadh also decreased
from 1,979,146 in 2006 to 1,952,334 in 2007.
Arriyadh City is one of the Kingdom’s largest
producers of milk and milk derivatives, having
21 projects with a total production of 645.4
million liters per year representing 74% of the
Kingdom’s total production. There are also
specialized apiaries with a production of 26,692
kg of honey per year, or 15% of the Kingdom’s
production(1).
The Government has subsidized the Saudi
agricultural sector(2) with SR 53 billion since the
Saudi Agricultural Bank was first established. It
provides interest-free loans to meet the needs
of the farmers and develop this vital sector.
Thus the total accredited loans between 1965,
when the bank opened, and 2007 was 428,350,
with a total value of SR 39.9 billion.
In addition to the Bank’s major role in providing
agricultural loans and fiduciary services, it was
authorized to grant agricultural subsidies in 1974
for the purpose of developing the agricultural
sector in the Kingdom and make it easier for
farmers and investors in this vital sector. The
total subsidies spent by 2006-7 reached SR 81.5
million, making a total of SR 13.7 billion since
the fiscal years 1973-4.
These loans were put towards irrigation pumps,
agricultural machinery and equipment, drilling
wells, irrigation machinery, machinery for
pumping water, generators greenhouses, fruit
and date palm nurseries, boats and fishing
equipment, hives and bee-breeding equipment,
as well as seeds, fertilizers, pesticides and fuels.
As regards specialized agricultural projects(3),
the loans have gone towards establishing 4,723
projects over 44 years. Poultry farmers received
1,032 loans or 21.9% of the total agricultural
loans, with a value of SR 2.94 billion, or 30.6% of
the projects’ total value. These projects comprise
breeding broilers, a second generation of egg
layers, a first generation of broilers, in addition
to slaughterhouses and automatic hatcheries.
Grain and vegetable production projects
attracted 2,985 loans, or 63% of total projects,
with a total loan value of SR 3.47 billion or 36%
of the total value. This group includes wheat,
barley, fruits, vegetables, dates and potatoes.
Loans granted for establishing greenhouses
numbered 315 or 6.7%, with a total value of SR
1.23 billion, 13% of total project loans. Other
projects included fish and shrimp breeding
facilities, date processing, sesame and olive
mills, as well as cooling stores for agricultural
products.
Trade Sector
The trade sector in Saudi Arabia witnessed real
growth during 2006-7. The preliminary GDP
results by type of activity indicated that growth
of this sector was 6.2%, (9.0% nominal growth)(4).
In 2007, the number of commercial companies
in Arriyadh reached 17,824, increasing by 5,720
by the second quarter of 2008(5).
Established Commercial Companies
in Arriyadh to 2007 (6)
Year
Number
2005
10,980
2006
12,564
2007
17,824
(1)Ibid.
(2)Saudi Arabian Agricultural Bank, www.saab.gov.sa.
(3) Arriyadh daily newspaper, 24/9/2008. SR 35b in loans and subsidies to the agricultural sector.
(4) Saudi Arabian Monetary Agency, 44th Annual Report, 2008.
(5) Ministry of Commerce and Industry, a brief of commercial information for the second quarter, 2008.
(6) Ibid.
Annual Report 2009 (Eng) .indd 30
12/21/09 8:49:04 AM
Type Registered
Investment Climate in Arriyadh 2009
Established commercial registers increased for
single institutions and companies (both branch
and central ones) as follows(1);
Year
2005
2006
Single Company
9,081
9,912
Company
1,105
1,302
Total
10,186
11,214
In respect of existing companies in Arriyadh, the
total reached 10,093, distributed as follows(2):
The Accumulative Total of Companies (Central/Branch)in Arriyadh to 2006
Description
Number
Percentage
Limited Responsibility
7,667
76
Collaborative
1,398
13.8
Simple Recommendation
536
5.3
Contribution
501
5
10,093
100
Total
Construction and Building Sector (Contracting)
The building and construction sector is crucial to
the development and support of infrastructure
and other productive sectors. Between 2002
and 2006, the sector experienced a remarkable
growth of 7.2%. This sector comprises 4.5% of
the total local production’s current prices where
a building boom was a remarkable feature in
Arriyadh. Buildings licenses issued in Arriyadh
Region reached 15,661 in 2005, or 28% of total
55,369 licenses issued in the Kingdom. Most
building licenses issued by Arriyadh Region
Municipality were intended for construction of
residential and commercial buildings, reaching
13,951 licenses, representing 89% of total
building licenses issued in 2005(3). State-of-theart, well-designed buildings, skyscrapers and
sophisticated malls constitute the majority of
new buildings in Arriyadh City in recent years.
A large number of Saudi, foreign and joint
Arriyadh City Construction Licenses 2004 (4)
Type of Building
Number
%
13,951
89.08
1,136
7.25
Mosques, Educational and Medical Buildings
512
3.27
Government - social buildings
62
0.48
15,661
100
Residential and Commercial
Industrial and Commercial
Total
(1) Ministry of Commerce and Industry, Department of Information and Computers.
(2) Ibid.
(3) Ministry of Municipal and Rural Affairs, Municipal Statistics, 2005.
(4) Ibid.
Annual Report 2009 (Eng) .indd 31
31
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The High Commission for the Development of Arriyadh
construction companies operate in Arriyadh City.
They cover all the sub-sectors of the industry
including bridges, residential and commercial
buildings, factories and maintenance of facilities.
The Arriyadh building and construction sector
is further enhanced by the existence of more
than 170 licensed factories producing building
materials, china, ceramics and glass as well
as 74 licenses(1) for new further factories. The
sector is also sustained by the concessionary
loans provided by the Real Estate Development
Fund. In 2008, the number of classified Saudi
contractors in Arriyadh reached 750, 48.86% of
a total of 1,535 for the Kingdom(2).
Real Estate Sector
The real estate sector’s contribution to the GDP
was 8% in 2005-6(3). This sector is supported
by the Real Estate Development Fund, which
granted special loans to Arriyadh City totaling
SR 392.7 million covering 1,309 loans in 2004.
The building and construction activity is an
important component of the real estate sector.
Subdivided vacant land constitutes 44% of
total land area in Arriyadh City, whereas unsubdivided developed vacant land constitutes
31%, and planned area 25.2%.(4)
The Comprehensive Strategic Plan for Arriyadh
City has set up a number of general objectives
and policies to develop the housing sector to
accommodate the City’s future demands. The
City’s housing needs are estimated at 495,000
units, at an annual rate of 27,500 units. This
represents a good investment opportunity for
the private sector in the areas of building and
construction and associated demand for health,
education, shops and leisure facilities(5).
%0,0
32
%0،6
%14,0
%26,0
%6,9
%37,8
%2,6
2006
%0,0 %0,9
%3,8 %2,9
Insurance Services Sector
The Saudi insurance sector witnessed significant
developments in 2007 with growth of about 24%
and gross premiums amounting to SR 6.9 billion
in 2006,(6) due to the favorable economical
conditions, and expanding compulsory vehicle
and health insurance and associated growth of
the service industry in the Kingdom.
General insurance made up about 60% of the
insurance market, growing by 15% to SR 5.2
billion in 2007 compared to SR 4.5 billion in
2006. Thirty-six percent was allocated to health
insurance, which grew by 38% to reach SR 3
%7,0
%5,1
2005
%28,8
%3,0
%12,1
%11,5
%36,9
Energy
Various incidents
Medical
Marine
Life
Fire
Engineering
Cars
Aviation
(1) Ministry of Commerce and Industry, Department of Industrial Statistics.
(2) Ministry of Municipal and Rural Affairs, 2008, see the website.
(3) CDSI, Statistical Yearbook, issue 42, 2006
(4) Ministry of Municipal and Rural Affairs, Annual Report, issue 46, 2005.
(5) Arriyadh Development Authority, Analytical Study of Field Survey of Land Use in Arriyadh City, 2005.
(6) The Saudi Insurance Market Survey Report 2007, Insurance Supervision Department, SAMA 2008.
Annual Report 2009 (Eng) .indd 32
12/21/09 8:49:07 AM
Education Sector
Education in Arriyadh is provided by public
and private sectors at the level of general
education for boys and girls of different
grades, technical and vocational training and
higher education. Enrollment rate within the
6-22 year age range in different educational
levels (primary to college) reached 92%. This
reflects an improvement on the 88% in 1996.
Illiteracy was reduced from 11.5% in 1996 to
8% in 2006.
General Education
Education in Arriyadh City is provided by
government and private sectors for both sexes
at all levels – schools, technical and vocational
training, and higher education. The following
are the latest statistics of the Ministry of
Education(2):
• The number of primary schools reached 114,
with 41,620 students, among them 35,162
non-Saudi nationals. New student numbers
reached 8,405 with 7,008 non-Saudi. Of a
total of 3,279 teachers, 666 are non-Saudi.
The number of administrative staff is 190.
Owned buildings number 25, with 107
being rented.
workers reached 439, including 301 in
administration. The number of owned
buildings reached 214, with 288 being
rented.
• Public secondary schools number 94,
accommodating 51,458 students, 38,462 of
whom are non-Saudi. New students number
18,577, 14,245 of them non-Saudi. There are
3,334 teachers, 2,882 of them non-Saudi.
The number of administration staff is 91
with 74 owned buildings and 12 rented.
• There are 80 private secondary schools in
Arriyadh, accommodating 24,355 students,
including 21,235 non-Saudis. New students
number 6,281, 5,613 of them non-Saudi.
There are 1,877 teachers, 464 of them nonSaudi. The number of administrators is 152,
with 22 owned buildings and 43 rented.
Investment Climate in Arriyadh 2009
billion in 2007 compared to SR 2.2 billion in
2006. The total for rescue and protection was
4% of the insurance market, and it grew by 50%
to SR 33 billion in 2007 compared to SR 22
billion in 2006.
In 2007, active insurance companies in the
Kingdom numbered 42, and by the end of March
2008, 11 insurance companies were licensed,
including nine foreign companies. However,
10 insurance companies were approved by the
Council of Ministers, and eight more are to
be licensed by the Ministry of Commerce and
Industry. Among working insurance companies
in the Kingdom, only 18 were in the Saudi stock
market, although three more will be soon listed.(1)
• In terms of private intermediate schools,
there are 107, accommodating 16,634
students, 14,515 of whom are non-Saudi.
New students number 6,198, with 1,439
teachers, 488 of them non-Saudi. The
number of administration workers is 124,
with 18 owned buildings and 71 rented.
• There are 206 public intermediate schools
which accommodate 73,511 students,
58,724 of them non-Saudi. New students
number 25,420, there are 5,133 teachers,
4,758 of them non-Saudi. The administration
staff number 189. Owned buildings reached
114, rented buildings 127.
• In 2006 the total number of registered
students in higher education in Arriyadh
was 109,760 – 50,438 female and 59,322
male. Total graduates were 16,264, (7,646
male and 8,618 female).
• There are 413 public primary schools
in Arriyadh City, catering for 167,081
students, 132,314 of them non-Saudi. New
student numbers reached 25,061, among
them 19,449 non-Saudi; there are 10,496
teachers, 10,490 of them non-Saudi. Staff
(1) SAMA, 44th Annual Report, 2008.
(2) General Department of Education in Arriyadh: http://www.riyadhedu.gov.sa/new/websit.html.
Annual Report 2009 (Eng) .indd 33
33
12/21/09 8:49:07 AM
The High Commission for the Development of Arriyadh
Higher Education in Arriyadh (Bachelor Degree) 2005-6 (1)
Registered Students
2005/2006
College Name
Colleges
Number
Male
Female
Total
Male
Female
Total
Imam Mohamed Bin Saud Islamic
University (Arriyadh Colleges)
16,036
13,430
29,466
3,141
1,350
4,491
8
Imam Mohamed Bin Saud Islamic
University (total Colleges)
19,569
13,430
32,999
3,461
1,353
4,814
9
King Saud College
28,536
20,800
49,336
3,494
2,919
6,413
14
King Saud Bin Abdulaziz College for
Health Sciences (Arriyadh Colleges)
63
269
332
0
38
38
2
Women’s Colleges (Arriyadh Colleges)(*)
0
23,659
22,659
0
4,311
4,311
6
Women’s Colleges (total colleges)
0
252,744
252,744
0
37,098
37,098
87
0
3,531
631
0
631
2
33,870
0
33,870
5,799
0
5,799
18
943
0
943
317
0
317
1
Private Colleges (Arriyadh Colleges)
1,329
1,164
2,493
63
0
63
5
Private Colleges (total Colleges)
2,628
2,439
5,067
130
103
233
17
Total Colleges of Arriyadh City
50,438
59,322
109,760
7,646
8,618
16,264
38
Total Colleges in the Kingdom of
Saudi Arabia
186,485
408,326
594,811
28,493
58,747
87,240
Teachers’ Colleges and the Faculty of
Physical Education
Teachers’ Colleges (total Colleges)
Technical Colleges in Arriyadh
3,531
Note: All colleges in the Kingdom of Saudi Arabia
comprise only Bachelor degree students.
The above number of colleges includes only
colleges granting Bachelor degree.
Private higher education comprises three
colleges in Arriyadh City: Prince Sultan College,
Al Faisal Private College and Arabic Open
College, in addition to five private colleges.
The number of registered students in private
higher education in 2005/2006 reached 2,493.
Technical education and vocational training
operates through General Organization for
Technical Education and Vocational Training
(GOTEVOT) and includes seven colleges, with
1,147 teachers and 9,110 students as well as six
technical institutes and 328 private centers(2).
Tourism Sector
Tourism is defined as travel outside the home
city whether for one day or for a year, for the
purpose of recreation, amusement, shopping,
visiting relatives and friends, medical treatment,
study, or training. Tourism overlaps other
34
Graduates 2005/2006
sectors, contributes to the economy, increases
gross domestic product, and conserves currency
reserves, thereby improving the balance of
payments, and stabilizing local currency(3).
Arriyadh City enjoys several attractive tourist
features, including recreational facilities. The
City has several historical sties, such as AlMasmak Palace, Al-Dereya archeological
sites, and King Abdulaziz Historical Center,
which comprises historical artifacts, museums,
libraries, public squares, parks and gardens.
Arriyadh City has a number of public parks,
the most famous of which is Salam Park at
the City center and Al-Watan Park within King
Abdulaziz Historical Center, in addition to sport
clubs and Malaz Zoo. The Zoo is equipped with
recreation and children’s facilities. Arriyadh
contains stylish shopping malls, state-of-the-art
buildings that are recognized not only in the
City but also worldwide. Special sidewalks in
some areas of Arriyadh City have land lighting
and trees, designed for families for those who
like to exercise.
(1) Ministry of Higher Education, statistical book, 2005/2006, see Arriyadh Economy, issue 16.
(*) Since 2006/2007 known as Arriyadh College for Women, by 2008/2009 it became Princess Nora Bint Abdul Rahman University.
(2) Ministry of Higher Education, statistical book, 2005/2006, see Arriyadh Economy, issue 16.
(3) SAMA, 44th Annual Report, 2008
Annual Report 2009 (Eng) .indd 34
12/21/09 8:49:08 AM
hosts the famous annual Janadriya Festival
of National Heritage and Culture, which is
attended by national and international guests.
Arriyadh also hosts important annual and
periodical international exhibitions, the most
important of which is the international book
fair.
The fact that the headquarters of all Ministries
and Government agencies are located in
Arriyadh assists the City in hosting international
conferences, which offer more opportunities
for ‘conference tourism’. Also, students from
all regions come to Arriyadh for university and
college education, and for medical treatment,
since Arriyadh provides advanced government
and private medical facilities.
In Arriyadh there are a number of hotels of
different classes to accommodate visitors to
the City. As of 2006, Arriyadh had 82 hotels, as
follows: (3)
Investment Climate in Arriyadh 2009
According to the Saudi Commission for Tourism
and Antiquities (SCTA) (1), the number of tourists
in 2007 (Saudi and non-Saudi) reached 28.5
million, compared to 27.1 in 2006, a growth of
5.3%. Tourism from abroad reached 12 million
trips in 2007 compared to 8.6 million in 2006 –
a percentage growth of 10.63% over 2006(2).
Arriyadh City is known for many recreational
projects undertaken by the private sector,
such as the private and public recreational
centers spread all over the City, notably those
on the Eastern and Al-Thumamah Road. Several
projects are currently underway, which will
add to the attraction of Arriyadh City. One such
example is the development of areas around
Wadi Hanifa and Al-Thamamah Park, which
are supervised by the Arriyadh Development
Authority.
These
projects
constitute
good investment opportunities and serve as
additional entertainment and recreational
areas for the inhabitants of the City. Arriyadh
Hotels In Arriyadh City, 2006
Class
Hotels Number
Number of Rooms
Premium Class
9
2,451
Five Star Hotels
23
3,025
Four Star Hotels
30
1,950
Three Star Hotels
17
595
Unclassified
3
69
Total
82
8,090
Additionally, there are about 345 units comprising 5,066 furnished apartments which are available
for leasing, distributed as follows (4):
Furnished Units in Arriyadh, 2006
Class
Number of Units
Number of Apartments
First Class
85
2,696
Second Class
165
2,831
Third Class
95
1,347
Total
345
6,874
Arriyadh Development Authority, in collaboration with the Saudi Commission for Tourism and
Antiquities (SCTA) plans to establish many projects such as parks in residential quarters, municipal
plazas, botanical gardens, as well as the infrastructure for King Abdullah International Gardens, all
of which present investment opportunities for the private sector.
The Tourism Information and Research Center (MAS) collaborated with tourism agencies to present
statistical studies for festivals and related events held in the summer of 2007 throughout the
Kingdom, the most remarkable of which was Arriyadh Festival for Shopping and Entertainment held
from 12 June to 12 July, 2007. This festival is now an annual event in Arriyadh City(5).
(1) MAS Center, General Commission for Tourism and Antiquities, key indicators of tourism, (2004/2007).
(2) Ibid.
(3) Tourism Information and Research Center, Statistics of Housing Sector, 2006.
(4) Ibid.
(5) MAS, General Commission for Tourism and Antiquities, Statistics Of Arriyadh Summer Festival, 2007, See website: www.mas.gov.sa
Annual Report 2009 (Eng) .indd 35
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12/21/09 8:49:09 AM
The High Commission for the Development of Arriyadh
Health Sector
Health services are offered by three major
sectors in the Kingdom and Arriyadh, namely the
Ministry of Health, other government agencies
and the private sector.
Arriyadh City houses a number of Ministry of
Health hospitals. These include the King Fahad
Medical City, Arriyadh Medical Center, the
Prince Salman Hospital, Al-Yamamah Hospital,
Al-Iman Hospital, the Pediatrics Hospital, the
Psychology Health Hospital, Al-Amal Hospital,
the TB and Pulmonary Diseases Hospital and
the Convalescence Hospital. There are also 63
Primary Health Care Centers spread throughout
the City. These hospitals provide free treatment,
diagnosis and surgery for citizens.
Additionally, there are other medical facilities
affiliated with other government agencies. These
are: university hospitals, the King Faisal Specialist
Hospital, the General Presidency for Youth
Welfare Hospital, the Armed Forces Hospital,
the King Abdulaziz Medical City of the National
Guard, the Security Forces Hospital, the King
Khaled Eye Hospital, the General Organization
for Social Insurance (GOSI) Hospitals, and the
Schools Health Care Units. King Fahad Medical
City in Arriyadh is one of the largest and most
modern facilities in the Middle East. It includes
a number of specialist hospitals, which employ
qualified national and expatriate medical staff.
The City includes(1):
• Pediatric hospital with a capacity of 246
beds Gynecology and Obstetrics hospital
with a capacity of 236 beds
• Medical Rehabilitation Center with a
capacity of 159 beds
• General Hospital with a capacity of 459 beds
• Outpatient and Support Services Clinics that
include 33 clinics, x-ray facilities, a pharmacy,
and a laboratory. A Medical College will be
established as part of the final phase(2).
According to the latest statistics from the
Ministry of Health, there are 40 hospitals in
Arriyadh (of 220 in the Kingdom), 361 medical
centers (of 1,925), and one dental center (of
19). Arriyadh City has two of the Kingdom’s 16
medical institutes, and two of its 30 Medical
Faculties, and 11 of 42 the Kingdom’s antismoking clinics(3).
Arriyadh Ministry of Health Medical Facilities and Services, 2006 (4)
Description
36
Arriyadh
Kingdom
Hospitals
40
220
Medical Centers
361
1925
Dental Centers
1
19
Rehabilitation Center
1
11
Regional and Central Laboratory
1
3
Lazaretto
1
22
Anti-Smoking Clinics
11
42
Health College
2
30
Health Institute
2
16
Medical Jurisprudence
1
18
(1) Ministry of Health, achievements during the years of the Seventh Development Plan, 1999-2004.
(2) Ministry of Health Decree No 1/10/66662 in 2004 to establish a college which received 40 students in 2004-5.
(3) Ministry of Health Statistical Report, 2006, available on the Ministry’s website.
(4) Ministry of Health Statistical Report, 2006, available on the Ministry’s website.
Annual Report 2009 (Eng) .indd 36
12/21/09 8:49:10 AM
The finance and banking sector is one of the most
important economic sectors, providing huge
investment potential through the expansion
of existing banks or the establishment of new
ones. Another opportunity lies in the King
Abdullah Financial Center, to be opened in
Arriyadh in 2009(1). In 2008, 18 banks operate in
Arriyadh, including the National Kuwaiti Bank,
the Deutsche Bank, the Muscat and Bahrain
National Bank (opened in 2000), and the Emirates
Bank (opened in 2002). Arriyadh houses the
headquarters of ten Saudi commercial banks..
The banking sector of Saudi Arabia is supervised
by the Saudi Arabian Monetary Agency (SAMA).
The key indicators of Saudi banks at the end of
2007 were as follows(2):
• 1,353 Bank Branches in the Kingdom, 519 of
which are in Arriyadh Region
• 7,543 ATMs
• 252 Investment Funds
• 426,085 subscribers to Investment Funds
• Credit granted: SR 595.84 billion, of which
SR 347.60 billion is short-term credit (one
year or less), SR 83.21 billion medium-term
credit (1-3 years) and SR 164.04 billion longterm credit (over three years)
• Total deposits: SR 717.56 billion
• Total assets: SR 1,075 billion. (Unified
Financial Position of Commercial Banks)
Telecommunications and Information
Technology Sector
Telecommunications and IT play a decisive
role in a community’s development process.
Information and knowledge have become
key factors of new economic production, as
they encourage productivity in other sectors.
Telecommunication and Internet infrastructures
are the nerve centers of modern communities.
The telecommunications sector in the
Kingdom in general, and in Arriyadh in
particular, experienced fundamental changes
after the privatization of the sector and the
establishment of the Communication and
Information Technology Commission (CITC)
whose headquarters is in Arriyadh. The Kingdom
is heading towards becoming an information
and knowledge-based community, through the
e-government program, which is based on the
National Plan of Information Technology by(3):
(1) Future Symposium, Arriyadh 9-10 May, 2006.
(2) SAMA, Statistical Tables Supplements: available on the website of the Monetary Agency.
(3) Ministry of Economy and Planning, 8th Development Plan 2005-9.
Annual Report 2009 (Eng) .indd 37
• Making Telecommunication and IT
services available to all community
members Providing an educational and
training environment that ensures that
the majority of citizens possess adequate
skills to deal with Telecommunication
and IT applications
• Pushing the economic and social sectors
towards achieving advanced levels of IT
applications
• Making the Telecommunications and
IT sectors a major source of revenue
As part of the Government’s initiative
to e n c o u r a ge i n ve s t m e n t s i n th e
telecommunications and IT industries
and motivate private companies to take
advantage of technology applications, such as
e-commerce; Arriyadh Development Authority,
in collaboration with Arriyadh Chamber of
Commerce and Industry, announced plans
to create a Telecommunications and IT City
on an area of 800,000 m², on land owned by
the Public Pension Agency. The City will add
new economic dimensions and a gateway to
commercial and industrial firms to enter the
open market at the regional and international
levels. It will also assist in the attraction
of foreign investments and large hi-tech
companies. Signs indicating that Arriyadh
City has become a society of technology are:
Application of Information Technology in
banking transactions (payment of utility
bills, passports, traffic and aviation services,
etc).
Use of IT in most private and public sectors
organizations.
Rapid expansion of mobile phone use through
the two service providers, Saudi Telecom (AlJawal) and Etihad Itisalat (Mobily) and, more
recently, Zain. Mobile companies’ services
witnessed great progress during the past years
in terms of spread, versatile services as well
as competitive pricing. The advantages of the
competition in the telecom market account for
the growth in subscribers in Arriyadh, which
grew to 28.4 million in 2007, representing
116%, compared with 12% (2.5 million
subscribers) in 2001, an annual average growth
of approximately 46%. More than 83% of the
subscribers have pre-paid cards.
Investment Climate in Arriyadh 2009
Finance and Banking Services Sector
37
12/21/09 8:49:12 AM
The High Commission for the Development of Arriyadh
Landlines (1)
The number of landlines in the Kingdom reached
four million by the end of 2007, 2.9 million
(73%) of them being home lines, representing
66.5 lines for each one hundred homes. By the
end of 2007, the number of phone-lines in the
Kingdom reached 16.3,lines (16.5%) for every
one hundred individuals.
The following diagram shows the growing
spread of landlines, and the decrease of using
these lines despite being widely spread, and
increasing the number of central exchanges.
The reason behind this is the rapid growth and
spread of mobile services and the facilities
available upon subscribing, in addition to a
gradual decrease in the price of mobile phones
which has led to increasing subscriber demand
for more mobile lines. This tendency toward
mobile phones and movement away from
landlines is a world phenomenon. It is seen
in most developed countries and those that
witness high penetration and spread of mobile
telephone services.
Rented
Lines
Digital
Subscribes’
line
Housing
Spread
rate
Subscribes
Spread
rate
Growth of Broadband Telecom Services
Rented
Lines
Digital
Subscribers’
lines
Housing
Spread
rate
Subscribers’
Spread
rate
Broad
Band
Subscribers
Internet Service
The number of Internet users was estimated at
one million in 2001, reaching 5.4 million by the
end of 2007, a spread rate of approximately 22%
of the population with an annual growth average
of 32%. The rapid growth is accounted for by
people becoming aware of the advantages of the
Internet, as well as improvements to broadband
services, and the increasing affordability of
computers and Internet access.
Broad
Band
Subscribes
Broadband Telecom Services(2)
The market of Broadband Telecom Services
grew from 14,000 in 2001 to more than 623,000
subscribers by the end of 2007 – a 90% per year
growth rate. In spite of this growth, the spread
rate is still low compared to developed countries
and other comparable countries. It represents
a spread rate of no more than 2.5% of the
population and 10.3% of residences.
Thus, the opportunities for growth of broadband
telecoms in the Kingdom are enormous, and likely
to leave space for competition in the field of land
telecommunications. New companies will spread
networks and provide commercial services. This
represents one of the most important challenges
facing the telecom and information technology
sector in the coming years.
38
(1) Ministry of Telecommunications and Information Technology, see their website.
(2) Ministry of Telecommunications and Information Technology, see their website.
Annual Report 2009 (Eng) .indd 38
12/21/09 8:49:13 AM
Introduction to Arriyadh Development
Authority (ADA)
Arriyadh
Development
Authority
was
established by resolution of the Council of
Ministers on June 19, 1974. The responsibility
of ADA is to implement plans to develop the
City in economic, social, cultural, urban and
environmental areas. ADA sets up policies that
improve the level of services so as to contribute
to the welfare and quality of life for its citizens.
ADA derives its legality and authority from the
Council of Ministers that defined the basis of
its role in a series of resolutions including its
founding resolution.
The major responsibility of ADA is to set
up comprehensive plans for the City and
emplace basic programs for implementation,
coordination and construction of projects.
The Comprehensive Strategic Plan for the City
of Arriyadh
The most remarkable efforts of Arriyadh
Development Authority are in the area of overall
planning and development of the City in the
Comprehensive Strategic Plan. It symbolizes
integrated and renewable organizational
environment of a strategic nature that organize
and direct urban, environmental, economic and
social activities in a way that accommodates
future requirements, benefits from modern
facilities and in general avoids the negative
aspects of city growth, particularly fast growth,
as is the case of Arriyadh City.
The Comprehensive Strategic Plan of Arriyadh
City comprises several elements
Element One
Outlook for the City with the following
objectives:
Introduce the City as the Capital of the Kingdom
• A City of humanity, welfare and prosperity
Element Two
Arriyadh Urban Plan:
Investment Climate in Arriyadh 2009
Theme Four:
Arriyadh Development Authority and its
Role in the Development of the City
• A modern oasis in harmony with the desert
environment through the optimum use of
technology and environmentally successful
structural planning
• A center of scientific and cultural
enlightenment
• A financial and commercial center
• A beautiful City with distinguished and
stylish design, integrated with social and
cultural life, and a center for Islamic arts
and culture
The Urban Plan consists of several subplans which serve as a mechanism for policy
implementation. The most important features
of these plans are:
• Structural Plan for Arriyadh City, which
reflects all the urban and functional aspects
of the objectives, strategies and different
urban policies which are incorporated
in the Comprehensive Strategic Plan.
The Plan defines distribution of land use,
major activities, business centers, city
transportation system, and network of
public utilities. It specifies the environment
protection areas, open areas, directions
and boundaries of urban development.
The Structural Plan covers all parts of
Arriyadh City within the boundaries of the
development protection having an area of
4,900 km² and forecasted population size of
7.2 million by 2024(1).
• Local Structural Plans which aims to clarify
policies and controls for certain areas of
great importance for sites. Most important
of these plans is the Structural Plan for the
City center, Structural Plans for urban areas
and Structural Plans for hub centers.
• Land Usage Plan, which is considered one
of the most important tools for the plans
and policies of the Comprehensive Strategic
Plan. It defines the current and future use of
land up to 2021.
• Zoning Regulations, which divide the
city into zones in accordance with the Land
Usage Plan and sets up rules and regulations
(1) Arriyadh Development Authority, Population Forecasts Study, Arriyadh City, 2004-24.
39
Annual Report 2009 (Eng) .indd 39
12/21/09 8:49:15 AM
The High Commission for the Development of Arriyadh
and recommends development standards
with respect to density, height and other
terms, to ensure privacy and protection of
property, the environment, heritage and
urban issues. It also lists procedures and
steps required for regulations related to
planning licenses, building licenses, and
encouraging distinguished construction
designs.
Element Three
Transportation Plan:
The objective of this Plan is to secure safe and
convenient transportation to accommodate
existing and future requirements, taking into
consideration the high rate of population
growth, and provide a transportation system
integrated with the continued urban growth of
the City.
Element Four
Economic Development Plan:
The objective is to achieve a balanced socioeconomic development with a diversified
economic base, increase the City’s sources of
revenue, limiting the flight of revenue, take
full advantage of the City’s characteristics
and competitiveness and enhance its role
as a financial, commercial and Information
Technology center.
Element Five
Environment Management and Protection:
Aims to achieve a sustainable environment while
planning for the City of the future, preserve
natural resources, and improve environmental
quality. It also aims to achieve the optimum
use of resources to accommodate future
generations’ needs.
Element Six
Housing Availability Plan:
Sets up a mechanism for development of the
housing sector to address increasing demand,
improve residential environment and make
available basic needs of the community.
Element Seven
Public Utility Plan:
Upgrades the standards of public utility
(electricity, water, telephone and sanitary waste),
improving on the current deficit and applying the
concept of optimum management resources.
Element Eight
Urban Management Plan:
Makes arrangements to develop existing systems
to ensure the well-coordinated future growth of
the City. This will be achieved through integrated
planning, application of decentralization
of decisions to allow the private sector and
residents to participate in the decision-making
process.
The approval of the Comprehensive Plan for
Arriyadh City will undoubtedly reshape the
future of the City for the next 20 years. There are
significant investment opportunities available to
the private sector, including building materials,
housing, transportation, tourism and recreational
services, health, and educational services.
Arriyadh Development Authority (ADA)
licenses comprehensive development
projects and raises them to 11:
Comprehensive development projects for
building residential villages in and around
Arriyadh City rose to 11 after the approval of
Arriyadh Development Authority to license two
projects in Alarja and Eshbelia.
Arriyadh City needs approximately half a million
residential units by 2024, with an average of
27.5 thousand units per year. In order to address
these needs, Arriyadh Development Authority
controls construction in designated areas to
provide more residences in one of the fastestgrowing cities in the world.
The objectives are multiple, for example
organizing services for defined areas, raising the
capacity of new residential projects approved
by the Authority, and preparing residences
with integrated services and utilities in order to
enhance the social aspects. At the same time,
investors’ needs will be fulfilled in terms of
establishing noteworthy buildings and improved
services, green areas and sidewalks.
Private sector companies have initiated three
projects: Durrat Arriyadh, located in the north
of the City, Al Qasr in the south and Shams alRiyadh residential project on King Khaled Road.
The three companies involved are expected to
start working during this year.
40
Annual Report 2009 (Eng) .indd 40
12/21/09 8:49:15 AM
residential units over the coming five years
an essential step towards price stability of the
residential units, whether freehold or leasehold.
The objectives of this initiative are multiple:
• Ensuring reasonable price of residential
units, in the knowledge that there will be
increasing demand
• Establishing villages with full services and
utilities, in order to create socially integrated
residential environments.
• Increasing the number of green areas and
sidewalks in all new projects
• Improving the provision of electricity, water,
and sanitary waste networks, particularly on
major projects
• Increasing the elevations permitted to
enable the City to grow upwards rather than
outwards
Investment Climate in Arriyadh 2009
Arriyadh Municipality has already declared an
initiative which adopts nine completely served
residential projects to be developed by the
private sector. These projects are expected to
establish more than 105,000 residential units
worth more than SR 131 billion. Development has
begun on the villas, apartments, offices, schools,
mosques, commercial markets, entertainment
centers and medical centers.
This and other initiatives are underway under
the aegis of Ansenat Arriyadh whose objective
is to ensure the harmony of residents and their
environment and provide facilities to cater from
cradle to grave.
Arriyadh Development Authority has resolved
to cement the identity of Arriyadh City as a
fitting capital for the Kingdom, maximizing its
advantages and ensuring attractive returns to
investors.
Al Saadan project, Eshbelia:
The Effects of Comprehensive Development
Projects (residential):
Economists and observers consider the Arriyadh
City initiative to establish more than 120,000
The Arriyadh Development Authority issued
permission to develop 534,573 m2 of land on
King Abdullah bin Abdulaziz road in the Eshbelia
district.
41
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The High Commission for the Development of Arriyadh
The project’s adjustment comprises the condition
of ‘mixed land use’ of the main areas,
combining residential units, offices and hotels.
The percentage of land allocated for planning
is to be not less than 65% devoted to roads,
parks and, public areas and green spaces. The
remaining 35% is assigned for the development
of buildings. A special center has been assigned
for the administration.
The Authority has increased the permitted
heights of buildings on this site, as follows:
• Offices – ground plus five floors
• Commercial Centers – ground plus three floors
• Central Areas – ground plus five floors
• Apartments – ground plus seven floors
The development is to include suitable parking
facilities. The developer will be responsible for
the administration and maintenance of the
project, which is to be completed within five
years of commencement.
Taameer Project, Almalkaa:
Arriyadh Development Authority agreed on a
project to develop 2,226,420 m2 of land located
in the Almalkaa quarter, on the western side of
King Khaled road and within the Municipality of
Aldaryaa Governorate.
The division of use is to be 40% for residential
units, 70% for commercial use, 23% for open
areas and parks and 30% for utilities and roads
services.
The project will allocate 30% of the total
residential area to apartments, the remainder
to be villas and town houses (connected
buildings).
The maximum height allowed for residential
buildings (apartments) is restricted to 10 floors,
two floors for villas and three floors for connected
residential units. Commercial buildings will
reach four floors. In the central area, no than
three floors are permitted, and on its fringes,
building will be restricted to two or three floors
and must accord with their surroundings.
The developer will be responsible for the dayto-day administration and maintenance of the
project, which is to be completed within eight
years of commencement.
Al Yamama Project, Aloraija District:
In this project, Arriyadh Development Authority
42
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Areez Project, Arrimal district:
Arriyadh Development Authority has agreed to
the development of 3 million m2 of land located
in Arrimal district to the east of the King Khaled
International Airport. Adjustments on land usage
allow for residential and recreational buildings,
in addition to some commercial and public
utilities, divided as follows: 40% for residences
and 7% for commercial purposes; 9% for public
utilities; 23% for open areas, parks and plazas;
21% for roads and utilities.
Building heights are adjusted as follows: nine
floors for residential buildings (apartments);
two floors for commercial buildings; four floors
for medical centers; High buildings (residential)
of three to nine floors located only in the central
area of the project, not affecting the surrounding
areas, and provided that buildings located on
the sidelines of the project should be low (two
floors) in accordance with the surroundings; the
maximum height for buildings located on the
fringes is two floors.
The developer will be responsible for the dayto-day administration and maintenance of the
project, which is to be completed within six
years of commencement.
Investment Climate in Arriyadh 2009
has agreed on developing 710,788 m2 of
land located in Aloraija district on the Jeddah
highway.
The allocation of use is to be 30% for commercial
and residential use, (26% for residences and
hotels, and 4% for commercial purposes), and
70% for utilities, open areas, parks and roads.
Height regulations have been adjusted as
follows: residential buildings (apartments) to
be a maximum of 10 floors, graduated from four
to ten floors on all sides, except on the Wadi
Laban side, so that surrounding areas are not
affected; hotels to be a maximum of 12 floors,
and commercial buildings a maximum of two
floors.
The developer will be responsible for the dayto-day administration and maintenance of the
project, which is to be completed within eight
years of commencement.
43
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The High Commission for the Development of Arriyadh
44
Theme Five:
Arriyadh Chamber of Commerce and Industry,
Enhancement of Investment Climate
The Arriyadh Chamber of Commerce and Industry
(RCCI) was established in 1961 to maintain,
protect and develop the interests of the private
sector in Arriyadh Region through integrated
services. The most important services it provides
are as follows:
• Highlight investment opportunities within
and without the Kingdom and make good
use of them
• Highlight new investment fields and
recommend viable opportunities
• Publish directories and information guides
regarding activities of the private sector and
the national economy in general
• Provide legal advice, settle commercial
disputes and clarify rules and regulations
• Prepare studies and specialized research
and provide advice on economic issues
The Chamber of Commerce and Industry in
Arriyadh plays a vital role in investment in the
City. The Chamber has prepared a strategy
covering the period 2005-9 with the objective of
motivating the private sector to invest in sectors
of comparative advantage, and to improving the
investment environment in Arriyadh. It provides
services to its members through a number of
administrative and technical units:
• Research and Studies Center
• Data Center
• Economic Data Bank
• Tools Center
• Small and Medium Business Center
The Chamber provides economic information
and guidance to businessmen on different
investment opportunities and the appropriate
communication channels with respect to import
and export across the world(1).
It actively participates with other investment
agencies in the Kingdom and Arriyadh Region,
through the Arriyadh Economic Forum, held every
two years. The Third Economic Forum was held
from 2-4 December 2007 under the slogan ‘For
Better and Continuous Economic Development’,
under the direction of the Custodian of the Two
Holy Mosques, King Abdullah Bin Abdulaziz,
Chief of the Supreme Economic Council. The
(1) For more information see Chamber of Commerce Website, www.riyadhchamber.org.sa.
Annual Report 2009 (Eng) .indd 44
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Towards a Continuous Infrastructure
Development:
• Establish Ministry of Infrastructure
• Establish Infrastructure Fund
• Stimulate the private sector to contribute in
developing infrastructure services.
Juridical Environment and Requirements of
Economic Development:
• Remove all recent obstacles in the way of
developing the legislative environment
• Remove all recent obstacles in the way of
developing a just environment
• Rehabilitate and train all members of the
judiciary
• Develop the judicial system relating to
women’s issues
Investment Climate in Arriyadh 2009
Forum calls for an enhanced role of the private
sector, which is an important element and
stimulator of economic growth in the face of
the socio-economic challenges that face the
Kingdom. Leading businessmen were invited
to participate in the Forum to discuss critical
issues and recommend solutions. These issues
included ‘ways to develop efficient publicprivate sector partnership’, ‘transparency and
accountability in the economic sector’, and
‘high-tech industrial zones’ or ‘membership
of the WTO’ and other themes to promote
awareness among the business community.
The Arriyadh Economic Forum produced a set
of recommendations intended to improve and
promote the investment environment in the
Kingdom and Arriyadh Region. The following
are the key recommendations (1):
Recruiting in the Government Sector:
Recommendations of Arriyadh Third Economic
Forum according to each theme
Financial Surpluses Study:
• Transform the Public Investment Fund (PIF)
into a public and independent joint stock
company, under the supervision of Supreme
Economic Council.
• The Forum recommended that the Monetary
Agency fulfill its function as a central bank.
• Define a specific and fixed methodology
for the purpose of financial surpluses
formation.
• Set basic tendencies in order to invest the
public financial surpluses.
A Vision for Developing Human Resources:
The Forum recommended the following
policies and legislations:
• Upgrade
Saudi
Human
Resources
competences to ensure a competitive world
position.
• Upgrade Human Resources competences
is a societal responsibility and requires a
informed political leadership to implement
the vision and the integration of all parties
concerned
• All companies involved must set standards
of qualification and tests of performance
• Expand the role of the law-enforcement
agencies and monitor them under the
supervision of the National Agency for AntiCorruption.
• Implement the website speedily in order
to consolidate recent, accurate and
comprehensive data and information for all
investors and members of society to increase
transparency. Instigate electronic methods
to enable customers to access educational
and information programs without the need
to visit service centers, thus involving the
public in the development process.
• Expand methods of reward and punishment,
the evaluation of performance, and monitor
staff efficiency, accountability and suitability
for promotion.
(1) RCCI, 3rd Economic Forum of Arriyadh, 3 December, 2008, see also their website.
45
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KINGDOM OF SAUDI ARABIA AND
ENHANCEMENT OF THE INVESTMENT CLIMATE
Annual Report 2009 (Eng) .indd 47
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The High Commission for the Development of Arriyadh
Distribution of Budget Allocations for the fiscal
year 2008 by Major Sectors:
Theme One:
General Economic Indicators of the
Kingdom of Saudi Arabia
%1.6
%3.6
%4.0
%3.0
%35.0
%15.4
%25.5
%3.5
State Budget
According to figures issued by the Ministry of
Finance(1), actual revenues for the fiscal year
2007-8 exceeded SR 1,100 trillion, an increase
of 144% on the budget estimate. Oil revenues
contributed 90% to the realized gross revenues.
The actual expenditures amounted to more than
SR 510 billion, an increase of SR 100 billion on
the budget as a result of the expenditures and
high cost of living allowance and various other
projects.
The figures also showed a decline of public debt
to SR 237 billion, representing approximately
13.5% of the gross domestic product.
Regarding the balance sheet of the state
for the fiscal year 2009-10, public revenues
were estimated at SR 410 billion and public
expenditure at SR 475 billion, whereas the
deficit was estimated at SR 65 billion. The
likely decline in oil prices during late 2009 and
early 2010, were taken into consideration in
preparing balance sheets for the investment of
fiscal resources to achieve the requirements of
comprehensive and sustainable development.
%0.1
Defense & National
Security
Subsidies
General
Administation &
Pubilc facilities &
Items
Human Resource
Development
Transport &
Communication
Special
governmental
lending institutions
Development
of infrastructure
facilites
Health & Social
development
Economic
resources
development
Balance Sheet Key Features 2009-10 (2)
Main Sector Allocations
Item
Education and Training
122.1
Medical Services and Social Development
52,3
Municipal Services
18.9
Transport and Telecommunications
19.2
Water, Agriculture and Essential Provisions
35.4
Other Sectors
48
Amount (1,000 million)
18
(1) Ministry of Finance statement upon issuing of the budget, 2009-10, see Ministry website www.mof.gov.sa.
(2) From the statement of the Ministry of Finance.
Annual Report 2009 (Eng) .indd 48
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According to estimates by Central Department
of Statistics and Information(1), the volume of
GDP for 2007-8 exceeds SR 1,753.5 billion at
current prices, realizing a rate of growth of
22%, compared to 7.6% in 2000-7. There was an
increase of 34.9% for the oil sector and 8% for
the private sector.
Based on fixed prices, GDP witnessed a growth
of 4.2%, 3% for the government sector and 4.3%
for the private sector.
All economic activities showed positive growth,
reaching 5.4% in the field of non-oil manufacturing
industries, 11.4% in telecommunications,
transport and storage, 6.3% in electricity, gas
and water, 4.1% in construction and building,
4.2% in retail and wholesale trade, hotels and
restaurants and 2.2% in real estate, insurance
and financial services.
However, constantly adapting procedures and
resolutions in economic reforms had an impact
in realizing positive rates of growth in the
private sector, diversifying and expanding the
base of the national economy and leading to a
GDP growth of 46% (excluding import duties)
on the fixed prices. These indicators show the
increasing efficiency of this sector, particularly
in manufacturing industries and services, which
continue to develop.
Balance of Payments and Foreign Trade(2):
The volume of foreign trade (imports and exports)
increased from SR 1,028.6 billion in 2006 to
reach SR 1,184.6 billion in 2007. Active trade
positively affected the balance of payments and
the balance of trade surplus improved, reaching
SR 565.6 billion in 2007, compared to SR 549.8
billion in 2006. Thus the accomplished surplus
in the current account is SR 356.3 billion.
The value of commodity exports increased from
SR 791.3 billion in 2006 to SR 874.4 billion in
2007, a 10.5% increase. Oil exports made up
the majority of these exports, reaching 68.6%
in 2007, compared to 89.2% in 2006. Asian
countries were the major receiver of exports
from the Kingdom in 2007, receiving 49.5 % of
the total exports in that year. This percentage
greatly differs from those of North America,
Western Europe, Gulf Cooperation Council
(GCC) states, and other Arab countries, where
percentages reached 17.6%,11.1%, 8.1%, and
5.3% respectively.
Investment Climate in Arriyadh 2009
Gross Domestic Product (GDP)
Kingdom Commodity Exports by Million Riyals (3)
2004
2005
2006*
2007**
Rate of Annual
Change
Oil Exports
415,297
605,881
705,811
772,989
9.5
Crude Oil
348,209
513,939
607,509
665,544
9.6
Refined Products
67,088
91,942
98,302
107,445
9.3
Ships’ Fuel
1,246
1,818
2,118
2,318
9.4
Non-Oil Exports
57,194
71,263
85,528
104,468
22.1
Petrochemicals
18,673
42,055
45,936
54,036
17.6
Building Materials
5,317
6,154
7,908
10,778
36.6
Food, Agricultural and
Animal Products
3,657
4,361
5,228
7,442
42.3
Other Commodities***
29,547
18,693
26,456
32,212
21.8
Total
472,491
677,144
791,339
877,457
10.9
* Modified Figures
** Actual exports statements according to estimates of SAMA, and non-oil primary exports
*** Comprises re-exportation
(1) Ministry of Finance statement upon issuing of the budget, 2009-10, see Ministry website www.mof.gov.sa.
(2) SAMA 44th Annual Report, 2008.
(3) From the statement of the Ministry of Finance.
Annual Report 2009 (Eng) .indd 49
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The High Commission for the Development of Arriyadh
The value of commodity imports increased
appreciably from SR 261.6 billion in 2006, to
SR 338.1 billion in 2007 (an increase of 29.3%).
Western European countries were the main
exporters to the Kingdom’s in 2007, making
up 32.6% of the total imports, followed by the
Asian countries with a similar percentage of
30.1%, and 17% for North American countries,
the remaining percentage distributed between
the rest of the world.
In 2007, the balance of trade surplus achieved a
small increase of 1.2% with commodity imports
outnumbering exports, and its value rose from
SR 529.9 billion in 2006 to SR 536.3 billion in
2007. The GDP percentage decreased from
39.7% in 2006 to 37.5% in 2007(1).
Kingdom Imports According to their Main Ingredients (2)
Million Riyals
Percent Share
2005
2006*
2007**
2005
2006*
2007**
Percentage
of Annual
Change 2007
Machinery, Equipment
and Electrical Appliances
54,168
67,302
99,740
24.3
25.7
29.5
48.2
Food stuffs
32,968
35,547
44,815
14.8
13.6
13.3
26.1
Minerals and Chemical
Products
30,087
33,394
39,975
13.5
12.8
11.8
19.7
Textiles and Clothing
9,664
10,281
11,640
4.3
3.9
3.4
13.2
Metals and Related
Products
23,773
38,262
50,829
10.7
14.8
15.0
31.6
Wood and Jewelry
5,504
4,257
6,019
2.5
1.6
1.8
41.4
Transport Equipment
46,704
50,453
59,440
20.9
19.3
17.6
17.8
Other Commodities
20,117
21,543
25,630
9.0
8.3
7.6
19.0
222,985
261,402
338,088
100.0
100.00
100.00
29.3
Total
Cost of Living Index:
In 2008 a remarkable rise in the cost of living was witnessed – estimated at 9% compared to 4.1%
in 2006-7. This rise was apparent in many categories: repairs, rent fuel and water reached 17.7%,
domestic furniture 14%, food and beverages 13.3%, fresh vegetables 21.9%, other commodities
and services 3.6%, medical care 2.5%, education and promotion category, textiles and shoes 1.8%,
transport and communications 1.2%.
50
(1) Ministry of Economy and Planning website.
(2) CDSI in SAMA 44th Annual Report 2008, p.130.
Annual Report 2009 (Eng) .indd 50
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General Index
Rate change compared to the previous
month
December 2007
110.2
0.6+
January 2008
111.7
1.4+
February 2008
112.8
1.0+
March2008
114.4
1.2+
April 2008
115.2
0.9+
May 2008
115.0
0.2-
June 2008
115.5
0.4+
July 2008
117.3
1.6+
August 2008
117.9
0.5+
September 2008
118.3
0.3+
October 2008
120.1
1.5+
November 2008
119.9
0.2-
December 2008
120.0
0.2+
Month (*)
Investment Climate in Arriyadh 2009
Monthly Cost of Living Index and Rate Changes
From December 2007 to end December 2008(1)
In 2008, the rise in the cost of living was estimated at 4.1% compared to 2.2% the previous year.
Price increases were mainly in rent, water and restoration works, food, beverages and other goods,
in addition to medical care, and reached 8.1%, 7%, 5.3% and 5.2% respectively. Whereas the average
price of clothing and shoes, as well as transport and telecommunications decreased to 2.4%, 0.9%
respectively. Increases in cost of education and social recreation were only 0.2%.
Labor Market Structure during 2007(2)
The growth of the labor force by 4.5% in 2007 played a major role in increasing the employment rate
to 3.2%. The total number of employees reached 7.8 million compared to 7.5 million in 2006. The
national labor force reached 3.6 million in 2007 compared to 3.4 million in 2006.
Labor Force by Nationality and Gender in 2007 (3)
Nationality
Labor Force
Employed
Unemployed
Male
Female
Total
Male
Female
Total
Male
Female
Total
3,362,712
667,343
4,039,955
3,082,301
502,456
3,584,757
380,411
164,787
445,198
Rate to Total
83.4
16.6
100
86
14
100
63
37
100
Rate to
Grand Total
40.9
8.1
49
37.5
6.1
43.6
3.4
2
5.4
Non-Saudis
3,596,778
602,921
4,199,699
3,581,716
599,868
4,181,584
15,062
3,053
18,115
Rate to Total
85.6
14.4
100
85.7
14.3
100
83.1
16.9
100
Rate to
Grand Total
43.7
7.3
51
43.5
7.3
50.8
0.2
0
0.2
6,959,490
1,270,164
8,229,654
6,664,017
1,102,324
7,766,341
295,473
167,840
463,313
84.6
15.4
100
81
13.4
94.4
3.6
2
5.6
Saudis
Total
Rate to
Grand Total
(1) Check CDSI website, www.cdsi.gov.sa.
(*) The Gregorian calendar was necessarily used.
(2) Ministry of Economy and Planning website.
51
(3) Estimates of Labor Force Research as shown in SAMA, 44th Annual Report, 2008, p 222.
Annual Report 2009 (Eng) .indd 51
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The High Commission for the Development of Arriyadh
Transport and Telecommunications
Infrastructure
Roads:
The road network in the Kingdom of Saudi Arabia
is remarkably safe. The total length of roads in
2007 was approximately 52,100 km, 14,400 km
of these being highways linking all cities of the
Kingdom as well as international borders. This
network also serves large urban areas, 9,000
km link major cities and 28,700 km are branch
roads to serve villages and agricultural areas (1).
Railways:
Railways in the Kingdom experienced
remarkable development. Advanced networks,
as well as several modern passenger stations,
were established. Moreover, high-speed
trains were introduced, leading to improved
passenger and freight services. Particularly
noteworthy is the Council of Ministers approval
for the establishment of North-South Railways
Company, owned by the Public Investment Fund,
which has led to remarkable improvements in
the transport of passengers and goods(2), and
issuance of the Royal Decree No 26 in 2006 to
establish Saudi Railways Organization (SAR) with
a capital of SR 1 billion(3). In 2007, the number
of passengers in the Kingdom decreased,
especially on the line linking Arriyadh and the
Eastern Province, by 38,800 passengers, or 3.6%
to 1.07 million compared to 1.11 million in the
previous year. The volume of freight reached
3.2 million tons, an increase of 576,600 tons or
21.6% on the last year(4).
Airports and Air Transport:
The airport network in the Kingdom comprises
27 airports, including 4 international and 23
national airports across the Kingdom. These are
equipped with the most advanced equipment
and systems. Today, integrated airports are
being established in Yanbu and Al Ula. The
General Authority of Civil Aviation (GACA)
licensed companies to work as either national
or international air transporters – such as
SAMA, with a capital of SR 187.5 million, which
increased to SR 302 million and NAS with an
initial capital of SR 308.6 million increasing
to SR 356.2 million. King Abdulaziz Airport in
Jeddah is being expanded in two stages: the first
ends in 2011, the second ends in 2035. In 2007,
52
the total number of passengers passing through
domestic airports amounted to 48.5 million.
This represents three million extra passengers
or a growth of 8.4%, compared to the total of
35.5 million passengers in 2006. Moreover, a
total of 564,200 flights were made, an increase
of 279,500 flights (representing a growth of
98.2%) compared to 284,700 flights in 2006(5).
Seaports:
There are eight commercial and industrial
seaports in the Kingdom. Large volumes of
cargo are handled annually at these ports.
The total weight of exported commodities in
2007 reached 83.35 million tons (excluding oil
exports). The volume of imported commodities
amounted to 57.48 million tons during the same
year. The total number of passengers reached
1.5 million, and 11,821 ships(6).
Postal Services:
The total number of post offices in the Kingdom
in 2007 amounted to 470 main offices, 146
branch offices, 83 postal agencies (36 in
Arriyadh), 4,933 depots for surface mail and
2,465 street mail boxes. Express mail offices
numbered 120, in addition to 5,665 mobile
postal services to cover the villages(7).
(1) SAMA, 44th Annual Report, 2008.
(2) Al Hayat Magazine: issue # 4608. May 24 -2006.
(3) SAMA, 44th Annual Report, 2008.
(4) Saudi Railways Organization, 2007 statistics.
(5) Saudi Arabian Airlines, Annual Report, 2007.
(6) Saudi Ports Authority, 2007 statistics.
(7) SAMA, 44th Annual Report, 2008.
Annual Report 2009 (Eng) .indd 52
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Telephone Lines:
Investment Climate in Arriyadh 2009
Total number of working land telephone lines
in the Kingdom stood at approximately four
million land lines, according to 2007 statistics.
The number of working mobile telephone
lines provided by Saudi Telecom Company and
Etihad Itisalat, (Aljawal and Mobily) exceeded 28
million mobile lines, or 46% of annual growth.
During the same year, the number of Internet
users reached more than 6.4 million(1).
Major Producing Sectors:
Agriculture
The Kingdom has succeeded in achieving selfsufficiency in basic crops. Moreover, it has begun
to export many agricultural products such as
wheat, dates, dairy products vegetables, eggs,
fish and animal products to overseas markets.
Industry:
The cumulative number of operating factories
in the Kingdom amounted to 4,048 at the
end of 2007, with total financing of SR 334.8
billion. These factories employ around 437,000
workers.(2)
Companies:
The cumulative number of operating companies
in the Kingdom, based on licenses granted
by the Ministry of Commerce and Industry,
amounted to 18,861 in 2007, with a gross capital
of SR 570.5 billion. The capital of joint stock
companies reached 72.3% of the gross capital of
existing companies. Limited liability companies
made up 25.1%, joint liability companies 1.9%,
and 0.7% for limited partnerships(3).
Banks:
The Saudi Arabian Monetary Agency (SAMA) is
the central bank in the Kingdom. In 2007, there
were 18 commercial banks operating in the
Kingdom, including The National Kuwaiti Bank,
Deutsche Bank, Muscat Bank and National Bank
of Bahrain. A further 64 commercial banks have
since established, with a total 1,353 branches(4).
The foremost banks in the Kingdom are:
• National Commercial Bank
• Riyadh Bank
• Saudi French Bank
• Samba Financial Group
• Saudi British Bank (SAAB)
(1) SAMA, 44th Annual Report, 2008. p.402.
(2) SAMA, 44th Annual Report, 2008.
(3) Ibid.
(4) Ibid.
(5) SAMA 44th Annual Report, 2008.
Annual Report 2009 (Eng) .indd 53
•
•
•
•
•
•
•
Saudi Hollandi Bank
Al Jazira Bank
Al Rajhi Bank
Arab National Bank
Saudi Investment Bank
Al Bilad Bank
Al Inma Bank
Performance of the Saudi Economy and Future
Outlook
The Saudi economy represents more than onethird of the combined economies of all Arab
countries. The Kingdom is the major partner in
the inter-Arab trade and investment. It is also
ranked the first among Arab countries in terms
of attracting foreign investments.
The Saudi economy continued to achieve high
rates of growth in all sectors during 2007. The
positive conditions in the world oil market
combine with persistent efforts aimed at fulfilling
structural reformation to enhance continuous
economic development. GDP increased by 3.4%,
and the role of the private sector achieved a
4.3% increase and the government sector 3%.
In 2007, the 44th Annual Report of the Saudi
Arabian Monetary Agency(5) showed that public
finance witnessed a remarkable improvement,
leading to a surplus for the fifth consecutive
year with a percentage of 12.3% of GDP. In
addition, the report showed a 24.9% surplus of
balance of payments of GDP achieved for the
ninth consecutive year. Non-oil exports rose
by 23.1% annually to reach 7.3% of GDP by the
end of 2007. The report also pointed to the
acceleration of inflation rates in the Kingdom
from 4.1% in 2007 to approximately 11.1% in
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12/21/09 8:49:44 AM
The High Commission for the Development of Arriyadh
July 2008, falling to 10.9% in August 2008. The
report mentioned that signs of inflation started
to show in 2006 when demand started to exceed
supply and affect prices. Rising prices all over the
world and the high expectations of individuals
and companies played a major role in increasing
the pressure on the available resources and
consequently to increase the rate of inflation,
particularly after the remarkable improvement
in Government income.
The report considered the Kingdom’s early
versatile procedures an adequate initiation whose
objective was controlling causes of inflation that
directly impact various categories of society,
that cannot readily cope with the impact. The
Monetary Agency undertook various measures
to prevent national over-liquidity by raising the
compulsory reserve rates many times.
Moreover, the report pointed to the world
crisis that threatens economic development.
It assured that the conservative policies and
procedures of the Monetary Agency in order to
maintain the stability of the national financial
system played an essential role in protecting it
from any possible shocks it might face due to
national and international events.
During the coming ten years 2006/2016,
approximately 1,000 billion dollars will
be allocated to different sectors in the
Kingdom for either development or
improvement according to the following:
* $/us 180 billion to update the
infrastructure
* $/us 75 billion to update housing
projects
* $/us 112 billion to expand the
petrochemical industries
* $/us 140 billion for electricity
generation projects
* $/us 100 billion for desalinating
* $/us 28 billion for agricultural projects
* $/us 80 billion for telecommunications
projects
* $/us 53 billion for tourism
* $/us 150 billion for gas production
* $/us 13 billion for mining
Regarding outlook for the Saudi economy, the
Eighth Development Plan(1) indicates an increase
in economic growth, as well as investments
of the Government and private sector, and
encouragement of foreign capital investment.
Accordingly, the Plan calls for increasing total
investment from SR 146.6 billion in 2004, to
SR 243.9 billion by 2009, an increase in job
opportunities and reduction of unemployment
through the creation of 1.2 million jobs during
the Plan period. Moreover, the Plan anticipates
diversification of economic activities and
sources of national revenue through increased
contribution of non-oil sectors to GDP. The
value-added of these sectors is expected to
increase from approximately SR 525.3 billion in
2004 to around SR 677.2 billion in 2009. This is
in addition to expansion and development of
public services (health, education, housing, etc.).
By 2009, the number of government hospitals
will increase to 248 and the number of beds to
34,722, in addition to an increase in emergency
health centers to 356, and support medical
services, education and housing. According to
the Plan, demand for housing is estimated to be
around one million units during the Plan period,
and will attempt to provide housing to needy
families.
The Government’s strategy aims to increase
the total value of crude oil exports, from
approximately SR 368.8 billion in 2004 to
approximately SR 398.5 billion in 2009, an
average annual growth rate of 1.56%. It also
expects a surplus in the trade balance as
well as development in the agriculture field
(annual growth rate of 3.2%), mining and
quarrying (7.9%), petrochemicals (7.3%), other
manufacturing sectors (6.7%), electricity, gas
and water sector (4.2%), construction sector
(6.7%), real estate sector (5.8%)(2), as well as all
other economic sectors, which will grow in an
integrated manner leading to improvements in
the standard of living for citizens in conjunction
with social and economic stability.
From a speech by the Ministry of Commerce and
Industry at the Chicago Council for Foreign
54
(1) Ministry of Economy and Planning, 8th Development Plan (2005-2009)
(2) Ibid.
Annual Report 2009 (Eng) .indd 54
12/21/09 8:49:45 AM
Investment Climate in Arriyadh 2009
Outlook for the Saudi Economy
By 2025, the Saudi economy will be
prosperous and versatile, led by the
private sector. It will provide job
opportunities, education at all levels,
quality medical care as well as social
facilities needed by citizens, and protect
Islamic principles and the cultural
heritage of the Kingdom.
The Conference of the Future Outlook of
the Saudi Economy.
Top Ten Fastest – growing Saudi Companies in the Kingdom
Established for more than five years
Company
Rank
100
Established less than five years
Area
Company
Rank
100
Area
Electronic Security Co.
1
Jeddah
Maktoob Co. for Advertising and Media
1
Jeddah
Olalmajd Co.
2
Arriyadh
Telco. Services
2
Arriyadh
Security Technology
3
Arriyadh
Water and Electricity Arabic Company
3
Arriyadh
Integrated Networks Co.
4
Arriyadh
Creative Solutions Co.
4
Arriyadh
Al – Elm Information Security
5
Arriyadh
Creative Business Solutions Est.
5
Jeddah
Azizia Panda United
6
Jeddah
Hazza tractors & Heavy Mach. co
6
Al
Khobar
Saudi Delta
7
Arriyadh
Amwal Financial Consultants Co.
7
Arriyadh
Applied Technology
8
Arriyadh
Tufail information technology Co.
8
Jeddah
Roiyah Co.
9
Jeddah
Shumool Real Estate Co.
9
Arriyadh
Alcantara Co.
10
Jeddah
DNA Co.
10
Jeddah
55
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The High Commission for the Development of Arriyadh
Theme Two:
Policies and Measures Supporting
Investment in the Kingdom
The Saudi economy has entered a new stage
of economic development and progress which
has accelerated growth rates during the last
few years. Higher rates of growth are expected
in the coming years, in line with the regulatory
measures which aim at boosting the economic
development process, increasing the volume
of domestic and foreign investments and
strengthening the capital market. The expected
higher growth rates are also in line with the
sectoral measures which aim at reorganizing
a number of economic sectors to participate
effectively in the development process. These
sectors include; insurance, tourism, gas and
mining. Measures aiming to boost economic
growth also include restructuring a number
of government agencies to improve their
efficiency (restructuring of the Public Pensions
Agency, the judiciary, and modernization of
the Department of Zakat and Income Tax). This
aims also to support the privatization strategy
in order to raise production efficiency and to
increase the private sector role in economic
activities and development (privatization of the
industrial parks, postal services, etc.)
•
•
•
•
•
•
•
•
•
•
•
•
Economic Activities Planned for Privatization(1)
Privatization represents one of the most
important constituents of the economic policy
in the Kingdom. This policy comprises the
following:
• Water and sanitary waste
• Desalination of seawater
• Telecommunications
• Air transport and related services
• Railroads
• Roads, which includes:
- Management, operation and maintenance
of express roads for which there are
alternative roads
- Construction and operation of new express
roads
•
•
Airport services
Postal services
Grain Silos and flour mills
Seaports services
Industrial parks services
Government shares in joint stock companies,
including Saudi Electricity Company, banks,
Saudi Basic Industries Corporation (SABIC),
Saudi Mining Company (Ma’aden), Saudi
Telecom Company as well as government
shares in local refineries
Government shares in the capital of joint
Arab and Islamic investment companies
Government Hotels
Sports Clubs
Municipal services, such as:
- Establishment and operation of abattoirs
- Establishment and operation of public
markets and sales centers
- Establishment, operation and
maintenance of public parks
- Transport services and collection of
municipal revenue
- Cleaning and waste disposal services
Educational Services, such as:
- Construction and maintenance of
educational facilities
- Printing of textbooks
School related transport
- Students boarding houses
Leasing and operation of schools and
universities facilities
Social services, such as:
- Management and operation of social care
institutions
- Services related to placement of Saudis in
the private sector
Agriculture services, such as:
- Services related to health quarantines,
- diagnostic laboratories and veterinary
clinics
Health services, such as:
- Construction and operation of health
facilities
- Patients transportation services
Economic Freedom and the Enhancement of
Investment Climate
The Kingdom has embarked, during the last
five years, on implementing an ambitious
program of economic reform. This concerted
(1) For further information see 8th Development Plan, SAMA 44th Annual Report and achievements of 7th Development Plan.
56
Annual Report 2009 (Eng) .indd 56
12/21/09 8:49:46 AM
(1)
(2)
(3)
(4)
SAGIA: Annual Report of Investment Performance, 2005.
http://www.heritage.org/research/features/index/countries.cfm.
Ministry of Economy and planning, 8th development plan, 2004-9.
SAMA, 44th Annual Report, 2008.
Annual Report 2009 (Eng) .indd 57
pillar of national economy. The growing role
of the private sector in fixed capital formation
represents a positive phenomenon, which is
expected to continue in the future, particularly
under Government policies which support the
investment climate and boost efforts of the
private sector. The Government was keen to
provide a positive climate and opportunity
for maximizing the role of the private sector.
The best evidence for that is the privatization
strategy, which provides promising investment
opportunities for this sector and, in the
meantime, enhances its role in socio-economic
development. The main activities covered by
the recent privatization process include the
following(4):
• Complete the studies related to privatization
of Saline Water Conversion Corporation and
transforming it into a holding company as
well as establish related companies with
the contribution of the private sector
• Private sector contribution in generating,
connecting and distribution of electricity,
(the plan of 11th generation station
in Arriyadh with a capacity of 2000
megawatt) and operating the station in
2014, in addition to the Village project
with a capacity of 2000 megawatt starting
operation in 2014
• Issuing the Royal Decree No M/70 on 15
August 2007, which licenses the Saudi lines
to transform strategic units in the sectors
to be privatized into companies with the
contribution of investors from the private
sector
• Transform Prince Sultan Aviation Academy
into a private company (mid-2008)
• Privatization of the Grains Silos and Flour
Mills Corporation from 1 July 2008
• Sign contracts with the private sector for
the management and operation of water
and sanitary waste for a time period of 6-7
years
• Privatization of Saudi Arabian Mining
Company (Ma’aden) and offering 50% of its
capital for public subscription
• Issuing 109 licenses to establish domestic
employment offices in 2008
• Issuing licenses related to private sector
companies to construct five industrial
parks during 2007-8
Investment Climate in Arriyadh 2009
effort encouraged foreign capital inflow into
the Kingdom, the creation of adequate job
opportunities for the growing number of citizens
as well as achieving tangible GDP growth. This is
attributed to many factors, including the increase
in oil prices in the global markets, economic
reform policy and the ongoing improvement in
the investment climate. These factors contributed
together to accelerate economic growth and
increase local and foreign investments.
Growth prospects inspire optimism. The impact
of the same factors is likely to prevail, leading to
further growth in all sectors of the Saudi economy.
Moreover, the private sector is expected to be a
major beneficiary from the improvement in the
local business environment. Such improvement
will also contribute to attraction of more
foreign investment and will enhance the level of
confidence, which will, in turn, lead to increase in
local investment. Regarding economic freedom
and its relationship with the investment climate
in the Kingdom, the Economic Freedom
Index(1), issued by the Heritage Foundation,
indicates that the Kingdom has been ranked
in 60th position of 160 countries. This rank is
continuously improving(2). This matches its
position among world indicators in terms of
business and competitive environment, which
means that the Saudi economy is ‘Mostly Free’,
as indicated by the report.
Investment is the main engine of economic
growth. It affects growth as it forms an integral
part of the aggregate demand. Investment has
a direct impact on stimulation of domestic
production and contributes to accumulation
of productive assets required to maintain
production capacity of the economy and enhance
its competitiveness.
Successive development plans paid due attention
to encouragement of investment and growth
of fixed capital in order to achieve strategic
goals represented in diversifying the economic
base and realizing sustainable development.
Remarkable achievements were realized in this
regard. Foremost among these are the policies
of economic reform, economic liberalization,
privatization and transparency. This has supported
the role of the private sector in the development
process, where private non-oil investments, up
to 2004, constituted approximately 75.6%(3)
of total investments, becoming the main
57
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The High Commission for the Development of Arriyadh
Volume and Fields of Private Sector Activities (1)
Number of Companies
Number of Laborers (by thousand)
2004
2007
2004
2007
Industry
8,848
9,723
568.9
565.8
Agriculture
1,501
1,559
339.0
364.2
Trade
334,214
431,472
1,148.2
1,499.0
Construction
169,091
177,406
901.1
793.6
Fiscal Services
2,284
3,515
59.5
83.8
66
66
2,476.9
2,564.2
Personal Services
and comprehensive electronic services were
provided in these offices where the Authority was
represented. Recently, preparations have been
made to open optimum service centers in many
areas and economic cities in the Kingdom from
the first quarter of 2007. New measures have
been applied by the Authority to grant licenses
for projects that attract significant investments,
and avoid investments with meager contribution
and low capacities of training, rehabilitating
and employing citizens(2).
Statistics from the Saudi Arabian General
Investment Authority (SAGIA) show that the
Authority issued 4,606 licenses for investment
projects with a total capital of SR 368.12
billion (3).
In the field of licenses and services, more
licenses were granted from the Investment
Authority due to many factors such as; the
efforts made by the Kingdom for the purpose
of improving the economic and investment
climate, enhancing the level of confidence in
the strong Saudi economy, the rising prices of
oil and establishment of integrated economic
cities. Hence, in 2006, 1,389 joint Saudi/foreign
investments were licensed with a total finance
of SR 253 billion, a growth rate of 25% on
2005. The purpose was to attract joint Saudi
and foreign investments with more than SR
300 billion during 2007. Service offices were
established to serve the investors in King Khaled
International Airport in Arriyadh. More advanced
Licenses Granted by the General Investment
Authority to 2006 (4)
Number
%
Total Finance
(billion riyal)
%
1,579
34.3%
175.65
47.7%
8
0.2%
0.45
0.1%
Service
3,019
65.5%
192.02
2.2%
Total
4,606
100.0%
368.12
100%
License Kind
Industrial
Agricultural
It should be mentioned that 100% foreign-owned investments reached approximately 3,229, licensed
with a capital of SR 49.7 billion and represent approximately 70% of the total licensed projects –
approximately 13.5% of the total invested and licensed capital(5).
58
(1) Ministry of Economy and Planning website.
(2) General Investment Authority website, 2008.
(3) Ibid.
(4) Ibid., Studies Departure.
(5) Arriyadh Chamber of Commerce and Industry, Arriyadh Economy, issue 15, 2006.
Annual Report 2009 (Eng) .indd 58
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License Kind
Industrial
Service
Agricultural
Total
Number
Percentage
Total Finance
(billion riyal)
Percentage
634
29.4%
21.4
48%
1,521
70.4%
23.6
52%
4
0.19%
0.1
0.2%
2,159
100.0%
45.1
100.0%
The Kingdom is still endeavoring to prepare
a comprehensive long-term strategy for
restructuring the economy. It has endorsed the
establishment of many regulatory bodies, issued
trade related laws, and negotiated aiming
at signing a number of bilateral agreements
concerning free trade, and coordination of
policies and trade regulations among GCC
States. All these efforts are directed towards
facing globalization challenges and reaping its
fruits in the 21st century.
The Kingdom and the World Trade
Organization (WTO) (2)
The Kingdom signed the accession agreement
to join the World Trade Organization on 11
November 2005, to become officially member
Number 149, after more than ten years of
negotiations. The Kingdom’s accession to WTO
aims to integrate the Kingdom into the world
economy and to shift the Saudi economy from
a local Arab economy to a global one. The
agreement comprises three sections; all of them
come under the accession protocol document
signed by the Minister of Commerce and
Industry on behalf of the Government. Signature
of the agreement is considered an official
endorsement by the Kingdom of accepting the
terms and conditions of accession stated in
the table of unified commitments concerning
agricultural and industrial commodities
sector, which amounts to 7,177 commodities
representing the first section of the agreement.
The service sector includes 12 main activities,
155 sub-activities and four methods for delivery
of services, and represents the second section.
The report of the working team, which includes
316 paragraphs that explain legislative,
legal, investment, economic, trade, financial,
(1) Arriyadh Chamber of Commerce and Industry, Arriyadh Economy, issue 15, 2006.
(2) See Ministry of Commerce and Industry website www.commerce.gov.sa.
Annual Report 2009 (Eng) .indd 59
technical, health and environmental policies in
the Kingdom represents the third section of the
agreement.
According to this Agreement, the Kingdom
obtained 59 exemptions, foremost among
which are:
• Using the principle of gradual penetration
to markets in increasing foreign capital
invested in services (49% at the time of
accession, increasing to 51% after one year
of accession and to 70% after three years of
accession).
• Exempting the Kingdom from implementing
the government procurements agreement.
It is an agreement of some parties (of
specific membership) and not a multilateral
one. The country has the right to purchase
national products of goods and services and
is exempted from the principle of national
treatment.
• Continuing with provision of loans from
industrial and agricultural banks and
maintaining exemption of imported
products from import duties.
• This Agreement will bring many benefits to
the Kingdom, the most significant among
them are:
• The consumer is free to choose goods and
services available in the local market, which
has become an integral part of the global
market. The consumer is free to choose
the products of the highest quality at the
minimum possible price.
• Consumer confidence in the available goods
and products will be free of commercial
deceit and manipulated prices. This is
because local and foreign goods will be
subject to strict rules and controls, such
as meeting international standards, health
Investment Climate in Arriyadh 2009
100% Foreign Investments Licenses
17/4/2000 to 30/12/2006 (1)
59
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The High Commission for the Development of Arriyadh
measures and the protection of intellectual
property rights.
• More opportunities for Saudi products to
enter into the markets of all WTO member
countries, which enjoy low custom ceilings
and open economic and trade policies.
Moreover, Saudi exports will no longer be
subjected to aggressive measures from any
country, as was the case prior to accession
to the WTO.
• Resorting to Trade Disputes Settlement
Board of the WTO, characterized by its
prompt decisions and enforcement of the
measures aimed at achieving fairness to all
member states.
The Impact of the Kingdom’s Accession to WTO
on the Saudi Economy(1)
The Kingdom’s accession to the WTO is clear
evidence of the adequacy of its economic, fiscal
and legislative environment. This accession
is likely to lead to marked enhancement of
Kingdom’s investment climate and higher
value-added to the Saudi economy in general.
In particular, this accession will enhance the
level of confidence in the Saudi capital market
and encourage competent companies to enter
this market, particularly in the long run.
With respect to the capital market, accession
to the WTO represents an important event for
the financial services sector, mainly securities
investment in the Saudi Capital Market. Such
importance stems from the commitments
resulting from accession, a matter that will
enhance the investment climate in general.
The commitments are in harmony with general
objectives set by the Capital Market Law through
activation of the section related to opening the
door for non-banking institutions to practice
important activities related to securities in
the Kingdom (such as activities of dealing and
administration). This is also consistent with the
strategic objectives set by the Capital Market
Authority in this regard.
Regarding the impact of accession to WTO
on tariff protection, industries depending on
continuity of such protection will be affected to
a limited degree. Custom duties will decrease
for 396 commodities out of 458 currently
protected by the 20% category as well as 197
commodities out of 492 currently protected by
category 12%. However, the decrease of tariffs
will not be large, since most of them were
reduced from 20% to 15% and the protected
duties from 12% to 10% or to 6.5%. At the
beginning of the accession, the custom duties
of some commodities protected by 20%, such as
sweets and chocolates, will be reduced to 8%,
lubricants to 10%, steel pipes to 8% and plastic
products, paper, steel and furniture to 15%.
After three years of accession, computer sets
and related accessories as well as telephone sets
(land and mobile) will be exempted, and after
five years from the date of accession, the custom
duties of the chemical materials protected by
the 20% and 12% categories will be reduced to
6.5%. Such materials include fertilizers, soap,
perfumes and plastic products.
As a further result of the Kingdom’s accession
to the WTO, Saudi companies will face intensive
competition from multinational companies.
Small enterprises which operated inefficiently
in the past while benefiting from protection
policy will be forced to exit the market unless
they merge with larger national or foreign
companies, or improve levels of efficiency
and competitiveness. Moreover, some goods
and services, which currently enjoy generous
government support, will no longer receive such
subsidies. Multiplying the productivity of the
economy and diversifying its activities, support
of foreign investment and its integration with
national investment, as well as other strategic
bases required for development of the economy
and community, will maintain the material and
human resources of the economy and cope
flexibly with the challenges resulting from
accession to the WTO.
(1) See Ministry of Commerce and Industry website www.commerce.gov.sa.
60
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The Latest on the Kingdom’s Membership of the WTO (1)
Government and WTO. Within two years of the Kingdom’s accession to the WTO, the Kingdom pledged
to follow up the implementation of the commitment as a part of the requirements of its Accession and
commitments in both service and commodities sectors, and the report of the working team.
2- The Council of Ministers issued a decree No (41) in 2/19/2007 which requires the Ministry of Commerce
and Industry to implement their responsibilities related to the WTO including the special tasks of the WTO
requirements.
3- With respect to implementing the Kingdom’s commitments toward the members of the Organization, the
Kingdom was committed to implementing its obligations in Accordance with the deadlines included in the
report of the working team as the following:
- Canceling some activities from the list of the actions exempted from foreign investment system which
include:
- Insurance services
- Movies and video tapes services
- Distribution services and wholesale and retail trade including medical retail such as
- the special pharmacies
- Commercial agents except the ones of international categorized commission No (6)
- Telecommunication Services
- Services of train transport of citizens within the Kingdom
- Air transport services
- Space transportation services
The Ministry kept the WTO up to date with developments, and a new list has been distributed among
businessmen, foreign investors and those interested in different languages.
- As long as the Kingdom is committed to implement article No 231 of the working team report, the
Kingdom’s proposal has been presented to the WTO Director General on April 15, 2007. Thus the
Kingdom is able to contribute in the meeting of the government purchases committee as an observer.
The Kingdom’s proposal has been approved and Saudi delegation is participating in the formal and
informal meetings held by the committee.
Investment Climate in Arriyadh 2009
1- The Ministry of Commerce and Industry continued its responsibility for coordination between the
4- Regarding the Kingdom’s contribution in the multilateral commercial negotiations ‘Doha Development
Agenda’. Since the Kingdom’s accession to the WTO on the 6th Ministerial conference held in Hong Kong,
the Ministry formed technical negotiation teams from the concerned governments. Each team is headed
with an official according to the negotiating subject area: agriculture, commercial of the Kingdom to the
WTO on the website, so the specialists and interested people inside and disputes team, trade technical
obstacles, health measures, trade and development, the Organization rules, intellectual property rights,
trade facilities, services, trade and the environment, industrial commodities. Professionals from the technical
teams coordinate with the delegations of the member states according to common interests. As is the case
with states that recently joined the WTO, the 6th Ministerial Declaration of Hong Kong Conference was
interested in these countries, and it appreciated the efforts exerted and the commitments made during the
negotiations to join the WTO.
5- The Ministry has prepared all notices required by the Organization in collaboration with specialists in
Government agencies, and 42 notices were provided The Ministry also established a website to answer all
inquiries of the member states which are related to implementing agreements related to the Organization.
6- The Kingdom shared in all working teams meetings concerned with the accession of some countries to
the WTO, as well as it supported the measures of joining Arab and Islamic countries, developing and under
developing ones to the Organization. On the other hand, the Kingdom participated in many negotiations of
bilateral meeting with the Russians related to depletion of goods and services of the Russian Union Markets
as part of the measures required to Join the WTO. This participation of the Kingdom as a member of the
meetings of the working teams concerned with the accession of Russia to the WTO.
7- With regard to the awareness of the businessmen to the impacts of joining the WTO, the Ministry,
represented by the agency of technical affairs and the information center, made available on the internet
all documents related to the Kingdom’s accessionso as to inform those inside and outside the Kingdom of
the depletion of goods and service trade as well as the report of the working team. Many conferences and
workshops were held in the commercial chambers and boards of chambers to introduce business sector and
government principals concerned with the Organization’s themes and implementing of the commitments.
(1) SAMA, 44th Annual Report, 2008.
61
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The High Commission for the Development of Arriyadh
Saudi Capital Market(1)
The Arab Motor Company was the first joint
stock company in the Kingdom. It was founded
in 1932, but was subsequently liquidated. The
Arab Cement Company, founded in 1954, was
the first Saudi joint stock company to be listed in
the stock market.
It was decided, in 1983, to trade securities
through commercial banks only. In 1984, SAMA
issued a circular explaining the methods and
conditions of trading shares.
To overcome the constraints in the process of
trading shares, the ESIE system was adopted in
1990. This system was replaced by TADAWUL
system in 2001, which is based on the latest
international technologies. During this period,
non-Saudis residing in the Kingdom were
allowed to invest in the Saudi Capital Market via
mutual investment funds. Royal Decree No. 9
was issued in 2003, endorsing the Capital Market
Law. Royal Decree No. 114/A was also issued in
2004, regarding formation of the Capital Market
Authority to be entrusted with management and
supervision of the market. It is noteworthy that
the Capital Market Authority is an autonomous
body.
The Saudi Capital Market is one of the most active
markets in terms of values of trading and the
contracts held. This Market developed positively
in 2007 where the value of the general index of
the shares rose from 7,933.3 points at the end of
2006 to reach 11,176.0 points at the end of 2007.
The companies listed in the market numbered 86
in 2006, rising to 111 companies in 2007.
Key Indicators of the Saudi Capital Market(2)
General Indicator of Stock Prices (1985= 100)
Investment Funds Assets (billion riyal)
Commercial Banks’ Investments in Government Capital (billion
riyal)
Bank Credit (billion riyal)
Actual Disbursement of Specialized Lending Institution Loans
(billion riyal)
62
2006
2007
Annual Change %
9,933.3
11,176.0
40.9
84.1
105.1
25.0
123.3
144.2
16.9
497.1
594.8
19.7
10.2
16.5
62.5
(1) SAMA, Economic Updates, 4th quarter, 2005.
(2) Ministry of Economy and Planning, www.moep.gov.sa.
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value with liberalization of the sector from any
imposed restraints. The service sector was the
second to record an increase in market value
of 22.9% to SR 226 billion. In terms of share of
total market value, the industrial sector was the
largest contributor by 39% (or SR 755 billion),
followed by the banking sector with 30% (SR
583 billion). Also, in 2007, the number of traded
stocks increased by 8% to reach 58.86 billion
compared to 54.44 billion stocks in 2006. In
spite of the marginal increase of the traded
shares, its value recorded a decline of 50% which
underlines the dominance of the shares of small
and medium companies on the TSE. All sectors
of the Saudi market recorded a decline in the
value of traded shares, except for insurance
sector. Whereas industry and services sectors
were dominant on the traded value, contributing
70% of the total value in the market(2).
Investment Climate in Arriyadh 2009
In 2007, the Saudi Capital Market regained its
performance when the market general index
rose 41% compared to a 35% decrease in 2006(1).
All market’s sectors improved during this year
and they were topped by the industrial sector
that achieved 79% and ended with 28,683
points, 62% for the insurance sector, and 31%
for the banking sector. On the other hand,
electricity and telecommunication sectors
were the lowest, amounting to 13% and 7%
respectively. In December 2007 remarkable
progress occurred, and the Saudi index increased
by 18%. This increase was the main contributor
instrumental in achieving total annual profits of
41% in 2007.
Generally, market value recorded an increase of
59% to SR 1.94 trillion in 2007 compared to SR
1.22 trillion in 2006. The Insurance sector had
lately witnessed the largest increase in market
Working Companies in the Saudi Capital Market to 2008 (3)
Number
Company
Company
Number
Banks and Fiscal Services
11
Multiple Investments
7
Petrochemical Industries
13
Industrial Investment
11
Cement
8
Construction
12
Retail
8
Real Estate Development
7
Energy and Facilities
2
Transportation
4
Agriculture and Food Industries
15
Media and Publishing
3
3
Hotels and Tourism
2
Telecommunications
Technology
Insurance
and
Information
21
Total of 127 companies
(1) Saudi Stock Market performance, economic strategy and future outlook, ‘Kingdom of Saudi Arabia a Home for World Investment ’ Global, February 2008.
(2) SAMA, 44th Annual Report, 2008.
(3) TADAWUL website.
Annual Report 2009 (Eng) .indd 63
63
12/21/09 8:49:52 AM
The High Commission for the Development of Arriyadh
64
Profits of Companies in Saudi Capital Market:
Profits of Companies in the Saudi Capital Market
during the period 2003-7 recorded an annual
composite rate of 28%. The insurance sector
headed the list when it recorded an annual
composite rate of 85%, followed by 56% for the
service sector and 42% for the industrial sector.
In 2007, the gross profits of the Saudi sectors
reached SR 85 billion compared to SR 76.7
billion in 2006, up by 11%. It is noteworthy that
the Saudi Stock Market has recorded remarkable
revenues in 2007.
In 2007 the banking sector witnessed a
depression when ten of the listed commercial
banks recorded a decline of 16.9 % to SR 24
billion compared to SR 29 billion in the same
period of the previous year. On the other hand,
the industrial sector recorded increased profits
of 32.7% or SR 34.7 billion compared to SR26.46
billion in 2006. The service sector also witnessed
increased profits of 22.7% to SR 6.13 billion in
2007 compared to SR 1.87 billion in 2006.
In 2007 SABIC (one of the biggest Saudi
companies in terms of market value) was ranked
in first position when it recorded a net profit
of SR 27 billion compared to SR 20.3 billion in
the previous year, an increase of 33%. SABIC’s
share was 32% of the gross profits of the Saudi
companies listed in the market. It realized
primary net profits in the first half of 2008 of
SR 14.5 billion compared to SR 12.8 billion in
2007 – an increase of 13%. The earnings per
share were SR 4.82 compared to SR 4.25 in the
same period of the past year (the total shares
were three billion) or an increase of 13%. For the
first six months of 2008, the primary operating
profits amounted to billion compared to SR 19.2
billion in 2007, an increase of 20%.
In the second quarter of 2008, the corporation
realized the highest profits since it was first
established, when the realized net profits
reached SR 7.54 billion compared to SR 6.47
in the same second quarter of the past year, an
increase of 17% (1).
By the end of the first half of 2008, total revenues
reached SR 83 billion or a rate of growth by 54%
over the same period of the previous year. That is
mainly attributed to listing the results of SABIC
Innovative Plastics among the consolidated
fiscal lists, in addition to the improvement of
sales prices of most essential products and the
increase of the production and sales volume by
5% and 6% respectively, despite the continuous
rise of the price of raw materials due to the high
price of oil. The company’s board decided on
distributing SR 5.25 billion as cash profits for
shareholders on the first half of 2008 or SR 1.75
per share, provided that the owners of the shares
and listed in the records of TADAWUL have the
priority of the realized profits by 23 July, 2008.(2)
However, the positive action of the market
started to decrease in 2008, to start with 7,458
points by the beginning of the year and close at
4,802 points by the end of the year – a negative
change rate of 35.60% compared to the year
2006-7.
(1) SABIC website.
(2) Ibid.
Annual Report 2009 (Eng) .indd 64
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Transactions
To the
market %
Traded shares
To the
market
%
Value of traded
shares
Banks and Financial
services
1,111,639
12.24%
4,776,182,806
29.44%
73,081,439,090.50
Petrochemical Industries
2,075,637
22.85%
3,100,286,690
19.11%
98,306,859,539.05
Cement
119,029
1.31%
90,695,387
0.56%
4,326,350,108.45
Retail
374,626
4.12%
375,238,598
2.31%
6,788,872,529.55
Power and Service
Facilities
80,158
0.88%
236,063,868
1.46%
2,568,897,846.45
Agriculture and Food
Industries
621,555
6.84%
690,007,023
4.25%
13,092,311,563.40
Telecommunications and
Information Technology
532,390
5.86%
1,336,705,175
8.24%
23,430,392,984.75
Insurance
905,563
9.97%
655,028,911
4.04%
14,658,345,358.45
Multiple Investment
Companies
467,294
5.14%
734,321,606
4.53%
9,127,525,387.35
Industrial Investment
1,005,256
11.06%
1,508,817,841
9.30%
28,009,301,537.70
Construction and Building
874,819
9.63%
656,302,479
4.05%
23,039,176,653.70
Real Estate Development
557,039
6.13%
1,321,300,728
8.15%
18,746,818,701.95
Transport
250,116
2.75%
614,675,339
3.79%
9,105,910,010.75
Media and Publishing
53,638
0.59%
66,956,575
0.41%
1,113,969,737.10
Hotels and Tourism
56,302
0.62%
59,489,485
0.37%
946,227,656.45
9,085,061
100.00%
16,222,072,511
100.00%
326,342,398,705.60
Sector
The total
Investment Climate in Arriyadh 2009
Brief of Market Sectors During 2008(1)
(1) See Saudi Capital Market website www.tadawul.com.
65
Annual Report 2009 (Eng) .indd 65
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The High Commission for the Development of Arriyadh
The Most Important Regulatory Development in Saudi
Capital Market in 2007(1)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
On January 13, 2006 Capital Market Authority suspended trading shares of Besha Agricultural
Development Company in Saudi Capital Market. From 13/1/2006.
On January 18, 2006 Capital Market Authority suspended trading shares of ANAAM
International Group in Saudi Capital Market. From 20/1/2007.
On December 31, 2007 CMA approved trading shares of ANAAM International Group (holding
company) out of continuous automatic trading system, according to controls proposed by
TADAWUL capital market and endorsed by the Authority Council during a month from this
date.
By the end of trading on Wednesday 6, June, 2007, Albaha Development Investment Company
(ABDICO) trading shares were stopped for ten days to enable the shareholders to pay back the
remaining of shares value of SR 2.5 per share.
Trading of shares of Albaha Company resumed after repayments of all installments on
Saturday 23, June, 2007.
Both Al Babtain Power and Telecommunication Corporation shares and Fawaz Abdulaziz
Alhokair and his partners’ shares were added to the market indicator (TADAWUL) according
to closing price of both shares on January 23, 2007.
On February 17, 2007 the shareS of Advanced Polypropylene Corporation (APPC) were added
to market indicator (TADAWUL) according to closing price of shares. Cooperative Insurance
(SIIC) shares joined.
Seven financial mediation companies joined Saudi Capital Market as working members to
serve financial mediation:
- FALCOM for Financial Services, February 24, 2007
- Hermes Saudi Financial Group, March 4, 2007
- Jadwa Investment Company, March 10, 2007
- Rana Investment Company, March 21, 2007
- Saudi Swiss Securities, April 23, 2007
Alabdulatif Industrial Investment Company shares were added to the market indicator
according to closing price on Saturday, March 3, 2007.
Malath Insurance and Cooperative Reinsuring shares as well as the shares of MEDGULF Share to
the market indicator (TADAWUL) According to closing price of Tuesday 6, 2007. [MEC: month?]
Saudi Vitrified Clay Pipe (SVCP), SABB Takaful Co, and Saudi IAIC Cooperative Insurance Co.
(SALAMA) shares joined TADAWUL according to closing price of shares on July 30, 2007.
On July 1, 2007 Saudi Kayan Petrochemical Co. and Arabian Shield Cooperative Insurance Co.
(ASHIELD) shares joined TADAWUL according to closing price of both shares.
On September 30, 2007, Saudi Printing and Packaging Co. (SPPC) shares were added to
TADAWUL according to share’s price. Saudi United Cooperative Insurance Co. (WALAA) shares,
Sanad Insurance and Re-insurance Cooperative Co. (SANAD) shares and Saudi Fransi Cooperative
Insurance (ALLIANZSF) shares also joined TADAWUL according to closing price of shares on
September 30, 2007.
On October 3, 2007, AlAhli Takaful Co (ATC) share, and Saudi Indian Co. for TADAWUL according
to closing price for both shares.
On November 10, 2007, Allied Cooperative Insurance Group (ACIG) joined TADAWUL according
to closing price of the share.
On November 17, 2007, the shares of United International Transportation Company and Saudi
Arabian Cooperative Insurance Co. (SAICO) joined TADAWUL according to closing price of both
shares.
On November 25, 2007, the share of Gulf Union Cooperative Insurance Co. (GUCIC) joined TADAWUL
according to closing price of the share on that day.
On December 31, 2007, the share of Al- Ahlia Insurance Co. joined TADAWUL according to closing
price of the share on that day.
(1) SAMA, 44th Annual Report, 2008.
66
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Investment Climate in Arriyadh 2009
Saudi Capital Market witnessed remarkable
progress during 2007/2008, notably by:
• Licensing service providers of securities
• Adjusting instructions related to
declaration of companies whose shares are
enrolled in the market
• Imposing sanctions (fines) on some
companies for violating labor laws and
regulations of the market
• Offering new investment funds
• Modifying price change units of 25 halalas
to be variable by the price of traded shares
according to three new bands to better
reflect price changes in the shares of the
listed companies.
New Forms of Price Change Unit (1)
Stock Price Band
New Price Change Unit
The First Band: 25 riyal and less
5 halalas
The Second Band: from 25.10 to 50 riyal
10 halalas
The Third Band: 50.25 riyal and more
25 halalas
Real Estate Investment and Companies:
The real estate sector in the Kingdom contributes
to the GDP by SR 55 billion, and approximately
95% of the non-oil domestic products. This
growth is expected to continue to the end of
the Eighth Development Plan, with an annual
average of 5.8%. The real estate contribution
to the GDP is also expected to increase to
7.2%, which makes it an important hub of the
development process in the Kingdom.
The Saudi real estate sector is of particular
importance to national economy. This is reflected
in the provision of housing units, buildings,
shops, industrial parks and recreational, health
and educational facilities required by society
and the economy in general. This sector also
participates in provision of different government
facilities.
The real estate sector has forward and backward
links with approximately 80-100 sub-sectors of
the economy, particularly building materials
and contracting sectors.
The real estate sector comprises two main subsectors: real estate bureaus real estate companies.
These are Saudi joint stock companies, which
are well known and enjoy the confidence of
different groups benefiting from their services.
They are managed by the private sector and
are specialized in real estate investment and
development. Some have crossed the barriers
of the Arab world, and are present particularly
in Dubai and Sharjah. Others have gone further
to regional and international levels through
concluding strategic partnerships and coalitions
with a number of the largest international real
estate companies.
The Real Estate Development Fund provides
easy-term loans to support investment in this
sector. It is noteworthy in this respect to refer
to the Royal Directives regarding increase of
the Fund’s capital by SR 9 billion from the State
Budget surplus of 2006, to enable the Fund
meet the steady growth of demand for loans.
This will boost the role of the real estate sector
and encourage relevant companies and firms.
Private companies operating in this sector will
grow during the Eighth Development Plan
2005-9, with approximately 875,000 housing
units out of the total expected demand of one
million housing units. Around 280 million m² of
residential land is likely to be available for the
real estate sector so that it can meet housing
(1) TADAWUL Website: www.tadawul.com.
67
Annual Report 2009 (Eng) .indd 67
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The High Commission for the Development of Arriyadh
demands. The Real Estate Development Fund
will provide approximately 75,000 loans with a
total value of SR 22,500 million for construction
of approximately 90,000(1) housing units across
the Kingdom. Moreover, relevant studies
indicate that total demand for housing is likely
to reach approximately 2.4 million units by
2020, requiring an investment of SR 1.2 trillion
to meet such demand (2).
There is no doubt that the real estate sector in
the Kingdom is facing major challenges and
great responsibilities. Hence, it is imperative
for it to concentrate on forming joint stock real
estate companies. This form is considered the
best for the economic activity that believes in
separation of ownership from management.
It also allows for the attraction of substantial
capital as well as coordination with other related
agencies such as banks, real estate finance
companies, contracting companies, and real
estate mortgage and installments companies.
Demand for Housing by Administrative Provinces and
Type of Demand during the 8th Development Plan 2004-9 (3)
New Demand
Provinces
Replacement Demand
Total
Number
(Thousand)
%
Number
(Thousand)
%
Number
(Thousand)
%
Arriyadh
160
25.5
20
19.5
180
24.7
Makkah
170
27
25
24.4
195
26.7
Madinah
34
5.4
5
4.9
39
5.3
Qassim
20
3.2
5
4.9
25
3.4
Eastern Province
118
18.8
20
19.5
138
18.9
Asir
30
4.8
5
4.9
35
4.8
13.5
2.2
4
3.9
17.5
2.4
Hail
15
2.4
3
2.9
18
2.5
Northern Frontiers
7
1.1
1.5
1.5
8.5
1.2
Jazan
30
4.8
5
4.9
35
4.8
Najran
7
1.1
2
1.9
9
1.2
Baha
11
1.8
5
4.9
16
2.2
Jouf
12
1.9
2
1.9
14
1.9
Total
627.5
100
102.5
100
730
100
Tabuk
Banking System Development (4):
The Kingdom of Saudi Arabia has a modern banking system in terms of the quality of service and
efficiency of regulations. The banking sector in the Kingdom comprises eighteen national and joint
banks, in addition to branches of Kuwait National Bank, Deutsche Bank, Muscat Bank and Bahrain
National Bank.
Reserves, capitals and the profits of the commercial banks branches increased during the second
quarter of 2008 by 9.6% (SR 9.8 billion). By the end of the second quarter of 2008, the rate of
capital and commercial banks reserves to gross bank deposits reached 6.17% compared to 5.16%
in the previous year. The annual rate of growth for the capital and commercial bank provisions
68
(1) All Figures are derived from the 8th Development Plan, 2004-9.
(2) Study by SAMBA Financial Group, April 2006.
(3) Ministry of Economy and Commerce, Demand Analysis of the 8th Development Plan, 2005.
(4) SAMA, 44th Annual Report, 2008.
Annual Report 2009 (Eng) .indd 68
12/21/09 8:49:57 AM
years, especially in electronic and commercial
transactions, as well as personal transfers.
In addition, salaries for both private and
government sectors will be transferred via
this SARIE System. Saudi Pay Network (SPAN)
witnessed good progress in terms of transactions
made. By the second quarter of 2008, the
total of these operations reached 216 million
(an estimated total value of SR 96 billion).
The number of cash machines (ATMs) reached
8,200, while the ATM cards issued by local
banks numbered approximately 4.11 million.
Moreover, the operations through points of sale
reached 31 million, with a total of SR 14 billion.
These continued to grow, reaching 66,000
by the second quarter of 2008. Regarding the
clearings statistics for the second quarter of
2008, the cheques issued from clearing houses
(imports and exports) reached approximately
1,944,000, whose value was SR 4,196 billion.
Company and individual cheques reached
1,681,000 with a total value of SR 8,135 billion.
Bank (certified) cheques amounted to 263,000
whose value reached SR 6.60 billion.
Investment Climate in Arriyadh 2009
increased by 9.29% (SR 8.31 billion). The profits
of commercial banks also increased to SR 1.9
billion compared to SR 3.8 billion in the last
quarter, an increase of 6.9% (SR 8.0 billion), with
an annual rate of growth of 2.1%, or SR 40 billion.
During the second quarter of 2008 the number
of commercial banks increased to 1,384, with a
rate of growth of 9.0% (13 branches) compared
to 1,371 in the previous year. At the same time,
commercial banks’ branches realized an annual
growth of 6.4%, or 61 branches compared to
1,323 the previous year.
Regarding development of banking technology,
the SARIE system shows that in the second
quarter of 2008 total operations carried out
by this system reached approximately SR 8,631
billion via 8.9 million transfers. Total personal
payments reached SR 8,409 billion, and SR
222 billion for deferred payments. Customer’s
payments amounted SR 726 billion, meaning
a high percentage of 16. 53% compared to the
second quarter of 2007. Gross payment value
among the banks reached SR 7,904 billion.
The SARIE System will continue in the coming
Performance Indicators of the Banking Sector in 2007 Compared to 2006 (1)
Value
(thousand riyals/2007)
Value (billion
riyals/2006)
Total Bank Deposits
717,564
482
Total Bank Liabilities
1,075,221
595.9
Total Claims on Government and Semi Government
181,613
435.9
Total Claims on Private Sector
577,882
159.5
Total Foreign Assets of Commercial Banks
105,213
91.4
Total Foreign Liabilities of Commercial Banks
42,499
65
Item
(1) Statistical Tables Supplement, SAMA.
69
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The High Commission for the Development of Arriyadh
Economic and Industrial Cities:
The economic strategy of the Government includes,
within the economic development program,
establishment of multi-activities economic cities,
which are more coherent with the new position of
the Saudi economy, particularly after the Kingdom’s
accession to WTO. That entails the construction of
more infrastructure for the establishment of major
projects, attracting national and foreign expertise,
attracting foreign investments as well as preparation
of an investment environment on scientific basis
to attract national and international investors and
value-added industries.
Experience in the field of development and
manufacturing reveals that the establishment
of economic and industrial cities represents a
cornerstone for success. The Kingdom of Saudi
Arabia was able to establish many industrial plants
during the few past decades, such as King Abdullah
Economic City (KAEC) that constitute a turning point
for comprehensive development and manufacturing
process in the Kingdom. Yet this turning point
requires an accurate study and making use of th
ample is the newly industrialized Asian countries
that have witnessed a revolution of numerous new
economic and industrial cities over the past two
decades. Comparative experience, particularly in
these countries, confirms the success of economic and
industrial cities in achieving economic and industrial
renaissance. This is particularly the case in Singapore,
Taiwan, Hong Kong and Malaysia. Establishment of
these cities is a key part of settled areas or free trade
industrial zones. They put into the hands of investors
various infrastructure capacities and facilities, as well
as provide them with a needed skilled workforce.
According to SAMA statements (2008), there are 14
industrial cities in the Kingdom, with a total area of
89.50 million m2, accommodating approximately
1,700 plants with 200 more under construction.
Twelve government sites are earmarked for the
establishment of new industrial cities, with a total
area of 448 million m2.
Licenses were granted in Arriyadh to many private
sector land areas in order to establish industrial
cities with a total area estimated at 4.3 million
m2. The Public Pension Agency was also licensed
to establish telecommunication and information
centers in Arriyadh such as Obaican Industrial
Cities, Jar Allah Industrial zone, Tatweer, Ojaimi
and Fanar Industrial Cities(1).
The prime purpose of establishing and developing
these cities was to attract local and foreign
companies and investments and this has been
successful. In Malaysia for example, most foreign
companies work in the free-trade zone whose
advantages and merits are not available in other
cities. The objective of the investment was exportoriented investments. Thus the share of the
companies working in these areas was more than
80% of the gross Malaysian exports of electronics
and equipment. It is noteworthy to mention that
by 2002, there were more than 105 industrial
cities compared to 1970 when such cities did
not really exist. These cities were implemented in
cooperation with both private and government
sectors. Comparing this large number of cities (in a
very small country like Malaysia) to existing ones in
the Kingdom, leads to the conclusion that despite
the relatively long time frame required to reach
this objective, the opportunity exists to draw n the
experience and make use of available capacity and
resources.
During the past three years, the Kingdom of Saudi
Arabia has initiated four industrial parks: King
Abdullah Economic City (KAEC), Prince Abdulaziz
Bin Mussaed Economic City in Hail, the City of
Economic Knowledge in Madinah and Jazan
Economic City. Each one of these cities is located
in an industrial area or related industrial areas,
such as the ones of King Abdullah, and Prince
Abdulaziz Bin Mussaed, or any other areas that
feed the industry, such as the case of the City of
Economic Knowledge and Jazan.
Expectations of Economic Cities’ Contribution to Saudi Domestic Product by 2020 (2)
2006
Economic Cities Contribution to
Domestic Product by 2020
GDP (billion riyal)
1307.5
562.5
Careers (million)
7.5
1.3
Population (million)
23.7
4.5
Average Individual Share from GDP (one
thousand riyal)
55.2
125.6
Item
70
(1) SAMA, 44th Annual Report, 2008.
(2) Ibid.
Annual Report 2009 (Eng) .indd 70
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Industrial
cities
King Abdullah
Economic
City (KAEC)
Prince
Abdulaziz
Bin Mussaed
Economic
City
City of
Economic
Knowledge
Jazan
Economic
City
Date of
Inauguration
20/12/2005
13/6/2006
16/6/2006
4/11/2006
Location
Rabegh
Hail
Madinah
Jazan
Space
168 k
m²
156 k
m²
48 k
m²
100 k
m²
Infrastructure
Cost
SR 100 billion
SR 100 billion
SR 25 billion
SR 100 billion
Job
Opportunities
500,000
20,000
20,000
500,000
Investment Climate in Arriyadh 2009
Newly Constructed Economic Cities in 2005 and 2006
Parts of the City
1-a world seaport.
2- an industrial park
3- coastal resorts
4- financial island
5- educational zone
6- residential district
1- logistic services
and transport center
2- dry port
3- educational
services
4- agricultural
services
5- industrial and
mining services
6- entertainment
services
7- residential areas
1- TIBA technology
and knowledge
economy complex
2- advanced
technological studies
institute
3- Prophet’s sunna
museum
4- Islamic civilization
studies center
5- medical studies
and biological science
complex
6- shopping center
and hotels
7- residential areas
1- sea port
2- logistic center
services
3- energy,
desalination and
cooling station
4- island of business
5- cultural center
6- the corniche
7- health services
district
8- educational city
9- residential areas
According to the Saudi Arabian General Investment Authority(1), these cities are expected to increase
the domestic product by SR 562,5 billion by 2020, and they are expected to create 1.3 million job
opportunities, and their population expected to reach 4.5 million. The Authority also expects that
individual share of the gross domestic product to increase by 127.5%, from SR 55,200 in 2006 to
reach 125,600 by 2020.
(1) Saudi Arabian General Investment Authority website.
71
Annual Report 2009 (Eng) .indd 71
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The High Commission for the Development of Arriyadh
72
Foreign Investment Law (2)
Theme Three:
Rules of Investment in the
Kingdom and Related Procedures
Labor Law (1)
Royal Decree M/21 was issued on November 15,
1969, endorsing the Labor and Workmen’s Law,
by-laws, and related decisions which regulate
work in companies. The law identifies the duties
of employers towards employees as well as the
rights of employees. All issues related to this law
were assigned to the former Ministry of Labor
and Social Affairs.
As a result of development witnessed by
the economic companies and the need for
substantial measures regarding the law,
following the transformation of the Ministry
of Labor and Social Affairs into two ministries
(Ministry of Labor and Ministry of Social Affairs),
Royal Decree M/51 was issued on September 27,
2005, endorsing the new labor law under the
supervision of the Ministry of Labor.
The provisions of this law apply to any contract
under which any person undertakes to work
for an employer and under his direction or
supervision against compensation. The law
also applies to workers in government and
public corporations including those working
in pastures or farming, charity institutions and
agricultural firms which employ ten workers or
more. It also applies to workers in agricultural
facilities processing their products, permanent
operators of agricultural machinery, part-time
workers, within the limits of safety, occupational
hazards, and training contracts regarding those
not working with their employer.
The following are exempted from the provisions
of this law: members of the employer’s family
who constitute the only employees of the
firm, housemaids, marine workers in vessels
with capacities less than 500 tons, agricultural
workers other than those stated in Article 5 of
the law and non-Saudi workers recruited for a
specific task for a duration of not more than two
months, in addition to players and directors of
sports clubs.
The Foreign Investment Law was issued by Royal
Decree M/1 on October 10, 2000, and relevant
by-laws were issued by the Council of Ministers
Resolution 1 on October 10, 2000. Both are
referred to as Foreign Investment Law. According
to this Law, foreigners (other than Saudis and
GCC nationals) are not allowed any business or
activity inside the Kingdom without obtaining
licenses there. The main objective of the Foreign
Investment Law is to make investment in the
Kingdom more attractive and to streamline
licensing procedures.
SAGIA is responsible for granting licenses to
foreign investors and is also responsible for
granting licenses for activities not listed in
the ‘Negative List’ (3) and activities not subject
to regulation by another law. The Foreign
Investment Law and the ‘Negative List’ make
investment in the Kingdom clearer and
represent a framework regulation rather than a
comprehensive regulatory group.
Excerpts from the law allowing possession and
investment of real estate by foreigners, issued
as per Royal Decree M/15 on July 19, 2000:
The foreign investor, who obtains a license to
undertake a business, shall have the right to
possess the required real estate for operation of
his business and providing housing for himself
and his staff.
In case the license includes purchase of buildings
or vacant land for construction of buildings,
then the total cost of the project should not
be less than SR 30 million, while the Council of
Ministers has the right to reduce this amount.
However, the law stipulates that the property
should be utilized within five years.
Non-Saudis, residing legally in the Kingdom
are allowed to possess real estate for private
residence as per a license granted by the Ministry
of Interior.
Main Features of the Foreign
Investment Law
• All foreign investors in the Kingdom should
obtain licenses.
• Foreign investors may enjoy 100% ownership
of projects they establish in the Kingdom.
• SAGIA is fully responsible for attracting foreign
investment to the Kingdom and providing
licenses through its One-Stop-Shop.
(1) Ministry of Labor, Labor Law, for more information see www.mol.gov.sa.
(2) For more information on Foreign Investment Law and By-laws see SAGIA website: www.sagia.gov.sa.
(3) Negative List: Activities which exclude foreign companies from investment in Early Operation in Oil Activities (Exploration, Drilling, and Production), some
Industrial Activities, e.g. Military Equipment Industry, Military Uniforms, etc. For more information re the negative list see SAGIA website: www.sagia.gov.sa .
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The law related to Non-Saudi Possession
of Real Estates and Investments
According to Royal Decree (M/15) on 19 July
2000:
• Foreign investors may start any economic
work, and possess real estate for this
purpose including his residence as well as
his employees’.
• The total cost should be not less than SR
30 million if the licence includes purchase
of buildings, renting and investment by
sale. The Council of Ministers has the right
to reduce this amount. However, the law
stipulates that the property should be
utilized within five years.
• Non-Saudis residing legally in the
Kingdom are allowed to possess real estate
for private residences as per a license
granted by the Ministry of Interior.
Capital Market Law
The Capital Market Law was issued by Royal
Decree M/3 dated 31 July 2003. The Law provides
legal and institutional framework for the capital
market, and contributes to its development in
accordance with latest international standards,
as well as enhancing the efficiency of operation
and trading systems.
Main Features of the Capital Market
Law are (1):
• The establishment of the Capital Market
Authority (CMA) as an autonomous body
which is financially and administratively
independent and reports directly to the
Council of Ministers. The CMA enjoys all
powers required to perform its tasks as
stated in the law.
• The establishment of a market for trading of
securities in the Kingdom under the name of
‘Saudi Capital Market’ which is incorporated
as a joint stock company.
• The establishment of the ‘Securities Deposit
Center’ as the sole agency in the Kingdom
which is authorized to carry out transactions
related to deposit of securities traded in the
Kingdom, as well as marketing, clearing and
registering their ownership. It is also the
sole agency authorized to register property
rights of securities traded in the market.
• The forming of a committee for settlement
of disputes related to securities as well as an
appeals committee.
• The consideration of liability for all practices
which are based on deceit and forgery or
trading of shares according to information
given by insiders and imposing penalties
on anyone who commits or helps others to
commit such practices.
Corporate Law (2)
The Saudi Corporate Law was issued by Royal
Decree M/6 dated 22 July 1965. The law is
composed of 234 articles and was amended
several times. The law identifies the types of
companies in the Kingdom as follows:
Limited Liability Company
• Limited Liability Company is usually referred
to as a Limited Proprietary Partnership
(1) Ministry of Economy and Planning, 8th Development Plan, 2005 - 2009
(2) For more information see Ministry of Commerce and Industry Website: www.commerce.gov.sa
Annual Report 2009 (Eng) .indd 73
Investment Climate in Arriyadh 2009
• SAGIA exerts utmost efforts to streamline
foreign investment licensing. It is committed
to study and review all applications within
30 days.
• According to the new Law, all fields are open
to foreign investment except those clearly
prohibited.
• Licensed foreign investors shall enjoy
the same treatment enjoyed by national
investors. This makes them eligible for easyterm loans provided to specific projects as
well as for custom duty exemption.
• With respect to expropriation, foreign
investors are treated on an equal footing
with national entities. Expropriation or
confiscation of foreign investments shall not
take place except in cases of public interest
and against fair compensation.
• Foreign businesses in the Kingdom shall
no longer require Saudi sponsorship as per
residence regulation. They have the right to
sponsor their workers.
• Reduction of corporate profit tax, which
exceed SR 100,000, from 45% to 30%, and
cancellation of temporary tax exemptions.
This allows foreign companies to carry
forward their losses.
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The High Commission for the Development of Arriyadh
• Number of partners not less than two and
not more than 50
• Shares cannot be offered for public
subscription
• Not allowed to practice banking, insurance
or investment activities
• 100% foreign ownership is allowed according
to the new Foreign Investment Law as from
3 November 2001
• Minimum amount of capital shared by
partners is SR 500,000 in the event all
partners are Saudis. In the event all or some
partners are non-Saudis, the minimum
amount of capital will depend on the type
of activity to be practiced by the company
Joint Stock Company
• The Joint Stock Company takes two forms:
Public or ‘Open’ Joint Stock Company,
where the shares are offered for public
subscription; Private or ‘Closed’ Joint Stock
Company which does not offer any shares
for public subscription
• Minimum subscribed capital is SR 10
million in case shares are offered for public
subscription (This capital may be increased
by the Ministry of Commerce in certain
situations)
• Minimum subscribed capital is SR 2 million
in the case of a Closed company (This
amount may be increased by the Ministry of
Commerce in certain situations)
• 25% of the subscribed capital should be
paid upon incorporation of the company.
• The number of shareholders should not be
less than five
• The capital is divided into shares of equal
nominal value of SR 10
• The legal liability of shareholders is limited
to the value of their shares
• This type of company is the only one allowed
to practice banking and insurance activities
in the Kingdom
• Every member of the Board of Directors
should possess shares with a minimum value
of SR 10,000
Joint Liability Partnership
• It is usually referred to as a joint liability
company
• Two or more partners are responsible
severally or jointly for the debts of the
company even from their personal funds
• Not allowed to practice banking or insurance
activities or brokerage in gold or silver.
• Not allowed to offer its shares for public
subscription
• Incorporated in the same manner as a
limited liability company
Simple Liability Partnership
• Usually referred to as a mixed liability
company
• At least one partner responsible for the debts
of the company even from his personal funds
• Not allowed to practice banking or insurance
activities or brokerage in gold or silver
• Incorporated in the same manner as a
limited liability company
• In addition to the previous types, there are
other types of companies which are seldom
incorporated. These are
Limited Partnership by Shares
• At least one partner responsible for the
debts of the company even from his personal
funds
• At least four sleeping partners
• The subscribed capital should not be less
than SR one million
• 50% of the capital should be paid in cash or
kind upon incorporation of the company
Company with Variable Capital
• The capital might change according to
incorporation documents
Cooperative Company
• A limited liability company or a joint stock
cooperative company might be established
to achieve a specific purpose such as
reduction of prices for certain products or
services
Joint Venture Company
• An anonymous company known only to the
partners. It does not enjoy any autonomy
and is not subject to required procedures
of disclosure or obtaining a commercial
register.
• Foreigners are allowed ownership in these
types of companies
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The Saudi Commercial Register law was issued as
per Royal Decree M/1 dated July 10, 1995. According
to this law, every merchant whose capital reaches
SR 100,000 or more is required to register within
30 days from the date of opening a commercial
store, or from the date of possessing a commercial
store, or from the date his capital reached the said
amount. He shall submit an application to obtain
a Commercial Register from the nearest center
whether it is a main office or a branch office or an
agency.
The law also stipulates that all companies
incorporated in the Kingdom shall obtain
a Commercial Register within 30 days from
validation of its articles by the Public Notary. The
same applies for the branches of the company.
It is conditional to obtain a Commercial Register
that the firm must be a member of the nearest
Chamber of Commerce and Industry.
Trade Agencies Law (2)
The Saudi Trade Agencies Law was issued by Royal
Decree M/11 dated July 22, 1962. This includes
the amendments regulating the relations with the
trade agencies of the companies which grant such
agencies.
The law stipulates that the Trade Agent must be
Saudi with a Commercial Register, that the capital
of the companies assuming the role of the Trade
Agencies must be fully owned by Saudis, and that
all members of the Board of Directors of such
companies and their authorized signatories must
be Saudis.
Trade Marks Law (3)
The Saudi Trade Marks Law was issued by the Royal
Decree M/21 dated February 5, 1984. The law
includes procedures for registering, publicizing,
renewing, canceling, transferring the ownership,
mortgaging and placing a lien on trade marks, as
well as licensing contracts, joint trade marks and
relevant fees.
According to this law, any distinguished names
or signatures, words, letters, numbers, pictures,
stamps or any sign or combination of signs are
considered as trade marks if they are suitable to
differentiate industrial, commercial, agricultural or
handicraft products or forests utilization projects
or a natural resource or to evidence that the item
which will carry the trade mark is owned by the
owner of the trade mark for the sake of processing,
purifying, inventing or trading or as an evidence of
providing a service.
According to this law, the following groups are
allowed to register trade marks:
Naturalized or legal Saudis
Foreigners residing in the Kingdom who have
permission to undertake trade or handicraft works
Foreign nationals of countries which have reciprocal
relations with the Kingdom
The rights of the owner of the registered Trade Mark
continue for ten years and may be extended to a
similar period upon requesting renewal. It should
be noted that this law superseded the former
’Distinctive Trade Marks Registration Regulation‘
issued by Royal Decree 8763 dated September 12,
1939.
Customs Law (4)
The Saudi Customs policy has a religious and
security objective represented in preventing the
entry of items which are against Islamic beliefs or
Saudi traditions and values or cause harm to the
society and its stability. It also has an economic
objective represented in imposing custom duties
on the imported goods according to identified
tariff categories, facilitating export procedures
and protecting national industries. Moreover, the
law has a social objective which aims at exempting
necessary goods from custom duties or imposing a
very low tariff rate on the imported ordinary goods.
The Customs Department, in keeping abreast of the
modernization process, simplification of customs
procedures as well as provision of necessary
information to concerned parties with respect to
Customs Law, has issued the following, in line with
the Customs Law and relevant By-laws (5):
(1) For more information see Ministry of Commerce and Industry, CR Law or website www.commerce.gov.sa.
(2) For more information see Ministry of Commerce and Industry, CR Law or the ministry website: www.commerce.gov.sa.
(3) For more information see text of Royal Decree M/21 dated 5/2/1984, or website: www.commerce.gov.sa.
(4) Ministry of Finance, Saudi Customs Directorate.
(5) See General Customs Directorate website: www.custom.gov.sa.
Annual Report 2009 (Eng) .indd 75
Investment Climate in Arriyadh 2009
Commercial Register Law (1)
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The High Commission for the Development of Arriyadh
Customs Provisions:
Tariff laws
Directory of temporary entry of imported goods
free of duties provided they are re-exported
Directory of unloading goods in the customs zones
Directory of customs release documents
Directory of goods which are subject to
provisions particularly precious goods
Directory of zones designated for depositing
imported and exported goods
The Kingdom is a member of the World
Customs Organization, the Harmonized System
of Custom Duties since 1990, and the Custom
Cooperation Council in Brussels as per Royal
Decree M/68 dated 2 February 1973. The
Kingdom also concluded an agreement among
the States of the Arab League for facilitation of
trade exchange and organization of transit trade
since 1953. This is in addition to implementing
a unified tariff for all Arab countries.
Income Tax Law
The new Income Tax Law(1) was issued by Royal
Decree M/1 dated 6 March 2004. The relevant
by-laws were issued by Ministerial Resolution
1535 dated 28 July 2004. The new law includes
many direct and indirect tax advantages with the
aim of creating an attractive investment climate
in the Kingdom, attracting foreign investments
and enhancing the role of the private sector
in economic development in light of local and
international developments. The main features
of the new Income Tax Law are as follows:
• Clarity and transparency
• Adoption of a moderate tax rates
• Carrying forward losses for an unlimited
number of years
• Adoption of group and accelerated assets
depreciation approach
• Adoption of self-allocation
• Endorsement of deduction tax for the first
time
• Clear identification of the rights and duties of
the tax department and tax payers
• Enhancement of the mechanism of tax
collection (clear measures to prevent tax
evasion and irregular provision of tax
declarations)
• Implementing the right of the tax payer to
appeal to the Grievance Board for the first
time in the Kingdom(2)
76
Measures and Weights Law (3)
The Saudi Weights and Measures Law was issued
by Royal Decree 29 on January 27, 1964. This law
includes identification of the standard decimal
units adopted in the Kingdom. These are:
Units of Length: The Meter and its parts
Units of Weight: The Kilogram and its parts
Units of Volume: The Liter and its parts
Units of Area: The Square Meter and its parts
These units are related to corresponding
international standard units. The law stipulates
that all companies and firms, importing goods
to the Kingdom or producing goods in the
Kingdom or exhibiting goods for sale, shall put
these units on such goods or packages.
Insurance Law
The Saudi Insurance Law was issued per Royal
Decree M/32 on July 31, 2003(4). The law aims
at setting a regulatory framework for the
local insurance market which includes health
insurance, and insurance against vehicle
accidents, aviation accidents, fire; engineering,
goods as well as miscellaneous accidents. The
law also aims at enhancing the regulatory role
of SAMA in the field of insurance, identifying
management criteria and requirements to
ensure the quality of environmental services
and to protect customers and investors of this
sector.
This law will enhance competition in this sector
and achieve further improvement of insurance
services provided by specialized companies,
brokers, agents, consulting bureaus and
insurance auditing bureaus.
Social Insurance Law (5)
The Saudi Social Insurance Law was issued by
Royal Decree M/2 dated November 15, 1969 and
became effective in February 1973. The law was
amended by Royal Decree M/33 of 29 November
2000 and became effective on 25 March 2001.
This law regulates two types of contributions to
the social insurance system:
Occupational hazards, where the system
provides compensation in case of work injuries
(the employer pays 2% of the worker’s wage
irrespective of nationality).
Pensions, where the system provides
compensation in case of occupational disability,
(1) Ministry of Finance, Informative Bulletin of the new Income Tax Law, 2004.
(2) For more information see Department of Zakat and Income Tax website www.dzit.gov.sa.
(3) Ministry of Commerce and Industry website: www.commerce.gov.sa.
(4) 8th Development Plan 2005-9.
(5) GOSI, Social Insurance Law.
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Investment Climate in Arriyadh 2009
old age and death (18% of the wage equally
between the worker and employer on 50:50 basis
and it is applied for Saudis only). The insurance
branches may be expanded to provide other
types of compensation in line with the law.
The occupational hazards branch is applied, on
obligatory basis, on all workers, irrespective of
gender, age or nationality. The pension branch is
applied, on obligatory basis, on all Saudi workers
irrespective of gender. However, worker’s age
should be less than sixty at the time of applying
the law(1).
General Environment Law (2)
This law aims to protect the environment against
pollution, ensure public health; conservation,
and the development and rational utilization
of natural resources. It also aims to make
environmental planning an integral part of the
comprehensive development planning in the
industrial, agricultural and urban fields. The
law also intends to enhance environmental
awareness, deepen the sense of responsibility
towards environment protection on the part of
individuals and groups, and enhance voluntary
efforts in this regard.
The law obliges everyone who undertakes
production or service activities or others to
take necessary measures to ensure protection
of the environment and not to exceed the
approved environmental safety limits as
stated in the by-laws. The existing projects, at
the time of issuance of this law, will be given
a grace period of five years to rearrange their
situation in line with this law. In case it is proved
that this period was insufficient, it might be
extended by a decision made by the Council of
Ministers based on a recommendation by the
concerned Minister. Credit funds are to adhere
to environmental standards as a prerequisite for
financing any project (Articles 15 and 16 of the
General Environmental Law).
Competition Law (3)
Competition law and its relevant by-laws were
issued by Royal Decree M/75, dated 25 June 2004.
This law aims at protecting and encouraging
fair competition by enhancing market rules,
trading of goods, as well as freedom and pricing
transparency against anything that might affect
lawful competition by preventing damaging
actions.
Commercial Mortgage Law (4)
Commercial mortgage law was issued by Royal
Decree M/75, dated 1 January 2004. The purpose
of this law is to clarify the policies and measures
related to commercial mortgage of any money
to be transferred as commercial debt for the
debtor.
Other laws related to investment in the Kingdom
are available on the website of the Ministry of
Commerce and Industry.
(1) For more information see GOSI Website: www.gosi.gov.sa.
(2) Presidency of Meteorology and Environment, General Environmental Law, for more information see PME website: www.pme.gov.sa.
(3) For more details see www.commerce.gov.sa.
(4) Ibid., commercial mortgage law.
Annual Report 2009 (Eng) .indd 77
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The High Commission for the Development of Arriyadh
Achievements of the Supreme Economic
Council in 2007 (3)
Theme Four:
Higher and Major Investment
Authorities in the Kingdom
The Supreme Economic Council (1):
The Supreme Economic Council represents the
highest economic authority in the Kingdom. It
is concerned with works and tasks needed to
enable the Council of Ministers to practice its
responsibilities and authorities. The Supreme
Economic Council is chaired by the Custodian
of the Two Holy Mosques, with HRH the Crown
Prince as Vice Chairman. The membership of the
Council includes Ministers of Labor, Commerce
and Industry, Petroleum and Mineral Resources,
Finance, Economy and Planning, Water and
Electricity and two State Ministers in addition to
the Governor of SAMA.
The main authorities of the Council are:
• Preparation of the economic policy and
appropriate alternatives
• Coordination among Government agencies
whose works are directly related to
national economy
• Following up of economic policy
implementation and related Council of
Ministers resolutions regarding economic
affairs
• Studying the general frame of the
development plan, fiscal policy, drafting
the State Budget, trade policies at local and
external levels as well as rules which govern
labor and capital markets, and policies
related to improving investment climate
and competition
• Drafting regulations and rules related to
economic affairs
The Supreme Council for Petroleum and
Mineral Affairs (2)
The Supreme Council for Petroleum and
Mineral Affairs was formed by Royal Decree
212/A on January 3, 2000. Royal Decree A/171
on October 17, 2007 was issued to reform the
Council for four years from October 27, 2007.
78
In 2007, the Supreme Economic Council
issued many resolutions aiming at
privatization of some public firms to
cooperate with the private sector according
to commercial bases whose objective is to
make profits. They include:
• Approval of the executive program
aiming at privatization of Saudi
Arabian Airlines
• Approval of the regulations aiming at
the contribution of the private sector
to water and sanitary waste sector
• Approval of the executive program
aiming at expanding pilgrim halls in
King Khaled International Airport
• Approval of regulations aiming at
applying Government e-dealings
• Organizing of technical education
and health education funds, besides
joining women and teachers’ college
to high education fund
• Approval of restructuring of
groundwater and drinking water
sectors, in addition to treatment of
sanitary waste related to the Ministry
of Electricity and Water
The Council is concerned with making
decisions related to all affairs of petroleum, gas
and other hydrocarbons. In this capacity,
the Council’s authorities include:
• Identifying and endorsing strategies
and policies concerning oil, gas and
other hydrocarbons in light of prevailing
circumstances and national interests
• Setting the general policy for Saudi Aramco
• Deciding on all investment matters related
to all post-production stages. This includes
endorsement of all agreements and contracts
concluded with specialized companies.
In this context, Royal Decree M/240 was
issued on February 14, 2000 entrusting
the Council to decide on works related to
gas exploration and other hydrocarbons
except oil, including their extraction and
production. This also includes approval
of agreements and contracts signed with
specialized companies.
(1) Supreme Economic Council Resolutions, 2004.
(2) Supreme Council for Petroleum and Mineral Affairs, General Municipality, special report from the Council’s Secretary-General Office, 2006.
(3) SAMA, 44th Annual Report, 2008.
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The Council is also responsible for studying
and approving general policies of mining and
reviewing related agreements and contracts.
In this context, Royal Decree M/30 was issued
on November 1, 2000 endorsing the Council
of Ministers Resolution 177 dated October 17,
2000, which entrusts the Supreme Council
of Petroleum and Mineral Affairs to assume
duties of Supreme Council for Saudi Arabian Oil
Company (Saudi Aramco) as of 3 January 2000.
The Council approved the gas strategy in the
Kingdom per Resolution No. 13 dated 6 June
2001. This strategy aims at ensuring gas supplies
from hydrocarbon sources, as well as achieving
maximum economic and social returns for the
Kingdom from utilization of its natural gas
resources. This will be best realized through a
plan that aims to meet local demand for gas and
related liquids up to 2025. This strategy looks
forward to develop an integrated gas industry
and provide gas supplies to the Saudi economy at
competitive prices. That will assist in diversifying
sources of income through the establishment of
prosperous industries, particularly petrochemical
industries, along with supply of electricity and
water in a manner that ensures the benefit and
welfare of the Saudi society.
The strategy calls for development of gas
supplies and intensifying exploration operations
to increase the Kingdom’s gas reserves. It also
aims at providing all regions of the Kingdom
with gas in a gradual manner, using ethane and
methane in an optimal manner that ensures
growth of national economy and diversification
of income.
Investment Climate in Arriyadh 2009
• Deciding on all investment matters related
to oil, gas and other hydrocarbons. This
also includes exploration and production,
approval of agreements related to
development and operation and other
investment contracts with specialized
companies.
• Studying draft international agreements in
oil, gas, and minerals fields
• Follow-up
implementation
of
these
policies and strategies and requesting any
information or reports from specialized
agencies, if deemed necessary for carrying
out its tasks
Saudi Commission for Tourism and Antiquities
The Saudi Commission for Tourism and
Antiquities (SCTA) was established in 2000, as
an autonomous body entrusted with tourism
affairs in the Kingdom, including development
of tourism, increasing role of the tourism
sector, and removing constraints which impede
development of tourism. Tourism is considered
a major contributor to the national economy,
and the private sector plays a major role in
establishing tourism investment facilities.
The Value Added to Tourism Sector and its Contribution to the GDP (by current prices) (1 )
Year
Tourism GDP
The GDP of the
Non-Oil GDP in
Tourism
Tourism
Kingdom
the Kingdom
Contribution to
Contribution to
(SR billion)
(SR billion)
GDP (%)
Non-Oil GDP (%)
(SR billion)
2005
36.5
1,182.5
554.1
3.1
6.6
2006
35.5
1,335.6
603.9
2.7
5.9
2007
37.0*
1,530.5**
640.4**
2.6
5.8
* Estimated datum
** Primary datum
(1) SAMA, 44th Annual Report, 2008.
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The High Commission for the Development of Arriyadh
The vision of the Commission is to achieve unique,
valuable tourism development which produces
social, cultural, economic, and environmental
benefits based on Islamic values(1), transforming
the tourism sector into a sector capable of
attracting Saudi citizens to tour within the
Kingdom, increasing investment opportunities,
developing national manpower, and provide job
opportunities for Saudis. Accordingly, tourism
development would be considered a national
economic project. This vision is translated into
action through a scientific approach adopted by
the Commission. This approach aims at achieving
an integrated project for national tourism
development and institutional development of
the tourism sector, developing tourism regulations
(draft national tourism security regulation,
draft general tourism regulation), establishing
effective partnership and cooperation with
related agencies, developing and marketing of
tourism related products (tourism promotion
and marketing strategy) such as festivals and
tourism events, post-Umrah tourism, tourism
guidance, etc. The approach also aims at the
training Saudis and providing job opportunities
in the tourism sector, preparing a social tourism
strategy (tourism awareness programs, tourism
and society, tourism culture in the educational
process), enhancing international tourism
relation (Arab e-tourism project), representing
the Kingdom in the World Tourism Organization
and other organizations, preparing a tourism
information strategy, and preparation of a glossary
of tourism terms. Moreover, an adequate tourism
investment climate will be created through
instruments which encourage investment, such
as tourism development companies, tourism
business services centers, liberalization of the
tourism services markets and establishment of
an e-tourism market.
2010, and may increase to 108.9 million in
2015 and 141.1 million by 2020
• Tourism allocations of expenditures are
expected to grow to SR 73.7 billion in 2010,
and are expected to increase to SR 85.5
billion in 2015 and SR 101.3 billion by 2020
Saudi Arabian General Investment Authority
(SAGIA)
The Saudi Arabian General Investment Authority
(SAGIA) was established in 2000 to achieve the
goal of taking care of investment affairs in the
Kingdom, including foreign investment, as well
as preparing Government policies related to local
and foreign investment, proposing executive
plans and regulations required for providing
an adequate investment climate, follow-up and
evaluation of local and foreign investments, and
defining investment opportunities in various
economic sectors.
The investment climate has improved markedly
since the establishment of SAGIA. The Foreign
Investment Law was promulgated to provide
foreign investors with the following incentives
(3)
:
• Allow foreign investors full ownership
(100%) of their investment projects
• Provide foreign investments with same
benefits, incentives and guarantees provided
to national investments
• Reduce Corporate Tax from 45% to 20%
• Allow foreign investors to repatriate their
invested capital, profits and accrued interest
to their countries of origin
MAS center statistics related to the Saudi
Commission for Tourism and Antiquities
reviews the following (2):
• 974 direct and indirect job opportunities
will be available in 2010, and may increase
to 1,196 opportunities in 2015 to reach
1,459 in 2020
• Expectedly, domestic tours (domestic and
foreign) will increase to 86.2 million tours in
80
(1) Saudi Commission for Tourism and Antiquities; the guidance of the approach and initiatives of SCTA, to implement the general strategy for better national tourism.
(2) Saudi Commission for Tourism and Antiquities, MAS Center.
(3) Alestethmar Arabic Magazine, issue 8, October 2005 (from an interview with SAGIA Governor).
Annual Report 2009 (Eng) .indd 80
12/21/09 8:50:07 AM
identification and removal of constraints which
impede investment activities, increasing degree
of transparency, providing relevant information
to investors and simplifying procedures. All
these contribute effectively to the increase of
investment licenses.
In a short time, the efforts exerted by SAGIA could
place the Kingdom among the top 20 countries
for world direct foreign investment. This has
been confirmed by the World Investment Report
of 2007, and it qualified the Kingdom to issue
this important report. The Kingdom’s share of
direct foreign investments increased from $
778 million in 2003 to reach $ 2 billion in 2004.
It increased to more than $ 12 billion in 2005,
and $ 18.2 billion by the end of 2006, a rate
of growth of 51% in 2006 from 2005(1). Hence,
the Kingdom topped Arab countries in terms
of the volume of foreign flows, simultaneously
decreasing half of the Kingdom’s investments
abroad in 2006, compared to 2005. This reflects
the recent attraction of the Saudi market to
both Saudi and foreign investments.
According to SAGIA surveys(2), Japan was number
one in terms of investments in the Kingdom,
exceeding $3.5 billion, followed by France $ 2
billion, Canada $ 1.6 billion, the USA, China and
Russia. Russia and China made significant entries
since their investments were not noticeable
before 2006. The contributions of countries
other than Japan, USA and European countries
were approximately 38% of the total flows to the
Kingdom in 2002. This percentage increased in
2006 to 47%. Chinese, Russian and Malaysian
investments led to diversification in the sources
of direct foreign investments heading to the
Kingdom, which were economic and strategic
in nature.
Investment Climate in Arriyadh 2009
• Partners in any foreign investment project
have the right to waive their shares amongst
themselves and others
• Licensed foreign investment projects have
the right to obtain industrial loans at easy
terms from the Saudi Industrial Development
Fund and other credit institutions
• Licensed foreign investment projects
have the right to possess commercial and
residential buildings needed to implement
their licensed industrial activities
• Foreign investors have the right to make
use of bilateral agreements of investment
protection and promotion signed with the
Government
• It is forbidden to confiscate or expropriate
any investment, wholly or partially, except
upon a decision made by a court of law and
after payment of fair compensation
• Foreign investors may obtain more than one
license for practice of the same activity or
different activities
• Licensed projects may sponsor foreigners
working in the project
• Lately, the condition of the minimum capital,
that used to stipulate obtaining a license of
the investment, has been cancelled. SAGIA,
as an agency responsible for encouraging
investment, is responsible for improvement
of investment climate and quality of
investment services
To streamline the
procedures of licensing, SAGIA identified a
period of not more than 30 days for granting
the license, provided that all requirements
are met in the application.
SAGIA also endeavors to review and improve
investment climate to make it more competitive
relative to other countries. This includes
The Development of the Kingdom’s Share of Foreign Investments’ Flows Compared to Other Countries from
2000-6 ($ million) (3)
2000
2003
2004
2005
2006
Saudi Arabia
242
778
1,942
12,097
18,293
Turkey
719
1,752
3,883
9,803
20,120
UAE
18
4,256
10,004
10,900
8,386
844
237
2,157
5,376
10,043
Egypt
(1) World Investment Report, 2007, UNCTAD, datum related to imports and exports investment in the Kingdom.
(2) SAGIA, investment flows report, available on the website of the authority.
(3) World Investment Report, 2007, UNCTAD.
Annual Report 2009 (Eng) .indd 81
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The High Commission for the Development of Arriyadh
Regarding the distribution of foreign investments
in the Kingdom, four sectors controlled
approximately 76% of the total flows: the
industrial sector (16.9%), mining and gas and
petroleum exploration (29.8%), finance and
insurance (15.4%) as well as refining of petroleum
products (14.2%). These percentages of flows
distributed in the Kingdom reflected the world
changes, where mining and exploration sector had
the highest percentage of flows (29.8%), while the
finance and insurance rate increased from 5% in
2005, to 15.4%. The share of real estate and rental
sector decreased from 16% in 2005 to 5.5% in
2006. Moreover, the share of construction sector
witnessed a slight decrease. Thus, the share of the
industrial sector, energy and the related products
witnessed an increase from 56% in 2005 to 60.9%
of the total flows in 2006.
14.20%
3.40%
5.50%
16.90%
15.40%
11.40%
3.40%
29.80%
Industry
Mining, gas & petroleum
exploration
Finance & Insurance Services
Refinig of petroleum Products
Electricity, gas, water
Real Estate
Constructions
Other Sectors
SAGIA also prepared a work strategy for the
period 2005-10, which comprised six initiatives:
services, marketing, regional development,
attraction of new investors, development of
sectors that have comparative advantages,
and improvement of investment climate. The
strategy is based on many criteria, such as
effective economic impact, the possibility of
fast implementation, low costs, removal of any
complications related to implementation and
the ability to ensure human resources.
During the coming stage SAGIA will focus on
attracting local and foreign investment to
three major sectors of distribution, power and
information technology with selection made
according to their comparative advantages and
economic efficiency.
Capital Market Authority (CMA)
The Capital Market Authority (CMA) is an
autonomous Government agency reporting
directly to the Chairman of the Council of
Ministers. CMA is responsible for supervision,
regulation and development of the capital
market as well as issuing rules, regulations
and directives required for enforcement of the
provisions of the Capital Market Law in order
to create a sound investment climate in the
market and to enhance trust and confidence in
it. CMA is also responsible for ensuring adequate
disclosure and transparency for the companies
listed in the market as well as protecting
investors and traders of securities.
CMA has the authority of regulating and
developing the Capital Market, developing
systems and techniques of agencies dealing
with securities trading and protecting investors
from illegal practices, forgery and deceit, and
from trading according to insider information.
By doing so, CMA aims at achieving efficiency,
justice and transparency of trading securities
and developing measures and controls needed
to reduce risks related to trading. It also aims at
regulating issue of shares, controlling activities
of agencies under its supervision and regulating
disclosure of information related to securities
and issuing agencies. CMA is managed by a
Board of Directors composed of five full-time
members appointed by Royal Decree.
In its first action, CMA issued rules organizing the
Market on December 14, 2003(1). These are:
• Market Conduct Rules, including measures
for prevention of market deception and
manipulation, prohibition of trading
based on information provided by insiders,
measures related to responsibility of
incorrect data, controls related to behavior
and conduct of the licensed party, etc.
• Rules of Offers of securities (public and
private) as well as exempt offers and
the responsibility regarding invalidity of
documents, etc.
• Rules of Registration and listing provisions
and abiding by such provisions and other
(1) Al Eqtesadia newspaper, Issue 1427, 2004.
82
Annual Report 2009 (Eng) .indd 82
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In light of CMA strategy to develop Saudi
Capital Market and reduce the risks in line of
the progress of the enrolled companies and
their multiple activities, the Authority issued the
following (1):
• The resolution of restructuring capital
market sectors in accordance with each
company’s activities, revenues and profits in
addition to updating the new indicators that
reflect price changes of enrolled company’s
shares. This resolution was active from April
5, 2008.
• The resolution of the Council of Ministers
dated March 19, 2007 of establishing Saudi
Joint stock (Saudi Capital Market)
• Starting a new trading system that comprises
controlling and observing the implemented
contracts and making sure of their legality,
besides trading of versatile and new
investments dated October 20, 2007
• CMA’s objectives aim at developing and
protecting the capital market, as well as
protecting the investors from the risks of
the market. In addition to that it guarantees
applying the transparency, justice and
enclosure. The Authority endeavors to
continue the task of actively monitoring the
companies, increasing the awareness of the
matter of governance, applying international
standards in the field of controlling the
trading by establishing an e-control system
of trading securities and monitoring any
irregularity in this market.
Communications and Information Technology
Commission (CITC)(2)
The
Communications
and
Information
Technology Commission (CITC) is a Government
organization founded in 2001. It is responsible
for regulation of the telecommunications and
information technology sector in the Kingdom so
as to provide high quality services at affordable
costs. CITC endeavors to create an adequate
environment for the growth of communications
and information technology market and to
encourage fair competition.
The number of land lines reached 4 million
by the end of 2007, while mobile phones
were increasingly in demand with their
spread rate reaching 116%.
Internet users in the Kingdom were estimated
at 1 million in 2001, and expected to reach
6.4 million by the end of 2007. It spread to
26% of the population and 36% as an annual
rate of growth.
Broadband subscribers increased from
24,000 in 2003, to more than 623,000 by the
end of 2007. The annual rate of growth was
126% during the past four years. However,
2006 and 2007 witnessed a tenfold increase
of subscribers over the previous two years.
CITC also protects interests of service
users, controls performance of licensed
service providers, and endeavors to provide
an adequate climate for investment in
communications and information technology
sector. The major tasks of CITC are:
• Encouraging investment in
communications and information
technology services
• Granting licenses for provision of
communications and internet services
• Protecting interests of users and controlling
licensed service providers
• Encouraging free market for provision of
services
• Implementing policies, plans and
programs approved for development of
the communications and information
technology sector
(1) CMA, Annual Report, 2007.
(2) CITC, Communication and Information Technology Commission, Introductory Bulletin, see: www.citc,gov.sa
Annual Report 2009 (Eng) .indd 83
Investment Climate in Arriyadh 2009
measures which regulate the process of
registration for those willing to register
their securities in the official list
• CMA has listed a number of joint stock
companies, operating in various economic
fields, in the Capital Market. It also reduced
the nominal value of the shares of the listed
companies from SR 50 to SR 10, thereby
splitting each share into five shares and
allowing non-Saudis residing in the Kingdom
to trade in shares. CMA is exerting maximum
efforts to develop rules and measures which
protect the rights of shareholders and to
make the market one of the most effective
economic tools in the process of economic
development in the Kingdom.
83
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The High Commission for the Development of Arriyadh
Major achievements made by CITC during 2007,
include the following(1):
• Complete the measures of the third license
to provide mobile phones services
• Establish land lines market, and granting
licenses for three companies in order to
provide this service
• Prepare the national plan of the spectrum
frequency
• Granting 71 licenses in 2007
• Revision and applying the referral offer in
order to reach local connection centers
• Reapply the methods of defining the costs of
wholesale related to telecommunications
• Prepare the conditions of presenting
landlines and mobiles services.
• Issuing many technical and regulative
measures
• Define the prices related to
telecommunications and information
technology
• Prepare guidance of transmitting landlines
numbers
• Revising of more than 2,000 demands
for telecommunications and information
technology equipment, and 4,800 requests
for licenses and completing their related
measures
• Prepare, update and apply high quality
services
• Prepare technical measures to supply the
roads with telecommunications networks in
both public and private facilities.
• End the second stage by preparing the
infrastructure required for categorizing
internet zones and site selections
• Establish the national center for information
security
• Set a strategic plan for the Commission in
the field of information technology in the
Kingdom
• Set a special strategy for improving internet
services in the whole Kingdom
• Prepare regulations required to prevent
spam e-mails
• Revising approximately 170 irregularities
and issuing the related resolutions in
accordance with the Commission’s laws
• Resolving the 3,200 complaints submitted
to the Commission
• Prepare by laws draft required for e-dealings
• Provide high quality telecommunication
services for pilgrims in Makkah and the Holy
places during Hajj period and Ramadan
• Prepare any other studies necessary
Royal Commission for Jubail and Yanbu
The Royal Commission for Jubail and Yanbu
was established in 1975. Its headquarters
are located in Arriyadh. The Commission is
governed by a Board of Directors responsible
for preparation of policies and managing
their implementation, through two General
Directorates located in Jubail and Yanbu
Industrial Cities. The Commission was entrusted
with the responsibility of implementing physical
and social infrastructure required for the
development of Jubail and Yanbu regions. The
major remits of the Commission are:
• To promote, assist, service and encourage
the development of basic, downstream and
light industries to utilize the Kingdom’s
natural resources to produce value added
products for local consumption and export
• To plan, develop, construct, operate and
maintain various infrastructure and services
needed for these industries
• To urge these industries to employ Saudi
nationals and upgrade their skills and
capabilities
• To maintain balance between industrial
development and protection of the
environment
• To encourage Saudi and foreign private
sectors to invest in the two cities
• To coordinate with other related agencies
such as Saudi Aramco, Seaports Authority
and others to facilitate supply of feedstock
and services needed by such industries
A sum of SR 84 billion was invested for
development of Jubail and Yanbu Industrial
Cities. The result was establishment of 233
industries with total investments of around
SR 244 billion. This brings total investments
in the Royal Commission to approximately
SR 328 billion and total job opportunities to
more than 107,000. Moreover, the 154,000
residents enjoy the most modern life style.
Chairman, Royal Commission
for Jubail and Yanbu
(1) SAMA, 44th Annual Report, issue 44.
84
Annual Report 2009 (Eng) .indd 84
12/21/09 8:50:08 AM
(1) Royal Commission for Jubail and Yanbu, website: www.rcjy.gov.sa.
(2) Ibid, Planning and Investment Department, Internal Bulletin,2006.
(3) Ibid.
(4) Ibid., website: www.rcjy.gov.sa (inauguration of Yanbu 2).
(5) Saudi Organization for Industrial Estates and Technology Zones, Projects Report, 2006.
(6) SAMA, 44th Annual Report, 2008.
Annual Report 2009 (Eng) .indd 85
The Royal Commission for Jubail and Yanbu
supervises Jubail Industrial City, with an area
of approximately 1,000 sq km, and Yanbu
Industrial City, with an area of 185 sq. km.
Both cities accommodate 361 plants for basic,
support and light industries, and they employ
more than 116,000 workers. In 2007, more than
42 industrial projects were awarded with a cost
of SR 4.2 billion. There are 67 projects under
study and design with an estimated cost of SR
18.2 billion.
Saudi Organization for Industrial Estates and
Technology Zones(5)
Investment Climate in Arriyadh 2009
The Royal Commission received many local,
regional and international prizes in recognition
of its efforts in different fields; environmental
protection, city planning, and plantation. The
share of the two industrial cities in the GDP
amounts to SR 58,202 billion, or 8.06%, and
their share of the non-oil GDP is 12.5%. The share
of the two cities of the industrial production of
the Kingdom is 60% and their share of total nonoil exports is 80%. They provide approximately
19%(1) of the total industrial employment of the
Kingdom.
The most important investment opportunities
in Jubail and Yanbu Industrial Cities are:
• Industrial investment opportunities:
establishment of joint industrial ventures
with foreign companies
• Commercial investment opportunities:
provision of developed commercial lands
to companies
• Residential investment opportunities:
establishment of housing projects to meet
the needs of the two cities
Total investments made by the Royal Commission
and the private sector in the two cities increased
markedly by the end of 2005, recording
approximately SR 12.2 billion, including SR 7.9
billion invested by the Commission and SR 4.3
billion by the private sector. The total number of
industrial projects amounted to 358 including 40
basic industries, 70 secondary industries and 248
support industries (2).
Investment by the Royal Commission in the Jubail
stage-2 Project represents approximately SR
14 billion, of which SR 3.5 billion is for stage-1,
completed by 2008. The project is likely to
attract around SR 210 billion. The cost of Yanbu
stage-2 Project is approximately SR 50 billion,
and it comprises many investment opportunities
in the fields of research and design, services,
construction, operation and maintenance and
others, completed by the beginning of 2009(3).
Upon completion, Yanbu stage-2 project is
expected to attract approximately SR 115 billion
of investments leading to establishment of 34
basic and secondary industries and 224 light
industries. Hence, total investments in Yanbu
Industrial City, after completion of Yanbu stage-2
project by 2019, will exceed SR 200 billion and will
provide approximately 116,000 job opportunities
in coming years(4).
The basic legislation to set up the Saudi
Organization for Industrial Estates and
Technology Zones was endorsed by Council
of Ministers Resolution 235 on 13 November
2001.
The Organization took over the tasks of
administering the industrial estates from the
Ministry of Commerce and Industry on 27 April
2005 under Council of Ministers Resolution 265
dated 28 November 2004.
Since its formation, the Organization prepared
its plans in line with the long-term objectives
and strategies for industrial development
adopted by the Government, and on the basis of
offering additional projects for development of
industrial land to the private sector to meet the
growing demand for services. The Organization
also established technology zones to implement
the findings and refurbish the existing industrial
estates.
In 2007(6), the Commission initiated methodology
to encourage the private sector. The first part of
phase 1 of Sudair Industrial Estate, with a total
area of 10 million m², and returns property to
the public sector (the Build-Operate-Transfer
or BOT scheme) . Then it develops Jeddah’s
second Industrial Estate, with land area of 3.5
million m² by BOT system. A similar scheme to
develop Jazan Industrial Estate, with land area
of two million m², has a total cost of SR 17.5
million as an unretrieved subsidy presented
from the government to the Commission.
There is also the Phase 4 of Dammam’s second
Industrial Estate, with land area of 4 million m².
The private sector has been granted licenses
for the purpose of establishing five further
industrial cities, with a total land area of 4.3
85
12/21/09 8:50:09 AM
The High Commission for the Development of Arriyadh
million m², and a license for Public Pension
Agency to establish telecommunications and
information technology zones in Arriyadh.
The Saudi Organization for Industrial Estates
and Technology Zones applied the system
of rehabilitation, operation of utilities and
returning the property to the public sector (BOT)
for the purpose of refurbishing and maintaining
all existing industrial cities after finishing the
present contracts financed by the government
in July 2006. This will run until May 2009. The
major achievements of the Commission in 2007
are rehabilitation of usufruct projects, including
improvement of water and sanitary waste in
the existing industrial estates, and solving the
problems of lack of water, sewage and industrial
treatment, as well as disposing of waste matter
with no damage to the environment, recycling
in industry or watering green lands. Projects
for the operation and maintenance of existing
industrial estates reached 17, with a total cost of
SR 20 million. Moreover, the Commission signed
10 advisory and study contracts for the purpose
of preparing plans and designs for industrial
estates.
Two major Industrial Cities are being
supervised by the Royal Commission of Jubail
and Yanbu, as mentioned. The Commission has
recently established technical zones in many
parts of the Kingdom, namely(1):
• Information Technology and
Telecommunications Center (ITCC) for the
Public Pensions Agency in Alnakhil Quarter,
Arriyadh
• King Abdullah Bin Abdulaziz Center for
Industrial Research, Dhahran Techno-Valley
related to King Fahd University for Petroleum
and Minerals
• King Saud Science Park (KSSP).
• The total cost of establishing these
technology zones in the Kingdom during
the Eighth Development Plan 2005-9 is
approximately SR 766 million, and the total
cost of the Organization’s projects pertaining
to expansion in industrial estates and
rehabilitation of the existing ones together
with establishment of the technology zones
is SR 2,656 million during the term of the
Plan(2). In 2007, the Commission initiated its
methodology to encourage the private sector(3).
86
Saudi Aramco
The Arabian American Oil Company (Aramco)
was established in 1933, when it undertook
the concession of oil exploration. The company
became wholly owned by the Government of
Saudi Arabia in 1980, and in 1988, undertook
management and operational responsibilities.
A Royal Decree was issued in 1993, which
stipulated the merging of all refineries and oil
producing facilities in Saudi Aramco, which
undertook responsibilities regarding most of the
Kingdom’s works in gas and petroleum sectors,
starting with exploration and production, up to
refining, transportation and marketing.
Saudi Aramco is considered a major pillar of the
Saudi economy. It obviously contributes towards
the GDP growth and provision of Government
revenues as well as export proceeds.
Saudi Aramco operates 92 oil fields and 13 gas
fields throughout the Kingdom, including the
Red Sea region.
Saudi Aramco Statistics (2006)(4)
• Total annual production of crude oil – 8.5
billion barrels
• Total reserves of crude oil and condensates
that can be extracted – 259.9 billion barrels
• Total refined energies of the projects’ share
and the common international – 2 billion
barrels per day
• Crude oil exports – 2,408 million barrels,
136 million barrels of refined products and
287 million barrels of natural gas liquids
• Total reserves of natural gas – 253.8 trillion
standard cubic feet
• Total domestic refined energy (thousand
barrels per day)
- Ras Tannura
550
- Arriyadh
122
- Jeddah
85
- Yanbu
237
- SAMER F – Yanbu 400
- SAMER F – Jubail 305
- Rabegh
358
• Kinds of Saudi crude oil according to the
American Petroleum Institute:
- Arab excellent light oil (more than 40 degrees)
- Very light Arabic oil (36-40 degrees)
- Arab light oil (32-36)
- Arab medium oil (29-32)
- Arab heavy oil (less than 29)
(1) For more information see the website www.soietz.gov.sa.
(2) Ibid.
(3) SAMA, 44th Annual Report, 2008.
(4) Saudi Aramco, Annual Report, 2007.
Annual Report 2009 (Eng) .indd 86
12/21/09 8:50:10 AM
Production/Exportation
Crude Oil and Refined Products (by barrels)
Crude Oil Production, Except Natural Petroleum Mixture
Crude Oil Exports
Crude Oil Cargos (via owned or rented vehicles)
Refined Products
Refined Products Exports
Natural Gas
Crude Gas Delivered to Gas Plants (billions of standard
cubic feet daily)
Amount of Gas Delivered and Prepared for Sale (trillions
of British thermal units daily)
Ethane Gas Prepared to be Sold
Ethane
Total Delivered and Prepared to Sale Gas Quantities
Natural Gas Liquids (production)
Natural Gas Liquid Production of Hydro Carbon (by
barrels)
Propane
Butane
Gas Condensates
Natural Petroleum
Total of Natural Gas Liquid Production
Natural Gas Liquids (exports)
Natural Gas Liquids Extracted from Hydro Carbonic Gases
(by barrels)
Propane
Butane
Gas Condensates
Natural Petroleum
Total Exports of Natural Gas Liquids
Sulfur
Sulfur Production (by metric ton)
Sulfur Exports (not including sales of SAMREF and SASREF)
(by metric ton)
The Year
2005
2006
3,308,601,727
2,622,997,627
679,212,000
591,948,332
201,589,157
3,252,943,241
2,541,692,569
648,969,000
595,657,467
183,985,356
2205
2006
7,871
8,224
5,5530
1,0791
6,7321
5,8298
1,0278
6,8576
2005
2006
150,587,512
94,148,281
89,348,138
66,298,617
400,382,548
149,320,199
94,338,268
93,917,887
61,456,003
339,032,357
2005
2006
138,034,134
87,142,255
10,035,841
54,269,189
289,485,392
141,092,586
80,170,054
11,263,534
52,848,817
285,374,991
2005
2006
2,716,832
2,391,789
2,906,911
2,640,250
Investment Climate in Arriyadh 2009
Crude Oil, Natural Gas and Refined Products (1)
(1) Annual Report of Saudi Aramco, 2007.
87
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12/21/09 8:50:10 AM
The High Commission for the Development of Arriyadh
Main Products Manufactured in the Local Refineries in 2007 (1) (by barrels)
Fuel Oil
Asphalt
and
Related
Materials
Total
74,210,000
34,377,000
6,035,000
174,910,000
215,846
31,942,660
31,908,752
0
80,881,897
11,856,000
4,777,000
19,435,000
120,000
6,520,000
44,459,000
3,202,000
5,633,000
238,000-
8,965,000
6,353,000
2,486,000
27,414,000
21,336,000
0
11,807,000
39,359,000
46,134,000
0
118,652,000
Item
Liquefied
Petroleum
Gas
Cars Fuel
Aviation
Fuel
(Kerosene)
Naphtha
Diesel
Ras
Tannura
3,392,000
13,040,000
38,198,000
5,658,000
Yanbu
3,394,426
1,538,852-
15,387,757
Arriyadh
2,187,000
0
Jeddah
1,013,000
Rabegh
16,000
GDP
10,005,426 36,039,148
71,074,757
21,788,154 173,911,660 118,892,752 15,041,000
446,752,897
Distribution of Domestic Products by Areas (by barrels)
Item
Year
2005
2006
2007
12,191,864
11,863,947
12,455,625
108,789,864
115,300,359
126,713,993
20,500,122
20,396,003
21,085,223
Diesel
164,572,204
179,037,703
191,899,873
Fuel Oil
94,291,066
100,318,351
108,169,808
Asphalt and Related Materials
15,760,815
17,889,853
18,774,883
Total
416,105,935
444,806,216
479,099,405
Liquefied Petroleum Gas
Gas Fuel
Aviation Fuel (Kerosene)
• Saudi Aramco owns the second largest fleet
of tankers in the world
• Saudi
Aramco employs approximately
51,356 employees, 44,702 of whom are
Saudis and 6,654 are non-Saudis
• The Company is 100% owned by the
Government of Saudi Arabia
• The Company has affiliates, joint ventures,
offices and companies in China, Egypt,
Greece, Japan, Netherlands, Philippines,
South Korea, Singapore, UAE, UK and USA
• The main refineries are: Ras Tannura Refinery
with a capacity of 325,000 bpd and 200
barrels condensates; Jeddah Refinery with a
capacity of 84,000 bpd; Riyadh Refinery with
a capacity of 122,000 bpd; Yanbu Refinery
with a capacity of 235,000 bpd, and Rabigh
Refinery with a capacity of 370,000 bpd
• Headquarters: Dhahran
Investment opportunities in the Company are
reflected in domestic joint ventures refineries
projects such as:
• Saudi
Aramco/Exxon Mobil Refinery
(SAMREF), a joint venture owned 50:50 with
Exxon Mobil Company, 400,000 bpd
• Saudi Aramco/Shell Refinery (SASREF), a
joint venture owned 50:50 with Royal Dutch
Shell, 305,000 bpd
• Saudi Aramco Petroleum Lubricating Oil
Refining Company (Luberef): Saudi Aramco
owns 70% while Exxon Mobil owns the
remaining shares, 4.4 thousand bpd
• Saudi Aramco Petroleum Lubricating Oil
Company (Petrolube): Saudi Aramco owns
71% while Exxon Mobil owns the remaining
shares, 6.5 million barrels/day.
• The Company enjoys diversification of its
investment opportunities represented by
(1) The above numbers refer to products that were re-treated to be other refined products.
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Saudi Basic Industries Corporation (SABIC)
SABIC is the largest non-oil industrial company
in the Middle East. It ranks tenth in the list of
the top international petrochemical companies.
SABIC was established in 1976 (1) to invest in the
Kingdom’s natural hydrocarbon and mineral
resources. Its headquarters are located in Arriyadh.
SABIC’s production network in the Kingdom
encompasses 17 industrial companies, most of
which are in Jubail Industrial City on the Arabian
Gulf Coast, while the others are in Yanbu Industrial
City on the Red Sea Coast. Dammam City in the
Eastern Province hosts one of these companies. In
2006, a SABIC affiliated company was established
in Yanbu Industrial City – Yanbu National
Petrochemicals Company (YANSAB). SABIC owns
SABIC Europe Petrochemicals Company, with two
major manufacturing locations in Geleen in the
Netherlands and Gelsenkirchen in Germany, in
addition to three industrial complexes in Bahrain
with joint Gulf capital funding.
• The Government of the Kingdom owns 70%
of SABIC, while the remaining shares are
owned by Saudi and other GCC nationals.
SABIC’s products account for some 80% of
the petrochemicals exports at present
• SABIC ranks second in the list of the largest
international companies in the production
of ethylene glycol, methanol, MTBE, third
in production of polyethylene, fourth in
production of polyolefins, and sixth in
production of polypropylene
(1) SABIC, Annual Report, 2004.
(2) SABIC, Annual Report, 2007, see SABIC website.
Annual Report 2009 (Eng) .indd 89
• SABIC owns a 20% share of the Bahrain
Aluminum Company, 31.3% of Gulf Aluminum
Rolling Company, 20% of the National
Chemicals Transportation Company, 25%
of the Jubail Yanbu Utility Company, 20% of
TAP Line, and 16.67% of ARG
2007 was a remarkable year for SABIC, in terms
of technical and strategic systems. Standards
numbers reflected that in the production,
marketing, and profits domains. It also expanded
insider and industrial operations, as well as
promising industrial sectors abroad, which
enhanced the integrated local investments (2).
SABIC‘s output of more than 55 million tons
meets the needs of more than 100 countries
worldwide. It also meets the local demand,
contributing to the development of the
construction and agricultural sectors as well
as manufacturing industries, in addition to
its role in diversification of income sources,
and improving balance of payments. SABIC is
committed to applying highly accurate systems
in the field of industrial safety and environment.
It also intensified its efforts to gain long-term
customers by expanding and developing the
marketing network and providing the customers
with modern technology that might achieve a
world spread.
SABIC continues to expand its industries in the
Kingdom, Europe, USA and Asia, enhancing
local investments and undertaking executive
measures for the Saudi Company KAYAN under
construction in Jubail Industrial City, and it is
Investment Climate in Arriyadh 2009
international joint ventures reflected in its
partnership with five international ventures
which are:
- Petron Corporation, the Philippine
National Oil Company. Saudi Aramco has
owned 40% of Petron since 1994
- Motiva Enterprise: a joint venture between
Saudi Aramco (32.5%), Texaco (32.5%),
and Shell (35%). Operations of this joint
venture are concentrated on the Gulf and
Eastern Coasts of the United States. The
Company owns four refineries
- Oil Corporation, a South Korean oil
refining company. Saudi Aramco owns 35%
- Motor Oil Hellas and Avin Oil: a Greek
refining and marketing company. Saudi
Aramco owns 50% of the company’s
refineries
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The High Commission for the Development of Arriyadh
expected to start producing 6 million tons of cards
in 2010. This company represents an integrated link
between SABIC and the private sector. Forty-five
percent of the company’s capital of SR 15 billion
is owned by Saudi nationals. KAYAN petrochemical
share is 20%. 2007 represented a turning point
when SABIC possessed Plastic Industry Sector, that
was related to General Electric American Company,
to work now under the name of SABIC INNOVATIVE
PLASTICS that was added to SABIC chains of
specialized products and high value plastic
products. It contributes to the world of specialized
industries in line with the strategic project in 2020
aiming at reaching a pioneer world company that
is the best in Chemicals industry. The company
also aims at expanding the specialized products
to represent 20% of the total revenues. SABIC is
considered a leader in terms of Saudization, and
has attracted thousands of workers with high
qualifications and technology. Of course that
enriched the industrial culture of the Saudi human
resources and established an integrated entity of
human resources capable of achieving the goals
and overcome world challenges(1).
Saudi Arabian Mining Company (Ma’aden)
The Ministry of Petroleum and Mineral Resources
supervises mining activities in Saudi Arabia
including those of Ma’aden, established in
accordance with the Royal Decree M/17 dated
22 March 1996, with a capital of SR 3.8 billion
and wholly owned by the State. The Ministry also
encourages investment in mining and provides
services and advice to support this activity.
Furthermore, the Ministry supervises issuance of
mining licenses and deeds in line with relevant
rules and regulations.
On 4 October 2004, the new Mining Investment
Law was issued by Royal Decree M/47 to regulate
investment in mining in Saudi Arabia.
In May 2008, the Company announced its
intention to offer 50% of its shares in projects
for public subscription.
The activities of Ma’aden are multiple:(2)
Precious and Basic Metals: Ma’aden for Gold
and Basic Metals in mines such as:
Gold
58,257 ounce
Silver
170,116 ounce
Copper
737 tons
Zinc
800 tons
90
• Sukhaybarat Mine (Al Qassim): 2007
production approximately 25,000 oz. gold,
and 3,259 oz. silver
• Balgha (Al Madinah): 2007 production
approximately 43,299 oz. gold, and 4,972
oz. silver
• Al Hajar (Al Aqeq governorate in the south
of the Kingdom): production for 2007
approximately 128,16 oz. golden and
916,111oz. silver
• Al-Amar (Arriyadh Region): it processes
a gold-rich polymetalic which produces
approximately 200 thousand gold doré
tons per year of and copper and zinc
concentrates which are sold to third parties
for toll smelting
Phosphate:
through Ma’aden Phosphate Company (MPC).
The project has recently undertaken developing,
designing, constructing and operating two main
locations:
- Al Jalamid Mine with a production capacity
of 11.7 million tons per year (raw materials)
- Ras Al Zour: a phosphate fertilizer production
complex including the infrastructure required
for this project
(1) SABIC, Annual Report, 2007, see SABIC website.
(2) Saudi Arabian Mining Company, from the company’s website: www.maaden.com.sa.
Annual Report 2009 (Eng) .indd 90
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Chlor Alkali:
Ma’aden proposes to construct a facility in a 50:50
joint venture with Sahara Petrochemical Company
to produce caustic soda and EDC for export.
Magnesium carbonate:
Daraat location (Hail) to produce high quality
magnesium oxide.
Low Density Bauxite and Kaolin:
the Al Zabirah plant produces bauxite and kaolin
with low density in order to supply cement
industry with materials of high alumina.
(1) Al Eqtesadia newspaper, issue 4,515, February 20, 2006.
(2) See the website of Ma’aden company.
Annual Report 2009 (Eng) .indd 91
On July 14, 2008, Saudi Arabian Mining Company
(Ma’aden) and SABIC as well as the Public
Investment Fund under the Ministry of Finance
signed a contract that endorses the Fund to
grant long-term loans of SR 4,001 billion ($ 1,067
billion) for 16 years including a four-year grace
period and it is active since the time of signing
the agreement of a loan to finance Ma’aden for
Phosphate (1).
The deal includes SR 8 billion ($ 2,06 billion) for
a period of 16 years, with an insurance coverage
from the Korean Company for exports for 16 years
and a capital of SR 750 million annually ($ 200
million), in addition to facilities presented by the
Korean Imports and Exports Bank of SR 1,500
million ($ 400 million). Operating capital of SR
375 million ($ 100 million) was agreed, and direct
finance of SR 506 million ($ 135 million) presented
by Saudi Industrial Development Fund(2).
Investment Climate in Arriyadh 2009
Aluminum:
through a joint project with Alcan (a limited
liability company, the project includes developing,
designing and operating two integrated locations:
- Al-Zabirah Raw Bauxite Project and facilities
to deliver raw materials (Qassim and Hail
Regions): the mine’s capacity reaches 3.5
million ton per year of bauxite, and 1.4
million tons of alumina per year, as well as
650,000 tons of aluminum per year for more
than 30 years
- Ras Alzour location (Jubail) through
establishing alumina refinery and aluminum
smelter and its related infrastructure
Saudi Ports Authority
Since its establishment in 1965, the Saudi Ports
Authority has taken active measures to realize its
objectives of reorganization and upgrading all
ports, and increasing efficiency. It implemented
a series of projects integrate the eight ports,
(six commercial and two industrial) on the Red
Sea and Arabian Gulf. These ports encompass
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The High Commission for the Development of Arriyadh
186 berths at a depth of 11-32 meters with an
annual capacity of 266 million tons. These ports
are provided with state-of–the art handling
equipment and marine craft, as well as support
services(1).
Following completion of necessary infrastructure
in all ports, the Authority followed two paths to
keep abreast of new developments in the marine
arena, as ports shifted from mere commodity
handling facilities to economic entities with
direct impact on the economy and trade
simultaneously, and as a result of the changing
trade patterns and systems:
First:
On-going development of the ports’ capabilities
through increasing depth at the entrances and
basins to receive larger vessels.
Second:
Providing new services consistent with
contemporary developments as well as a keenness
to upgrade the standard of performance and
improve productivity in general.
Statistics of Passengers in all Saudi Ports (2)
Number of passengers
2007
2006
2005
Arrivals
721,166
633,007
W
Departures
751,937
683,060
1,095,697
1,473,139
1,316,067
2,180,369
Total
Delivered Goods to All Main Ports in the Kingdom (3)
Per ton
2007
Kind
2005
Packaged
Vacated
Packaged
Vacated
Packaged
Vacated
Solid Bulk Cargo
19,146,137
6,981,854
17,139,308
6,259,001
18,155,133
5,676,193
Liquid Bulk
Cargo
2,695,224
57,105,313
2,802,218
57,268,900
2,812,782
58,009,331
General Cargo
9,806,503
1,093,050
8,815,958
1,001,417
7,609,355
842,424
Containers
24,142,309
18,001,546
22,118,763
16,741,234
21,427,602
15,935,614
Vehicles
1,504,972
220,830
1,201,366
158,834
1,469,281
177,173
Cattle
182,365
223
286,509
36,810
125,725
-
Total
57,477,510
83,348,816
52,364,122
81,466,196
51,599,878
80,640,735
(*)
Total Delivered
Goods
92
2006
140,826,326
133,830,318
132,240,613
(1) Saudi Ports Authority, King Fahd Port, Jubail Industrial City, Introductory Bulletin.
(2) Saudi Ports Authority website.
(3) Ibid.
(*) Liquid bulk cargo not including crude oil.
Annual Report 2009 (Eng) .indd 92
12/21/09 8:50:13 AM
Saudi Industrial Development Fund (SIDF)(1)
The Saudi Industrial Development Fund (SIDF)
was established in accordance with a Royal
Decree in 1973 as a Government financing and
developmental body linked with the Ministry of
Finance. SIDF assumes a key role in the support and
realization of the objectives of the country’s fiveyear development plans in the field of industrial
development, through supporting projects in this
sector and creating investment awareness in the
Kingdom. This support is represented by providing
medium- and long-term soft loans to the private
sector as well as providing consulting services in
technical, administrative, financial and marketing
domains.
SIDF started operation with a capital of SR 500
million. Due to the growing and high demand by
the private sector for the Fund’s loans, its capital
was increased to SR 20 billion after allocation of
SR 13 billion from the budget of fiscal year 2006,
in accordance with a Royal Decree issued by the
Custodian of the Two Holy Mosques. Accordingly,
SIDF has raised the maximum limit of industrial
projects loans from SR 400 million to SR 600
million.
The following are the most important
SIDF strategic objectives in the context of
supporting industrial development process in
the Kingdom:
• Enhance competitiveness and expand the
industrial base of the private sector
• Enhance non-oil industrial exports
• Realize industrial integration among various
sectors
• Encourage and develop the role of small and
medium enterprises (SMEs)
• Attract foreign capital and ensure technology
transfer and assimilation
The policies and measures adopted by SIDF
regarding provision of loans are reflected in
providing such loans to industrial projects carried
Following are the main policies pertaining to
the SIDF’s lending rules:
• Individuals, national and foreign companies
with industrial licenses in Saudi Arabia can
request loans form the Fund
• The terms of loans provided by the Fund shall
not exceed 15 years. The loans are repaid in
accordance with specific maturity schedules
consistent with expected cash flows of the
projects enjoying such loans.
• The Fund finances industrial projects at
a rate that reaches up to 50% of the costs
of fixed assets, start-up expenses and
working capital, provided that not more
than one year has passed since the start of
commercial production. The Fund does not
finance purchase of used machinery
• The Fund mortgages fixed assets of the
project as well as ensuring personal
guarantees from partners in limited liability
companies
• The Fund stipulates contribution of projects’
owners that they finance not less than 25%
of their projects’ costs
• Approved loans shall be disbursed in
accordance with actual implementation
of projects and in line with supporting
documents
• In order to ensure continued growth of
the industrial sector, SIDF allocated SR
500 million to finance development of
infrastructure of industrial cities and
technology zones which are established on
land owned by the Saudi Organization for
Industrial Estates and Technology Zones, as
well as technology zones and land owned
by the private sector. In the context of
its efforts to support small and medium
enterprises, SIDF adopted Kafala SME’s
Finance Program with a view to overcoming
problems of obtaining adequate financing
for such enterprises.
Investment Climate in Arriyadh 2009
Theme Five:
Financial Services and Credit
Funds in the Kingdom
out by the private sector (including projects
with foreign partners), encouraging intensive
linkages and making use of other economic
sectors, such as adherence to using local materials
and procurement of locally produced building
materials, and awarding work tenders (engineering,
accounting, consulting, etc.) to Saudi firms which
possess the necessary experience.
(1) SIDF report on activities, achievements, programs and tasks 2005/2006.
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The High Commission for the Development of Arriyadh
94
This program was established with a capital of
SR 200 million with contributions from local
banks and the Ministry of Finance. The program
depends on the guarantee mechanism, as it
guarantees 75% of the value of the finance not
exceeding SR 2 million, provided that properties
of the enterprise shall be mortgaged in favor
of the funding body until the whole finance
amount is repaid.
Following are the program’s procedures:
• Small or medium enterprises interested
in investment shall submit a request to a
commercial bank to obtain financing. In
the event the firm does not have sufficient
collateral, then it requests financing under
the Kafala Program
• The bank submits an application to the
Kafala Program to guarantee the finance
required
• Kafala Program administered by SIDF shall
review the request in accordance with
principles adopted for issuance of the Kafala
(Guarantee) in favor of the bank financing
the firm
In 2006-7, loan values approved by the Fund
reached SR 8.54 billion with an increase of 36%
on the previous year. At the same time, sums
disbursed reached SR 4.24 billion, the highest
value since Fund was established in 1974, and
increase of 44% compared to 2005-6.
The net industrial loans approved by the Fund
since it was first established reached 2,512. These
loans were granted for the purpose of establishing
1,667 industrial projects all over the Kingdom. The
net approved sums reached SR 59.45 billion, while
the total loans disbursed from the Fund reached
SR 42.40 billion in that time. The total repaid to
the Fund reached SR 28.44 billion.
The Fund played a positive role in the Kafala
program to finance medium and industrial
enterprises in coordination with local commercial
banks that are sharing in this program. In the
fiscal years 2006-7, the program issued 264
documents of guarantee with a total value of
SR 127 million, with conditional bank finance
reaching SR 272 million. Thus the total number
of guarantees issued by this program since it was
started reached 315, with a total value of SR 149
million, in addition to bank finance of SR 321
million on behalf of 247 enterprises.
It is noteworthy that the Fund’s role is not
only concerned with the provision of loans for
projects benefiting from its service, but also
in evaluating the feasibility of these projects
and providing financial, technical, marketing
and administrative advice from inception to
production and full repayment all their its
obligations to the Fund(1).
The Saudi Industrial Development Fund is the
main pillar of financing industry in the Kingdom.
The total loans to Saudi industry reached SR 66.8
billion by the end of 2006-7. 69 plants benefited
from the loans and services in 2007(2). The loans
were distributed among industrial sectors
in a balanced and compatible way with the
development plans. Chemical industry’s share
was 38% of the Fund’s total lending, followed
by construction materials sector, engineering
industries sector and consumer industries.
Real Estate Development Fund (REDF)
The Real Estate Development Fund was established
in accordance with the Royal Decree 27 of July
1, 1974, to provide loans to citizens in order to
help them establish their own houses as well as
for investment purposes. The Fund started with a
capital of SR 250 million.
The Fund provides exemption of 10% for accelerated
repayments only. In 2008, the Fund’s management
agreed on financing 4,835 special loans for the
purpose of constructing 5,802 residential units,
according to the priority of upgrading cities,
governorates and villages under its services. The
total amount of these loans reached SR 1.35
billion and it represented the third payment from
the approved loans in the budget of the fiscal
year 2007-8. According to the Fund’s report, the
stated loans allocated for this year reached 14,261
loans, with a total value of SR 3.98 billion that will
contribute to the building of 17,113 residences.
The Fund has received special support from the
Custodian of the Two Holy Mosques, that has led to
increase the number of loans funded, and enabled
thousands of nationals to construct decent
housing. Total loans provided by REDF, since the
Custodian of the Two Holy Mosques declared the
increase of the Fund’s capital, reached 94,465
loans, with a total value of SR 26.16 billion, and
the total requests for financing private housing,
since the Fund started, amounted 541,614 with a
total value exceeding SR 144 billion(3).
(1) SIDF Annual Report for the fiscal year 2007, p.5.
(2) Ibid.
(3) REDF, Website: www.redf.gov.sa
Annual Report 2009 (Eng) .indd 94
12/21/09 8:50:15 AM
1%
38%
18%
20%
23%
projects, 28 for petrochemical activities and
16 to public services, transportation, financial
services and real estate investments. The biggest
share of the total disbursed loans was allocated
to Petromin and SABIC Projects (approximately
SR 29.4 billion for each), while loans for pilgrims’
projects reached SR 4.4 billion, and SR 13 billion
for the rest of the projects(2).
Saudi Fund for Development (SFD)
Chemicals
Construction Materials
Engineering
Consumers Industries
Other Industries
Public Investment Fund (PIF)
The Public Investment Fund (PIF) was established
by Royal Decree M/24 of August 17, 1971 to
finance some business-oriented production
projects due to their significant importance to
the development of the national economy. The
Fund provides the basic factors of such projects,
which the private sector cannot solely provide,
due to insufficient experience, capital, or both.
The Fund provides loans to local refinery
projects,
manufacturing
of
lubricants,
petroleum products storage facilities, crude oil
and petroleum products distribution pipelines,
export refineries, steel factories, fertilizers
and petrochemicals factories as well as loans
for purchasing planes for SAUDIA, water and
electricity companies, holy sites projects, etc.
It also holds shares in the capitals of such
companies as cement, electricity, insurance,
public transport, agriculture, gas, petrochemicals,
services and real estate.
The Fund also holds shares, in the name of the
Government, in several joint Arab companies as
well as Arab bilateral companies.
The value of total loans provided by the Fund
up to the end of 2007 reached 69, and the total
disbursed stood at approximately SR 76 million,
while repayments reached approximately SR
53.4 billion, and the credit by the end of 2007
reached SR 22.5 billion. The Fund’s loans were
divided among three main parts: Petromin
loans, 27 to SABIC projects, 18 loans to pilgrims’
(1) SIDF Annual Report, 2008
(2) Statistical tables supplement, SAMA.
(3) Ibid.
Annual Report 2009 (Eng) .indd 95
The Saudi Fund for Development was established
in accordance with Royal Decree M/48 of
September 1, 1974 and started operation on March
11, 1975. The objective is to provide soft loans to
governments of developing countries with a view
to help financing priority development projects.
The Fund assumed the task of supporting vital
projects that enhance development of the basic
infrastructure and vital services. In 2007 the Fund
signed loans with a total value of SR 108.2 million
in order to finance 17 projects in 12 countries,
and it also contributed to 11 projects in seven
African countries, as well as six projects in five
Asian countries. The following is the distribution
of the Fund’s loans according to countries and
sectors (3):
Investment Climate in Arriyadh 2009
The Distribution of the Fund’s Lending by Sectors
by the end of 2007 (1)
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The High Commission for the Development of Arriyadh
SFD Loans Granted to Beneficial Countries
(by million Riyals)
Country
Loan
Total
Project
Date of Signature
Hijri
Gregorian
Africa
Senegal
Dalal Jam Hospital
Medina Jonas Road – Guinea Borders
Wakam Road, Dakar
54.50
37.50
114.00
18/12/1427
2/3/1428
2/3/1428
8/1/2007
21/3/2007
21/3/2007
Kenya
Dandori – Najabini Road
37.50
10/2/1428
28/2/2007
Burkina Faso
Igeriso – Dibjr Road
Samendini Dam
37.50
45.00
4/5/1428
20/11/1428
21/5/2007
30/11/2007
Morocco
Taschort Dam
100.00
1/5/1428
18/5/2007
Tanzania
Establishing and paving roads in Zanzibar
21.00
9/7/1428
23/7/2007
Lesotho
Mitalong Dam
37.50
15/10/1428
27/10/2007
Egypt
Supporting Social Development Fund
Projects
Establishing and providing basic medical
centers
100.00
85.00
6/12/1428
6/12/1428
16/12/2007
16/12/2007
Total
669.50
Asia
Azerbaijan
Evk-Qanja Road
48.75
24/1/1428
12/2/2007
Nepal
Finishing Bjmti irrigation project
56.25
21/8/1428
13/11/2007
Yemen
Taiz Medicine College and Health Science
Hodeidah Central Hospital
45.00
112.50
3/11/1428
3/11/1428
13/11/2007
13/11/2007
Jordan
Expanding Albashir Hospital
(extra loan)
82.50
25/11/1428
5/12/2007
China
Educational buildings in Gansu Province
93.75
20/12/1428
30/7/2007
Sum
438.75
Total
1108.25
Saudi Arabian Agricultural Bank (SAAB)
The Saudi Arabian Agricultural Bank (SAAB) was established by Royal Decree 58 of April 30, 1963 as a
public credit institution specialized in providing finance for various agricultural activities in all regions
of the Kingdom. The Bank also assists in the development of the agriculture sector and enhancement of
its production efficiency by introducing the best and state-of-the-art scientific and technical methods
through providing interest-free soft loans to farmers to enable them to secure such industry prerequisites
as machinery, irrigation pumps, agricultural equipment, livestock, poultry, fish and aviary farming
equipment, etc. The Bank’s capital totaled SR 10.84 billion.
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Growing, storing and marketing agricultural and forestry products as well as livestock and poultry
breeding and fish farming
Land reclamation
Credit facilities for providing water supply required for above purposes
The bank’s contributions had a positive impact on the performance and the development of the
agricultural sector in the Kingdom. This impact is evident in the recent agricultural boom. The
agricultural bank persists with outstanding achievements, where total approved loans reached
428,349 with a total value of SR 39.98 billion between 1965 and 2007. In 2007, 3,770 individuals
benefited from these loans, whose value stood at SR 1.04 billion (2 )
Loans and Subsidies Disbursed by SAAB 2003-4 to 2006-7 (3)
Loans
Year
Subsidies
Number of Loans
The Value
(million riyal)
The Value
(million riyal)
2004
5,136
1043.9
246.2
2005
3,527
896
249.8
2006
4,303
98.2
258.6
2007
3,770
1044.3
32,9
Cumulative Total
428,349
39,978.4
13,025.9
(1) SAAB, introductory bulletin.(2) Statistical tables supplement, SAMA.
(2) SAAB, Annual Report, 2007.
(3) Ibid.
Annual Report 2009 (Eng) .indd 97
Investment Climate in Arriyadh 2009
SAAB provides loans and credit facilities to help in the development, promotion and activation of
the agricultural sector, including the following(1):
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The High Commission for the Development of Arriyadh
These loans went towards machinery, irrigation
pumps, agricultural equipment, drilling wells,
irrigation machinery, dynamos and electrical
plugs, greenhouses, palm seedlings and fruits
nurseries, and boats and fishing equipment, hives
and bee- breeding equipment, as well as fertilizers,
fuels and pesticides. Furthermore, for 43 years
the loans contributed to establishing 4,661
specialized agricultural projects. One thousand
loans, or 21.5% of total agricultural loans, were
allocated to the poultry sector. Total agricultural
loans stood at SR 2.84 billion or approximately
30.4% of total projects’ value. This category
includes poultry fattening and egg-laying farms in
addition to automated hatcheries and abattoirs.
Loans granted for botanical projects reached 2,985
or approximately 64% of the total value of SR 3.48
billion ‫ ـ‬approximately 37% of total agricultural
loans. Projects funded include wheat, barley,
cattle feed, and fruit, uncovered vegetables, date
palms and potatoes, in addition to air-conditioned
greenhouses for vegetable production. The 304
loans represent approximately 6.5% of the total
loans, with a total value of SR 1.21 billion, which
represents approximately 13% of total project
loans. Moreover, other projects were established
such as dairies, fish and shrimp breeding, date
processing and olive and sesame presses, as well
as cooling stores for agricultural projects (1).
Saudi Credit Bank (SCB)
The Saudi Credit Bank (SCB) was established by Royal
Decree M/44 on November 9, 1971(2). According
to the provisions of its articles of association, the
Bank was established as a financially and legally
independent entity, eligible for acquisition, disposal
and litigation.The Bank was established to extend
interest-free loans to Saudi citizens with limited
financial resources, to help them overcome their
financial difficulties. Its loans are extended in return
for sufficient mortgage or acceptable guarantee
from a creditworthy individual or firm to ensure
repayment of the loan. The Bank extends loans, the
value of each not exceeding SR 20,000, according to
specific conditions such as:
• A loan applicant must be in actual need of the
loan
• His annual income should not exceed SR
36,000
• He should not have outstanding loans from
SCB
98
(1)
(2)
(3)
(4)
• Submitted guarantee should conform to SCB’s
by-laws and relevant regulations
SCB provides loans for purposes such as marriage,
home repair and other social loans including
family loans, vocational loans (not exceeding SR
200,000) and taxi drivers’ loans which commenced
in May 2002.
This bank is considered one of the major
government pillars, where it grants soft developing
loans for Saudi citizens. Royal Decree M/34
cancelled the previous bank Decree No M/44 and
replaced it with a new Decree with the following
objectives (3):
• Grant interest-free loans for small and medium
enterprises, and for craftsmen and tradesmen
to encourage them to be independent and for
their own interests
• Grant interest-free social loans for low income
citizens to assist them meet difficulties faced
• Function as the complimentary coordinator to
sponsor small and medium size enterprises
• Encourage citizens to save (at individual and
institutional levels) and provide adequate
methods for this purpose
• The bank includes 26 branches throughout
the Kingdom, located in; Arriyadh, Jeddah,
Dammam, Al Hasa, Khamis Mushayt, Buraidah,
Makkah, Taif, Hail, Tabuk, Al Jouf, Jizan, Wadi
Aldawaser, Al Kharj, Al Baha, Najran, Al Konfoda,
Bisha, Al Majmaa, Al Adwadmi, Qurayat, Hafr
Al Batin, Al Namas, Araar, Yanbu.
The bank serves different kinds of loans as the
following:
1. Social loans include:
• Marriage loans
• Family loans
• House repair loans
2. Other loans:
• Small and medium enterprises loans
• Vocational loans
• Craft loans
• Taxi cars and school transportation loans
These loans are interest-free in return for soft
guarantees.
According to SAMA statistics, total loans from
Saudi Credit and Saving Bank reached SR 1,799
million by the end of 2006, compared to SR 1,313
million by the end of 2007. Total repayments
stood at SR 554 million, while the net credits by
the end of 2007 reached SR 486 million(4):
SAAB website, www.saab.gov.sa.
Ministry of Finance, Saudi Credit Bank, introductory bulletin.
Saudi Credit and Saving Bank website, www.scb.gov.sa/Home.aspx.
SAMA, 44th Annual Report, 2008.
Annual Report 2009 (Eng) .indd 98
12/21/09 8:50:19 AM
The establishment of the Human Resources
Development Fund, as an administratively and
financially independent entity, came as a result of
a clear vision for a strategic Saudi objective, the
attainment of which represent an unprecedented
challenge reflected in Saudization of private
sector jobs. The establishment of the Fund came
as an effective mechanism to contribute towards
providing qualified and well-trained Saudi youth
(both male and female), to realize the strategic
objective of providing the nation with social,
economic and security benefits.
The Fund was established by Council of Ministers
Resolution 107 of July 31, 2000 and Royal Decree
M/18 dated August 5, 2000, as an administratively,
financially and legally independent entity located
in Riyadh. Its aims are to translate the efforts of
those responsible for the country’s policy into
actions on the ground, by enabling Saudi youth
to acquire knowledge and skills necessary to
occupy private sector jobs, thus bringing about
a positive impact on the national economy. In
order to realize its objectives, the Fund carries
out the following activities:
• Assistance in training and employment of
national manpower in the private sector
• Contribution in the costs of training
national manpower to join the private sector
Shouldering a percentage of the salaries of
those employed in the private sector firms
after training them.
• Supporting the finance of field programs,
plans and studies aimed at the employment
of Saudis to replace foreign labor
• Providing loans to firms involved in training
national manpower
• Conducting research and studies related
to its activities in the field of national
manpower training
The Human Resources Development Fund,
between its inception in 2000 and December
2007, succeeded in providing thousands of job
opportunities and training for both Saudi young
males (93% of total beneficiaries) and females (7%
of total beneficiaries). As shown in the following
diagram, the Fund succeeded in providing job
opportunities and training more than 108,000
unqualified, and more than 87,000 qualified Saudis
of both genders.
(1) Human Resources Development Fund, Annual Report, 2004.
(2) Human Resources Development Fund, Annual Report, 2007.
Annual Report 2009 (Eng) .indd 99
Distribution of training and employing opportunities
since the fund’s inception till the end of 2007 (2)
Training & employing
the qualified
Training & employing
the unqualified
Investment Climate in Arriyadh 2009
Human Resources Development
Fund (HRDF) (1)
Furthermore, the Fund succeeded in supporting
thousands of youngsters to obtain jobs in
the Saudi private sector, particularly in the
technical fields, down payment sale, the
service sector, clerical, engineering, business,
agricultural, administrative and industry. These
job opportunities were distributed across the
Kingdom. Total opportunities reached more
195,000, mostly concentrated in Arriyadh Region
(more than 87,000), Makkah (more than 42,000),
Al Madinah and Qassim (more than 4,000 in
each). Most opportunities were concentrated in
the commercial sector (approximately 77,000),
followed by the industrial sector (more than
29,000). The construction sector’s share reached
29,000 as shown in the following diagram:
Other Sectors
Tourism
Consulling & Advocacy
Health
Agriculture
Private Education
Communications & Postal
Services
Teaching
Construction
Sector
Industrial
Commercial
99
12/21/09 8:50:19 AM
The High Commission for the Development of Arriyadh
100
Centenary Fund (1)
The Centenary Fund was established by Royal
Decree on July 7, 2004, as a Saudi private charity
foundation. The Fund aims at rendering assistance
to Saudi youth of both genders to establish their
own commercial businesses.
The Fund provides interest-free loans ranging
between SR 50,000 and SR 200,000, to be
repaid within sixth months of commencement
of commercial operations. The loan is repaid in
monthly installments over five years. The Fund
also provides counseling services for three years
from the start of commercial operations. This is
done through volunteer business people with
proven practical experience supporting emerging
investors. The Fund also streamlines Government
procedures regarding establishment of commercial
projects in collaboration with SAGIA.
The Centenary Fund recent achievements are
witnessed in the successful basis and regulations
in the Fund in cooperation with international
institutes specialized in the administrative and
financial fields. This project has proved successful in
terms of the beneficiaries of the Fund’s services. The
Fund also succeeded in supporting the emerging
investors and resulting in the cooperation of many
sectors with the Fund to supply financial support
to provide better services for businessmen.
The Fund also provides whole or partial finance in
the form of interest-free loans for projects whose
values range between SR 50,000 to SR 200,000.
Advisory services required are provided for three
years from inception of the project by making
use of experiences related to world consulting
services that means approximately 70% of the
provided support. Moreover, the project’s owner
will receive streamlines and necessary services
for establishment of the project, and finish all
government procedures via comprehensive
services center located in different areas of the
Kingdom and related to the Saudi Arabian General
Investment Authority. In addition, the Fund
provides support in developing self-sufficiency in
decision making, and provides bank and insurance
services and prepares project links so that the
owners of the different projects can communicate
with their mentors.
The Fund also provides support in marketing,
promotion and publicity. The Fund endeavors
to obtain special discounts and facilities for the
project’s owners through companies that offer
their commodities for nothing or at a discounted
rate. More than 7,000 young people benefited from
these services, and the Fund seeks to reach 10,000
beneficiaries before the end of 2008. The Fund
is only available to the unemployed and private
sector staff and the retirees are not eligible.
The Fund’s key achievements in 2007(2):
• Hosting the first Islamic forum for members
of world youth organizations
• The Fund held a high-level workshop for a
large number of guides (both males and
females) from all regions of the Kingdom
• Pass the periodic review of ISO 9001
successfully and without any observations
• The Fund had formally established a branch
in Rabegh
• The number of existing projects in 2007
reached 442 (a 21% increase from the
original plan), thus the total financed
projects stood at 540, with a total value of
SR 88.6 million
• Delivered payments reached SR 34.8 million,
or 40% of the approved sums.
• 17,231 requests for loans were studied
and categorized according to an approach
adopted by the Fund’s administration. 40%
of these requests were approved
• The rate of collection was 73% in 2007.
Accordingly, the Fund revised many cases
that were in default, and the defaulters with
no acceptable excuse were moved to legal
affairs
• Donations to the Fund reached SR 9.8 million
in 2007
• Appoint approximately 702 guides (male
and female). By the end of 2007 there were
1,207
• By the end of the third quarter, there were
80 volunteers (of both genders)
• 31 introductory workshops had been
presented, whose purpose was introduce
the Fund’s essential objectives
• Strategic objectives and performance
evaluation indicators of the Fund had been
set for 2008 to the end of 2021
• The beneficiaries trained throughout the
Kingdom reached 278, and 423 out of 487
guides from both genders were trained
(1) Eastern Province Chamber of Commerce and Industry, SME 3rd Forum, paper by the Centenary Fund’s Director General, 2005.
(2) SAMA, 44th Annual Report, 2008.
Annual Report 2009 (Eng) .indd 100
12/21/09 8:50:20 AM
According to Saudi Arabian Monetary
Agency statistics, the total credit granted
by commercial banks by the end of 2008
reached SR 594.9 billion compared to SR
497 billion at the end of 2006. Bank credit
was distributed among the following
sectors; agriculture, industry, mining, water,
electricity, construction, trade, transport,
telecommunications, finance and others.
Total bank deposits during the second
quarter of 2008 recorded an increase of
8.2% (SR 5.21 billion) to reach SR 1,783
billion compared to an increase of 1.6%
(SR 1,440 during the previous quarter).
Moreover, by the end of the second quarter
of 2008, it witnessed an annual increase of
9.21% (SR 8.14 billion). The total deposits
(bank deposits to total money supply N3) by
the second quarter of 2008 reached 0.91%
compared to 6.9% in the same period of the
previous year.
Investment Climate in Arriyadh 2009
Commercial Banks and Bank Financing
Distribution of Bank Credit the Sectors from 2001 to 2008 (1)
Year
Agriculture
and Fishing
Manufacturing
and Production
Mining
and
Mines
Water,
Electricity
and other
services
Construction
Trading
Transport and
Telecommunication
Financing
Services
Other
Government
and Quasigovernment
Total
2001
2,138
24,659
1,206
1,220
16,746
40,167
9,917
6,703
9,514
64,534
10,817
187,620
2002
2,530
24,324
715
1,094
20,982
42,194
13,555
8,862
9,718
74,724
11,960
210,657
2003
2,549
26,604
650
1,837
21,955
51,886
12,803
11,877
8,839
82,124
25,844
246,967
2004
3,785
26,519
1,252
3,273
23,057
62,808
13,406
33,839
12,337
122,722
29,138
332,126
2005
6,716
34,460
2,2775
3,226
31,726
83,054
14,382
56,747
15,097
173,146
31,672
452,501
2006
6,802
37566
1,802
3,598
37,845
111,511
6,875
61,826
16,735
177,539
34,965
497,067
2007
8,636
54,339
3,897
5,878
43,421
127,473
20,989
62,632
28,286
201,854
37,434
594,840
First
quarter
9,503
56,721
4,122
7,427
47,618
142,634
31,392
66,356
28,723
312,151
34,032
640,679
Commercial Bank Foreign Assets and Liabilities
180
160
78,9
120
100
89,6
140
60
2,6
40
11,6
12,5
80
20
0
Foreign Assets
Foreign Liabilities
Net Foreign Assets
(1) See the supplements to statistical tables, SAMA, Annual Report 2008.
101
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The High Commission for the Development of Arriyadh
102
Theme Six:
Eighth Development Plan and
Investment Outlook in The Kingdom (1)
The Eighth Development Plan is expected to
achieve preparation and approval of more
important national strategies, such as: long
term strategy for the Saudi economy up to 2024;
national strategy for post secondary education;
national strategy for export development and
national strategy for eradication of poverty.
In the light of the above, general indicators of
national economy are reflected in increased
economic growth rates, increased employment
rates, growth of private sector contribution to the
economy and national income, diversification of
the economic base, improvement of the balance
of payments in favor of Saudi Arabia, realization
of a high degree of economic equilibrium and
price stability, and achievement of balanced
development in all regions of the Kingdom.
Furthermore, these indicators will be reflected in
the increased integration among GCC States and
enhancement of Arab economic cooperation
and accelerated integration in national and
international economy.
(1) Concerned Agencies in the Ministry of Economy and Planning prepared a guide for the 9th Development Plan by the end of 2008, the
report year.
Annual Report 2009 (Eng) .indd 102
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Generd Objectives and Strategic Bases for the 8th Development Plan 2005 - 9 (1)
Strategic Bases
•
Safeguard Islamic teachings and values,
enhance national unity, enhance the security
and social stability and deepen the Arab and
Islamic identity of the Kingdom.
•
Increase the share of Saudi manpower in total
employment in various sectors, pay attention
to upgrading their efficiency and productivity
through training and retraining, and continue
to substitute Saudi manpower for non-Saudis.
•
Continue to improve services provided to Hajj
and Umrah pilgrims, to ensure performance of
religious rites with ease and convenience
•
Place emphasis on the welfare of women,
upgrade their capabilities and remove
constraints which impede their participation
in development activities, in line with Islamic
values and teachings.
•
Raise the standard of living, improve the
quality of life and provide job opportunities
for citizens, through acceleration of the
development process and increasing the rates
of economic growth, as well as qualitative and
quantitative expansion of education, health
and social services.
•
Expand the provision of health care and social
welfare services.
•
Take care of needy groups of citizens and pay
attention to management and reduction of
poverty by concentrating on economic policies
and programs which lead to higher economic
growth along with achieving balanced
development in all regions of the Kingdom.
•
Develop
human
resources,
upgrade
competency and enhance their contribution
to meet requirements of national economy.
•
Diversify the economic base with due emphasis
on promising areas, such as manufacturing
industries, particularly energy intensive
industries and their derivatives, in addition to
mining, tourism and information technology
industries.
•
Develop all aspects of education and training
systems. Upgrade their output in conformity
with changing needs of society, labor market
and requirements of development process.
In addition, keep abreast of advances in
knowledge and technology, and pay attention
to the promotion and dissemination of
culture.
•
Improve productivity of the national economy,
enhance its competitiveness and make it
adaptable and flexible while facing economic
changes and developments at the national,
regional and international levels.
•
Improve the quality of public services and
increase their supply in line with the growing
needs of the population along with improving
performance of the responsible agencies.
•
Enhance the private sector’s participation in
socio-economic development.
•
Enhance the utilization of economic resources
with due emphasis on rationalization as a
basic factor as well as improve performance of
responsible agencies.
•
Achieve a balanced development throughout
all regions of the Kingdom and reduce the
development gap among them.
•
Continue to build infrastructure in line with
growing demand, improve performance
and place emphasis on maintenance and
replacement of areas in disrepair.
•
Develop science and technology, concentrate
on information, support and encourage
scientific research and technology development
with a view to enhancing the efficiency of the
Saudi economy, and keeping abreast of the
knowledge economy.
•
Continue to pay attention to preparing a
climate conducive to boosting private sector
participation in socio-economic development,
while intensifying government initiatives
to encourage private, domestic and foreign
investments and bolstering competitiveness
of domestic products.
•
Conserve and develop water resources and
ensure rational utilization.
•
Privatize additional public facilities, activities
and services. Consideration should be given
to raising citizens’ share in the ownership of
assets within the framework of competition
and transparency.
Investment Climate in Arriyadh 2009
Objectives
(1) Ministry of planning: 8th development plan 2005 - 9
103
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The High Commission for the Development of Arriyadh
Objectives
Strategic Bases
•
Protect the environment and develop suitable
systems within the context of sustainable
development requirements.
•
Develop tourism and improve associated
services and facilities along with conserving
the environment and national heritage.
•
Continue to strengthen and promote the
Kingdom’s relations with Arab, Islamic and
industrial countries.
•
Adopt a population policy that takes
into consideration the quantitative and
qualitative changes of the population and
their geographical distribution, and enhances
correlation between demographic changes
and directions of sustainable development.
•
Distribute resources and services among the
Kingdom’s regions in a manner that would
ensure reduction of development disparities
among them and enhance their comparative
and competitive advantages.
•
Create a strong foundation for national
science and technology capable of innovation,
expand Information and Telecommunications
Technology (ITT) applications and improve
databases to support the national economy.
•
Continue with the process of administrative
development and creation of a regulatory
environment
conducive
to
economic
development and efficiency.
•
Adopt fiscal and monetary policies that
contribute to accelerating economic growth,
realizing a higher employment level and
enhancing economic stability.
•
Reduce public debt to reasonable levels and
develop appropriate mechanisms to realize
financial stability in the long run.
•
Adopt an integrated management of water
resources and optimize utilization of these
resources, while emphasizing their rational use
and developing their sources and conservation
techniques.
•
Encourage private firms, enterprises and
individuals to participate in benevolent and
voluntary activities in the social, health and
educational domains, along with inculcating
the concept and significance of these activities
and improving their methods and performance
techniques.
•
Continue to pay due attention to protection
of the environment against pollution. Develop
sound environmental protection regulations,
protect and promote wildlife, and ensure
conservation of natural resources and
rationalize their utilization.
•
Promote integration among the Gulf
Cooperation Council (GCC) States and
strengthen the Kingdom’s relations with
Arab, Islamic and friendly countries as well as
international economic blocks.
104
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The Kingdom adopts the market economy
principle. However, Government economic
policies remain significantly in place to ensure that
economic activities are within the framework of
the approved development strategy to deal with
unexpected and unfavorable economic events.
Thus, the Eighth Development Plan demonstrates
the significance of integrated functions of macroeconomic policies as well as the importance of
economic reform policies aimed at enhancing
market economy mechanisms. The Plan also
highlights the importance of encouraging the
private sector in carrying out its tasks in the
context of boosting economic growth as well
as the importance of Government investment in
infrastructure projects with a view to improving
the economic climate in general and investment
environment in particular, thereby raising
economic growth rates, job opportunities and
improving standards of living. In the light of the
above, the State’s economic role encompasses
regulating general economic equilibrium through
macro-economic policies, a matter which was
adopted by the Eighth Development Plan through
maintaining price inflation within 0.6% (1) as an
annual rate over the coming five years.
This stability of the Saudi Riyal exchange rate is
expected to continue. Growth, rationalization
and restructuring of public expenditures are also
expected to continue with a view to meeting the
requirements of socio-economic development
in light of high population growth, and to be
increasingly financed through actual oil and nonoil sources. In the domain of investment policy,
the Eighth Development Plan aims at ensuring an
adequate investment climate for Saudi and foreign
private sectors along with raising Government
investment in vital development projects.
Eighth Development Plan and Private Sector
Investments
The Kingdom’s development plans, including
the Eighth Development Plan, adopted the
strategy of paving the way for the private sector
to assume many economic activities. This policy
has had its impact on supporting the activity
of the private sector, boosting its importance
in the economy, developing its capabilities
and improving its economic efficiency in its
investment and production concept. This has
not only enabled the private sector to mobilize
capital to finance projects, but also to use
modern management methods and adopt
advanced technologies.
The Government is keen to ensure a favorable
economic climate and opportunities necessary
for boosting the developmental role of the
private sector. Privatization policy and investment
incentive systems, as well as the partnership with
the government sector are the best example for
that. In 2006 the estimated number of economic
institutions working for the private sector stood
at 700,000 including 3.5 million workers. The
value added by the private sector, excluding nonoil products, to the GDP by fixed prices of 1999,
increased from SR 314.9 billion in 2004 (the first
year of the Eighth Development Plan) to reach SR
375.4 billion in 2007, meaning the contribution
to the GDP over the first three years of the plan
increased from 43.6% in 2004 to 46.7% in 2007.
Hence, the actual rate of growth for the value
added to the private sector is estimated at 6%
during the first three years of the Plan. This
rate is slightly higher than the expected annual
growth rate of the private sector during the Fifth
Development Plan, which is estimated at 5.7% (1).
The expansion of the private sector during the
past three years edged over that of the public
sector, and that is obvious on comparing real rate
of growth of the GDP which was estimated at 4.1%.
The value added to the private sector, excluding
non-oil products, (by current prices that reached
SR 321.3 in 2004), increased to approximately SR
402.5 billion in 2007, which indicates that the
value added to the GDP according to current prices
is estimated at 34.2% in 2004. The percentage fell
in 2007 to 28.5%. Annual rate of growth of nonoil private sector is estimated at 7.8% for the first
three years of the Eighth Development Plan.
The expansion of the private sector further
reflected its growing contribution to employment,
where the number of workers increased from
6,168 in 2004 to 6,641 in 2007 – and additional
473 workers in the private sector during the first
three years of the Plan. Thus the realized annual
increase reached 2.53% compared to the Plan’s
expected increase of 2.2%.
These results were realized when private sector
investment increased (fixed capital formation by
fixed prices of 1999) from SR 118.5 billion in 2004,
Investment Climate in Arriyadh 2009
Eighth Development Plan and
Economic Policy
(1) Ministry of Economy and Planning, 8th Development Plan.
105
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The High Commission for the Development of Arriyadh
106
to reach SR 136.6 billion in 2006. That means
an annual increase of 7.6% during the first two
years of the plan. The Eighth Development Plan
aimed at raising the number of investments (fixed
capital formation) in the private sector with an
annual rate of 10.45%. To date, this target has
not been reached. The actual invested capital in
the industrial sector increased only from SR 286
billion in 2002, to approximately SR 297 billion in
2006. It is also noteworthy that the investments
of the foreign joint private sector (according to
current prices) barely increased during the first
three years of the plan­ – SR 128.6 billion in 2004
and SR 128.8 billion in 2007(1).
In addition, bank loans granted to the private
sector increased from SR 321.1 million in 2004
to SR 594.8 million in 2007, a total increase of
85.2% during the first three years of the Plan.
This reflects the progress achieved on the first
three years of the Eighth Development Plan
in expanding private finance reducing the
importance of financing – a source of trouble for
the private sector.
The private sector contributed in providing
job opportunities for most sectors, especially
to trade, manufacturing and construction
sectors, while investments were concentrated
in petroleum, mining, manufacturing, transport
and telecommunications sectors. In 2006, the
trade sector employed more than 30% of the
total manpower in the Kingdom, 25% of the
total workforce in this sector being Saudis. The
manufacturing industries sector followed with
more than 17% of the total workers, with Saudis
representing approximately 12% of the total. The
construction sector was in the third position in
terms of employing workers, estimated at 14%
of whom 8% were Saudis. The petroleum and
mining sectors’ contribution to employment
was low, little more than 2%. Saudi nationals
represent 8% of the total workers in this field.
Private sector fixed assets represented in
equipment, transport, machinery, furniture and
lands (fixed capital formation) could achieve the
highest percentage in petroleum and mining
sector. These assets contributed 28% of the fixed
assets purchased by most economic institutions,
followed by the sector of manufacturing
industries with more than 20%, 12% for transport
and communication sector and 7% for the
construction sector.
A low percentage of 3% was witnessed in the
personal and public services sector. The same
is noticed in social and health services (0.7%),
0.8% for hotels and restaurants and 1.1% for the
education sector.
Eighth Development Plan and Investment
Requirements
The investment strategy of the Kingdom is based
on several key pillars such as (2)
• Ensuring integration of Government and
private investments
• Increasing non-oil Government revenues to
the level of financing a significant part of
operational expenditures and Government
services away from oil revenues
• Reducing operational expenditures (current)
through privatization and expanding
cooperation between the public and private
sectors
• Increasing savings and Government
investments and adopting an investment
plan not influenced by fluctuations of oil
revenues
Against the above background, the general
strategic objectives of development in the
Kingdom are reflected in increase of the rate of
private and public domestic savings, increase
of net Government capital formation and
repatriation of Saudi savings and investments
from abroad, as well as encouragement of direct
foreign investment.
(1) See Ministry of Economy and Planning website.
(2) Ibid.
Annual Report 2009 (Eng) .indd 106
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Item
7th Development Plan
1999-2000 to 2003-4
8th Development Plan Target
2004-9
Value (Actual)
(billion riyal)
%
Value (Expected)
(billion riyal)
%
A. Non-Oil sectors
598.1
89.6
920.3
88.1
1. Producing Sectors
277.1
41.5
438.7
42.0
1.1 Agriculture, Forests and Fisheries
18.8
2.8
32.5
3.1
1.2 Non-oil Mining - Quarries
1.4
0.2
3.5
0.3
1.3 Manufacturing industries
94.0
14.1
178.7
17.1
1.3.1 Oil Refining
8.9
1.3
12.1
1.2
1.3.2 Petrochemicals
52.0
7.8
101.5
9.7
1.3.3 Other Manufacturing
33.1
5.0
65.0
6.2
1.4 Electricity, Gas and Water
154.4
23.1
207.8
19.9
1.5 Construction
8.5
1.3
16.4
1.6
2 Services Sector
227.4
34.1
365.2
35.0
2.1 Trade, Restaurants and Hotels
25.6
3.8
35.7
3.4
2.2 Transport and Communication
24.7
3.7
45.3
4.3
2.3 Finance, Insurance, Business and Real
Estate Services
166.7
25.0
262.6
25.1
2.3.1 Real Estates Services
145.7
21.8
227.3
21.7
2.3.2 Finance, Business and Insurance
Services
21.0
3.1
35.3
3.4
2.4 Community and Personal Services
10.4
1.6
21.5
2.1
Total non-oil Private Sector
504.5
75.6
803.9
77.0
3. Government Services
93.6
14.0
116.4
11.1
B. Crude Oil and Natural Gas
69.0
10.4
124.5
11.9
(1) Ministry of Economy and Planning, 8th Development Plan, 2005-9.
(2) Ministry of Economy and Planning, Macro-economic Forecasts, 2005.
Annual Report 2009 (Eng) .indd 107
Investment Climate in Arriyadh 2009
Targeted Investments During the 8th Development Plan at Fixed Prices in 1999 (2)
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Investment Opportunities
in the City of Arriyadh
Arriyadh is a strategic center for national and foreign investments,
and one of the important commercial centers in the Middle East.
Arriyadh is looking to become a world-class financial center.
Arriyadh’s position is further enhanced by other merits, among
them the fact that it is the administrative capital of the Kingdom
Saudi Arabia, and the location of all investment agencies.
Administrative and legal procedures have been developed
to improve the investment environment. These include the
simplification of customs exemptions procedures to ensure
faster transactions within no more than one month, electronic
information sharing projects, facilities provided by the Saudi Fund
for Development to subsidize export financing, and services of the
Saudi Industrial Development Fund. In addition, visa procedures
have been simplified, allowing easier entry for businessmen
visiting Saudi Arabia, and offices of the Saudi Arabian General
Investment Authority (SAGIA) established in Saudi Embassies
abroad. The Kingdom’s Strategic Investment Plan implemented
through SAGIA aims at making the Kingdom one of the world’s
top ten competitive countries included in the ‘Doing Business
Competitiveness Report’ published by the World Economic
Forum.
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The High Commission for the Development of Arriyadh
Theme One:
Investment Opportunities Issuing
from Government and Other
Agencies
Arriyadh Development Authority (ADA)
Urban Suburbs
ADA has endorsed structural plans,(1) policies
and regulatory measures for the north and east
suburbs of the city which the Authority aims to
commence in cooperation with the private sector.
The total area is about 419 square kilometer and
will address the expected growing population
of the capital in the near future. The authority
also plans to find new, well-planned areas that
are independent in terms of urban development
to meet the executive framework that has the
advantage of flexibility to accommodate future
developments.
The northern suburb involves an essential
and important activity: privatization of a
special area and preparing it as the center of
scientific and technological industries, research
centers and support facilities. The initiative
of developing the suburbs is one of the major
economic opportunities in the Kingdom. The
volume of investments required for each suburb
is estimated at SR 270 billion. Structural plans,
policies and the regulatory measures being
prepared for both suburbs are considered
as referral documents upon which all future
business being implemented depend.
In line with the expected population growth
in Arriyadh City, and the process of finding
new well-planned areas, the ADA’s urban
development plan endorsed the establishment
of new independent suburbs. These suburbs
meet high standards and flexibility for future
developments.
The establishment of both suburbs will
contribute to realizing a sustainable urban
environment with a high level of services,
housing and public utilities, as well as a level
of autonomy from central Government. The
private sector’s increased contribution to the
development process will reduce the burden
on the city and provide job opportunities.
The Authority depends on the private sector
to finance all costs of public utilities in both
suburbs and to link them to the nearest public
utilities network. In doing so, they will improve
public utilities and buildings through the system
of ‘constructing, leasing, then transferring the
property’ as well as enhancing the principal of
‘developing integrated projects inside these
suburbs’.
By the end of 2007, ADA had endorsed structural
plans, policies and regulatory controls for both
suburbs and drawn up plans for all future business
development. As a consequence, the following
objectives of establishing both suburbs will be
realized:
• Reduce the burden on the city by making
the suburbs largely independent of central
Government
• Create a sustainable urban environment with
a high level of services, utilities and housing
• Provide economic opportunities, and achieve
self-sufficiency for the suburbs through a
variety of economic activities
• Achieve a balance in terms of distribution of
main needs according to the requirements
of the urban areas
• Create an executive and flexible frame to
address any future updates
• Provide adequate opportunities to cooperate
with the private sector in the process of
developing the new suburbs, as well as
establish projects of integrated utilities
The northern suburb is located in the northern
part of Arriyadh City, 20 sq km from the crossroad
of King Fahd Road and the northern circular
road. It will extend to an area of 205 km2. The
city is bordered to the north by development
protection areas, to the east by King Khaled
International Airport, to the south by a proposed
expressway. This is located in the northern area
of the Special Security Forces, and to the west
by King Khaled Road (previously Salboukh).
The northern suburb features many remarkable
milestones, such as Prince Sultan Bin Abdulaziz
City for Humanitarian Services, located in the
center, Banban Village in the eastern part, and
Sultana Village in the (North-East). An area has
been set aside for development of a specialized
Banban Park. More rest houses are located in
the northern part of the suburb. The developed
(1) Al Eqtesadia Saudi Newspaper, 30/8/2008.
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ADA studies reveal that the northern suburb is
expected to have a population of 675,000 by
2029. Residential units expected to be housed
here may reach 123,000 by 2029.
The northern suburb is expected to provide
133,000 job opportunities for a number of
sectors such as logistic services and technological
industries sector, public services, commercial
activities, educational, health and entertaining
activities in addition to other support services.
In implementing a successful public transport
system, the plan takes into consideration
the topography of the suburb, the ease of
connection between the center and the five
residential areas, as well as the expected
population increase.
Thus the plan identifies major land areas used
in the suburb with the principal activities and
employment there, the location of central
public services, road networks, public utilities
and open areas. The following includes the main
features of the structural plan of the suburb:
1. Technological industries area: a special
area had been assigned to be the center
of technological industries in the southeastern part of the suburb close to King
Khaled International Airport. This area has
all activities related to the science and
technology sector and research and logistic
facilities sector. Both sectors contribute to
providing an attractive environment for
businesses. The total area is to be 9.43 km2.
2. Mixed–use area: combined commercial and
residential use in the center of the suburb.
The high-density mixed-area includes; stateof-the–art buildings located in the center,
as well as other residential buildings with
versatile activities such as retail trade,
exhibitions, offices, entertainment centers
and a central station for public transport.
All kinds of jobs and retail trade services are
available in this area. The suburb’s center will
provide high-density residences within walking
distance of the services and job opportunities.
A variety of services are to be available, as
follows:
• Suburb center: includes the center, stateof–the-art, specific high-rise buildings
in the central area, residential areas and
utilities with associated plazas, shopping
centers, cultural centers, security services,
Investment Climate in Arriyadh 2009
areas constitute 2.44% of the total suburban
area. About 24% of this area has been planned,
with schemes for roads and streets network
as well as residential and rest house schemes.
Vacant unplanned area represents about 73.54%
inside the suburb.
The main feature of the structural scheme of the
northern suburb is represented by allocating
a special area for technological industrial
activities in the south-east, comprising a science
and technology sector as well as research and
support utilities sector. The residential area is to
be state-of-the-art style. Also a clear hierarchy
to distribute the centers serving residents of the
suburbs should be available with various needed
services, in addition to a planned road network,
an efficient transport system and an integrated
system for open areas.
The development of the northern suburb makes
will make it a major economic center for information
technology and telecommunications. Its location
in the northern hub of Arriyadh City and its
proximity to King Khaled International Airport
and the railway routes under construction will
enable it to serve other regional development
centers.
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The High Commission for the Development of Arriyadh
administrative buildings and a central Eid
mosque.
• Residential area: includes an administrative
center, shopping center, main hall, public
library, cultural center, religious and security
services and technical school. It serves a
population of about 135,000.
• Quarter center: includes parks, shopping
center, the district’s hall, and a branch of
the public library. Each residential quarter
accommodates a population of about
30,000.
• A center for residential neighborhood
quarter: includes plazas, domestic shopping
area, a primary school and kindergarten.
Each quarter accommodates a population
of about 5,000.
• A distinct pattern of planning has been
adopted for all residences in the suburb in
terms of diversification of densities. At the
same time, open areas were exploited for this
purpose. Urban growth has been limited to
certain areas. Moreover, the residential areas
imply versatile residences such as apartments,
duplexes and different size villas.
Residential development is distributed
according population density, starting with 5%
for high–density development in the center, 15%
in medium-density areas, 65% in low-density
areas and 10% for very low-density areas or rest
houses. The total residential area constitutes
about 55% of the total developed suburb.
Besides public services, specific areas were
assigned for central and public services in the
suburb such as a medical city, college, and sports
city, in addition to domestic services provided
inside the residential areas.
An integrated system has been provided for the
open areas in the northern suburb. It makes
use of topographical features, such as natural
valleys.
The open areas concept is based on a center of
entertainment, a recreational hub linking Wadi
Hanifah with Al Thumamah and including the
suburb’s park in the center of the suburb, open
spaces inside residential areas, in addition to
gardens and playgrounds at the domestic level.
The structural scheme will provide a road
network of a clear hierarchy that mainly depends
on the Qassim and Salboukh roads, with the key
hub being a ring road around the central area,
with branch roads linking the suburb’s center
with all residential areas.
The scheme also includes development of
efficient public transport, including electrified
trains, buses, a main station in the central area
integrated with the suggested north-south
railway that will serve the suburb’s eastern
borders.
Furthermore, master systems and regulatory
controls related to development and usage of
lands inside the suburb were prepared in a way
that is flexible and compatible with any future
development in the northern suburb. These
systems and controls implied specific usages
allowed within the borders of the suburb, in
addition to general controls of construction
(population density, construction plants and
rate of coverage for the buildings). Other
guiding controls of development were also set.
According to the regulatory controls and
policies of the suburb, all lands located inside
the suburb are subject to the policies of urban
organization, as endorsed by the resolution and
by-laws of the Council of Ministers no.157, 2008,
to allow vacant and unplanned areas in both
northern and eastern suburbs on the following
conditions;
The first part of the northern suburb, located
within the borders of urban development up to
2014, is subject to measures approved by the
Council of Ministers (no. 157) which states that
when planning, the owner of the land located
within the limits of this area must supply
electricity, water, telephone lines, sanitary
waste disposal facilities as well and adequate
drainage and flood control measures.
The second part of the northern suburb, between
the borders of urban development up to 2014
and the borders of the urban development
2014-19, is subject to measures approved by
the Council of Ministers no. 157 which states
that when the owner of the land located within
the limits of this part is willing to develop
his land, in addition to implement all public
utilities network; the owner has to construct the
minimum of the scheme’s buildings according
to either of the following two alternatives:
Develop no less than 75% of the total planned
area
Develop no less than 30% of the total planned
area, on condition that percentage deducted on
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the idea of new, mixed-use centers with multi
activities and uses. They are linked by highways
and public transport to provide a safe and secure
environment with residential areas, businesses,
entertainment, and recreation, economically
viable and providing significant career
opportunities. At the same time they reflect
sophisticated local culture of the people. These
centers will include private and public sector
jobs in local administration and governmental
centers, offices, companies, banks, shopping
centers as well as social, cultural and recreational
services.
Investment Climate in Arriyadh 2009
behalf of streets and public utilities should not
be less than 50% of the total area
The process of advancing and modifying the
suburbs’ schemes is undertaken every five
years by the Bureau of Suburbs’ Planning and
Development Affairs and includes; establishment
of an e-system to observe the development and
coordinate with the concerned agencies, as well
as methods of cooperation with the residents in
order to develop their living areas (i.e. as field
surveys, workshops, and meeting).
In case of willingness to plan lands located
between both suburbs, the developers and
owners have to submit a request to the
above-mentioned bureau and directly to
Arriyadh Municipality to follow up all required
procedures.
The suburb’s development administration
represents a major and efficient pillar in
applying the structural schemes successfully.
The administrative independency of the suburb
represented in the decentralization of running
the suburb, and reduction of the routine of
administrative procedures are part of the main
trend toward setting a specific form of the
suburbs’ management.
The adopted master organizational structure
consists of the following:
Arriyadh Development authority: responsible for
comprehensive planning for both northern and
eastern suburbs, and it endorses the structural
scheme for each suburb
The committee supervising new suburbs:
responsible for adopting major projects in both
suburbs. It also endorses all adjustments of the
structural schemes and measures approved by
the Authority
The Bureau of Suburb Planning and Development
Affairs: responsible, under ADA supervision,
for planning lands, granting licenses, studying
development requests and coordinating with
the concerned agencies
Objectives of Sub-Centers:
Sub-centers represent an advanced urban
building pattern with a long-term vision for
planning and development of the city. The
benefits and objectives of this urban pattern:
• Support the current status of the city
• Support the department of urban
decentralization
• Provide activities and services for new subzones away from the city center
• Create new job opportunities among the
different sectors of the city
• Reduce traffic in the city center
• Improve the urban environment in general
through a high quality and efficient model
in planning such centers
• Promote the participation of public and private
sector in the process of urban development
Functions of Sub-Centers
The sub-centers will provide job opportunities
for both public and private sectors in businesses,
offices, banks, shopping centers, governmental
and administrative centers as well as
recreational, cultural and social services. New
sub-centers will accommodate the following
uses and functions:
Economic Function
Sub-Centers (1)
Sub-centers are known as urban areas with
a variety of activities and services and a
space between 2 and 2.5 km2 and they serve
approximately 600,000 to one million people in
a radius of 20 km provided with comprehensive
civil service.
The outlook for these sub-centers is based on
Each sub-center in Arriyadh City will provide
great opportunities for the concentration of
diverse economic activities that characterize the
city center. Thus, they will be easily accessible
by transport to the immediate residents. Among
these activities are shopping and commercial
areas, offices, banks and businesses. The center
might also include relatively large development
(1) ADA, Arriyadh City Sub-Centers (a brochure issued by the Authority).
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The High Commission for the Development of Arriyadh
projects including exhibitions, hotels and other places of recreation. The concentration of these
economic activities is considered one of the essential objectives of planning these new centers
whose economic feasibility is a key incentive to attracting investment, providing job opportunities
and energizing the city’s new neighborhoods.
The Outlook of the Sub-Centers
• New mixed-use centers
• High feasibility environment
• Multi activities and uses
• A place for specialized educational institutions
• Safe and secure environment for living
• A mixture of traditional and modern building
techniques
• Adequate environment for commercial
business
• Take into account environmental
considerations
• Availability of multi recreational facilities
Administrative Function
Each
sub-center
accommodates
an
administrative center with branches for
government administration and ministries (a
branch for Arriyadh Region, sub municipality,
police office, civil defense, post office,
telecommunication center, etc). Hence, subcenters will be the focus of administrations
seeking decentralization and looking to the
sub-areas.
Promotional & Cultural Functions
Developing cultural and promotional
activities aimed at all classes of the society is
one of the urgent requirements, particularly
for families who live in neighborhoods away
from the city center. Thus, the creation of
these new sub-centers is considered an
appropriate opportunity to provide such
cultural facilities as public libraries, centers
to host festivals, ceremonies, art exhibitions
and other activities.
These centers will also include a variety of
attractive areas for family recreation, public
parks, playgrounds and green areas.
Health and Educational Functions
The sub-centers will be equipped to house
major educational institutions such as
technical institutes and specialized colleges,
as well as health centers to serve the center’s
population and those around it and in its turn
serve sectors away from the city center. This
will contribute to meeting all the needs of
the population locally, avoiding the necessity
of travel to remoter areas.
Housing Function
To avoid what happens in city centers in
terms of transformation of residential
areas to deserted areas at work time, new
sub-centers will provide new housing for
various social classes that prefer to live near
the center according to different formulas
including quality buildings to lease or own.
Thus isolated sub-centers will be designed in
a way that guarantees privacy and safety for
the population within these centers.
Residential areas neighboring sub-centers
will provide housing units of variable size
and least density for big families, while the
center will provide high population densities
through smaller housing units to meet the
needs of new families.
Special Incentives & Advantages Related to
Sub-Center Development
The centers are characterized with a number
of advantages over the rest of the city since
they are special development zones, where
each represents a model city center of
integrated services. It is allowed to distinguish
them from the surrounding areas with fixed
building heights, and they are considered as
areas of high building densities. They imply
variety of uses and activities at the city level.
Upon its development completion, it will
represent an attractive urban and economic
environment at a city level.
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Real Criteria of Sub-Centers:
The key criteria
• The centers occupy a space between 20
and 25 km and extend from the city center
(Cairo Field) within the spatial zone.
• The centers provide services for the
population of the surrounding area
within a circular radius of 10 km that
serves between 600,000 to one million of
the population.
• They are located in the center of each
sector.
• The space allocated for each center ranges
between 2 and 2.5 square kilometers.
• They are close to the highway
• They are close to the end of the hubs
mentioned in the city’s structural
scheme
• The centers are compatible to all close
developed or specialized activities
Development of King Abdullah Road in
Arriyadh:
Arriyadh Development Authority is exerting
major efforts to develop Arriyadh City in a way
that promotes Arriyadh as a world capital. This
will be evident in its world-class and state-ofthe-art projects, centers and road transport.
Seeking to streamline the motion in the city,
the project of King Abdullah Bin Abdulaziz
Road has been started and it is considered the
hub and major artery of the city, linking east
and west. The objective is to turn King Abdullah
Road into an expressway that provides free
movement of vehicles, with a high capacity of
520,000 vehicles per day, instead of 200,000
vehicles per day. With a length of over 26 km,
it will be an essential hub in the Saudi capital,
and is expected on completion to contribute
to increasing local income via incentives
presented to the owners and developers. That
is mainly attributed to various spaces and new
investment opportunities in line with the new
development through what ADA offers by way
of investment and commercial opportunities
represented in hotel, housing and restaurant
projects. In addition there is a 10 meter
allocation of available space to accommodate
an electric train (metro). This is considered a
step toward improving public transportation
and reducing motor vehicle congestion.
Investment Climate in Arriyadh 2009
The private sector will be capable of
developing these centers and investing in
all services and this will create a significant
investment opportunity in Arriyadh City that
will contribute to raising the level of economic
performance of the city and enhancing the
mechanism of partnership between the
private and public sectors in the process of
urban development.
Spatial Zone of Sub-Center Location
Sector
Directions
North
South
East
West
Eastern
King Saud Bin
Mohammed Bin
Mekren
Imam Ahmad Bin
Hanbal Street
Janadriah Road
Circular Eastern Road
Southern
Al Nasir Road
Follow the circle on
the approved map
Along the Eastern
Ring Road from the
south
Al Haeir Road
South-Western
South-western Ring
Road
Follow the circle on
the approved map
Wadi Hanifah
Follow the circle on
the approved map
Western
Prince Meshaal Bin
Abdulaziz Street
Al Madinah street
Wadi Hanifah
Follow the circle on
the approved map
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The High Commission for the Development of Arriyadh
The metro route along King Abdullah Road starts
from King Khaled Road at King Saud College, and
extends east until it reaches Khaled Bin Alwaleed
Street, with a total length of 16 km. There will
be 24 stations along both routes including five
main stations with bus links. King Abdullah
Road will be equipped with a pedestrian route.
The development aims at turning the road into
one of the biggest highways in Arriyadh City.
The project is well equipped to accommodate
the metro. Besides this project, King Abdullah
Road will be turned into a sophisticated road,
and one of the active and main hubs of the city
in accordance with the comprehensive strategic
scheme. It will also be equipped to fit the latest
urban, commercial, recreational, residential,
and office activities.
The project involves creating three tunnels,
each with a length of 185 m. These tunnels will
be located at the crossroad of Prince Turki Bin
Abdulaziz (the first), with Takhasosi Street and
King Abdulaziz Road. In addition there is to be
a closed tunnel of 700 m2 extending from the
western part of King Fahd to the eastern part of
Olaya Street. Besides this tunnel, there will be
service roads, open green land and parks. Public
utility networks will be implemented including
electricity, water, flood drainage, sewerage
and telecommunications networks serving
the surrounding areas. All these services are
considered private sector investment projects and
opportunities to enhance its role in development
and improvement of Arriyadh City.
Ministry of Municipal & Rural Affairs (MOMRA):
New projects in other cities of the
Kingdom including Arriyadh (1):
The Ministry of Municipal and Rural Affairs is
establishing many investment projects that
constitute investment opportunities for Saudi
private and public sectors companies. The
following are some examples in Arriyadh City:
• Establish gardens and kindergartens for
children in all residential quarters in Arriyadh
City
• Improve, develop and organize pedestrians
walkways, sidewalks and crossroads in
Arriyadh City:
• Renew and maintain municipal branches
and general management related to ADA
116
• Plant and beautify areas close to waste
disposals in Arriyadh City. These projects
are investment opportunities for the private
sector in order to contribute in the process of
improving and developing the environment
of the city
Arriyadh Region Municipality
Arriyadh Region Municipality offers several
projects and opportunities to the private
sector. The following are the most important
investment opportunities launched in 2007 and
early 2008(2):
• An estimated 200 new infrastructure
projects in Arriyadh with a total cost of SR
44 billion
• Electricity sector main projects estimated
at SR 22.44 billion, comprising 10 projects
for energy generation sector, 62 projects
for power transfer sector and 19 projects for
energy distribution
• Lease of 440 locations for MegaCom
billboardsMCom
• Lease land in scrapyards
Saudi Commission for Tourism and
Antiquities (SCTA)
The Saudi Commission for Tourism and
Antiquities took the initiative to develop
national tourism with particular focus on
resolution of the problems obstructing
investment in this sector, and is offering
inducements to attract more investment,
by liberalizing tourism services markets and
reviewing laws that control investments in
the sector.
The most important investment opportunities
offered by the Saudi Commission for Tourism
and Antiquities are (3):
• Tourism development companies which
motivate the private sector to invest tourism
facilities and services
• Tourism service centers that provide
comprehensive
services
for
tourism
investment and promotion of investment
opportunities in the tourism industry
• Electronic tourism marketing (SETS) which
(1) MOMRA website: www.momra.gov.sa.
(2) ADA website: www.arriyadh.com.
(3) Saudi Commission for Tourism and Antiquities: Guide & Initiatives of the Commission to Implement the General Strategy to Develop National Tourism.
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Information Initiatives & Tourism Research
The Saudi Commission for Tourism and
Antiquities, set in 2001 a website on the internet
for its General Secretariat, which is updated daily:
www.sct.gov.sa
In 2003 SCTA developed portals for national
tourism on the Internet to be the basic referral
site to the tourist in matters of tourism in the
Kingdom: www.sct.gov.sa
Set-up and operate the Tourism and Information
Research Center (MAS) to become the main
referral center with respect of collating and
providing tourism information, preserving and
documenting them, and publication of tourism
studies, reports and statistics, accurately and
regularly.
Saudi Electricity Company
As part of the privatization strategy, the
Saudi Electricity Company offers projects
and investment opportunities to the private
sector throughout the Kingdom. The most
important of these opportunities in Arriyadh is
the establishment of gas electricity generation
plants in some of Arriyadh quarters and
provinces. Some of these opportunities are AlMezahmiya power station, Salboukh, Al-Ashera,
overhead electricity distribution lines and many
other projects with costs up to tens of billions of
Riyals. (2).
The volume of investments in electricity
generation and distribution during the next ten
years is estimated at SR 53 billion of which SR 8
billion is for the distribution sector. Accordingly,
the electricity company has opened several
investment projects to the private sector at an
estimated cost of SR 48 billion during the period
2006-17 (3).
Investment Climate in Arriyadh 2009
provides opportunities for the private sector
to develop tourism products and present
information to tourists which can be sold
electronically.
• Tourism marketing and promotion programs
which are exclusively or partially offered
by the private sector in association with
the public sector, e.g. festivals and tourism
events
• Tourism markets which accompany business
tourism such as conferences, cultural, sports,
arts and special events, in addition to tourism
education and training. These activities bring
opportunities to the private sector.
• Development of tourism sites: There are 168
tourism sites available for development, 28
of which are inside the tourism development
zones. They offer investment opportunities to
the private sector. There are other investment
opportunities, e.g. tourism village projects,
skating facilities, women’s recreational
centers, restaurants, picnic organization
centers, etc.(1).
Electricity Generation Projects in Arriyadh (4)
Capacity (mw)
Expected date of
commencement
Expected date of
implementation
3325
2007
2011
50/ 50/50
2007/2008/2009
2008/2009/2011
The 11th power station
2000
2010
2013
Al-Mezahmiya power station
1325
2008
2011
Salboukh power station
1325
2011
2014
Project
The 10th power station
Expansion of Al Janoba power station
(1) For more information about available investment opportunities of the Commission, check the Investment Opportunities
in the Kingdom, SAGIA, 2006, or the website www.sagia.org.
(2) SAGIA, Available Investments Opportunities in the Kingdom, 2006.
(3) SAGIA, Investment Performance Annual Report, 2004-05.
(4) Ministry of Electricity & Water, 2008, see the website.
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The High Commission for the Development of Arriyadh
Riyadh Chamber of Commerce and Industry:
The Riyadh Chamber of Commerce and Industry established an independent investment center that
endeavors to boost investment climate in general and Arriyadh Region in particular to increase national
and foreign investment flows in the Kingdom and its capital, Arriyadh. The center also aims at making
new investment opportunities available to small and medium enterprises in Arriyadh Region and the
related governorates, as well as promoting the advantages of foreign investment in the Kingdom
supervised by General Investment Authority (SAGIA). As part of this effort, the investment center
prepares studies and reports needed for investment activity in the Kingdom, as well as its elements of
success, and prepares databases specializing on investment opportunities in Arriyadh Region.
Patterns for Investment Opportunities Available and Issued from the Chamber of Commerce & Industry in
Arriyadh City 2006 (1)
Annual
Production
Capacity
Total of
investments
Costs
Average of
Annual Profit
Rate of
Return on
Investments
Recovery
Period of
Invested
Capital
Home Furniture Store
661,500
314,000
186,876
59.9%
1.5
Electric Appliances Trade
540.000
285,000
81,600
28.6%
2.10
Medical Equipments Trade
495.00
270,000
70,500
26%
2.10
Advertising Agency
460.000
420,963
139,000
31%
3.1
Travel and Tourism Agency
400,000
282,988
94,875
33.5%
2.6
Manufacturing Coolers for the
Cars (radiator)
315 ton
3,142,763
708,000
19.1%
4.5
1,950 ton
1,404,763
361,250
21.4%
4.1
425 ton
2,446,544
532,000
18.1%
4.7
5,000 ton
4,153,961
1,063,199
21%
4.3
400 ton
693,475
1,077,250
19.2%
4.5
Investment Opportunity
Salt for Industrial Purposes
Paper Packaging Industry
Wooden Boards
Adhesive Tape
Investment Opportunities for Businesswomen
in Arriyadh:
The investment center of the Chamber of
Commerce and Industry in Arriyadh generated
about 38 investment opportunities for
businesswomen. The Chamber prepared a
preliminary feasibility study in cooperation with
many consulting centers. It takes into account
many industrial and service activities. The total
estimated investments for these projects reached
SR 210 million. The Chamber’s objective behind
generating investment opportunities guidance
for businesswomen is to activate the investment
process through providing many versatile
investment opportunities, and expanding the
118
recent zone of activities in which most women’s
projects are concentrated. Studies show that the
rate of investment estimated for the one project
ranges between SR 0.6 to 22 million, with gross
profits accumulated within ten years of about
SR 428 million. These accumulating profits
estimated for each project ranges between SR 1
to 55 of the revenues of each project(2).
The Chamber endeavors to encourage joint
foreign investment, and create investment
opportunities for small and medium enterprises,
provided that the capital allocated for any
project should not exceed SR 5 million, by
providing 391 opportunities in Arriyadh(3).
(1) Arriyadh Chamber of Commerce & Industry, 16th issuance, 2008.
(2) Arriyadh Chamber of Commerce website.
(3) Ministry of Commerce and Industry: information Depastment.
Annual Report 2009 (Eng) .indd 118
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Activity
Number
Retail and Wholesale Trade
5,447
Food Products Trade
2,262
Textiles and Fabric Trade
2,795
Import and Export
1,404
Building, Health and Electrical Materials
1,990
Women’s Workshops
633
Fast Food Restaurants
298
Furniture Trade
794
Total
Investment Climate in Arriyadh 2009
Women’s Commercial Registers by Activity in Arriyadh, 2008 (1)
15,653
(1) Ministry of Commerce and Industry: information Depastment.
119
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The High Commission for the Development of Arriyadh
Theme Two:
Investment Opportunities in
Various Economic and Service
Sectors
Industrial Investment Opportunities in Arriyadh
City
Factories in Arriyadh Region, as in other parts
of the Kingdom, enjoy a number of concessions
and benefits offered by the State, including
provision of land at nominal prices, raw materials,
machinery and spare parts custom exempted,
supply of electricity at reduced prices, the
possibility of obtaining concessionary loans to
finance new, or expand existing, factories and
support of exports.
Several industrial investment opportunities
available to the private sector in Arriyadh are
offered to both national and foreign investors,
such as:
• Vehicle tires
• Medicines, vaccines, antibiotics, and other
support medical accessories
• Household refrigerators
• Pottery and reflective and colored glass
industries
• Plastic sanitary ware
• Water and gas meters
• Garments, threads, blankets and bedding
• Elevators and refrigerators and airconditioning compressors
Detailed information on the above opportunities
such as the production capacity of each project,
total cost, and expected revenue, etc. can be
found at the website of SAGIA, where investment
opportunities, mostly industrial, are featured.
Some of the projects are available in Arriyadh.
Commercial Investment Opportunities in
Arriyadh City
Commercial works in the area of distribution of
goods, wholesale and retail trade, pharmacies,
distribution of medicines, commercial agency
services, except concession rights, are exclusively
for Saudi investors. The State has enacted a
number of rules and regulations that control
trading activities. Wholesale and retail trade
dominates the commercial activity in Arriyadh,
where there were 213,297 CRs in 2007 (1).
Existing Commercial Institutions in Arriyadh 2005-2007 (2)
120
Year
Number
%
2005
10,980
34.3%
2006
12,564
33.4%
2007
17,824
28.5%
Total Cumulated by End 2008
213,297
30.7%
(1) SAMA ,44th Annual Report, 2008.
(2) Ibid.
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Real Estate Investment Opportunities in
Arriyadh City
The real estate sector in Arriyadh is characterized
by rich investment opportunities, as the City
faces a shortage of housing affordable to low
and medium income groups. The City also faces
a shortage of apartments for rent, and business
offices in the city center. Various parts of Arriyadh
City, particularly the north and north-west of
the City, are witnessing a construction boom.
New office space is being built in the city center.
GDP of the private sector is expected to grow
by over 5%(1) in the next five years. This growth
will multiply demand for quality office space
which is currently in limited supply. In general
Arriyadh is expected to attract more businesses
and capital during coming years, which will
increase the demand for office buildings and
housing in the City and its suburbs and this will
offer excellent investment opportunities in the
real estate sector. Building and construction
investments are expected to amount to SR 150
billion by 2010(2).
According to studies released by the Arriyadh
Development Authority, the City will have a
need for 495,000 housing units by 2024, an
annual growth rate of 27,500 units(3). Studies
conducted by one real estate company
estimated Arriyadh demand for new housing
units growing to 482,000 units during the
period 2004-24(4). Commercial buildings, large
and medium residential compounds, residential
and commercial towers will represent good
investment opportunities in Arriyadh’s real
estate sector.
Investment Climate in Arriyadh 2009
Permits issued by Arriyadh Region Municipality
offering investment opportunities in wholesale
and retail trade to small and medium size
enterprises include:
• Computers and accessories
• Electric appliances
• Sanitary ware, plumbing accessories, paints
and electrical materials
• Garments and fabrics
• Industrial hardware, tools and equipment
• Building materials
• Office and home furniture
Estimated Demand for New Housing in Arriyadh 2005-25 (5)
Period
Estimated Units
%
2004-09
104,375
21.65
2009-14
113,126
23.46
2014-19
124,965
25.91
2019-24
139,759
28.98
Total
482,225
100.00
Arriyadh Development Authority recently
approved new standards and regulations for
buildings in certain areas of Arriyadh City. The
building codes and regulations were upgraded
for the City Hub (the area between King Fahd
Road and Olaya Street) and also along King Fahd
Road and Olaya Street. According to the new
standards, restrictions on the height of buildings
at the hub, and the west side of King Fahd Road
were removed, whereas the permitted height of
buildings east of Olaya Street was doubled.
Proprietors and developers will have the choice
to apply the new or the old building codes.
(1) Al Hayat Newspaper, Economy Page, Issue 15724, April 23, 2006.
(2) Eastern Province Chamber of Commerce & Industry, Al Eqtesad Magazine, Issue 40, 2006.
(3) Arriyadh Development Authority, Population Study of Arriyadh City, 2004.
(4) Al Eqtesadia Saudi Newspaper, Real Estate Page, Issue 4552, March 2006 .
(5) Ibid.
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121
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The High Commission for the Development of Arriyadh
122
Educational Investment Opportunities in
Arriyadh City
Investment in human development is the
cornerstone of a nation’s growth and prosperity.
During the past years, the Government of
Saudi Arabia has spent billions of riyals on the
education sector. SR 105 billion was allocated
to the education sector in the 2008 budget (1).
The Government continues to encourage the
private sector to invest in the education sector
where rules and regulations were established
for this purpose. Licenses for private educational
facilities are issued by a number of agencies, as
follows:
• Primary, intermediate and secondary schools
are licensed and supervised by the Ministry
of Education.
• Technical colleges and vocational training
centers are licensed and supervised by
General Organization for Technical Education
& Vocational Training (GOTEVOT).
• Universities and university colleges are
licensed and supervised by the Ministry of
Higher Education.
The Government offers the private sector the
opportunity to build and furnish schools for lease
to the State. At the end of the lease period the
Government will own the building. There are also
investment opportunities in the area of printing
schoolbooks, transportation and housing
for students. The Government is expected to
allocate over US $ 8 billion (2) during the next ten
years in support of higher education projects
and make this available to the private sector
which will motivate investors to respond to the
market requirements for private universities and
colleges.
The demand for private university education for
both genders and the inability of Government
universities to accommodate the current
students will attract private sector investment.
Statistics of the Eighth Development Plan show
that, by the end of 2009, Arriyadh Region will
have a capacity for 55,584 kindergarten students,
102,616 primary school students, 41,000 higher
education students(3). This will require significant
educational infrastructure and offer a good
investment opportunity to the private sector.
The establishment of Human Resources
Development Fund is evidence of the
Government’s commitment to the expansion of
education and training towards a higher level
of employment among the Saudi citizens. Major
financial concessions are available to national
and foreign investors, particularly to those able
to bring new experience and advanced hi-tech
educational aids and instructional materials. The
private sector is currently establishing education
and training companies in light of the General
Organization for Technical Education and
Vocational Training (GOTEVOT) estimates that
over 16,000 students will join technical colleges
and over 14,000 will join training institutes
during the period 2005-9(4).
(1) SAMA, 44th Annual Report, 2008.
(2) Ministry of Economy and Planning, 8th Development Plan, 2004-09.
(3) Ibid.
(4) GOTEVOT, as stated in the 8th Development Plan.
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Health Sector Investment Opportunities
The health sector of the Kingdom of Saudi
Arabia is the largest in the region with respect
to volume, activity and opportunities, with an
average annual expenditure of SR 30 billion,
80% of which is public sector and 20% private
sector (2). A world-class health infrastructure
of hospitals and medical centers has been
implemented during the past years throughout
the Kingdom.
The private health sector in Arriyadh is expected
to grow in terms of medical facilities for
treatment and diagnosis, and cooperative
medical insurance. The latter is expected to
experience rapid growth, benefiting from the
Royal Decree M/10 dated August 12, 1999(3)
which mandates the medical insurance
coverage of resident foreigners. The decree
formed a Council of Medical Insurance headed
by the Minister of Health. The Council will be
responsible for qualifying cooperative insurance
companies and approving medical facilities
which will be selected to provide medical
treatment for insured patients. The by-laws
of medical insurance were issued by Minister
of Health Resolution 460/23/S dated June 7,
2002(4). In support of these measures, the Saudi
Government has already transferred ownership
of some public hospitals to the private sector.
The Comprehensive Health Care Program is
currently being prepared. It is expected to
produce a series of opportunities to national
and foreign investors in the area of medical
equipment, medical care, pharmaceutical
industries, management and consultations, in
addition to the establishment and operation
of medical facilities which will in turn generate
more opportunities to the private sector. The
Eighth Development Plan 2005-9 estimates
Arriyadh requirements at 235 primary health
care centers, eight hospitals, five health colleges
and 98 emergency centers(5). In addition, there
are other investment opportunities available in
fitness, weight loss, cosmetic surgery, medical
rehabilitation, care of persons with special
needs, and opportunities available in the
hospital and medical facilities such as:
• Lease ATMs and vending machines
• Lease vending booths
• Lease cafeterias
• Lease supermarkets, flowers stores and
photography studios
• Lease billboards
• Lease tourist offices
• Lease pharmacies
• Management of health economics calls all
investors to discuss study and implement
any new investment project (6).
Investment Opportunities in Personal Services
In addition to large-scale investment
opportunities and the mega projects which
require large capital investments and
(1) SAGIA – Available Investment Opportunities, 2006.
(2) Ministry of Economy & Planning, 8th Development Plan, 2004-9.
(3) Ministry of Health Website: www.moh.gov.sa .
(4) Arriyadh Trade Magazine, Terms of Medical Cooperative Insurance By-laws, Issue 479, 2002.
(5) Ministry of Economy & Planning, 8th Development Plan, 2004-9.
(6) See SAGIA’s Website for more Available Opportunities in the Health Sector, and General Management for Medical Affairs in Arriyadh: www.
riyadhealth.med.sa.
Annual Report 2009 (Eng) .indd 123
Investment Climate in Arriyadh 2009
Moreover, colleges, institutes and schools owned
by foreign investors will generate investment
opportunities in the area of transportation of
students and printing of books. A mega project
will be jointly implemented by a group of
investors, to build 3,000 schools on a BOT basis
at a total cost of SR 13 billion (US $ 3.4 billion).
The private sector will continue to establish
joint stock companies which will serve in the
education sector (primary, secondary and higher
education) as an investment in knowledgebased industry to supply skilled workforce
which is critical to economic growth and social
coherence. Existing investment opportunities in
Arriyadh are as follows:
• Establish University Colleges such as
Dentistry College and others
• Prince Nora Bint Abdurrahman College
Project (previously Arriyadh Women’s
College) including university residence for
all faculty teaching members, students and
other support services.
• King Saud College for Women Project and
the university residence and other facilities
• School Compound Project
• Housing Project for all faculty members
in King Saud University, in addition to car
parking floors in the college, and expansion
of the King Khaled Hospital and women’s
department
• Other colleges and private centers such as:
• Information Technology College.
• Tourism and Hotels College
• Talent Development Centers (children and
youth)
• Vocational Training Centers
As well as many other significant investment
opportunities (1)
123
12/21/09 8:50:36 AM
The High Commission for the Development of Arriyadh
Auto Repair Workshops and Vehicle Service
Centers
Except for auto dealers, the vast majority of
workshops are of an individual nature and
offer modest services. The City provides several
investment opportunities to set up stateof-the-art integrated workshops capable of
providing full repair and maintenance services,
e.g. mechanical, electrical, body repairs, paint
jobs, valeting, car washing and polishing, wheel
alignment.and tire replacement, oil change,
parts sales, towing, and options for maintenance
services on a contract basis.
Car Parks
sophisticated technologies stated within this
report, there are several investment projects
available to individuals or small to medium
enterprises. Despite the absence of studies
providing detailed information on the actual
requirements of the City, there is clear evidence
that a significant need for personal and
household services exists. Examples are:
The urban development and expansion during
the last three decades of the last century was
not accompanied by equal growth of modern
establishments which provide personal services
to residents
Whilst there are a number of sophisticated firms
of medium size which provide personal services
to Arriyadh City residents, the vast majority
of firms still offer modest services due to the
small volume of its services, provided in the
traditional way by firms owned and managed
by individuals.
Implementation of the Eighth Development
Plan, will lead to further expansion in the City’s
facilities, in addition to mega projects which
are currently being established, such as the
Financial Quarter in Arriyadh. This will increase
the demand for personal services and will
therefore open the door for new investments in
these services. Accordingly, there will be a need
for sophisticated firms which are capable of
providing high quality services, particularly in,
but not limited to, the following areas:
Due to the increased number of vehicles and
the lack of adequate parking lots, the City
is currently in need of multi-storey parking,
particularly in areas with commercial activities,
providing parking services on temporary basis
or long term during vacations.
Household Maintenance Services
A vast majority of Arriyadh households will
require periodic maintenance services in areas
of electricity, air-conditioning, water networks,
sanitary connections etc. Such services are mostly
provided by individually-owned establishments,
which provide only one type of maintenance of
poor quality by unqualified staff. Arriyadh City
provides great investment opportunities where
qualified household maintenance companies
can be established to provide professional
maintenance services by qualified technicians,
guaranteed and with fixed prices.
Laundry Services
Although laundry shops are available throughout
Arriyadh, few of them provide good quality
service. There is a need for companies that can
provide good services, collect from and deliver
laundry to homes.
Personal Services Offered to Ladies
Although there are large numbers of modest
establishments which provide personal services
for ladies, e.g. hairdressing, bridal shops,
seamstresses, the City still has a requirement for
modern and integrated beauty services.
124
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Investment Climate in Arriyadh 2009
Taxi Services with Paging System
Despite the large number of taxis and limousine
services operating in Arriyadh City, there is still
a need computer-controlled car hire companies.
Such companies could also provide school
transportation services.
Family Restaurants
Arriyadh City has a large number of restaurants
which serve fast food, traditional Oriental and
Western dishes. However, Arriyadh still provides
excellent investment opportunities in this line
of business. Demand exists for restaurants that
provide good service to customers, a family
ambiance, with diversified menus, parking and
children’s playgrounds.
Gas Stations
The majority of gas stations still request cash
payments. A chain of gas stations that will
accept credit card payments and offer other
services, such washing, oil change, etc. will be a
welcome addition to Arriyadh City
125
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Annual Report 2009 (Eng) .indd 126
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Tables Index
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128
Annual Report 2009 (Eng) .indd 128
12/21/09 8:50:40 AM
S/N
Description
Page
1
Population Distribution in Arriyadh City by Nationality
130
2
Population Distribution in Arriyadh City by Gender (males/Females)
130
3
Labor Force Working in the Private Sector by Main Careers, Gender and Nationality in Arriyadh City
2005/2006
130
4
Labor Force Working In the Private Sector by Careers,
Gender and Nationality in Arriyadh Region, 2005/2006
131
5
Producing Plants in Arriyadh Region till 2006
131
6
Industrial Licenses Issued by SAGIA During 2006 by Industrial Activity in Arriyadh
132
7
Existing Industrial Cities in Arriyadh City till the Third Quarter of 2008
132
8
Area of Developed and Unused Lands (planned and unplanned) in Arriyadh City by End of
2005/2006
132
9
Building Licenses Issued in Arriyadh During 2006
133
10
License of Shops Issued in Arriyadh City During 2006
133
11
Lengths of Existing, Under Construction & Proposed Roads in Arriyadh City
by end of 2006
133
12
Contractors in Arriyadh Region by Careers and Classification, 2007
134
13
Cultivated Land & Total Production in Arriyadh Region as of 2005/2006
135
14
Active Phone Lines and the Capacity Used in Arriyadh City, 2007
135
15
Mobile Lines and Digital Subscription DSL in Arriyadh City, 2007
135
16
Postal Services Network in Arriyadh as of 2005/2006
136
17
Air Traffic in King Khaled Airport in Arriyadh
136
18
Number of Subscribers and Electricity Consumption in the
Central Region for 2005/2006
137
19
Ministry of Health Medical Services & Facilities in Arriyadh Region as of 2006
137
20
Private Medical Facilities and Health Services in Arriyadh City as of 2006
138
21
Higher Education in Arriyadh City and Kingdom (Undergraduate) during 2005/2006
139
22
Selected Economic Indicators of the Kingdom
140
23
General & Higher Education for Males and Females in Arriyadh City 2005/2006
141
129
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Table No 1 (1)
Population Distribution in Arriyadh City by Nationality
(forecasts of population survey, 2007)
Nationality
Number
%
Saudi
3,097,032
67%
Non- Saudi
1,525,399
33%
Total
4,622,421
100%
Table No 2
Population Distribution in Arriyadh City by Gender (males/Females)
(forecasts of population survey, 2007) (2)
Gender
Number
%
Males
2,588,556
56%
Females
2,033,865
44%
Total
4,622,421
100%
Table No 3
Labor Force Working in the Private Sector by Main Careers, Gender and Nationality in Arriyadh City 2005/2006 (3)
Main Careers
Saudi
Non-Saudi
Total
Male
Female
Whole
Male
Female
Whole
Male
Female
Whole
Managers and
Businessmen
21,255
439
21,694
2,998
12
3,010
24,253
451
24,704
Scientific,
Vocational and
Human Specialists
20,425
2,897
23,322
106,805
3,669
110,474
127,230
6,566
133,796
Vocational, Human
and Scientific
Technicians
16,628
4,1333
30,761
92,037
14,771
106,808
108,665
18,904
127,569
Writing Careers
56,388
3,496
59,884
6,387
206
6,593
62,775
3,702
66,477
Sales Careers
29,674
2,501
32,175
74,969
34
75,003
104,643
2,535
107,178
Services Careers
60,821
2,949
63,770
616,345
14,222
630,567
677,166
17,171
694,337
Agriculture,
Birds and Animal
Breeding and
Hunting Careers
1,912
49
1,961
76,431
97
76,528
78,343
146
87,489
Industrial and
Chemical Careers
and Food Industries
4,097
341
4,438
59,038
2,359
61,397
63,135
2,700
65,835
Assisting Main
Engineering Careers
25,154
871
26,025
485,898
637
486,535
511,052
1,508
512,560
2
-
2
2
-
2
4
-
4
236,356
17,676
254,032
1,520,910
36,007
1,556,917
1,757,266
53,683
1,810,949
Other Careers
Total
(1+2) Arriyadh City website: www.arriyadh.com.
(3) Ministry of Labor, Information Department .
130
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12/21/09 8:50:41 AM
Table No 4
Labor Force Working In the Private Sector by Careers,
Gender and Nationality in Arriyadh Region, 2005/2006 (1)
Economic Activity
Saudi
Non-Saudi
The Total
Male
Female
Whole
Male
Female
Whole
Male
Female
Whole
3,293
1
3,294
72,806
41
72,847
76,099
42
76,141
Mines, Gas
and Petroleum
Exploration and
Quarries
515
-
515
2,977
1
2,078
2,592
1
2,593
Manufacturing
Industries
24,098
951
25,094
149,478
2,089
151,567
173,576
3,040
176,616
482
47
529
2,525
1
2,526
3,007
48
3,055
Building and
Construction
77,704
2,558
80,262
625,402
13,597
638,999
703,106
16,155
719,261
Retail & Wholesale
Trade
68,328
3,734
72,062
414,675
5,587
420,262
483,003
9,321
492,324
Transportation,
Storage &
Communication
5,034
15
5,049
28,309
117
28,426
33,343
132
33,475
Finance, Insurance &
Real Estate Services
13,238
842
14,080
29,362
691
30,053
42,600
1,533
44,133
Social & Personal
Services
38,733
9,227
47,960
152,388
13,630
166,028
191,121
22,867
213,988
4,931
301
5,232
43,888
243
44,131
48,819
544
49,363
236,356
17,676
254,032
1,520,910
36,007
1,556,917
1,757,266
53,683
1,810,949
Agriculture, Forestry,
Hunting and Fishing
Electricity, Gas and
Water
Other Activities
Total
Table No. 5
Producing Plants in Arriyadh Region till 2006(2)
No. of Factories
Workforce
Total finance (million
riyal)
Work Force
Foodstuff and beverages
185
9,690.28
21,829
Textiles, garments and leather
87
2,369.71
13,295
Wood products and furniture
85
1,205.99
13,295
Paper, printing & publishing
92
2,274.04
7,461
Chemical industries & plastic products
304
7,939.61
8,264
Building material, chinaware, ceramics & glass
207
8,388.64
25,944
Basic metal industries
248
2,665.23
20,686
Metal products, machinery and equipment
209
7,868.13
20,167
Transport and storage
2
18.02
52
Miscellaneous industries
30
502.07
3,202
1.449
45,921.71
144,761
Industrial Activity
Total
(1) Ministry of Labor, Information Department
(2) Ministry of Commerce & Industry: Industrial Database, Information Department.
131
Annual Report 2009 (Eng) .indd 131
12/21/09 8:50:41 AM
Table No 6
Industrial Licenses Issued by SAGIA During 2006 by Industrial Activity in Arriyadh (1)
Activity
M
Number
Work
Force
Finance
(million riyal)
1
Foodstuff and beverages
16
1,081
308,63
2
Textiles, garments and leather industries
10
292
1,630
3
Furniture and wood products industries
12
295
16,10
4
Paper printing and publishing industries
2
50
2,00
5
Chemicals and plastic products
40
2,096
3,505.94
6
Building materials, china ware, ceramics and glass industries
15
382
1990
7
Basic metal industries
50
1,260
7753
8
Metal, and manufacturing materials, machinery and equipment industries
23
850
165,67
9
Miscellaneous industries
6
180
9,50
174
6,487
4,121,56
The Total
Table No. 7
Existing Industrial Cities in Arriyadh City till the Third Quarter of 2008 (2)
Industrial City
Total Area m²
Developed Area
m²
Factory Workers
Number of Factories
First
451,000
451,000
5,080
59
Second
18,786,000
15,409,000
65,256
80.6
Total
19,237,000
15,860,000
70,336
8065
Table No. 8
Area of Developed and Unused Lands (planned and unplanned) in Arriyadh City by End of 2005/2006 (3) (by hectares)
Type of Land
Developed
Planned
Unplanned
Residential
23,332
80,704
32,888
Industrial
6,530
27,435
11,327
Agricultural
5,354
3,819
781,8
688
4,029,8
897,01
24,535
4,641,6
9,758.4
60,419
120,926.49
55,651.51
Type of Use
Greenland
Others
Total
132
(1) Ministry of Commerce & Industry: Industrial Database, Information Department.
(2) Ministry of Commerce & Industry website www.soietz.gov.sa.
(3) MOMRA: Statistical Yearbook, issue 58.
Annual Report 2009 (Eng) .indd 132
12/21/09 8:50:41 AM
Table No. 9
Building Licenses Issued in Arriyadh During 2006 (1)
Type of Use
Licenses
Land space
(m²)
Built Space
( m²)
Building levels
Level space
( m²)
Walls Length
(m)
Commercial / Residential
11,116
10,401,966
5,332,291
32,498
--------
1,065,492
Commercial / Industrial
1,007
8,598,046
3,073,390
2,633
7,760,844
72,952
Education /Health / Mosques
284
1,600,538
601,688
895
4,496,571
60,340
Social / Government
16
8,558,692
108,879
55
337,753
6,149
Total
12,423
29,159,242
9,116,248
36,081
1,204,933
Table No. 10
License of Shops Issued in Arriyadh City During 2006 (2)
License
New
Renewal
Total
Kingdom
% to Kingdom
1,538
7,855
9,939
50,402
18.64
317
1,775
2,092
3,489
59.96
1,741
1,619
3,360
31.290
10.74
Industrial workshops
365
228
493
5,261
937[?]
Furniture & Decoration
371
1,111
1,482
9,743
1512
Maintenance of appliances
857
1,963
2,280
12,494
2257
Auto repairs
367
1,016
1,383
14,152
9.77
Plumbing
228
589
817
5,542
14.99
Fuel and auto service
194
524
718
8,596
835
Personal services
1,037
3,581
4,618
31,370
14.72
Others
2,433
7,287
9,720
44,614
21.79
9,348
27,548
36,896
216,863
17.01
Type of License
Grocery
Supermarket
Commercial Establishments.
Total
Table No. 11
Lengths of Existing, Under Construction & Proposed Roads in Arriyadh City
by end of 2006 (Km) (3)
Activity
Asphalt, tree-lined with
street lights
Asphalt
Only
Number of
Lamp posts
1,350
6,160
79,900
Highways Under Construction
250
2,900
1,600
Proposed Roads
250
700
8,800
Type
Existing Roads
(1) MOMRA, Statistical Yearbook, 2007.
(2) Ibid.
(3) Ibid.
Annual Report 2009 (Eng) .indd 133
133
12/21/09 8:50:42 AM
Table No. 12
Contractors in Arriyadh Region by Careers and Classification, 2007 (1)
Degree
First
Second
Third
Fourth
Fifth
The
Total
Buildings
10
17
28
70
76
201
Roads
4
6
8
24
43
85
Water and sanitary waste works
2
6
5
44
49
106
Electrical works
2
3
9
57
57
128
Mechanical works
1
1
3
47
35
87
Industrial works
-
-
2
1
1
4
Marine works
-
-
-
3
4
7
Dams
1
5
5
11
8
30
Electronic works
6
5
10
23
11
55
Garden planting and site organization
2
1
3
15
7
28
Abattoirs
-
-
-
1
-
1
Buildings maintenance
3
5
15
20
-
52
Roads maintenance
4
1
9
24
39
Maintain, and operate water and sanitary waste works
-
3
2
4
8
17
Maintain and operate electrical works
1
3
3
14
15
3
Maintain and operate mechanical works
1
3
2
8
7
21
City cleanliness
1
-
-
23
11
35
Medical centers maintenance
3
1
1
16
11
32
Maintain and operate abattoirs
-
-
1
1
4
6
Maintain and operate industrial works
1
-
-
-
-
1
Maintain and operate marine works
-
-
-
-
-
-
Maintain and operate e-works
2
3
4
7
5
21
Dams maintenance
-
-
2
-
2
Gardens and parks maintenance
1
-
-
10
-
11
Food and service provisions of medical centers
3
1
-
1
7
12
Individuals service and insurance
1
5
3
2
3
14
50
68
105
413
386
1022
Activity
Total
(1) MOMRA: Statistical Yearbook, 2007.
134
Annual Report 2009 (Eng) .indd 134
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Table No. 13
Cultivated Land & Total Production in Arriyadh Region as of 2005/2006 (1)
Kingdom
Description
Arriyadh
% to Kingdom
Area/
hectares
Production/
thousand tons
Area/
hectares
Production/
thousand tons
Area/
hectares
Production/
thousand tons
Grains
602,653
3,042
113,014
545
18.75%
17.92%
Vegetables
110,566
2,617
50,790
1,124
45.94%
42.95%
Fodder
137,357
2,369
64,647
1,120
47.06%
47.28%
Fruits
223,579
1,549
47,531
295
21.26%
19.04%
1,074,155
9,577
275,982
3,084
25.7%
32.2%
Total
Table No. 14
Active Phone Lines and the Capacity Used in Arriyadh City, 2007 (2)
Item
Active
Used Capacity
Arriyadh City
The Kingdom
% to Kingdom
1,024,086
3,996,493
25.6%
810,987
3,317,543
24.4%
Table No. 15
Mobile Lines and Digital Subscription DSL in Arriyadh City, 2007 (3)
Item
Mobile Lines
Digital Subscription Lines DSL
Arriyadh
The Kingdom
% to Kingdom
1,094,868
4,321,483
25.3%
184,674
595,121
31%
(2) Ministry of Agriculture, Statistics Department, 2007 statistics.
(3) Central Department of Statistics and Information, Statistical Yearbook, 2007.
(4) Ibid.
Annual Report 2009 (Eng) .indd 135
135
12/21/09 8:50:42 AM
Table No. 16
Postal Services Network in Arriyadh as of 2005/2006 (1)
Description
Arriyadh City
Kingdom
% to Kingdom
Main Post Offices
93
470
19.8%
Post Sub-Centers
16
146
11%
Postal Agencies
36
83
43.4%
1,025
4,632
22.1%
561
2,367
23.7%
Customers Post Office Boxes
132,478
458,759
28.9%
Post Boxes Agencies
59,572
120,158
49.6%
Surface Post Points (tawaaf)
Street Post Boxes
Table No. 17
Air Traffic in King Khaled Airport in Arriyadh (2)
Saudi Air Traffic (international)
Arrival
Departure
Number of flights
37,517
passengers
Freight by
ton
Mail by
ton
passengers
Freight by
ton
Mail by ton
4,473,845
104,574
1,070
4,333,177
77,087
1,070
Saudi Air Traffic (domestic)
Passengers
136
Freight
Arrival
Departure
Arrival
Departure
4,473,845
4,333,177
10,457,598
77,085,589
(1) Saudi Postal Corporation, according to the Statistical Yearbook, 2007 issued from CDSI.
(2) Saudi Arabian Airlines, according to the Statistical Yearbook, 2007 issued from CDSI.
Annual Report 2009 (Eng) .indd 136
12/21/09 8:50:42 AM
Table No. 18
Number of Subscribers and Electricity Consumption in the
Central Region for 2005/2006 (1)
Item
2005
2006
Rate of Growth %
1,498,370
1,560,735
4.2
44,099,567
48,503,374
10
Average of Consumption (mega watt/hour)
29,4
31,1
5.8
Individual Consumption (mega watt/hour)
7,8
8,4
7.7
Number of Subscribers
Total sold Power (mega watt/hour)
Table No. 19
Ministry of Health Medical Services & Facilities in Arriyadh Region as of 2006
Description
(2)
Arriyadh
Kingdom
%
40
220
18.18
5,791
1,877
18.17
361
1,925
18.75
Physicians
3,831
21,265
18
Nurses
8,321
495
18.74
216
1,023
21.12
Medical Assistants
4,116
25,052
16.43
Technical Non-Medical Staff
978
6,475
15.24
Administrative
1,540
10,889
14.14
Helpers
7,390
42,676
17.32
Number of Hospitals
Beds
Health Care Centers
Pharmacists
(1) Table derived from Central Electricity Company, 2006 statistics.
(2) Ministry of Health, Statistical Yearbook, 2006.
Annual Report 2009 (Eng) .indd 137
137
12/21/09 8:50:42 AM
Table No. 20
Private Medical Facilities and Health Services in Arriyadh City as of 2006
Descriptions
Arriyadh
Kingdom
%
28
127
22
3,892
12,590
30.9
Number of Dispensaries
373
1,075
32.3
Private Clinics (Private, Companies, Polyclinics)
568
1,326
42.8
Number of Laboratories
22
84
26.2
Physiotherapy Centers
19
44
43.2
572
1,534
37.3
Pharmacies
1,413
4,747
29.2
Doctors*
3,772
14,091
26.77
Nursing Staff
4,590
18,985
24.18
Pharmacists
340
1,526
22.28
Medical Assistants
1,292
7,782
17.06
Technical Non-Medical Staff
1,189
4,598
25.86
Administrative
3,026
11,906
25.42
Helpers
2,577
10,819
23.82
Number of Hospitals
Number of Beds
Optical Shops
138
(1)
(1) Ibid.
(*) Includes Dentists.
Annual Report 2009 (Eng) .indd 138
12/21/09 8:50:42 AM
Table No. 21
Higher Education in Arriyadh City and Kingdom (Undergraduate) during 2005/2006 (1)
Enrolled Students
Graduates
College
Males
Females
The
Total
Males
Females
The
Total
Number of
Colleges (*)
Imam Mohammed Bin Saud Islamic College (Arriyadh Colleges)
16,036
13,430
29,466
3,141
1,350
4.491
8
Imam Mohammed Bin Saud Islamic College (total)
19,569
13,430
32,999
3,461
1,353
4.814
9
King Saud University
28,536
20,800
49,336
3,494
2,919
6.413
14
King Saud Bin Abdulaziz College for Health Sciences
63
269
332
0
38
38
2
Women’s Colleges (Arriyadh Colleges) (*)
0
23,659
23,659
0
4,311
4.311
6
Women’s Colleges (total)
0
252,744
252,744
0
37,098
7.098
87
3,531
0
3,531
631
0
631
2
33,870
0
33,870
5,799
0
5.799
18
943
0
943
317
0
317
1
Private colleges (Arriyadh colleges)
1,329
1,164
2,493
63
0
63
5
Private colleges (total)
2,628
2,439
5,067
130
103
233
17
Arriyadh City: Total Colleges
50,438
59,322
109,760
7,646
8,618
16.264
38
Total Colleges in the whole Kingdom
186,485
408,326
594,811
28,439
58,747
87,240
Teachers’ Colleges and Physical Education College in Arriyadh
Teachers’ Colleges (total)
Technical Colleges in Arriyadh
(1) Ministry of Education, Statistical Yearbook, 2006.
*
( )
The number includes only colleges that grant Bachelor Degree.
Annual Report 2009 (Eng) .indd 139
139
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Table No. 22
Selected Economic Indicators of the Kingdom (1)
2003
2004
2005
2006
2007
Population Estimates (million)
22.02
22.67
23.1
23.68
23.98
GDP in Current Prices (SR billion)
804.6
938.8
1182.5
1335.6
1430.5
686
722.2
762.3
786.3
813
102.1
105.9
110.3
114.4
115.8
0.6
0.3
0.7
2.2
4.1
Total Money Supply (M3) (SR billion)
417.5
496.1
553.7
660.6
789.8
Average Oil Prices / Barrel, Arabian Light (*)(US$)
27.69
34.53
50.15
61.05
68.74
Average of Real Exchange Rate of the SR (Year 2000=100)
90.5
84.4
82.3
80.8
78.5
Currency Circulated to Total Money Supply (%)
13.3
12.1
11.6
10.5
10.5
Deposits to Total Money Supply (%)
86.7
87.9
88.4
89.5
89.5
41
47.1
26.4
70.6
42.5
Interest Rates, Average 3-Month Deposits (Local Currency)
1.63
1.73
3.75
5.02
4.79
Banks Capital Adequacy Ratio (Basel Standards)
19.4
17.8
17.8
21.9
20.6
Actual Public Revenues (SR billion)
293
392.3
564.3
673.7
642.8
Actual Public Expenditures (SR billion)
257
285.2
346.5
393.3
466.2
Budget Surplus or Deficit to GDP
4.5
11.4
18.4
21.0
12.3
Commodity Exports (SR billion) (**)
349.7
472.5
677.1
791.3
877.5
Imports (CIF) (SR billion)
138.4
167.8
223
261.4
338.1
Current Account Surplus to GDP
13.1
20.7
28.5
27.8
24.9
Current Account (SR billion)
105.2
184.9
337.5
371
356.3
Local Stock Market Index (1985 = 1000)
4437.6
8206.2
16712.6
7933.3
11176
GDP in Fixed Prices (SR billion) 1999 = 100
Retraction Ratio of Non-Oil GDP Prices
Inflation Rate (Consumer Prices)
Net Foreign Assets at Local Banks (SR billion)
(1) SAMA, 44th Annual Report, 2008.
140
(*) According to OPEC Figuses
(**) Including (oil exports, not oil exports, re exports + shapes’ fuel.
Annual Report 2009 (Eng) .indd 140
12/21/09 8:50:43 AM
Table No. 23
General & Higher Education for Males and Females in Arriyadh City 2005/2006 (1)
Males
Item
Arriyadh
Region
Kingdom
Number of
Schools
2,456
Number of
Students
Number of
Teachers
Females
Total
%
Arriyadh
Region
(Males &
Females)
Kingdom
(Males &
Females)
%
14,839
21,4
5,630
28,225
20
475,193
2,115,914
22,5
504,850
4,293,336
11.8
50,764
214,701
23,6
86,664
395,440
22
%
Arriyadh
Region
Kingdom
13,386
18,3
2,174
457,257
2,177,422
21
35,900
180,739
19,9
(1) Ministry of Education, Statistical Yearbook, 2006.
141
Annual Report 2009 (Eng) .indd 141
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S/N
Address
Telephone
Fax
Mailing Address
PO Box 2454
Arriyadh11451
56
King Saud University
467000
4678126
57
Imam Mohammed bin Saud Islamic University
2580000
2580707
58
Nayef Security Sciences Arab University
2463444
2464713
PO Box 6830
Arriyadh11452
59
Prince Sultan Private University
4548489
4548317
PO Box 66833
Arriyadh11586
60
Institute of Public Administration
476888
4768878
PO Box 205
Arriyadh11141
61
General Presidency for Youth Welfare
4018888
4010376
PO Box 956
Arriyadh11185
62
General Audit Bureau
4056770
4032057
PO Box 7185
Arriyadh11128
63
Saudi Arabian Red Crescent
4740027
4740430
Arriyadh11129
64
General Presidency for Environment Protection and
Meteorology
2211584
2211581
PO Box 1158
Jeddah21431
65
Saudi Arabian Basic Industries (SABIC)
2258000
4013831
PO Box 5101
Arriyadh11422
66
National Shipping Company of Saudi Arabia
4785454
4777478
PO Box 8931
Arriyadh11492
67
Saudi Arabian Mining Company (Ma’aden)
4740857
4721333
PO Box 68861
Arriyadh11537
68
Saudi Telecom Company
4527000
4525229
PO Box 87912
Arriyadh11652
69
Ittihad Itisalat Company
2735050
0560631667
PO Box 9979
Arriyadh11423
70
Saudi Aramco
4410200
03/8738190
PO Box 5000
Dhahran31311
71
National Company for Cooperative Insurance
2180100
2180102
PO Box 86959
Arriyadh11632
72
Council of Saudi Chambers of Commerce & Industry
4053200
4024747
PO Box 1183
Arriyadh11474
73
Riyadh Chamber of Commerce & Industry
4040044
4020110
PO Box 596
Arriyadh11421
74
National Commercial Bank
75
Al-Bilad Bank
4798888
4798898
PO Box 140
Arriyadh11411
76
Al Rajhi Bank
4601000
4776781
PO Box 28
Arriyadh 11481
77
Al-Jazira Bank
2/6158070
2/6533278
PO Box 6277
Jeddah21442
78
Arab National Bank
4023503
4029000
4027747
PO Box 56921
Arriyadh11564
79
Riyad Bank
4013030
4042707
PO Box 22622
Arriyadh11416
80
Saudi Investment Bank
4778433
4776781
PO Box 3533
Arriyadh11481
81
SAMBA Financial Group
4774770
4774770
Ext.1200
PO Box 833
Arriyadh11421
82
SABB
4050677
4050660
PO Box 9084
Arriyadh11413
83
Banque Saudi Fransi
4042222
4042331
PO Box 56006
Arriyadh11554
84
Saudi Hollandi Bank
4010288
4067888
Ext: 656
PO Box 1467
Arriyadh11431
85
Al Inma Bank
2185555
2185000
PO Box 66674
Arriyadh 11586
Jeddah 4693333
Arriyadh 4787877
PO Box 3555
Jeddah21481
142
Annual Report 2009 (Eng) .indd 142
12/21/09 8:50:43 AM
Name of Organization
Web Address
Ministry of Water & Electricity
www.mowe.gov.sa
Ministry of Economy & Planning
www.planning.gov.sa
Ministry of Higher Education
www.mohe.gov.sa
Ministry of Education
www.moe.gov.sa
Ministry of Foreign Affairs
www.mofa.gov.sa
Ministry of Civil Service
www.mcs.gov.sa
Ministry of Petroleum & Mineral Resources
www.mopm.gov.sa
Ministry of Labor
www.mol.gov.sa
Ministry of Social Affairs
www.mol.gov.sa
Ministry of Information & Culture
www.saudinf.com
Ministry of Commerce & Industry
www.commerce.gov.sa
Ministry of Justice
www.moj.gov.sa
Ministry of Health
www.moh.gov.sa
Ministry of Agriculture
www.agrwat.gov.sa
Ministry of Transportation
www.mot.gov.sa
Ministry of Finance
www.mof.gov.sa
Ministry of Interior – General Security
www.security.gov.sa
Ministry of Municipal & Rural Affairs
www.momra.gov.sa
Shura Council
www.shura.gov.sa
Governorates
Governorate of Arriyadh
www.riyadh.gov.sa
Governorate of Eastern Province
www.easternemara.gov.sa
Governorate of Madinah
www.imaratalmadinah.gov.sa
Governorate of Tabuk
www.tabuk.gov.sa
Governorate of Hail
www.hail.gov.sa
Governorate of Al-Baha region
www.bahaimarah.gov.sa
Governorate of Makkah Region
www.makkah.gov.sa
Governorate of Aseer Region
www.emartaseer.gov.sa
Governorate of Al Jouf Region
www.aljouf.gov.sa
Governorate of Jazan Region
www.jazan.gov.sa
Governorate of Qassim Region
www.qassim.gov.sa
Governorate of Najran Region
www.najran.gov.sa (under construction)
Governorate of Northern Borders Region
www.northernborder.gov.sa (under construction)
143
Annual Report 2009 (Eng) .indd 143
12/21/09 8:50:43 AM
Government Organizations
Name of Organization
Web Address
Saudi Commission for Tourism and Antiquities (SCTA)
www.sct.gov.sa
Arriyadh Development Authority
www.ada.gov.sa
Saudi Arabian General Investment Authority (SAGIA)
www.sagia.gov.sa
Royal Commission for Jubail & Yanbu
www.rcjubail.gov.sa
Communications & Information TechnologyCommission (CITC)
www.citc.gov.sa
Saudi Arabian Standards Organization (SASO)
www.saso.org.sa
Saudi Geological Survey (SGS)
www.sgs.org.sa
Saudi Commission for Health Specialties
www.scfhs.org
Capital Market Authority (CMA)
www.cma.org.sa
National Commission for Wildlife Conservation & Development
www.ncwed.gov.sa
Saudi Organization of Certified Public Accountants (SOCPA)
www.socpa.org.sa
National Shipping Company of Saudi Arabia
www.nscsa.com
Public Pension Agency
www.pension,gov.sa
Saudi Ports Authority
www.ports.gov.sa
Saudi Arabian Monetary Agency (SAMA)
www.sama.gov.sa
General Organization for Social Insurance (GOSI)
www.gosi.gov.sa
Saudi Fund for Development
www.sfd.gov.sa
Saudi Industrial Development Fund (SIDF)
www.sidf.gov.sa
Real Estate Development Fund
www.redf.gov.sa
General Presidency for Environment Protection & Meteorology
www.mepa.org.sa
Saudi Customs
www.customs.gov.sa
King Abdulaziz City for Science & Technology (KACST)
www.kacst.edu.sa
General Audit Bureau
www.gab.gov.sa
General Directorate for Passports
www.passport.gov.sa
Saudi Arabian Agricultural Bank
www.saab.gov.sa
King Abdulaziz Foundation for Research & Archive
www.darh.org.sa
Arriyadh Traffic Department
www.r-t.gov.sa
Department of Zakat & Income Tax (DZIT)
www.dzit.gov.sa
Saudi Stock Market
www.tadawul.com.sa
Saudi Money & Business Directory
www.allsaudi.com/defaultara.asp
Saudi Press Agency (SPA)
www.spa.gov.sa
Saudi Airlines Companies
Saudi Arabian Airlines
www.saudiairlines.com
NAS Airlines
www.flynas.com
SAMA Airlines
www.flysama.com
Kayala Airlines
www.kayala.com
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Name of Organization
Web Address
Chambers of Commerce
Council of Saudi Chambers of Commerce & Industry
www.saudichambers.org.sa
Riyadh Chamber of Commerce & Industry
www.riyadhchamber.org.sa
Chamber of Commerce & Industry – Eastern Province
www.chamber.org.sa
Chamber of Commerce & Industry – Madinah
www.madcci.org.sa
Chamber of Commerce & Industry- Jeddah
www.jcci.org.sa
Chamber of Commerce & Industry - Makkah
www.makcci.com
Saudi Daily Newspapers
Riyadh Newspaper
www.alriyadh-np.com
Al-Jazeera Newspaper
www.al-jazirah.com
Al-Watan Newspaper
www.alwatan.com.sa
Al-Eqtesadia Newspaper
www.aleqt.com
Al-Yaum Newspaper
www.alyaum.com
Arab News
www.arabnews.com
Okaz Newspaper
www.okaz.com.sa
Saudi Gazette
www.saudigazette.com.sa
Al Madinah Newspaper
www.al-madina.com
Asharq Alawsat Newspaper
www.asharqalawsat.com
Albilad Newspaper
www.albilad-daily.com
Local Banks
Al Rajhi Bank
www.alrajhibank.com.sa
Al Bilad Bank
www.bankalbilad.com.sa
National Commercial Bank
www.alahli.com
Riyad Bank
www.riyadhbank.com
SAMBA Financial Group
www.samba.com.
Arab National Bank
www.anb.com.sa
SAAB
www.sabb.com.sa
Al Jazeera Bank
www.baj.com.sa
Banque Saudi Fransi
www.alfransi.com.sa
Saudi Investment Bank
www.saib.com.sa
Saudi Hollandi Bank
www.shb.com.sa
Al Inma
ww.alinma.com
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This Report Was Prepared By
Middle East Consulting Center
CHANGE MANAGEMENT EXPERTS
License No. 6
P.O.Box 27925 Riyadh 11427
Tel: +966-1-216 8740 / 216 8840
Fax: +966-1-216 8730
www.mcc-ksa.com
info@mcc-ksa.com
Annual Report 2009 (Eng) .indd 146
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Annual Report 2009 (Eng) .indd 147
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Tel: +966 1 488 3331
Fax: +966 1 482 9331
P.O.Box: 94501 Riyadh 11614
Kingdom of Saudi Arabia
ARRIYADH DEVELOPMENT AUTHORITY
www.arriyadh.com
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