Economy Here we survey all the main aspects of the Saudi economy.

The most distinguishing feature of the Saudi Arabian economy is the extent to which formal planning has determined the direction of the economy. Although the Kingdom's main source of revenue remains oil, great efforts have been made to diversify the economy, to reduce dependence on oil revenues.

The Economy: Introduction Supreme Economic Council The Economy: Consolidation Economic Indicators Civilian Employment Stock Exchange SAMA (Saudi Arabian Monetary Agency) Specialized Credit Institutions Chambers of Commerce The Planning Process Industrial Development Mineral Resources and Mining Saudi Geology Survey Bureau Tourism

Economy: Introduction The Government, through the public sector, plays a major role in the Kingdom's industrial activity but, in recent years, the private sector has, with the Government's encouragement under the Kingdom's system of free enterprise, become increasingly involved in and responsible for industrial development and diversification. Following the peak years of oil revenues in 1980/81 - 1982/83 (1400/01 1402/03 AH), it became necessary to undertake a very considerable downward adjustment to the government's level of expenditure. At the same time, the economy as a whole had to come to terms with more modest circumstances. The most remarkable feature of this process is the relative ease with which both the government and the private sector came to terms with the new circumstances. This is not to say that the process has not been difficult, demanding, even painful. But it is true that a decline in revenues which could have destabilized other economies has been taken as an opportunity to consolidate past achievements and to engender a more commercially realistic and efficient approach to all types of venture.

Stock Exchange The Saudi Arabian Stock Market has grown over the last ten years and is now the largest in the Arab world, with a capitalization of $58 billion. The number of joint stock companies which trade shares has increased steadily. There are about 70 firms listed on the stock market. The market is supervised by the Saudi Arabian Monetary Agency (SAMA) which, in 1997, approved the participation of international investors in the Saudi stock market through mutual funds. The number of shares traded during 1997 was 312.4 million, valued at $16.6 billion. In 1998, due to fluctuations in international financial markets, the total value of shares traded decreased to 144.3 million with their value dropping to 13.6 billion. Specialized Credit Institutions To assist in the Kingdom's development, the government established several specialized credit institutions: The Real Estate Development Fund Saudi Industrial Development Fund The Saudi Arabian Agricultural Bank The Saudi Credit Bank

Saudi Arabia's Five Year Development Plans The Kingdom's development has been overseen by a series of Five Year Plans; First Development Plan: 1390-1395 AH (1970 - 1975) Second Development Plan: 1395-1400 AH (1975 - 1980) Third Development Plan: 1400-1405 AH (1980 - 1985) Fourth Development Plan: 1405-1410 AH (1985 - 1990) Fifth Development Plan: 1410-1415 AH (1990 - 1995) Sixth Development Plan: 1415 to 1420 AH (1995 - 2000) Seventh Development Plan: 1420 to 1425 AH (2000 - 2005)

The Seventh Development Plan will run from 1420 to 1425 AH (2000 2005). The Planning Process has played a crucial role in the Kingdom's extraordinarily fast industrial development, of which SABIC, the Saudi Arabian Basic Industries Corporation is an outstanding example. Industrial Development: Background A key element in the Saudi Arabian government's economic strategy is industrial diversification, a process which has as its primary objective the reduction of the Kingdom's dependence on oil revenues. To this end, the government has encouraged the development of a wide range of manufacturing industries. The government has provided a range of incentives to encourage the private sector to participate in the Kingdom's industrial effort. Eight industrial estates provide private Saudi manufacturing companies with the necessary infrastructure and services at a very low cost. Credit facilities on generous terms are readily available for such enterprises.

The Kingdom has adopted a free market economic model. The financial, industrial and trade sectors of the economy have made rapid progress, enabling the private sector to play an increasingly important role in the development and diversification of the economy, especially in the fields of construction and farming.
Factories Licensed

Productive Factories licensed under the National Industries Protection and Encouragement Law and the Foreign Capital Investment Law (1981-2001) Industrial Sector Manufacture of food and beverages Textile, wearing apparel and leather industries Manufacture of wood and wood products including furniture Manufacture of paper products, printing and publishing Manufacture of chemicals and petroleum, coal, rubber and plastic Manufacturing of construction materials, chinaware and glass 1981 1985 1989 1994 2001 144 15 27 70 116 225 216 25 46 104 200 309 275 40 70 119 273 359 346 81 100 148 399 439 539 167 174 211 693 570

Basic metal industries Manufacture of fabricated metal products, machinery and equipment Other manufacturing industries Transport and storage TOTAL
Mineral Resources and Mining

4 226 10 13

6 361 25 21

8 484 45 21

10 633 57 21

12 948 83 21

850 1,313 1,694 2,234 3,418

Geological surveys and mineral exploration have revealed that, in addition to vast oil reserves, the Kingdom of Saudi Arabia possesses large deposits of various minerals, including bauxite, copper, gold, iron, lead, silver, tin and a number of non-metallic minerals. On 23rd March 1997, in order to coordinate projects and promote efficiency in the mining industry, the Saudi Arabian Mining Company (Maadin) was created, with an initial capital of more than $1 billion. Maadin is responsible for regulating mineral exploration and overseeing its progress. Mining projects which are owned by the Government or in which the Government is participating are to be consolidated and rebuilt commercially. Maadin will also provide sufficient basic infrastructure for mining projects located in remote areas. MAADIN owns Mahd adh-Dhahab and as-Sukhaibirat mines and has obtained exploration licences for the gold deposits in Wadi Bidah, Al-Hajar, Ad-Duwaihi, Samran, Sheban, Zalm and Hamdah, for phosphate ore in Wadi Al Sarhan and Turaif, for magnesium in Zargat, Jabal Abt and Jabal Al Rukham, for zinc in Al Khnaiguiyah, as well as licenses for exploration of industrial metals in Jabal Sodah. The company's articles of association stipulate that it will be reorganized as a joint stock company within five years of establishment