The Kingdom of Saudi Arabia made huge progress in its economic march through backing its production capability in the sectors of commerce, industry, electricity, oil, agriculture, construction, contracting and banks. The five year development plans, which started in 1970, concentrated on developing the country’s infrastructure and resources in order to widen its economic base, diversify the national income and achieve economic efficiency for both the government and private sectors. In addition, there has been a move to reinforce the role of the private sector in the national economy, to develop the much needed manpower, to increase jobs and rationalize government and private expenditure.

  The government of the kingdom of Saudi Arabia continues its efforts to develop its economy by offering more incentives to the private sector and maintaining the strength and stability of the Saudi currency. In this regard, the higher economic council was formed, the higher council for petroleum was reshuffled, a new system for foreign investment was released, the general organization of investment was established and the cabinet issued a resolution to grant foreign tourist visas to the Kingdom and to establish the higher organization for tourism. Among the policies of the government to increase the role of the private sector are:

• Studying the feasibility of transferring the proprietorship and administration of some governmental commercial activities to the private sector, This is in order to make the final outcome of the privatization policy positive for the government and the private sector. The kingdom has had a successful experience in this field, represented in the establishment in 1976 of the Saudi Arabian basic industries company, offering part of its shares to the public. The Saudi and the Gulf Cooperation Council Countries citizens own 25% of the company shares.

  In this context, Saudi Telecommunications with all its facilities was converted to a joint stock company, whose shares were put up for public subscription. In addition, some services of harbor administration and operation were turned over to the private sector. Encouraging the establishment of giant joint stock companies.

• Attracting foreign companies to invest in the kingdom. The government invited large oil companies to invest in the field of natural gas and form a ministerial committee to study offers of the companies.

• Expanding the use of private capital money in financing many government projects, such as constructing schools and other projects.

• Supporting the small installations through coordination between the governments different departments and the chambers of commerce and industry in the kingdom.

Fast Leaps

  The following figures reflect factual data of the Saudi economy and its fast leaps achieved despite the economic stagnation which has prevailed in the world in the last few years:

• The economic growth in the kingdom, represented in its total domestic output, recorded a remarkable improvement in its performance. This growth, based on the General Statistics Department estimates, reached 8.44% at current prices in 1999. The total domestic output at the end of the year 1419-1420H (1999) is estimated at SR 521,3 billion compared to SR. 480,8billionlastyear. - The private sector participates in the total domestic output with a percentage of 38% at current prices and 48% at fixed prices. The performance of the private sector went on its improvement, most of its branches were renewed and the industrial sector achieved, for example, a growth atarate of 6,3%. –

• Expectations indicate that the standard figure of the cost of living in 1999 decreased by 1.2% compared to last year. This percentage reflects the price stability that the domestic market has witnessed.

• The current account of the balance of payments decreased by a rate of 70.3% to reach SR 14.6 billion compared to SR 49.2 billion in 1998. This is attributed to the rise of oil prices in the second half of 1999. Non-oil exports are estimated to grow by a rate of 1.6% to reach SR 23.8 billion, while imports decreased by a ratio of 1.2% to reach SR 102,8 billion, which was SR 104 billion in 1996.

• The Saudi industrial products are exported to markets in more than 120 countries all over the world.

• The number of factories in the kingdom reached 3190, with a total finance of more than SR 232 billion. In these factories, about 293.7 laborers work up to the first quarter of 1420 H (1999).

• In addition to the two industrial cities in Jubail and Yanbu, whose planning was supervised by the royal organization which was founded in 1975, there are eight industrial cities namely in Riyadh, Jeddah, Dammam, Quassim, Al-Ihsa’a and Makkah. They have all facilities and services. The Ministry of Industry and Electricity has declared plans to construct new industrial cities in other areas of the kingdom.

• The volume of manpower in the kingdom reached 7 million workers, 2.5 million of which are Saudi nationals.

The Agricultural Sector

  The agriculture sector in the kingdom plays an important role in the national economy as it is one of the most important economic productive sectors. The developmental policies and plans carried out by the kingdom, accomplished an entire agricultural increase, represented in achieving self-sufficiency for the country in agriculture specially wheat, dates, vegetables, some types of fruits, dairy products, eggs, poultry, fish and shrimps as well as exporting the surplus of these products to the world markets.

  The following figures show the volume of development achieved by the agricultural sector in the kingdom:

• The cultivated land increased from 600 thousand hectares in 1980 to 1.6millionhectares in 1992.

• Nearly 2.9 million hectares of fallow land were distributed to farmers and agricultural companies, of which about 110,128 investors were involved. Until the end of 1998, 6929- thousand hectares were distributed in accordance with the uncultivated land system, releasedinl388H(1968),

• The Agricultural Bank, established by the country in 1962, offered loans to farmers and investors in the fields of agricultural and animal production, reaching, until the end of 1997, more than SR 29.5 billion. These loans resulted in the installation of more than 3132 projects specialized in producing vegetables, fruits, dairy products and meat. The bank also offered aid for production input, agricultural machines and equipment, reaching, since their start in 1973 until the end of 1997, more than SR 10.9 billion. The state bears 50% of the value of irrigation machines and 45% of the value of the - agricultural equipment, tools and fertilizers.

• The General Corporation for Corps Cells and Flour Grinders established ten industrial complexes in the area of agricultural production in the kingdom to store cereals, production of flour and manufacture of forage. The capacity of storing reached 2.38 million tons and the capacity of flour grinders’ production increased tol.6milliontons.

• The kingdom achieved self-sufficiency in wheat in 1985and started to export it to the world markets in 1986. The rate of wheat production in the kingdom reached its highest rate in 1992 as it reached 4.2 million tons. But in order to rationalize the consumption of water and maintain the artisan water, the production was decreased gradually only to meet the selfYc sufficiency needs of the ration, Exporting wheat came to a halt with the last quantity exported in 1995. A similar action was taken for barley, which had reached its peak of production in 1994 with a quantity of 1.82 million tons and was decreased in 1996 to 464 thousand tons.

• The kingdom’s production of vegetables in 1998 reached 2:7 million tons and fruit production reached 1.2 million tons, 648 thousand tons of which were in dates. The production of dairy products ry reached more than 883 thousand tons and the production of table eggs reached about 2500 million eggs. The production of hens reached 451 thousand :V tons and the production of red meat reached 157 thousand tons. Also the production of fish increased to reach 55 thousand tons.

• The rate of annual growth for the agricultural sector reached 8.4% during the period from 1969 to 1996 and its participation in the total domestic output in 1998 reached SR34billion.

Oil Sector

  Although oil plays an important role in the Saudi economy, the government recognized at the beginning that it must not depend on it as a major source of income. Thus, the government worked on developing other income sources which led to the decrease of the oil private sector participation in the total domestic output to 36%. The Saudi Aramco company, which is one of the largest companies of its type in the world, takes over operations of research, excavation, extraction, refining and marketing of oil. The latest oil discoveries in the middle area led to increasing the kingdom’s reserve of oil and gas, which is estimated at 25% of the world’s reserves. The kingdom’s raw oil production reaches 8 million barrels daily. Nine refineries fulfill the country’s needs of oil byproducts which amount to about 1.8 millionbarrels daily.

The Metallurgical Sector

  Efforts exerted in the research and excavation of metals resulted in discovering several sites rich in raw materials. The Ministry of Petroleum and Metal Wealth granted 841 licenses for exploiting granite, marble, limestone, sand and pottery in addition to granting 17 concessions to exploit cement, gold, basic metals and industrial metals. Another 15 discovering licenses and 26 exploring metal licenses were granted.

  The production of gold from Gold Cradle and Su khairat mines reached 150 thousand ounces. The Arab Saudi Metallurgy Company was established in accordance with a royal decree in 1997 as a joint-stock company with a capital of SR 4 billion. It takes over the development and improvement of the metallurgical industry in the kingdom. Annexed to it are the Gold Cradle project and the Saudi Company for precious metals, which produces gold in the Sukhairat area in Qassim. It seeks to head toward other metallurgical projects, either independently or by sharing in the enterprise with the Saudi private sector or foreign companies. It is worth mentioning that the metallurgical sector in the kingdom plays an important role in the Saudi economy through the projects and companies that presently exist such as the Cement, Gypsum and Marble Company and other companies which depend on various metal resources. The annual average growth rate in the metallurgical sector is estimated at 9%, and its contribution to in the total domestic output at 4%.

Banking Sector

  The ten commercial bank services cover various areas of the kingdom through 1194 branches. They participated, and still participate, in serving the private sector and organizing the circulation operations of shares of the joint-stock companies working in the kingdom under the auspices of the Saudi Monetary Agency. These banks do their work in an active investment atmosphere in addition to the stability of the Saudi riyal exchange rate. Banks in the kingdom use the most modern banking technologies in the world, such as using electronic transference mechanisms for balances and circulation of shares. Electronic money tellers number 1942, serving more that 4.5 million electronic issue cards for the clients.

  The data available on performance of the banks in 1998, show that good performance of these banks continues and their different commercial transactions expand. The net value of loans these banks granted in 1998 reached SR 160,9 billion, with an increase at a rate of 24% compared to 1997. The volume of deposits reached SR 276,5 billion with an increase at a rate of 7.1% compared to last year. As for the net benefits these banks achieved in 1998, they reached about SR 7.28 billion compared to SR 6.6billionin 1997.

  Banks continued supporting their monetary foundation as their capital and reserves increased during the first ten months in 1999, with a ratio of 4.7% to reach SR 42.1 billion at the end of October 1999. Thus, the rate of capital sufficiency reached 21.1% which exceeds the international standards with two digits and a half.

  In addition to the strength of the banking sector and the kingdom’s occupation of four seats of the first ten in the list of the biggest 100 Arab banks, the Saudi market witnessed a great improvement in the movement of shares in 1999 compared to the previous year. The general indicator of shares at the end of 16/12/1999 reached (1974) points against (1413) points at the start of the year. This is an increase at a ratio of 39.7%. It is to be stated that 96 Saudi companies put up a part of their shares for circulation. Non-Saudis are allowed to invest in the Saudi share market. The total value of shares circulated in the domestic share market in 1999 reached SR 39.2 billion representing 349 million shares.