Saudi spends to double rate of growth

As a result, The Kingdom's eighth and latest five-year economic development plan (2005-2009) is more ambitious and long-term oriented than previous plans.

Saudi Arabia's projected investment over the next 20 years amounts to $600 billion in an effort to double the rate of economic growth. The plan envisages a doubling of the Kingdom's per capita income to some $27,000. This would bring it up to the level of most developed economies.

Water and electricity projects will account for $170 billion. Another $100 billion is likely to be spent on roads, port developments and a national railway system. Development of high technology, life sciences and healthcare industries is also expected to take $100 billion of investments.

Petrochems $300bn

The largest capital investment of $300 billion is expected to be targeted at petrochemical ventures. Investments are being accelerated following membership to the World Trade Organisation accorded to the Kingdom last November.

This confirmed the pricing system for Saudi natural gas supplied to the country's petrochemicals industry. The move makes Saudi Arabia one of the most economically advantageous global locations for developing new petrochemicals ventures.

However, the leadership role for achieving this growth has been given to the private sector which is being encouraged to provide investments in infrastructure development and operation, mining development, transport as well as a series of huge new industrial cities.

In order to encourage the private sector and especially foreign investors Saudi Arabia has embarked on far reaching liberalisation measures that are opening up the economy as never before.

SAGIA role

The Saudi Arabian General Investment Authority is the main catalyst for change. SAGIA has recently been given enhanced powers to implement the planned new economic cities and to help it provide a one-stop service for companies needing to negotiate licences and regulatory matters with Saudi government bodies.

The Kingdom will build a total of six special economic zones. These include a second phase of Jubail industrial city, new developments at Dammam, Hail, Madina and at Ras Az Zour the chosen location of the Kingdom's first aluminium smelter and a new phosphate processing industry

The most spectacular plan is King Abdullah City to be built near Rabigh north of Jeddah. The latter's 55-square kilometre multi-phased project is expected to cost $26.7 billion.

Foreigners should not be concerned about making investments. Prince Mohammed ibn Nawaf, Saudi Arabia's ambassador to the UK stated recently.

'It's all about timing, currently some may be reluctant to invest because of the perceived security risk. There is a gap between reality and perception. The reality is that Saudi Arabia is safe and provides an exceptional investment climate and opportunities today.'