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Overview of the Saudi Arabian economy as of July 2014 provided by the Committee for International Trade (CIT) at the Saudi Chambers of Commerce and Industry. Helpful charts and graphs provide background and context to the state of Saudi trade, investment and economic performance.
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SAUDI ARABIA,THE GATEWAY TO INVESTMENT
OPPORTUNITIES IN THE MIDDLE EAST2014
CONTENTS
Saudi Arabia – key indicators.
Saudi Arabia underlying strengths.
Investment in Saudi Arabia.
Foreign trade of Saudi Arabia.
Saudi estimated Budget - 2014.
Reforms to Enhance Saudi Economy.
Towards Better UK–Saudi Relations.
2
3
SAUDI ARABIA – KEY INDICATORS 2013
Area: 2000000 km2.
Population: 30 million.
GDP: $745 billion (preliminary)
GDP per Capita: $24847.
GDP Growth: 1.5 % (Current)
3.8% (Constant)
Non-Oil Sector GDP Growth: %7.
Private Sector Growth rate: 9.4%. Exports:$367 billion .Imports:$153
billion. Currency: Saudi Riyal (SR), SR 3.75 = $1.
SAUDI ARABIA -UNDERLYING STRENGTHS
4
Strong GDP growth.
Significant budget surplus .
Price level stability.
Owns 25% of world’s Oil reserves .
Fourth Largest Natural Gas reserve.
The largest economy in the Arab World, and among the top 20 Economies in the world (G20).
The Largest producer of Petrochemicals in the Arab World.
Open economy, a member of WTO.
5
SAUDI ARABIA -UNDERLYING STRENGTHS
Cont….
Political stability, member of many Arab & International Organizations.
An attractive environment for investment, among the top 20 recipients of Foreign Direct Investment in the world.
Investment incentives, Income tax free, financial facilities.
Ranked 22 in ease of doing businesses in 2013.
10th largest worldwide Exporter (excluding intra-EU (27) trade).
21st largest worldwide Importer (excluding intra-EU (27) trade).
saudi Arabia
U.A.E Qatar Kuwait Oman Bahrain0
100
200
300
400
500
600
700
800
745
359
183 17377
27
$ Billion
Saudi’s GDP among Gulf countries
SAUDI ARABIA -UNDERLYING STRENGTHS
Cont….
6
saudi Arabia
Turky Iran Egypt Algeria Morocco0
100
200
300
400
500
600
700
800
900
745794
549
257 20897
$ Billion
Saudi’s GDP among MENA countries
SAUDI ARABIA -UNDERLYING STRENGTHS
Cont….
7
SAUDI ARABIA -UNDERLYING STRENGTHS
8
Cont….
Saudi Arabia’s ranking in global competitiveness 2013/2014
Indicator Ranking Among Arabic Countries
Ranking Among World Countries
Ease of doing businesses 1 22Global competitiveness 3 20Institutions 4 20Infrastructure 4 31Macroeconomic environment 2 4Property rights 5 27Health and primary education 5 53Higher education and training 3 48Goods market efficiency 4 27Financial market development 3 27Technological readiness 3 41Market Size 1 23Business sophistication 3 28Innovation 3 30
SAUDI ARABIA -UNDERLYING STRENGTHS
9
Cont….
Saudi Arabia’s ranking in Financial Stability Among MENA CountriesCountry Ranking Among
MENA Countries Ranking Among World Countries
Saudi Arabia 1 1
Emirates 2 5
Kuwait 3 15
Morocco 4 32
Tunisia 5 35
Bahrain 6 37
Egypt 7 46
Jordan 8 49
Turkey 9 54
10
INVESTMENTS IN SAUDI ARABIA
SAUDI ARABIA -UNDERLYING STRENGTHS
11
Cont….
Saudi Arabia’s ranking in Business Environment Among MENA Countries
Country Ranking AmongMENA Countries
Ranking Among World Countries
Bahrain 1 16
Saudi Arabia 2 17
Emirates 3 22
Kuwait 4 29
Tunisia 5 32
Turkey 6 34
Jordan 7 40
Morocco 8 43
Egypt 9 48
• 12
Saudi Arabia
Egypt Emirates Qatar Oman Kuwait0
2
4
6
8
10
12
14
16
1816.4
6.45.5
4.4
1.10.3
FDI (Inflows) Bn US$ -2011
13
FDI TO SAUDI ARABIA BY COUNTRY - 2011
17%9%
8%9%
8%5%
4% 4%3%
2%1 %
USA
Kuwait
France
Japan
UAE
Bahrain
China
Germany
UK
Nether-lands
Jordan
MalaysiaUSA is by far the largest investor in Saudi Arabia.
7%
FDI in Saudi Arabia 2011: 16.4 billion US$
14
No bureaucracy and one gate to investment “General Authority for Investment Arabia (SAGIA).
100 % land and corporate ownership to foreigners.
No restrictions on the re-transfer of capital.
No taxes on personal income , taxes 20 % of the benefits on foreign companies.
The possibility of loss carry-over to later years rather than factoring them into tax settlements of profitable years.
Foreign investors have the right to benefit from specialized financial institutions (local and international institutions).
INVESTMENT INCENTIVES IN SAUDI ARABIA
ADVANTAGES OF INVESTING IN SAUDI ARABIA
15
Liberalized Market
Domestic Market of over 29 Million People
Proximity to big Markets
Low Labor Costs
Major source of energy
Guarantee of Transfers
National Treatment
Reliable Investment Environment
16
Topped the list of GCC and West Asian countries in terms of direct foreign investment.
Topped the list of Arab host in terms of direct foreign investment, with estimated flows of $ 38.2 billion, up 39% of the total.
Top of the list of Arab host of inter-Arab investment interfaces, with an estimated worth of $ 11.6 billion, up 60.4% of the total.
Major investments in west Asia go to three countries: KSA, Turkey and UAE.
Kingdom concluded 41 bilateral agreements with various worldwide countries, including 17 investment agreements, and 24 avoidance of double taxation agreements.
Cont….
ADVANTAGES OF INVESTING IN SAUDI ARABIA
Physical Infrastructure $200 billion
Petrochemical Expansions $92 billion
Electric Power Generation $90.7 billion
Water Desalination $88 billion
Telecom and IT $70.7 billion
Tourism and Leisure Development
$53.5 billion
Natural Gas Production $50 billion
Agricultural Expansion $28.3 billion
Educational and Training $10.7 billion
Railways $99 billion
PLANNED SAUDI INVESTMENTS UP TO 2020
17
INVESTMENT OPPORTUNITIES IN HOUSING
18
King Abdullah decree to support the Housing Sector through increased allocations totaling $14.67 billion to the General Housing Authority and the Real Estate Development Fund.
The royal decree to support the Housing Authority in building up to 500,000 housing units for citizens.
King’s initiative will bring down the existing shortage of housing units from 1.2 million to 700,000.
The decision to increase the real estate loan from SR300,000 ($80 thousand) to SR500,000 ($133 thousand) and build as many as 500,000 housing units, was reflected in the market with a boost in demand for plots of land for building houses and increased activities in the real estate market.
19
Saudi Arabia is planning to invest heavily in its railway infrastructure, with about SR 365 billion ($99.4 billion), by the year 2040.
Riyadh Metro line:• Saudi Arabia awarded more than $22 billion
in contracts to develop a metro line in Riyadh..
• It is the biggest infrastructure project to be undertaken in the Kingdom of Saudi Arabia, and is a cornerstone of the bold future for Riyadh city.
• Six lines will serve the capital city’s center, government facilities, universities, commercial areas, the airport and the financial district.
• Construction of the 175-kilometer (109-mile), and 85-station network will be the longest metro line in the world under construction, and will create 15,000 jobs over five years.
INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS
INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS
20
North-South railway: • Is considers the largest freight rail project,
2,750 km long, and valued at an estimated SR 37.87 billion ($10.1 billion).
• The project is of strategic importance in terms of freight exports to the Gulf.
Land bridge project: • Is another important freight line valued at SR
26.6 billion ($7.1 billion). • The line links the port cities of Jeddah,
Dammam and Jubail, passing through Riyadh.
Haramain High Speed rail project: • Is valued at SR 42 billion ($11.2 billion) and
built to transport pilgrims.
Jeddah metro: • Is another planned project valued at SR 35
billion ($9.3).billion).
Cont….
21
FOREIGN TRADE OF SAUDI ARABIA
DEVELOPMENT OF SAUDI ARABIA’S FOREIGN TRADE
22
2007 2008 2009 2010 2011 20120
100
200
300
400
500
600
233
313
192
251
365 388
90115
95 107132 156
323
428
287
358
497
544
Billion Dollars
EXPORTS IMPORTS TRADE VOLUME
Today, Saudi Arabia is the 10th biggest exporter and the 21st largest importer in the world. (excluding intra-EU (27) trade).
23
TO (10) FOREIGN TRADE PARTNERS -2012
SAUDI ARABIA EXPORTS TO USA 14% Japan 13% China 13% S . Korea 9.2% India 8.3% Singapore 3.6% Taiwan 3.4%
Italy 2.7% Bahrain 2.7% U.A.E 2.6%
SAUDI ARABIA IMPORTS FROM USA 13.5% China 12.7% Germany 7% Japan 6.7% S. Korea 6% U.A.E 4.1% India 3.3% France 3.2% Italy 3% UKs 2.5%
MAIN EXPORTS OF SAUDI ARABIA
24
Petrochemical Products Electric Power Towers (High
Tension) Paper Industries Medicine Prefab. Steel Structure Buildings Air Conditioning Materials Cleaning Materials Plastic Textiles Insulating Materials Plastic pipes and fittings and
bottles
Miscellaneous Plastic Material Electric Cables Irrigation Industries Electric Poles Steel Angles for Electric Power
Towers Transparent Glass Carpets Cement Foodstuff Copper Wire , bars and jewelry
SECTORAL BREAKDOWN OF SAUDI’S IMPORTS -2012
25
14%
12%
3%
14%26%
31%
Food stuffs
Chemical products
Textiles& Textiles Articles
Base metals
Electrical machines
Others
Machines appliances &electrical gadgets have the highest imports value during 2012 at rate of 26% of the total imports value of Saudi Arabia.
ADVANTAGES OF SAUDI’S EXPORTED PRODUCTS
26
More than 2000 commodity within 17 groups.
Applying International Standard & Specification .
Accessibility to more than 148 International Markets.
High Quality of Packaging .
Suitable & competitive price .
Financing programs.
Ease of Transport.
Air, sea & land cargo from various ports.
SAUDI ESTIMATED BUDGET - 2014
Expenditure $228 Billion
8%
7%
25%
13%
10%
Sectoral breakdown of expenditure) %(
Transport & Communications
Water, Agriculture, Industry
Education
Health & Social Development
Development Funds
27
Revenues $228 Billion
REFORMS TO ENHANCE SAUDI’S ECONOMY
28
Re-evaluation and issuance of new laws.
Developing IT and Communication platforms.
Attention to sectors in which Saudi Arabia has comparative and
competitive advantages.
Creating more jobs for Saud youth.
Enhance PPP Private / Public partnership.
Accelerating Privatization Program.
Support SME’s and Family Business.
Promotion of Non-Oil Export .
29
TOWARDS BETTER UK–SAUDI
RELATIONS
30
2012 2011 2010 2009 2008
2040 1528 923 697 950 Exports to UK
4192 3817 3442 3424 4060 Imports from UK
6232 5345 4365 4121 5010 Trade volume
-2152 -2289 -2519 -2727 -3110 Balance of trade
DEVELOPMENT OF KSA’S FOREIGN TRADE WITH UK (BILLION US $)
