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Country ProfileYoung and rapidly growing population of 27.1mCentral role in Islam as home to the Holy CitiesOil reserves comprise around one-fourth of global totalAt 2.15m sq km, the world’s ninth-largest country

COUNTRY PROFILE

At 2.15m sq km, Saudi Arabia is the world’s ninth-largest country

The Al Saud family, which reigns over Saudi Arabia, hasheld intermittent control over the Arabian Peninsulasince the mid-1700s. It was around this time that thehead of the family, Muhammad ibn Saud, joined forceswith Muhammad ibn Abd Al Wahhab, a religiousreformer, leading to the rise of the Wahhabi move-ment in Arabia. By the middle of the 19th century, theAl Saud family had gained control of the majority ofmodern-day Saudi Arabia, but was faced with the lin-gering threat of Ottoman forces stationed throughoutthe region. The Ottoman army managed to regain con-trol of substantial portions of the country in 1891,when rising tensions ultimately led Al Saud family to seekrefuge in Kuwait. The tables started to turn back in ear-ly 1902 when, on January 15th, a young member of theroyal family, Abdulaziz Al Saud, successfully staged aseries of night raids and took Riyadh. Thus began therecapture of the family’s former territory and the uni-fication of the peninsula’s diverse tribes. Three decadeslater, on September 23, 1932, the modern Kingdom ofSaudi Arabia was created by Abdulaziz Al Saud.A NEW ERA: Through political negotiations, Abdulaz-iz Al Saud became the first king of the young country,the third Saudi state. In 1933 he signed an oil explo-ration agreement with the Standard Oil Company of Cal-ifornia, launching a new chapter in the history of thenation and marking the beginning of economic suc-cess and large-scale development for years to come.Opening the energy sector transformed Saudi Arabiainto one of the world’s most important oil exporters.Having been blessed with 25% of the world’s provenoil reserves, according to the Ministry of Petroleumand Mineral Resources, the country has used its natu-ral assets to swiftly transform itself into a leading region-al economy with global reach. With a GDP in 2010 ofmore than $435bn according to the Saudi ArabianMonetary Agency, the Kingdom is now the largest econ-omy in the region, a member of the increasingly influ-ential G20, the dominant player in OPEC, a recognisedcontributor to global market stabilisation through its

swing-producer status in oil and a prudent manager ofits currency reserves in the financial sector. HOLY CITIES: The Kingdom’s central role in the inter-national Muslim community as the host of the two HolyCities of Makkah and Medina is paramount to the coun-try’s identity. Makkah was the birthplace of Islam 14centuries ago, and every year the Kingdom welcomesmillions of pilgrims from every corner of the globe whotravel to the city to carry out their spiritual duties ofHajj and Umrah – the pilgrimages to Makkah. Islam isa key part of the country’s identity abroad as well, asmillions of Muslims around the world face towardsMakkah every day during their prayers. GROWTH: Saudi Arabia’s population has expanded rap-idly, in step with the economy’s quick expansion overthe years. The growing population has increased theneed for the government to diversify the economy andto create more employment opportunities for futuregenerations. By looking for alternative options for devel-opment, the government is preparing for a future whenoil export earnings might not contribute as much toGDP as they have in the past.GOVERNMENT: Saudi Arabia is a monarchy governedby the direct descendants of King Abdulaziz Al Saud.The nation’s current monarch, King Abdullah bin Abdu-laziz Al Saud, ascended to the throne in 2005 after hisbrother, King Fahd, passed away. King Abdullah wasgranted regency and has been overseeing the opera-tions of government since 1995, when the late KingFahd suffered a stroke.

The Kingdom’s political system was first codified byKing Fahd in 1992 with the Basic Law of Saudi Arabia,which outlined the responsibilities of the governmentand defined the relationship between the ruler, Saudicitizens, and the various ministries and governing coun-cil bodies. The king is advised by the Council of Minis-ters and the Shura Council. The Council of Ministers,the highest governance body, has the primary legisla-tive role, a four-year term limitation and by-laws thatgovern its interaction with other consultative bodies.

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Balancing actStriving to maintain long-standing traditions while modernising

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COUNTRY PROFILE

The Shura Council, also called the National Consulta-tive Council, is a mixture of elected and appointed cit-izens representing a cross-section of the Saudi public.Initially, the king appointed 100% of the Shura Coun-cil; currently, however, the organisation is composedof both elected and appointed representatives.

The Council of Ministers recently increased the Shu-ra Council’s responsibilities by including it in the nation-al budgeting process, granting it the ability to adviseon the allocation of public spending and question min-isters on budgetary use. King Abdullah expanded theShura Council’s powers to allow it to propose and draftlaws and regulations. The body also has the ability toobject to, or approve, the passage of a law. In 1993 thecouncil was reformed to make it more efficient and rep-resentative of society at large. Primarily, this meantexpansion – the organisation grew to 90 members in1997, 120 members in 2001 and 150 members in 2005.In September 2011, King Abdullah announced thatwomen will have the right to join the council startingin the next term. The king has final approval rights onall new legislation, after an extensive deliberative andconsultative process in which the Shura Council, theCouncil of Ministers and numerous experts engage.

In 1993 King Fahd enacted legislation that detailedthe local administration of Saudi Arabia’s 13 provinces.In addition to a governor, each province has a councilmade up of representatives of the local governmentand 10 prominent community members who areappointed on a four-year, renewable basis.

King Abdullah also passed a succession law to ensurethat the process by which Saudi Arabia’s monarch waschosen was based on a specific law, rather than sim-ply using the general guidelines codified in the coun-try’s Basic Law. This has resulted in increased stabilityin terms of succession in the Kingdom. In October 2011,the Crown Prince, Prince Sultan bin Abdulaziz Al Saud,who also served as minister of defence and aviationand deputy prime minister, passed away at the age of85. Prince Naif bin Abdulaziz, minister of the interiorsince 2009, was appointed as the new Crown Prince.POPULATION: The most recent census in Saudi Ara-bia was carried out in 2010 by the Central Departmentof Statistics and Information (CDSI). According to resultsfrom the survey, the Kingdom’s population was estimat-ed at 27.1m. Of this number, around 70% were Saudinationals and 30% were foreigners – a split betweenlocal and expatriates that has remained relatively sta-ble in recent years. The average annual populationgrowth rate between 2006 and 2010 is currently esti-mated at 3.2% by the CDSI. Saudi Arabia’s demograph-ics and its historically high growth rates have had a directimpact on the country’s long-term development strat-egy. Providing adequate and affordable housing, healthcare and education at all levels for the expanding pop-ulation remains a government priority.

Saudi is among the fastest-growing societies glob-ally. The UN estimates the population could double by2050. The high growth rate in recent years can beattributed primarily to remarkable improvements in liv-ing, health and social conditions over the past 25 years.

The main population centres are the capital, Riyadh, andthe western city of Jeddah, which is the country’s com-mercial centre. Over the past decade the Kingdom’s citiesand towns have been transformed by steadily increas-ing internal migration from rural areas.

The Kingdom’s ongoing reliance on expatriate labouris a concern, as in the long run locals need to be trainedwith the skills to replace foreign workers. Continued eco-nomic expansion, large-scale government spending oninfrastructure and the private sector’s steadily increas-ing participation in the economy have contributed tothe recruitment of a large non-Saudi workforce – around8.4m of the Kingdom’s total population in 2010, accord-ing to the CDSI. A substantial majority of the foreignlabourers currently active in the Kingdom come fromSouth-east Asia. In May 2011, the Ministry of Labourannounced a new employment regime entitled Nitaqat.Private sector companies are categorised under oneof four zones based on the type of business of thecompany and the percentage of Saudi nationalsemployed. The programme aims to increase Saudiisa-tion rates via various incentives and penalties based onthe companies’ Nitaqat categorisation. RELIGION: Islam is the state religion, with a large major-ity of Muslims belonging to the Sunni sect and a minor-ity of Shia followers. Religion plays an essential role inthe Kingdom. Sunni Islam is divided into four schools:the Hanbali, Hanafi, Shafi and Maliki schools. Histori-cally Saudi Arabia has strictly adhered to the Hanbalischool of Islam, though in early 2009 King Abdullahchanged the make-up of the influential Grand UlemaCommission, a leading body of religious scholars, toreflect all Sunni sects, rather than just Hanbali. Thegovernment considers all Saudis to be Muslim; publicprayer, charity (a requirement in Islamic culture) and ful-ly abiding by sharia law are mandatory for all Saudis.Nonetheless, the significant influx of expatriates inrecent years has brought some Christians and follow-ers of various other religions to the Kingdom. Still, Islamtouches every feature of life in Saudi Arabia; the king’s

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THE REPORT Saudi Arabia 2012

With a young and growing population, providing adequate education, housing and health care is a priority

COUNTRY PROFILE

formal title is “Custodian of the Two Holy Mosques”. Asthe spiritual home of Islam, the country attracts over2.5m Muslims for the Hajj each year, and 7m pilgrimsvisit throughout the year to perform the Umrah, whichcan be undertaken at any time.EDUCATION: Free and universal education is availableto all citizens. Local institutions are segregated by gen-der at primary, secondary and tertiary levels. The oneexception to this is the King Abdullah University of Sci-ence and Technology (KAUST), which opened in 2009.KAUST, a graduate-level, research-focused institution,will eventually house 800 students.

The first boys’ school opened in 1954 and the firstgirls’ school two years later. The Saudi curriculum com-prises kindergarten, six years of primary school, threeyears of intermediate and an additional three years ofhigh school. The government has increased spendingon education in recent years to fulfil the country’s eco-nomic, religious and social objectives. Private sector par-ticipation in the education sector is on the rise as well.

Education has had a positive impact on develop-ment. A few generations ago Saudi Arabia had a liter-acy rate of 20%, whereas today it has been able to pushthat figure to 84.7% for males and 70.8% for females.Around 58% of students enrolled in higher educationinstitutions are women. Bringing the education systemin line with the needs of the private sector is seen asessential, as the government moves ahead with a far-reaching Saudiisation programme. The national budg-

et for 2011 included SR150bn ($40.0bn) for educationand training, a 9% increase from the previous year.LANGUAGE: The official language of Saudi Arabia isArabic and the spoken dialect is commonly called GulfArabic. However, English is generally spoken in largercities and by the majority of businesspeople.GEOGRAPHY & CLIMATE: At 2.15m sq km, Saudi Ara-bia is the world’s ninth-largest country, and the biggeston the Arabian Peninsula, accounting for 80% of its ter-ritory. Half of the nation is desert. The country bordersIraq and Jordan to the north; Kuwait, Qatar and the UAEto the east; and Yemen and Oman to the south. TheRed Sea stretches alongside Saudi Arabia’s 1760-kmwestern coastline, from an entry point north of Yemenin the south to the Gulf of Aqaba in the north.

Saudi Arabia’s climate varies depending on the region.The Red Sea coast has comfortable temperaturesthroughout most of the year, with a hot and humid sum-mer. All coastal areas are generally cooler and morehumid than the central regions, which tend to have aharsh and dry climate, with temperatures often surpass-ing 40°C. Winters are generally mild and short. NATURAL RESOURCES: Saudi Arabia remains arguablythe most important oil producer in the world, withapproximately one-fourth of global conventionalreserves. The country contains around 260bn barrelsof known oil reserves – some 2.5bn of which are situ-ated in the Saudi-Kuwaiti neutral zone, otherwise knownas the Divided Zone. Saudi Arabia’s development has

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COUNTRY PROFILE

been greatly enhanced by its tremendous oil wealth.The Kingdom’s crude deposits are made up of light andextra-light grades of oil, which account for two-thirdsof the reserves, with the remainder consisting of medi-um or heavy grades. The government has a carefullymanaged swing-producer policy, and is committed tomaintaining global oil supply and pricing stability. Allfacets of the oil industry are managed by Saudi Aram-co, the Kingdom’s state-owned national oil companyand the world’s largest oil firm. Although Saudi Arabiahas over 100 oil and gas fields, over half of its reservesare found in just eight fields. Ghawar, the world’s largestoil field, is estimated to have reserves of 70bn barrelsand produces half of the country’s output.

The Kingdom has managed to accumulate large cashreserves due to years of high oil prices. This has allowedit to continue its economic diversification programmeand industrial development even during recessionaryyears. Recently, the mining sector has increasingly beenviewed as an area of future growth.

Due to large reserves of gold, silver, zinc, copper andindustrial minerals, especially in the western moun-tains and the north-eastern regions of the country,mining is expected to become the third industrial pil-lar of the economy, after energy and petrochemicals.Legislative changes have made the sector more attrac-tive for both national and international players in themining sector in recent years. The majority state-ownedSaudi Arabian Mining Company, also known as Ma’aden,was formed in 1997 to develop mineral resources inthe Kingdom. Ma’aden and American aluminium pro-ducer Alcoa signed an agreement in 2009 to constructan integrated aluminium complex at Ras Al Khair. The$10.8bn development is expected to include a smelter,aluminium refinery, bauxite mine and rolling mill.CULTURE: Saudi Arabia’s cultural and social normsderive from and are very closely related to the King-dom’s deep connection with Islam. Its conservativenature means that a number of strict social codes, suchas segregation of the sexes, must be adhered to at alltimes. Unmarried or unrelated men and women arestrongly discouraged from mixing.

The majority of Saudis wear traditional dress. Formen this consists of a thobe, a brilliant-white garmentthat covers the entire body. Male headwear consistsof an aqal, which is a black ring that sits atop the headand holds the head scarf, the ghuttera, a red and whitecloth, in place. Women cover themselves in public withthe abaya. Although it is common for Saudis from allbackgrounds to wear traditional garb, it is becomingincreasingly routine to see youths dressed in Western-style clothes, especially in cities and other urban areas.

While women are not permitted to drive or ride a bicy-cle on public roads, their role in the economy has grownsubstantially over the past decade. They have proper-ty rights and legal status, which has resulted in womenowning a significant percentage of assets. They alsohave considerable influence in Saudi households, whichhas made them important consumers in the economy.Women often look after and invest their own money.The Arabian Peninsula has been a centre for interna-

tional commerce since long before the Islamic era.Located along the principal trading route between Eastand West, the area benefitted from passing caravans,as traders carried spices, silks and other exotic mer-chandise through the desert for hundreds of years.This mercantile spirit lives on today. DESERT RETREAT: Taking a trip to the desert is a com-mon pastime for Saudi families, where they sit, talk anddrink tea with friends and family members. The desert,which is considered by many to be a necessary retreatfrom the pressures of modern-day living, plays an impor-tant role in Saudi life and identity. Saudis are also under-standably very proud of their long Bedouin ancestry.The king is often presented holding a falcon, which wasused by the Bedouin for hunting and is an emblem ofnobility. Similarly, horse and camel breeding are stillconsidered pursuits for true gentlemen.

The ubiquitous Arab hospitality is also a remnant oflife in the desert. Traditionally, visitors were given food,drink and a bed for the night, away from harsh condi-tions. Many Saudi artists have found inspiration in theKingdom’s long history as well. Much work in recent yearshas focused on rich abstract designs, reminiscent ofdesert landscapes. This has resulted in an array of stun-ning Arabic architecture, textiles and jewellery. LANGUAGE: Language, in both its written and spokenforms, is also an important cultural art form. There is arich history of calligraphy as an art in the Kingdom,particularly as it has related to the decoration of impor-tant documents over the years. The spoken word, mean-while, receives the greatest honour in Saudi Arabia,and poems and stories are often passed down from gen-eration to generation within families.

As the Kingdom moves forward economically and itscitizens enjoy the benefits of growth and globalisa-tion, Saudis are finding themselves performing a diffi-cult cultural balancing act, as they try to manage thesimple lifestyles of their Bedouin ancestors alongsidethe expectations of modernity. This is a challenge butmany Saudis view it as an opportunity for the future.

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THE REPORT Saudi Arabia 2012

The climate varies significantly by region, ranging from cooler coastal areas to hot, dry deserts

COUNTRY PROFILE VIEWPOINT

King Abdullah bin Abdulaziz Al Saud

While the world around us has undergone manychanges, our country continues to develop and enjoyssecurity and stability in the light of national unity. Thisclearly reflects the relationship and cohesion betweenthe leaders of this country and its loyal and noble peo-ple. We live in a changing world, but we are deter-mined with God’s help to continue the developmentprocess and the liberalisation of the economy, whileabiding by balanced policies for a bright future.

The continuation of the national dialogue as anapproach to deal with all issues and broaden the par-ticipation among all segments of Saudi society isimportant for strengthening national unity andaddressing local issues. Creating a channel of respon-sible expression that is based on the objectives of theKing Abdulaziz Centre for National Dialogue can pro-vide the proper environment for dialogue.

In addition to the importance of national securi-ty, water security is no less important, and it is oneof the strategic objectives of the Kingdom. It is sup-ported through the expansion of saltwater desalina-tion plants and dams to supplement undergroundwater resources. In the interest of reducing the costof water production methods, the state has adopt-ed the National Initiative for Water Desalination UsingSolar Energy, which will be implemented in threephases over a period of nine years.

To preserve this national resource, which formsthe backbone of life and is the essence of growth,the state has promulgated many laws and regulationsdealing with the exploitation of water resources.Additionally, the government has established centresof advanced research that employ the latest scien-tific techniques, which has made our country a leaderin the field of water desalination.

Our state has always sought to improve the livingconditions and welfare of its citizens, starting withsecure treatment and care for them, in the beliefthat human health is a measure of the progress ofpeople and advancement. This has been shown very

clearly by the continued establishment and expan-sion of integrated hospitals in cities, as well as thebuilding of health centres in villages.

We have issued an order to allocate SR16bn($4.3bn) for the implementation and expansion of anumber of medical cities. With God’s help and guid-ance, we will continue in the same direction towardsimproving the health services sector, whether byfocusing on the building of new projects, or by improv-ing the environment of existing health facilities andincreasing the funds allocated to them.

The Ninth Development Plan, will be – with God’shelp – a helping hand for us to achieve prosperityand growth, especially as it has provided for socialstability and will ensure the protection of humanrights and promotion of national unity. It also empha-sises raising the quality of life for citizens, continueddiversification of the economy, balanced and sus-tainable development of all regions of the Kingdom,activating the role of the private sector, and sup-porting small and medium-sized enterprises.

Based on the government’s keenness to continuethe development in all fields, it has established theMinistry of Housing. The government has also sup-ported the industrial, agricultural and real estatedevelopment funds, as well as provided financial facil-ities and soft loans to citizens to contribute effec-tively to development. Priority has also been givento the social security system, which now benefitsmore people. Lastly, there is an emphasis on creat-ing employment opportunities for citizens throughthe Saudiisation programme and the establishmentof training centres in all regions of the Kingdom.

I always stress that the citizen is the basis of thedevelopment and its target at the same time. Edu-cation is one of the pillars of development, so thestate has targeted increasing the number of educa-tional and cultural institutions and raised spendingfor building schools and universities in all regions ofthe Kingdom. We are heading towards a knowledge

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Investing in the futureKing Abdullah bin Abdulaziz Al Saud, Custodian of the Two HolyMosques, on the Kingdom’s development programme

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COUNTRY PROFILE VIEWPOINT

economy, and it is important to invest in future gen-erations through training, education and rehabilita-tion. The educational budget represents the largestallocation of government spending.

For the sake of expanding the knowledge of oursons and our daughters, the students, we have extend-ed foreign scholarship programmes to additionalcountries. For our sons and daughters who are study-ing at their own expense, they will be able to takeadvantage of our scholarship programme once theyhave met its requirements. We believe in creating anatmosphere for our students to dedicate themselvesto expanding their knowledge, so that they canbecome qualified professionals and technicians.

The enhancement of the status of women can onlybe achieved through a vision that believes in theinteraction of all society members for the purposeof development. Improving the capabilities of womenand removing the obstacles facing them would allowthem to increase their participation in society andbecome a productive factor in economic activities.

Our aspirations are limitless in terms of lifting ourcountry to the ranks of developed nations in the fieldof communications and service sectors. Therefore,the construction and upgrading of infrastructure,including the country’s communications network,airports, ports and roads, is in accordance with theobjectives of our development plans. These projectswill enhance opportunities for investors to activelyparticipate in the growth of the country.

Although the world is undergoing an economic cri-sis, the balanced financial and economic policies ofour state, as well as its rules and mechanisms forfinancial transactions and investment, have sparedus the negative effects of the international crisis, and even strengthened the Kingdom’s positionamong other countries in terms of attracting glob-al investors. We are determined to invest in large-scale projects such that the Kingdom can continue toavoid any impact from the global economic slowdown.

We have continued to pursue a petroleum policybased on the interests of present and future gener-ations, and the efficient exploitation of the wealththat God has granted us, harnessing it for econom-ic and social development. The Kingdom has alsocontinued to adopt policies that improve market sta-bility, taking into account the common interests ofproducers and consumers and the safety of the glob-al economy, including the less-wealthy economies ofdeveloping countries. Considering the world’sdependence on fossil fuels, especially oil, to meet theenergy demand for global prosperity and growth inthe coming decades, the Kingdom also encouragesscientific research in renewable energy and improv-ing the use of fossil fuels. In recognition of this rela-tionship we have established the King Abdullah Cityfor Atomic and Renewable Energy for the develop-ment of nuclear and renewable energy to comple-ment our oil and gas resources.

The Kingdom also helps ensure peace and securi-ty in the Middle East and the rest of the world, witha leading role in achieving stability and prosperity forthe region. We stress the right of everyone to use ofnuclear energy in accordance with the supervisionand control of the International Atomic Energy Agency,and we support the various steps and actions to makethe Middle East free of weapons of mass destructionas stipulated in the resolutions of the UN.

The call for dialogue among civilisations, culturesand religions is the best way to resolve internation-al disputes and issues by peaceful means. This dia-logue will spare the whole world, God willing, thetragedy of conflicts between civilisations and religions,and make us work towards a peaceful coexistence. Icall for the world to understand the importance ofdialogue, and take it as a key instrument for bring-ing different nations closer and improving relationsbetween governments and their citizens.

Excerpted from public remarks made to the ShuraCouncil on August 25, 2011.

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THE REPORT Saudi Arabia 2012

COUNTRY PROFILE INTERVIEW

HRH Prince Faisal bin Bandar bin Abdulaziz Al Saud, Governor,

In what ways does the Qassim region plan to increaseits contribution to Saudi Arabia’s economy?PRINCE FAISAL: Our vision is to build a diverse econ-omy that enhances cooperation among the agriculture,industry and manufacturing sectors to make the mostof the industrial base in the region. It will be essentialto increase the participation of the region’s privatesector and enhance its role in the economy. One wayof doing that is focusing on the development of indus-tries that depend on domestic resources. We can alsoincentivise downstream industries that manufacture andexport local natural resources.

The Qassim Investment Strategy Project, establishedin 2008, has been designed with the objective of link-ing the region’s development strategy with externalopportunities. It also involves a major collaborativeeffort across the region. Qassim will benefit from itstraditional strength in agriculture and also promoteother industries of interest, particularly minerals, con-struction materials and assembly line production.

What is being done to attract more business to theregion and encourage skilled workers to stay there?PRINCE FAISAL: The region is committed to acceler-ating the pace of economic transformation and pro-moting a friendly business environment where com-panies and entrepreneurs can flourish and innovate.The objective here is to attract investment in high-val-ue industries, which will bring and retain Saudi skilledworkers. To achieve this goal, we will support econom-ic development by engaging the private sector in capac-ity and quality enhancement.

In order to maintain a young, skilled Saudi workforce,the region’s educational programmes are being alignedwith local employment opportunities. Studies thatmatch the current needs for local industries are beingencouraged. We are also developing a regional work-force attraction programme to target workers withnecessary skills. In this way we will be able to initiaterecruitment and training programmes in collaboration

with Qassim's educational institutions based on demandfor certain skills. To create a better environment for work-ers, we are developing residential and commercial realestate projects to serve people who settle here.

How can Qassim diversify its economic base andincrease its share in the Kingdom’s GDP?PRINCE FAISAL: Economic diversification has beenthe top objective of the region’s development plan andremains a major target for sustainable economic growth.The programmes of the Qassim Investment Strategy willcreate opportunities for entrepreneurs to interact withsuccessful business leaders and facilitate the growthand success of local businesses by enhancing the avail-ability and quality of available support services. More-over, the region will encourage local investment inflowby increasing investor confidence and creating an envi-ronment friendly to business development.

As for marketing, Qassim’s communication strategywill highlight the advantages of living in the region withthe aim of attracting investors and skilled workers.Through these plans Qassim intends to attract invest-ment and human capital to diversify its economy.

How will the region maintain sustainable agricul-tural growth in the long term?PRINCE FAISAL: To maintain and promote the sustain-ability of the agriculture sector in the Kingdom, KingAbdullah reformed the Agricultural Development Fund(ADF) in January 2009. The fund aims to ensure sus-tainable development by providing accessible credit andfocusing on research and developing investments forthe long-term sustainability of the agricultural sector.

A collaborative approach on water use must be tak-en, as water is critical to the economic success of thewhole region. Industries will be encouraged to beinvolved in improving quality and efficiency. Qassim willsecure its position as a regional trade centre for agri-culture. The government will support farmers to pro-mote and maintain growth of the agriculture sector.

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THE REPORT Saudi Arabia 2012

A regional strategyOBG talks to HRH Prince Faisal bin Bandar bin Abdulaziz Al Saud, Governor, Qassim region

COUNTRY PROFILE INTERVIEW

Osama Al Bar, Mayor of Makkah

What residential projects address Makkah’s growth?AL BAR: The municipality has planned the developmentof three different areas in and around Makkah to meetthe demand and particular requirements of the city. TheUmm Al Joud project, north-west of Makkah in theHaram area, measures 670,000 sq metres and consistsof 4000 housing units. This project is intended to alle-viate the housing demands of Makkah’s residents andis being partly subsidised by the municipality. The firstphase of 2500 units is already being marketed, forwhich we have received 23,000 applications. Second-ly, on the border of the Haram area, to the west of thecity, we are planning the Makkah Gate development,which will be 86 sq km. This area will allow a more bal-anced growth, with the construction of schools, hos-pitals and public services planned. Lastly, the munici-pality has granted 4.3 sq km of land to the Ministry ofHousing, which has been allocated in line with KingAbdullah’s decree to build 500,000 housing units.

How is private sector input being encouraged?AL BAR: Our target is to conduct these projects inpartnership with the private sector to see more effi-cient development. To increase private sector partici-pation, the new development strategy aims to createattractive conditions for key government projects andpublic service facilities that will catch the attention ofcontractors and developers. To make the projects eco-nomically attractive, the municipality offers land at anattractive value, ensuring a high yield for the investorsand minimising investment risks. In exchange, we expectthe private sector to bring a skilled workforce, knowl-edge and financial capacity to carry out these projects.

To ensure reasonable prices for buyers while alsomaintaining companies’ profit margins, units sold to thepublic will be subsidised by the government. Neverthe-less, projects should be sustainable and generate rea-sonable turnover. Private sector firms will be able to access information about projects and apply forthem using a prequalification system we are developing.

How can transport systems facilitate the transit ofvisitors while minimising the impact on residents?AL BAR: Transport is a critical factor within Makkah’sdevelopment plans. Our target is to efficiently managethe high visitor numbers during the Hajj period and mit-igate the impact on the city’s mobility. The municipal-ity is working to design an efficient transport systemwithin the city and also to coordinate with intercityplans. Responding to the unique necessities of Makkahas a pilgrimage destination, the municipality is partic-ipating in the development of railway infrastructurethat will connect all the Hajj ritual areas, thereby reduc-ing traffic and facilitating the movement of pilgrimsbetween the different sites during their journey.

Connected to the rail links, a 182-km, 88-stationmetro system is also planned, connecting all the sacredsites, and extending to residential areas outside the cen-tre. The metro will allow visitors to perform their pil-grimage without the use of private transport. The tech-nical study for this project is being finalised and shouldbe put out to tender in 2012. To minimise risk for theprivate sector, the municipality will establish partner-ships with developers to provide support in any pub-lic-private partnership projects.

What new opportunities does the city present asan Islamic tourism destination?AL BAR: We intend to enhance the city’s tourism fea-tures and offer a wider range of activities. To carry outthis plan, Diafa, a new local tourism organisation, hasrecently been founded by the municipality. Its focus willbe mainly to encourage religious tourism in the region,restore historical and religious areas and create newfacilities. In line with this plan, we are studying the con-struction of an Islamic Civilisation Centre, which wouldallow visitors to learn about Islamic culture. Being in theboundaries of the Haram area, the museum would beopen for non-Muslims as well, so it can attract touristswithout access to other locations inside the city. Also,Makkah Gate will offer support services for pilgrims.

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Meeting demandsOBG talks to Osama Al Bar, Mayor of Makkah

www.oxfordbusinessgroup.com/country/Saudi Arabia

COUNTRY PROFILE VIEWPOINT

For the West, images of women in Saudi Arabia havemostly been of a marginal individual, without free willor freedom. This image has captured outsiders for mostof the last century, despite dramatic changes for Sau-di women. These changes have become evident tomany people who visit the Kingdom. It is true that 50years ago women occupied a completely different partof society. However, women in Saudi Arabia today leada life quite different from their ancestors. It is safe tosay we are witnessing the beginning of a golden agefor women in the Kingdom.

Historians always mention 1960 as an importantyear for Saudi women, since that year a royal decreeestablished the first governmental school for girls.Although the schools opened for female students thenwere elementary schools, they were the springboardfor Saudi women’s renaissance. These elementaryschools gave way to more institutions delivering high-er level education, allowing women to climb towardssuccess with fast, steady steps.

Visitors to the Kingdom will be astonished by thedevelopment of women’s education. According to 2009statistics, illiteracy rates have dropped among Saudiwomen to 18% and the percentage of females amongundergraduate students has risen to 58%.

Today, the Saudi woman is admirably active in almostevery academic specialisation, and in many occupation-al capacities. The Kingdom is proud to be home to manydistinguished women who have occupied senior posi-tions and received prestigious awards from the UnitedNations and international research centres. Saudiwomen are not only recognised in research and aca-demia alone; several Saudi women are distinguished insocial and charity work. In fact, one could say human-itarian work in the Kingdom was established mainly bySaudi women. Many non-governmental organisationsoffer substantial aid to fight domestic violence, drugsand poverty. Additionally, these NGOs contribute to care for children who are ill or have special needs,as well as working to provide for orphans and others.

Social life for Saudi women is unique in its own right.It is a priority to acquire a better education, serve andcontribute to the nation’s development, while alsomaintaining great regard for traditional values. Abid-ing by authentic identity continues to be characteris-tic of Saudi women, but this does not equate to hermarginalisation, as the West interprets it.

In fact, in an address to the Shura Council, King Abdul-lah bin Abdulaziz Al Saud reasserted that he would notaccept marginalisation of women. In an empoweringmove, the King declared women had the right to mem-bership in the Shura Council, as well as the right to voteand to run for municipal council elections. This is amajor step for women in Saudi Arabia. The support andsolidarity for women shown by King Abdullah and oth-er members of the royal family will be remembered asan act of social justice. Another form of the King’s sup-port is giving Saudi women an equal chance to receivescholarships for the world’s distinguished universities.For the first time, the Saudi woman has the opportu-nity to occupy high office in the government.

The establishment of Princess Nora bint Abdulrah-man University, a single-sex institution, is another signof support. The King suggested the university shouldbe named after an influential female figure in Saudi his-tory. Although new, the university has 15 colleges andan advanced hospital to train students in health care.The university complex has modern sports centres andstudent housing. The school is already working to rev-olutionise its educational system and academic pro-grammes, fulfilling its mission to provide a variety ofhigh-quality educational opportunities for women.

This certainly does not mean that women in SaudiArabia are without challenges, or that they are satis-fied with their achievement so far. Like all women, Sau-di women should not shrink from obstacles but pushto overcome them, helping work towards a better future.Saudi women are determined to continue to work qui-etly and resiliently to help provide a life of good, loveand peace for themselves, their society and the world.

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THE REPORT Saudi Arabia 2012

Constant progressHuda bint Mohammed Al Ameel, Rector, Princess Nora bintAbdulrahman University, on women in Saudi Arabia

COUNTRY PROFILE INTERVIEW

Jan O’Sullivan, Irish Minister of State

How has Ireland’s economic relationship with Sau-di Arabia developed in recent years? What policiesare being created to enhance bilateral relations?O’SULLIVAN: Relations between Ireland and Saudi Ara-bia have been very warm for a long time and econom-ic relations have been particularly strong in recentyears. Trade between the two nations increased by 25%in 2010, which is quite significant. The number of part-nerships is also increasing, usually between small Irishcompanies with specific expertise and larger Saudifirms that are expanding. Saudi Arabia remains a pri-ority market for our trade policy and for this reason wehave created a joint economic division and a marketplan coordinated from our embassy there.

Such relationships work to our mutual benefit: inIreland, we have developed certain sectors, and withslower growth we have spare capacity that can be usedabroad. The largest potential seems to exist in partner-ships in the health and education sectors.

What can be done to encourage international com-panies to invest in the Kingdom?O’SULLIVAN: Saudi Arabia is a highly attractive desti-nation, with huge potential for growth. Its develop-ment opportunities continue to attract new business-es that can meet the economy’s needs. Moreover, localcompanies are open to establishing partnerships withforeign investors. This enables Saudi firms and theinternational market to cooperate locally.

What is necessary now is to promote these oppor-tunities. The Kingdom has sound fundamentals thatguarantee continued economic growth, and govern-ment plans are targeting the development of the econ-omy. By making investors more aware of these quali-ties, the Kingdom will gain more attention.

What can be learned from the global economic cri-sis and how should future downturns be addressed?O’SULLIVAN: During the crisis, conditions have beenvery different for Europe and the GCC region, and par-

ticularly for Saudi Arabia. One of the main problems forEurope, the banking crisis, has not affected the King-dom thanks to its reduced exposure. It should remainunaffected as the banking sector remains protected.

The rapid growth taking place in some sectors, suchas the real estate market, could cause problems. How-ever, the demographic fundamentals of the countrymean it will not become a problem as long as housingprices continue to reflect the real market value.

Prospects in the GCC are promising and the bestadvice would be to keep planning ahead and not rely-ing only on current growth. Diversifying, investing in newsources of energy and developing new sectors will bethe key to success in the long term.

How can small and medium-sized enterprises (SMEs)address challenges in developing economies? Howcan their growth be encouraged in Saudi Arabia?O’SULLIVAN: SMEs are of tremendous importance inthe reduction of unemployment. New expanding com-panies are particularly eager to bring innovation andcreate new ideas and opportunities, helping to devel-op new ideas from within the population as well as topromote new areas of growth. SMEs are the engine ofthe local economies, particularly given that they areusually run by local people.

To encourage the development of SMEs in Saudi Ara-bia, we must start with education plans that are ori-ented to practical use, driven by technology and inno-vation. Universities can promote studies that promotejob creation and give young people a crucial role as asource of growth in their community.

On the other hand, it is equally important to encour-age research and development in the private sector.Entrepreneurship has to be incentivised. Additionally,the creation of incubation centres in universities is alsonecessary. This enhances the relationship betweeneducational institutions and the private sector and aidsin creating connections that promote the inclusion ofthe youth population as part of the economic system.

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A prospering partnershipOBG talks to Jan O’Sullivan, Irish Minister of State, Department ofForeign Affairs & Trade with responsibility for trade and development

www.oxfordbusinessgroup.com/country/Saudi Arabia