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The Kingdom of Saudi Arabia is the largest economy in the Arab world. It accounts for 25% of the Arab world’s Gross Domestic Product (GDP).
Saudi Arabia has had a period of relatively high growth and economic progress over the past few years. It is predicted to grow by at least 3% for the next couple of years.
With 50% of Saudis under 25 years old the Saudi population is one of the fastest growing in the world. The current population of over 28 million is expected to increase to 29 million by 2020. The large youth population generally lacks the education and technical skills the private sector needs.
Massive investment will be required to meet the needs of this growing population. The Kingdom has substantially increased spending on employer led vocational training and education. This includes opening a number of new women’s colleges and the women only Princess Noura University.
The government is also encouraging foreign companies to invest in vocational and technical training in support of Saudisation.
The Saudi government is pursuing a strategy of economic diversification and reform to:
- grow the private sector and reduce reliance on oil and gas
- open up previously restricted industries to foreign investment
- increase employment opportunities for Saudis
The government is also focused on getting private and foreign investment in important sectors such as:
- automobile assembly
- other knowledge driven industries, particularly those involved in research and development and IT where there is an opportunity for knowledge transfer
Saudi Arabia is a high growth market which offers significant opportunities for companies across a range of sectors. Record oil revenues have allowed the Kingdom to increase public spending on infrastructure and welfare. This includes major projects in:
- oil and gas and petrochemicals
- social infrastructure (including healthcare and education)
The total project value of the railways development programme is likely to exceed £14 billion. The Saudi Railways Organization (SRO) has an ongoing requirement for material, equipment and service providers.
There are additional opportunities for light rail systems in Jeddah, Mecca and Riyadh.
There are opportunities for companies throughout the supply chain.
The £60 billion healthcare development programme will lead to large scale investment in:
- systems development
Opportunities for companies include:
- commissioning of facilities and clinical services
- training for nursing staff and Accountable Health Partnerships (AHPs)
- design and construction of smart hospitals and health centres
- health centre equipment
- facilities management
- delivery of clinical services
The £30 billion water and wastewater upgrade programme is made up of a number of project. These include:
- building 20 new desalination plants
- new sewage treatment plants.
Sadara Petrochemical project
A joint venture between Dow Chemicals and Saudi Aramco will establish a major petrochemical complex. The complex from this US$20 billion development programme will produce:
- 1.3 million tonnes per year of ethylene
- 400,000 tonnes per year of propylene
- Although the ‘first stage’ of this project will is completed in 2015 there are still opportunities for firms involved with engineering and procurement.
New terminals in Riyadh, Jeddah and 33 other airport development projects all provide major opportunities for companies.
Red Sea natural gas
Saudi Aramco plans to exploit natural gas reserves during this decade off the Red Sea coast to support increased domestic demand. This will involve use of deep water technologies for drilling below 1,000 meters. US$25 billion capital expenditure is expected.
This programme offers opportunities for engineering and service companies with experience in deep water regions, such as the North Sea.
Saudi Arabia will invest US$100 billion in 16 new reactors over the next 20 years.
Opportunities for companies include:
- project management
- engineering and technical consultancy
- legal advice
- regulatory and licensing consultancy
- skills and training
- local capability building
- uranium enrichment
Urban transport projects
5 major cities have developed public transportation master plans. These are at various stages of planning and implementation. They involve development of major rail networks, including tram, monorail, light rail and metros.
Major opportunities exist in exports of consultancy, products and services.
Saudi Arabia is investing heavily in the public education sector, particularly in further education and vocational training. Saudi Arabia represents the biggest education industry in the region. 25% of the government’s 2015 budget is allocated to the education sector (£37 billion).
Opportunities for the education and training sector include:
- teacher training and development
- curriculum development
- developing kindergartens
- special Need Education (SEN)
- hospitality and tourism / hospital management / logistics management / healthcare training
- marine training / International Maritime Organization (IMO) accreditation