Saudi Arabia is implementing a new set of domestic priorities in its economic and financial policies that will set the stage for growth well into the next century. Job creation and education, the promotion of both private and foreign investment and the development of earnings from the non-oil sector are all being emphasised. Increases earnings from oil and gas exports are helping to fund government expenditure and new industrial projects aimed at making better use of the country's own resources
Saudi Arabia's spending on education this year is expected to rise from SR 41.6 billion ($11.1 billion) to SR 45.6 billion ($12.2 billion), an increase of almost 10 per cent. Expenditure on health and social welfare is up even more, by almost 37 per cent, to SR 19.7 billion ($5.3 billion). Both represent increases well above the existing demand for such services and reflect the government's intention to prepare the Saudi workforce to play a larger role in the national economy.
This process of "Saudisation" is also being encouraged in the private sector, which employs an estimated 7.3 million people and where the hiring of expatriate managers and the recruitment of foreign workers is being discouraged. The government is "urging its citizens to enroll in vocational and technical training programmes to eventually replace the expatriate workforce," notes one Saudi analyst, Dr. Ihsan Ali bu Hulaiga.
"The manufacturing sector is envisaged as an instrumental tool for diversifying the Saudi economic base, and hence the employment sources for the native workforce."
Private and foreign investment is being sought to reduce the outflow of funds by Saudi investors -- currently estimated at some $18 billion a year -- and as a measure to limit the demand on government funds. In a major move last year, the government allowed two companies -- Saudi Chevron and Ibrahim al-Juffali and Brothers -- to set up new heavy industries in Jubail, an area previously dominated by the state-controlled Saudi Arabian Basic Industries Corporation (Sabic) and other public sector enterprises.
Saudi Chevron, which is a joint venture of the Saudi Industrial Venture Capital Group and the Chevron Chemical Company of the US, is to set up a petrochemical plant to produced benzene and cyclohexane. The complex, which is expected -- cost SR 2.4 billion ($640 million), will also include a plant to blend gasoline. In addition, Saudi Chevron is considering plans to set up a second petrochemical plant to produce paraxylene, according to officials at the Chamber of Commerce and Industry in the Eastern Province in Dammam. Total cost of the project is...