The Economic Development
In 1995 the Kingdom commenced working under its sixth comprehensive economic and social five-year plan. During the last five development plans, the Kingdom succeeded in establishing its infrastructure of roads, seaports, airports and other facilities and services. The total cost of these five plans reached more than $1,123 billion.
Within its efforts to diversify its economic production base and reduce dependence on oil as the sole source of national income, and according to the Ministry of Planning statistics, the non-oil GDP rose four-fold from 1970 to 1990 with an annual growth rate of 6 percent, while the rate of non-oil revenues' contribution to the total government revenues increased from 16 percent to 22 percent. The annual growth rate of the added value of the manufacturing industries reached 7.4 percent, and the value of commodity exports jumped from $7.46 million to $4.1 billion during the same period due to the remarkable growth in petrochemical exports.
Meanwhile, the private sector's annual investment volume rose from $266.66 million to $12.26 million. The private sector's contribution in the GDP rose from 21 percent to 45 percent and about 72 percent in the non-oil GDP. According to World Trade Organisation figures, the Kingdom of Saudi Arabia ranked 26 in the list of the major commodity exporting countries in 1995. The Ministry of Finance and National Economy statistics show that the GDP has registered positive growth for the fourth year consecutively. In 1997 it reached 7.1 percent according to current prices compared to 8.6 percent in 1996. By the end of 1997 the GDP was estimated at $145.86 billion compared with $136.26 billion in the previous year. The private sector contribution in the GDP reached 34 percent according to current prices (46.7 percent according to fixed prices) at the growth rate of 4.1 percent compared with 3.5 percent in 1996. The growth rate of the non-oil manufacturing industries and construction and building sector was 8.6 and 4.2 percent consecutively. There were also promising signs of improvements in the balance of payments for the second consecutive year.
In line with government policy on the subject, the Council of Ministers has approved the general framework for a privatisation strategy. In this respect, the Cabinet approved plans to convert the Saudi Telecommunications Corporation together with its carious facilities into a stock company. In addition, the private sector has taken over administration and operation responsibilities for the General Ports Authority.
The industrial sector has made great strides in contributing towards the Kingdom's economic development, particularly within the petrochemical sector whose products are now exported to 90 countries worldwide. The Kingdom is justifiably proud of achieving self-sufficiency in a number of industrial commodities. There are now 2538 factories in the Kingdom at a cost of $43.9 billion accommodating about 240,000 workers compared to 199 factories in 1970 at a cost of only $743.2 million providing work for work for 14,000 workers. In addition to this 12 fold growth, the contribution of the industrial sector in the GDP has increased from 6.5 percent in 1980 to 12.3 percent in 1996. The production of the Saudi Arabian Basic Industries Corporation (SABIC) 17 complexex now exceeds 24 million tonnes of petrochemicals, fertilisers, iron and steel.
Considerable progress has been made towards self-sufficiency in foods, especially wheat, dates, dairy and poultry products, with a surplus for export in these items. Since the early 1980s the agricultural sector achieved record figures in most areas of activity. The area under cultivation increased from 600,000 hectares in 1980 to 1.7 million hectares in 1995. The agricultural sector grew by 8.6 percent and its contribution in the GDP rose to more than $8 billion. The Kingdom's production of wheat reached 4.2 million tonnes in 1992. However, under the water rationalisation of vegetables roses to 2.7 million tonnes and fruits to more than one million tonnes of which 598,000 tonnes are dates. As regards dairy and poultry products, the production of milk rose to 749,000 tonnes, eggs 125,000 tonnes, poultry meat 397,000 tonnes, livestock meat 150,000 and fish 54,000 tonnes.
In the field of water resources and supply, 186 dams were built throughout the Kingdom for storage of rain water with a total capacity of 775 million cubic meters. The Kingdom also paid special attention to desalination of sea water to meet the daily demand for freshwater. By the end of 1997 about 25 seawater desalination plants were established along the Red Sea and the Arabian Gulf coasts with a production capacity of 520 million gallons of fresh water, raising production to 800 million gallons of freshwater per day and more than 4,500 megawatts of electricity. The Kingdom ranks first in the field of seawater desalination projects worldwide, with 30 percent of the world production.
The Kingdom of Saudi Arabia has a highly sophisticated telecommunications network serving all areas and maintains direct telephone links with 200 countries. There are presently around 2.3 million telephone lines, including 300,000 mobile telephone subscribers and 16,000 car phones.
Meanwhile, pager and telex networks accommodate more than 30,000 lines. Expansion work currently underway will raise the capacity to more than 3.5 million lines out of which 500,000 will be mobile phones.
All parts of the country are now connected by state-of-the-art networks of roads and highways with a total length of 44,000 kms as well as 96,000 kms of paved roads in agricultural areas. In addition, the railway route inaugurated by the late King Abdulaziz in October 1951 has been reinstated, with a new route built in 1985 to connect Riyadh and Dammam, handling 500,000 passengers and about 2 million tonnes of goods. Given the great distances involved it is not surprising that air-travel is one of the primary means for moving both people and goods. The number of airports in the Kingdom rose from 16 in 1970 to 24 in 1995, three of which handle international flights. In the field of sea transport, the number of Saudi shipping companies reached 114 and the number of berths in the Kingdom's commercial sea ports along the Red Sea and Arab Gulf coasts rose from 27 in 1975 to 182 in 1995.
Credit funds, established by the Government to provide financial loans to citizens, have played an important role in boosting development in all fields. The total value of loans offered by the Housing Development Fund since its establishment in 1974, up to 1995, reached $29.95 billion, contributing towards the construction of 513,120 housing units. Likewise, the overall loans provided by the Industrial Development Fund over the period 1974 to 1996 reached $8.18 billion contributing in financing 2,515 industrial projects. On the other hand, the Saudi Arabian Agricultural Bank provided loans worth worth $7.71 billion to farmers and agricultural firms during the period from 1962 to 1996. This has contributed largely towards new projects for the production of vegetables, fruits, dairy products and meat. The General Investment Loan Fund has provided loans worth $14.1 billion to national corporations and companies, while the Saudi Loans Bank has granted $1.44 billion of loans to low income citizens in order to help them meet marriage, medical treatment and house renovation requirements, with some 367,581 people benefiting from these loans. In addition, several specialised loans worth $1.09 billion have also been provided to hotels, private hospitals, bakeries, contractors and newspapers.
Tourism is a growing area of economic activity in the country which is blessed with a wide range of climatic conditions, beautiful beaches, public parks and gardens, recreational facilities, a state-of-the-art road network and regular air flights. The most important tourist areas are Shfa, Hada and Radf in the Taif area, as well as Asir and Al Bahah regions, which are at elevations of up to 2500 meters above sea-level and surrounded by Tihama and Al Sarat mountains. The Al Bahah area also includes Raghdan and Wadi Almalad forests, Wadi Beeda and Marzoog falls. The city of Jeddah at the Red Sea coast is another tourist attraction with its beautiful beaches, coral reefs and marine life.
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