INVESTMENT CLIMATE IN ARRIYADH CITY 2007

KINGDOM OF SAUDI ARABIAARRIYADH DEVELOPMENT AUTHORITY

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This Report is Sponsored by:

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In The Name Of Allah, The Most Merciful, The Most Compassionate

Thanks to Allah, The Almighty, our beloved country is enjoying broad-based development and economic growth under the wise leadership of the Custodian of the Two Holy Mosques King Abdullah Bin Abdulaziz. Strategic projects throughout the Kingdom will, God willing, lead to further economic and social prosperity, and will also contribute to achieve balanced economic growth throughout the Kingdom.

The establishment and construction efforts during the last decades, with God’s help, have strengthened Arriyadh’s position as a highly attractive investment destination, offering unparalleled investment opportunities that profit from a wide range of public sector services and facilities, coupled with administrative support and regulatory facilities. These benefits are further enhanced by the free movement of capital, high economic growth rates, diversity of economic resources and the existence of a prudent short and long-term planning vision.

The city of Arriyadh welcomes all affirmative and purposive investment and routinely provides new investment opportunities particularly in high-tech industries, financial, health, educational and tourism services, along with the establishment of utilities and infrastructure …etc.

Arriyadh continues to offer investment support through its administrative, executive and planning bodies, including administrative and regulatory support, information transparency and studies, to be reflected on the City, its inhabitants and investors alike.

Salman Bin AbdulazizChairman, High Commission for the Development of Arriyadh

The economic indicators show that Arriyadh will witness growing investment opportunities during the coming decades, by God’s will and the persistent efforts exerted by the government of the Custodian of the Two Holly Mosques towards building the country’s economy throughout its various regions. The economic potential of Arriyadh City is evident in its human capabilities, highly qualified manpower, and financial capability, prosperity of the commercial and industrial sectors, investment portfolios, as well as the availability and diversity of natural resources. The High Commission for the Development of Arriyadh, led by its Chairman HRH Prince Salman Bin Abdulaziz, who closely follows the City’s future economic prosperity, has developed a strategic vision based on sufficient organizational frameworks and long term implementation of strategic plans, together with a keenness of considering economic factors and their employment in various urban, service and construction projects of Arriyadh City. This strategy is reflected in the City’s reality, through preparation of several investment opportunities based on exploiting new economic resources and development of existing ones, along with conducting in-depth researches and studies for new, promising economic sectors and developing pertinent regulatory benchmarks that facilitate launching investment projects in these domains. This can also be accomplished through providing support based on planning and participation, as well as provision of technical and incorporeal support, along with administrative facilities to any strategic economic project. These efforts have resulted in a number of investment portfolios in various areas, such as installation and operation of infrastructure, management of natural resources, conservation and protection of environment, development of service and tourism facilities, public transport, financial sector information technology and telecommunications. The efforts exerted at all levels and in all directions, to develop the City’s economy, aim at making Arriyadh a model City for investment, provided with potential successful and flourishing economy, an environment capable of attracting investment, enjoying all the features of a successful economy, capable to renew its investment atmosphere now and always God’s willing.

Abdullatif Bin Abdulmalik Alshaikh Member of the High Commission for the Development of Arriyadh President of Arriyadh Development Authority

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Contents

This Report 13

Kingdom of Saudi Arabia: General Information. 15

Arriyadh City: Ongoing Development & Promising Investment Opportunities 19

Theme One: Arriyadh City: General Features 20

Theme Two: Infrastructure in Arriyadh City 23

Roads & Communications 23

Airports 23

Ports & Railroads 24

Telecommunications & Information Technology 24

Post 24

Electricity 25

Water & Sanitary Waste 26

Theme Three: Economic & Service Sectors in Arriyadh City 27

Industrial Sector 27

Agricultural Sector 28

Trade Sector 29

Construction & Building Sector (Contracting) 29

Real Estate Sector 30

Insurance Services Sector 31

Education Sector 31

Tourism Sector 33

Health Sector 34

Financial & Banking Services Sector 35

Communications & Information Technology Sector 35

Theme Four : High Commision for the Development of Arriyadh & its Role in Developing the City 37

Introduction 37

Comprehensive Strategic Plan for Arriyadh City 37

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Theme Five: Arriyadh Chamber of Commerce & Industry & the Enhancement of Investment Climate

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Kingdom of Saudi Arabia & the Enhancement of Investment Climate 43

Theme One: The Kingdom’s Macro-Economic Indicators 44

State Budget 44

Gross Domestic Product (GDP) 44

Balance of Payments 46

Foreign Trade 46

Cost of Living Index 46

Wholesale Price Index 46

Per Capita Income 47

Labor Market Structure During 2005 47

Transportation & Telecommunications Infrastructure 47

Major Producing Sectors 48

Performance & Future Outlook of the Saudi Economy 49

Theme Two: Policies & Measures Supporting Investment in the Kingdom 52

Economic Activities Planned for Privatization 52

Economic Freedom & the Enhancement of Investment Climate 53

The Kingdom & World Trade Organization 55

Saudi Capital Market 57

Real Estate Investment and Companies 60

Development of the Banking System 61

Economic Cities 63

Theme Three: Rules & Related Investment Regulations in the Kingdom 66

Labor Law 66

Foreign Investment Law 66

Capital Market Law 67

Corporate Law 67

Commercial Register Law 69

Trade Agencies Law 69

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Contents

Trade Marks Law 69

Customs Law 70

Income Tax Law 71

Standards & Measures Law 71

Insurance Law 71

Social Insurance Law 72

General Environment Law 72

Theme Four: High & Related Major Investment Authorities in the Kingdom 73

Supreme Economic Council 73

Supreme Council for Petroleum and Minerals Affairs 74

Saudi Arabian General Investment Authority (SAGIA) 75

Supreme Commission for Tourism (SCT) 79

Capital Market Authority (CMA) 80

Communications and Information Technology Commission (CITC) 81

Royal Commission for Jubail and Yanbu 82

Saudi Organization for Industrial Estates & Technology Zones 83

Saudi ARAMCO 84

Saudi Basic Industries Corporation (SABIC) 85

Saudi Arabian Mining Company (MAA’DEN) 86

Saudi Ports Authority 87

Theme Five: Financial Services & Credit Funds in the Kingdom 88

Saudi Industrial Development Fund (SIDF) 88

Real Estate Development Fund (REDF) 90

Public Investment Fund (PIF) 90

Saudi Fund for Development (SFD) 90

Saudi Arabian Agriculture Bank (SAAB) 91

Saudi Credit Bank (SCB) 92

Human Resources Development Fund (HRDF) 93

Centennial Fund 94

Commercial Banks & Bank Financing 94

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Theme Six: Eighth Development Plan & Investment Outlook in the Kingdom 95

General Objectives & Strategic Basis of the Eighth Development Plan 95

Eighth Development Plan & Economic Policy 98

Eighth Development Plan & Private Sector Investments 98

Eighth Development Plan & Investment Requirements 99

Investment Opportunities in the City of Arriyadh 105

Theme One: Investment Opportunities Provided by Government & other Agencies 106

Arriyadh Development Authority 106

Public Pension Agency 110

Supreme Commission for Tourism 112

Saudi Electricity Company 112

Arriyadh Region Municipality 113

Arriyadh Chamber of Commerce & Industry 113

Theme Two: Investment Opportunities in Various Economic & Service Sectors 114

Industrial Investment Opportunities in Arriyadh City 114

Commercial Investment Opportunities in Arriyadh City 115

Real Estate Investment Opportunities in Arriyadh City 115

Educational Investment Opportunities in Arriyadh City 116

Health Investment Opportunities in Arriyadh City 118

Investment Opportunities in Personal Services 119

Statistical Tables 123

Addresses of Some Public & Private Authorities 132

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This Report

This edition of INVESTMENT CLIMATE IN ARRIYADH CITY, 2007, is published by Arriyadh Development Authority to provide local and foreign businessmen and investors with guidelines and information on policies and procedures, responsible agencies, and the range of investment opportunities that are available in Arriyadh City.

The 2007 edition comprises four parts. The first provides background information on the Kingdom of Saudi Arabia.

Part two presents background information on Arriyadh City, including infrastructure, economic and service sectors, and the role of Arriyadh Development Authority in the economic development of the City.

Part three discusses economic indicators for the Kingdom of Saudi Arabia, and policies and procedures at the national and local levels that enhance investment climate and promote investment opportunities, including the recent Labor, Foreign Investment and Capital Market rules and regulations. Further, this part covers government agencies in the investment domain, such as the Supreme Economic Council, Supreme Council for Petroleum & Minerals, Saudi Arabian General Investment Authority, Supreme Commission for Tourism, Communications & Information Technology Commission…etc., and also includes the agencies which provide funding and investment support, such as Saudi Industrial Development Fund, Real Estate Development Fund, Saudi Fund for Development, and other financing agencies. In addition, this part covers the investment outlook for the Kingdom, the Eighth Development Plan and the proposed investment opportunities covered by this plan.

Part four handles investment opportunities in Arriyadh which are provided by various public agencies such as Arriyadh Development Authority, Supreme Commission for Tourism and other agencies. Further, it includes information on investment opportunities in various economic and service sectors.

The INVESTMENT CLIMATE Report concludes with various statistical tables on Arriyadh, accompanied by a list of Websites and other useful information on the most important public and private sector organizations involved in investment activities in Arriyadh.

KINGDOM OF SAUDI ARABIA GENERAL INFORMATION

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The Kingdom of Saudi Arabia is an Arab Islamic country, applying Islamic Sharia law in its judicial system. The constitution of the Kingdom is based on the Holy Qura’n and the Sunna of the Prophet (peace be upon him).

The political system is based on absolute monarchy. The executive and legislative powers are exercised by the King and the Council of Ministers within the teachings of Islam. The Consultative Council was established to provide advice to the King and the Council of Ministers in matters of relevance to the Government and its policies. Regional Municipal Councils were also established (half of the members are elected) to participate in the decision making process.The King of the Kingdom and Prime Minister: The Custodian of the Two Holly Mosques, King Abdullah bin Abdulaziz Al-Saud.

Membership in International Economic & Trade Organizations The Kingdom of Saudi Arabia is a member in many trade, economic and international organizations, such as: 1. Organization of Islamic Conference 2. Arab League 3. Gulf Cooperation Council 4. Islamic Development Bank5. United Nations Organization6. World Trade Organization 7. Arab Monetary Fund8. Arab Investment Guarantee Corporation

9. Great Arab Free Trade Organization10. World Bank 11. International Monetary Fund

Administrative Regions (Provinces)The Kingdom consists of thirteen administrative provinces. Each province consists of a number of governorates. The total number of governorates in the Kingdom amounts to 43 of class A and 61 of class B. Capital: Arriyadh Main Cities: Makkah, Madinah, Jeddah, Dammam, and Taif Religion: Islam Official Language: Arabic

Geographic FeaturesLocation: The Kingdom of Saudi Arabia lies in the southernmost part of western Asia. It is bordered by the Red Sea from the West; Arabian Gulf, United Arab Emirates and Qatar from the East; Kuwait, Iraq and Jordan from the North and Yemen and Sultanate of Oman from the South.

Area: The Kingdom occupies about 80% of the Arabian Peninsula, with a total land area of around 2,250,000 square kilometers.

Terrain: There are various types of terrains in the Kingdom resulting from its vast geographical area. In the Western parts there is a narrow coastal plain paralleled by a mountainous chain sloping eastwards to the Arabian Gulf. There are also the Empty Quarter and Annufoud Deserts, which occupy the South Eastern and Northern parts of the Kingdom respectively.

Climate: The climate of the Kingdom varies from one region to another according to the type of terrain. In general, it is continental, i.e. hot during summer and cold during the winter, with a low level of rainfall. However, the climate is moderate in the Western and South Western highlands. In the central part of the Kingdom, the climate is dry and hot in summer and dry and cold in winter. The coastal areas are generally characterized by high degrees of humidity.

Population According to 2004 census(1)

Total Population 22.67 million

Population Growth Rate 2.9%

Distribution by Gender

Male 12.56 million 55%

Female 10.11 million 45%

Distribution by Nationality

Saudi 16.53 million 72.9%

Non Saudi 6.14 million 27.1%

Distribution by Age Groups

14 years or less 39.7%

15 – 64 years 57.9%

65 + 2.4 %

Population Density 10 / Km²

Distribution of Population by Provinces

Arriyadh 23%

Makkah 26%

Eastern Province 15%

Assir 8%

Madinah 6%

Others 22%

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Work Hours- Government Sector: 7:30 a.m. to 2:30 p.m. - Banking Sector: 9:30 a.m. to 4: 30 p.m. (Saturday to Wednesday)- Private Sector: Varies from one firm to another and from one place to another.

Official HolidaysBesides the weekends (Thursdays & Fridays), the following official holidays are customary:

- Eid-Al-Fitr Holdiays: From the 25th of Ramadan to the 5th of Shawal (*) - Eid-Al-Adha Holidays: From the 5th to the 15th of Dhil Hijja (*)

- National Day Holiday: Falls on 23rd of September.

Official TimeThe Kingdom’s official local time is three hours ahead of Greenwich Mean Time. (GMT)

CurrencyThe currency unit of the Kingdom is the Saudi

Riyal, which is divided into 100 Halalas. The main banknote denominations are: One riyal, Five Riyals, Ten Riyals, Twenty Riyals, Fifty Riyals, One Hundred Riyals, Two Hundred Riyals and Five Hundred Riyals. With respect to coins, the main denominations are: One Riyal - Fifty Halalas - Twenty Five Halalas - Ten Halalas - Five Hallalas.

- Custom duty on most imported items is 5%.

Foreign Exchange Control There is no restriction on currency transfer to or from the Kingdom. The exchange rate of the Saudi Riyal is SR 3.75 per one US Dollar.

Measures and Weights The Kingdom adopts the Metric System in Measures and Kilograms in Weights.

Power VoltageBoth 110 Volts and 220 Volts are used. International Telephone Code

+ 966 + Area Code (Riyadh 1, Jeddah 2, and Dammam, Dhahran and AlKhobar is 3).

Population According to 2004 census(1)

Total Population 22.67 million

Population Growth Rate 2.9%

Distribution by Gender

Male 12.56 million 55%

Female 10.11 million 45%

Distribution by Nationality

Saudi 16.53 million 72.9%

Non Saudi 6.14 million 27.1%

Distribution by Age Groups

14 years or less 39.7%

15 – 64 years 57.9%

65 + 2.4 %

Population Density 10 / Km²

Distribution of Population by Provinces

Arriyadh 23%

Makkah 26%

Eastern Province 15%

Assir 8%

Madinah 6%

Others 22%

(*) Duration of holidays in the private sector varies from one firm to another.(1) Council of Chambers of Commerce & Industry, 4th Issue, July 2005

ARRIYADH CITY:ONGOING DEVELPPMENT ANDPROMISING INVESTMENT OPPORTUNITIES

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History of Arriyadh (1)

Arriyadh is the plural of the Arabic word

“Rawdah”, which means “Garden” or

“Meadow”. The city might have taken

this name due to the fact that it was one

of the few green areas amid the desert.

Historians indicated that it was a vast area

with numerous farms and water springs. The

City has risen on the ruins of (Hajar) ancient

city which was on top of limited altitude

highlands in the middle of a small basin on

both sides of Wadi Watr (Bathaa), a tributary

of Wadi Hanifa. The name “Arriyadh” became

known about 300 years ago.

Economically, trade and animal grazing

acquired special importance in Najd

Highlands, in the centre of which Arriyadh

is located. The City used to be a commercial

center linking East-West and South-North

areas of the Arabian Peninsula. Politically,

Arriyadh played a prominent role in the

history of Najd. It was the capital of the area

during the era of Imam Turki Bin Abdullah,

upon the rise of the second Saudi State in

1824. Arriyadh regained its glory when it

was restored by the late King Abdulaziz on

January 15, 1902.

Location

Arriyadh occupies a location derived from

the Kingdom’s geographical location amid

Theme One:

Arriyadh City: General Features

the world’s continents. This location acquires

another dimension as it lies in the center

of the Kingdom, at the Eastern part of the

heart of the Arabian Peninsula. It lies within

Latitude 38.24°ْ North and Longitude 43.46°

East and is about 600m above sea level.

Area

Within a period of half a century, Arriyadh

City was transformed from a small village

surrounded by walls into a modern city.

The developed area of Arriyadh City is

about 1,000 square kilometers. The City

includes 13 municipalities in addition to

Dereya District as well as 209 quarters(2).

This reflects the tangible expansion the

City witnessed after exceeding its walls and

fences to become one of the largest three

metropolitans in the Kingdom, together

with Makkah and Jeddah metropolitans and

those of Dhahran, Dammam and AlKhobar

in the Eastern Region.

Climate

Arriyadh climate is marked by very hot

temperatures in summer and cold temperatures

in winter, with low humidity throughout the

year, particularly in the summer season; the

temperature varies greatly between night

and day. In summer the highest average

temperature ranges between 40 ْc - 43ْc. The

rate of humidity ranges between 10% to 13%. In

winter, the weather is very cold with the highest

temperature ranging between 20 ْc & 28 ْc and

the lowest temperature between 8 ْc and 14 ْc.

Sometimes, the temperature may decline to

minus two degrees, while the humidity ranges

between 40% & 49%. Rainfall ranges between

10 cm to 13.1 cm (around four inches) (3).

(1) Arriyadh City website www.arriyadh.com(2) Arriyadh Development Authority, Investment Climate, 2005(3) CDSI, Central Department. of Statistics & Information, Statistical Yearbook, Issue 41, 2005

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Composition of Population (1)

Arriyadh is one of the world’s fastest

growing cities, including population

growth, which witnessed consecutive

jumps over the last ten years, at a rate of

4.2% during the period 1990 to 2004.

According to population projections

for 2006, carried out by Arriyadh

Development Authority, the population

of Arriyadh stands at about 4.5 million

(including Dereya, Erqa, Oyaynah,

Jibailyah and Hair Governorates).

The Saudi population makes up 66%,

while non Saudis represent 34% of total

population. Male and female population

represents 53% and 47% respectively of

the total number of Saudi population.

Non-Saudi male and female population

makes up 62% and 38% respectively

of the total number of non-Saudi

population. The median age is 18 years

for Saudis and 30 years for non-Saudis.

The percent of married population is 73%

of total population aged 22 years and

above. Arriyadh population is expected

to reach 7.2 million in 2024.

Population Pyramid

Young people dominate Arriyadh

population. Population under age 15

constitutes about 40% for Saudis and

23% for non-Saudis, while the age of

population over 60 years does not exceed

20%. It is noteworthy to know that the

Saudi population represents 63.32% of

total population in the ages ranging

between 15 to 60 years while non-Saudis

in the same age group represent 75% (2).

Gender

Saudi residents of Arriyadh are characterized by high

fertility rates and almost equal number of males

and females. Males represent 53% compared to 47%

for females. Age distribution is almost consistent

between males and females with more consistency

within younger population and less consistency within

older population. As for non-Saudis, the percentage

of males is higher as it accounts for 62% compared

75+

70 - 74

65 - 69

60 - 64

55 - 59

50 - 54

45 - 49

40 - 44

35 - 39

30 - 34

25 - 29

20 - 24

15 - 19

10 - 14

05 - 09

00 - 04

30

00

00

20

00

00

100

00

0

0 100

00

0

20

00

00

30

00

00

male

Female

Saudi Population Pyramid (3)

150

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100

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0

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0

0 50

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0

100

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0

150

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male

Female

Non- Saudi Population Pyramid (4)

(1) ADA, Arriyadh Development Authority- Population Estimates Study for Arriyadh City, for Period 2004 to 2024 (2) ADA, Arriyadh Development Authority- Population Study for Arriyadh City, 2004 (3- 4) ADA, Arriyadh Development Authority Investment Climate for Arriyadh City, 2005

75+

70 - 74

65 - 69

60 - 64

55 - 59

50 - 54

45 - 49

40 - 44

35 - 39

30 - 34

25 - 29

20 - 24

15 - 19

10 - 14

05 - 09

00 - 04

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with 38% for females (1). The distribution

and classification of Non-Saudis with

respect of age and gender is explained by

the nature of expatriates arriving to work.

Households

Arriyadh witnessed a tangible increase

in the number of Households. There are

two types of households: nuclear family

consists of couples and their children,

and extended family consists of couples

and relatives. The previous era, since

1986, reflected a change in the pattern of

Saudi households, when the single family

became dominant, representing 75%

in 2004, compared to 67% in 1996. The

percentage of extended family reached

21% in 2004.

The average household size in Arriyadh is

7.1 for Saudis and 4.9 for non-Saudis. The

average number of household members to

total population (Saudis and non-Saudis) is

6.3 persons (2). The number of households

in Arriyadh is estimated to reach 940,000

up to 2007 (3).

Labor Force

Population studies, conducted by

Arriyadh Development Authority in

2004(4) regarding labor force in Arriyadh

City, show the following indicators:

Total Work Force

The total number of workers at the age

of 16 and above is about 1.4 million of

whom 607,847 are Saudis, representing

32% of the labor force, compared with

816,859 of non-Saudis representing

73%. The government sector employs

32% of workers while the private sector

employs 68%. The percentage of Saudi

workers in the government sector is 93%

compared to 25% in the private sector. The

unemployment rate among Saudi males is

10%. The services sector absorbs 44% of

total workers in the private sector, followed

by construction sector (24%), trade sector

(22%) and the industrial sector 10% (5). The

number of jobs that need be provided up

to 2024 is 760,000, by an annual rate of

42,300 jobs (6)

Per Capita Income

The findings of the population study

conducted by Arriyadh Development

Authority for 2004(7) indicate that the

income of Saudis in Arriyadh City increased

by 35% whereas per capita income from

all sources reached SR 100,000 per year

compared to SR 74,000 in 1996. The non-

Saudis income grew by 122% to reach

an average of SR 24,000 compared to SR

12,000 in 1996 (8).

Cost of Living

The general index of the cost of living

standard for all population of the Kingdom’s

cities including Arriyadh City increased by 1.1

points according to 2004 / 2005 census, to

reach 100 points compared to 98.9 points in

the previous year (9). This increase in the general

index of the cost of living is attributed to the

changes in the main expenditure groups,

(some increased and some decreased) such

as increase in foods groups (3.5%), increase in

groups of other goods services (2%), while it

decreased in the remaining groups between

-0.1% to -2.3% (10).

(1) CDSI, Central Department. of Statistics & Information, Statistical Yearbook, Issue 40, 2004(2) ADA, Arriyadh Development Authority, Population Study for Arriyadh City, 2004 (3) Arriyadh City Website: www.arriyadh.com(4) ADA, Arriyadh Development Authority Population Study for Arriyadh City, 2004 (5) Arriyadh City Website: www.arriyadh.com (6) Ibid

(7) ADA, Arriyadh Development Authority Population Study for Arriyadh City, 2004. (8) Ibid(9) CDSI, Central Department. of Statistics & Information, Statistical Yearbook, Issue 41, 2005 (10) Ibid

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Roads and Communications

Arriyadh Development Authority has developed a

strategy for the development of the transport system

within the framework of the comprehensive strategic

plan in the City. This strategy encompassed several

elements, including development of the road network

through upgrading existing elements and addition of

new ones, along with determination of development

priorities to meet the existing and expected transport

requirements. The total length of main roads reached

320 km, 500 km for main arteries, the number of

main crossings reached 44, while the number of

independent crossings reached 54. Many elements of

the road network were implemented during the first

five years of the five-year plan to implement roads at a

total cost of SR 2.6 billion, which ends by 2006. Work

has started on the second five-year plan. It will include

the implementation and improvement of 28 main

roads during the period 2007 – 2012 (1).

Arriyadh’s various parts are connected by a modern

roads network that includes loop roads, ring roads, and

expressways, in addition to arterial roads. Both “King

Fahad” and Makkah” Expressways represent the two main

hubs of Arriyadh City. The first connects North and South

of the City while the second connects the East and West

parts. A circular expressway around the city connects the

outskirts of the city with the main roads. Arriyadh is linked

with the various parts of the Kingdom through a network

of expressways, such as (Arriyadh- Dammam) leading

to the Kingdom of Bahrain via King Fahad Causeway,

Arriyadh – Alhassa Expressway, leading to Qatar, UAE

and Oman, Arriyadh – Taif – Jeddah, Arriyadh – Qassim,

Arriyadh – Hafr Al-Batin – Qurryat, links with International

roads leading to Jordan and Arriyadh – Wadi Dawasir

– Najran extending to Abha, Jizan and on to Yemen.

Airports

Arriyadh City has one international airport (King Khalid

International Airport) linking it with the outside world

and with other airports throughout the Kingdom. The

airport is 35 km North of Arriyadh City and comprises one

Royal Terminal, three Commercial Terminals and a fourth

Auxiliary Terminal. The total number of departure and

arriving flights reached 70,970 flights in 2004 / 2005,

an increase of 5.8% which represents 28.5% of total

commercial flights Kingdom wide (2).

Main Indicators of Air Transport at King Khalid International Airport 2004 - 2005 (3)

Total number of passengers (Arrivals) International flights 5,308,000

Total number of passengers (Departures) International flights 5,225,000

Total number of passengers (Arrivals) domestic flights 4,276,000

Total number of passengers (departures) domestic flights 4,287,000

Cargo traffic (Arrivals) on International flights (tons) 117,910

Cargo traffic (Departures) on International flights (tons) 73,194

Cargo traffic (Arrivals) on domestic flights (tons) 92,017

Cargo traffic (Departures) on domestic flights (tons) 68,080

Mail traffic (Arrivals) on International flights (tons) 1,939

Mail traffic (Departures) on International flights (tons) 7,696

Theme Two:

Infrastructure in Arriyadh City

(1) ADA, Arriyadh Development Authority, Transport Unit (2) CDSI, Central Department. of Statistics, Statistical Yearbook, Issue 41, 2005(3) Ibid

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The private sector participates in many services related

to airport services. A private domestic airline (Al-Khyalah)

was established in 2005. In addition, two other domestic

airlines (NAS Airlines and SAMA Airlines) were established.

The private sector also contributes in maintenance of

facilities, making use of airport buildings and arrival of

passengers in providing several services such as banking

services, sale of goods, auto rental, hotels, etc.

Ports and Railroads

Arriyadh City is linked with the Eastern Province (Dammam

and Al-Hassa) via a 556 km long railroad and a new one

with a length of 449 km. The Saudi Government Railroad

Organization (SGRRO) provides passenger and goods

transport services to Arriyadh Dry Port to become a

practical extension to Dammam Port. Customs clearance

and storage processes are carried out in this Dry Port.

This railroad is served by 57 locomotives and 2,225

different cars for passengers and goods. Arriyadh City

has a passenger station, which has arrival and departure

terminals, where various services are provided. The

number of passengers arriving and departing from and to

Arriyadh Station in 2004 reached 435,000, representing

39.3% of total arriving and departing passengers in

all Kingdom’s stations, where their number exceeded

1.1 million. The volume of goods handled among all

stations including Arriyadh Dry Port reached more than

2.5 million tons (1). According to SGRRO’s strategic plans,

new lines are expected to operate between Arriyadh and

Jeddah, and Riyadh / Jeddah and Makkah. The private

sector will contribute to implementation of these new

projects.

Communications and Information Technology

Arriyadh City hosts the headquarters of Arab Satellite

Institution (Arabsat). Various telecommunications

services are provided through land lines, mobile

telephones, and data transmission services, etc., in

Arriyadh City by Saudi Telecom Company (STC) and

Etihad Itisalat (Mobily) Company (a Saudi – UAE Joint

Stock Company).

The number of operating land lines in Arriyadh City

reached 1.1 million in 2005, while the number of

roaming and mobile telephone lines reached. 1.1

million. Since 2002, the number of mobile telephones

increased significantly, particularly with the launching of

prepaid mobile cards (Sawa) by the STC, which started

in the first quarter of 2002. Besides, a reduction on

the establishment fees for AlJawal gradually, as well as

reduction of call rates per minute to 35 Halalas in case of

the monthly subscription fee of SR 45 and to 45 Halalas

in case of a monthly subscription fee of SR 35 (2).

Other services are also provided such as Friends &

Relatives Service, Qitaf Service and the services provided

by Etihad Itisalat (Mobily), which was awarded the

implementation and service contract in the last quarter

of 2004, such as free establishment service, additional

minutes and the various reductions on prepaid Mobily

cards.

Arriyadh Development Authority approved on November

28, 2005 (3), the establishment of a Communications

and Information Technology City on an area of 800,000

m2 on land owned by the Public Pensions Agency.

Post

The Saudi Post Corporation (SPC) provides all types of

postal services in Arriyadh City, such as Parcels Post,

Express Mail Service (EMS), Commercial Mail, Promotional

Mail, and Postal Agencies. SPC also supervises mail services

provided to customers. The private sector contributes in

providing these services through investments in Postal

Agencies, which provide mail services to citizens. The

number of Post Offices in Arriyadh, according to 2004

statistics, reached 93 Main Offices and 16 Branch Offices

while the number of Postal Agencies reached 36 as well

as 33 private sector Postal Agencies and 955 surface and

roaming mail points.

The number of Street Mail Boxes reached 561 and the

(1) SGRRO, Saudi Government Rail Road Organization, Annual Report, 2004 (2) STC, Saudi Telecom Company, Annual Report, 2004(3) Pension Magazine, Issue 15, 2006

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number of subscribers post office boxes reached more

than 130,000 in addition to 59,500(1) Postal Agencies

boxes. Since early 2006, SPC started offering home mail

delivery services through subscription to this service.

The mail box is placed in a location determined by the

subscriber. Furthermore, mail services are provided by

private companies such as DHL, ARAMEX, FEDEX, and UPS

and others, which render Express Mail Service in Arriyadh

City domestically and internationally.

Electricity

Six electricity generation plants are operating in Arriyadh

from among nine plants affiliated to Saudi Electricity

Company in the Central Region which supervises

the provision of electricity services in the City. These

services are provided to customers per tariffs based on

consumption segments system.

The total number of subscribers in Arriyadh City in 2004,

reached about 1.5 million, or 32% of the total number

of subscribers in the Kingdom (2). Following are the most

important projects implemented by the Central Region

Electricity Company during the said year:

• Transmission projects at the cost of about SR 2,542

million

• Distribution projects at the cost of about SR 486

million

• Generation and support projects at the cost of more

than SR 355 million (3)

Electricity Consumption Tariff (Halalas) (4)

Monthly Consumption

Brackets (KW/HR)Residential Commercial Government

Industrial Agricultural

Hospitals, Clinics, Private Institutes

and Schools

Mosques and Benevolent

Societies

0-1000 5 5 5 12 5

1001-2000 5 5 5 12 5

2001-3000 10 10 10 12 10

3001-4000 10 10 10 12 10

4001-5000 12 12 12 12 10

5001-6000 12 12 12 12 10

6001-7000 15 15 15 12 12

7001-8000 20 20 20 12 12

8001-9000 22 22 22 12 12

9001-10000 24 24 24 12 12

Over 10000 26 26 26 12 12

Electricity Service Connecting Fees (5)

Circuit Breaker (Ampere) Monthly Tariff (SR) Service Connecting Fees (SR)

60 10 1,380

100 15 2,800

200 21 11,400

300 22 18,800

400 25 26,600

Over 400 30 26,600+25 for any extra kv ampere

(1) SPC, Saudi Post Corporation, As Stated in the Statistical Yearbook, Issue 41, 2005(2) SEC, Saudi Electricity Company Annual Report, 2004 (3) Ibid(4) SEC, Saudi Electricity Company Website: www.se.com.sa (5) Ibid.

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Number of Subscribers & Electricity Consumption Method in Central Region 2003 - 2004(1)

Description 2003Thousand

2004Thousand

(%)Growth

Rate

No of Customers 1,372 1,439 4.9

Generated Energy (MW/HR) 30,692 32,191 4.9

Imported Power (MW/HR) 12,975 12,271 -5.4

Available Power (MW/HR) 43,129 44,763 3.8

Sold Power (MW/HR) 39,789 41,326 3.9

Average Sold Power sold to customers this year (MW/HR) 28,99 28,71 -1

Peak Synchronized Load at 15:00 hours on (6/9/1998) (MW/HR) with Al Hawyah Plant 6,057 - -

Water & Sanitary Waste

The General Water Directorate in Arriyadh Province

supervises provision of potable water and sanitary

waste water services in the province. It exerts on-

going efforts to meet the growing needs for these

services in the various development sectors. Drinking

water is delivered to the city from two main sources.

The first is from desalinated seawater through

special transmission pipes from desalination plants

in Jubail on the Arabian Gulf, which represents 60%

of water feeding the city. The second source is from

local artesian wells making up 40% of the total water

supply. The cumulative number of government wells

for different purposes up to 2004 reached 2,479

wells in addition to 49,565 licensed private wells.

The volume of water consumed in Arriyadh city in

2004 reached 1.7 billion m3 and the total number

of subscribers reached 313,390 (2) during the same

year. The General Water Directorate adopts a

program for operation and maintenance of sanitary

water network in Arriyadh. This program covers

various issues such as collection, treatment and

purification of sanitary waste water to contribute in

the protection of the environment and public health

against pollution hazards and making use of treated

waste water for agricultural and industrial purposes.

There are three treatment plants in Arriyadh with

a capacity of 403,000 m3/day. The total length of

sanitary waste network in Arriyadh reached more

than 2,500 km in 2004, with diameters ranging

between 200 mm to 2,900 mm connected to more

than 161,000 residential sanitary connections (3).

Water is provided to subscribers against a tariff

based on consumption segments.

Water Consumption Tariff in the Kingdom (4)

Monthly Consumption (CM ) Tariff (SR /CM)

1-50 0.1

51-100 0.15

101-200 2

201-300 4

Over 301 6

(1) Saudi Electricity Company Website: www.se.com.sa (2) General Water Directorate in Arriyadh Region: Informative Bulletin(3) Ibid(4) Ministry of Water & Electricity, The Ministry's Web Site for Arriyadh www.riyadhwater.org

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in the Southern outskirts of Arriyadh City. It is

composed of four phases. The first phase has an

area of 5.08 million m2. The second phase has

an area of 6.92 million m2. The first part of the

third phase has an area of 1.3 million m2 and

the second part (under development) has an

area of 2.5 million m2. The fourth phase (under

development) has an area of 891,000 m2, in

addition to an area of 2.1 million m2 allocated

for housing. There are 588 producing factories (2)

in the Second Industrial City. Factories operating

in Arriyadh in 2005 constitute more than 35% of

total factories in the Kingdom, totaling 1,229, with

total gross funding valued at SR 37,097 million,

employing 123,190 workers. These factories are

engaged in producing various products, such as:

344 metal products, 258 chemicals and plastics,

163 building materials, ceramics, chinaware and

glass, 116 foodstuff and soft drinks, 85 textile

and ready made clothes, 85 paper, printing of

publishing activities, 82 timber and related

products, 65 basic metals industry and 31 various

other industries (3).

Arriyadh City also houses Yamama Cement Factory

with an estimated production capacity of 3.6

million tons in 2005, an increase of 52.3 thousand

tons over the previous year. The production of

this factory accounts for 13.7% of total cement

production in the Kingdom (4).

The Saudi Industrial Development Fund (SIDF)

finances industrial projects through provision of

loans to various projects. The total number of

projects financed by SIDF up to 2004 reached 663

projects with a total value of about SR 11.4 billion,

representing 34.9% of the total 1,899 industrial

projects financed by the SIDF Kingdom wide. The

number of new industrial projects financed by

the SIDF, classified by main industrial sectors in

Arriyadh City during the same year, reached 16

Industrial Sector

Arriyadh City witnesses growing growth rates

higher than rates reached in other cities

considering that it is the Political, Commercial &

Financial Capital of the country. Several factors

stand behind the rising economic capabilities of

Arriyadh City, such as higher population growth,

increasing job opportunities that sustain the

growth of demand on goods and services, as

well as its unique location amid a large regional

market represented in the GCC States and other

neighboring countries. Arriyadh has also become

a financial center hosting the headquarters of

commercial banks operating in the country, the

Saudi Arabian Monetary Agency (SAMA), the

Capital Market Authority (CMA) in addition to

other government credit and financial institutions.

These factors play a significant role regarding

the progress achieved in the City during the last

three decades in the various economic sectors,

as industry and others. The private sector is

assumed to have a major and effective role in

the development of the industrial sector and the

growing number of producing factories.

Arriyadh City houses two Industrial Cities equipped

with various services and facilities. Both Cities

are supervised by the Ministry of Commerce and

Industry (1). The total area of the first Industrial City,

which lies in the center of Arriyadh City, is 451,000

m2 and includes 51 producing factories. The second

Industrial City, with an area of 18.8 million m2, lies

Theme Three:

Economic & Service Sectors

in Arriyadh City

(1) 258,000 Km² was allocated in Arriyadh Region for Sudair Industrial City, which is still in the design & study phase(2) Ministry of Economy & Planning, Statistical Yearbook, Issue 41, 2005 (3) Ministry of Commerce & Industry, Data Center Report, 2006(4) Figures from Statistical Yearbook, Issue 41, of Central Department of Statistics and Information, 2005

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Animal Resources in Arriyadh Region 2004 (3) (Thousand heads)

Description Kingdom Arriyadh (%)

Camel 283 99 34.98

Sheep 8,047 1,846 22.94

Goat 2,372 400 16.86

Cattle 346 164 47.40

Poultry 474,777 65,556 13.81

Total 485,825 68.065 14.01

Agricultural Subsidies Allocated for Agricultural ProjectsIn Arriyadh 2004 (SR Thousand) (4)

Field Arriyadh Kingdom (%)

Engines and Pumps 51,418 145,611 35.3

Machinery 27,820 97,467 28.5

Poultry Breeding Equipment 1,1283 1,966 65.3

Transport of Imported Cattle 1,189 1,189 100

Total 81,710 246,233 33.2

projects distributed between consumer, chemical

and engineering products, with a total finance

value of SR 842 million, constituting 37.2% of

the total industrial projects financed, 43 projects

and 25.6% of the value of total approved loans

Kingdom wide (1).

Agricultural Sector

The Agricultural sector in Arriyadh Province is

one of the major important sectors, constituting

35% of the Kingdom’s agricultural production.

Arriyadh occupies a central location between

the main agricultural areas in the Kingdom. This

makes the City a central market and a regional

center for distribution of agricultural products,

particularly as it is near Al-Kharj Governorate,

which is considered one of the largest agricultural

regions in the Kingdom. 2004 statistics indicate

that the total arable land in Arriyadh Province

is 314,000 hectares of which 129,900 hectares

are planted with all types of grain with total

production of 624,000 tons. 56,600 hectares

are planted with vegetables, (both opened and

covered), with a production volume of 1,235,900

tons. The land area for fodder production is

84,700 hectares, with a production volume of 1.3

million tons. The land area for fruit production is

43,000 hectares with a total production volume

of 266,000 tons (2).

Animal resources and its related products

(1) Saudi Industrial Development Fund Annual Report, 2004, as Reported in Arriyadh Economy, 14th Issue, 2005 (2) Ministry of Agriculture, Agricultural Statistics, 2004(3) Ibid (4) Saudi Arabian Agriculture Bank, Annual Report, 2004

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represent a significant part of the agricultural

sector in Arriyadh region. Animal resources include

cattle, goats, sheep, camel, poultry and related

products including milk, eggs, honey etc.

Arriyadh City is considered one of the largest

producing regions of the Kingdom for milk and

its derivatives. It houses 21 projects with a total

production of 645.4 million liters per year, or 74% of

the Kingdom's production. There are also specialized

apiaries with a production of 26,692 kg of honey

per year, or 15% of the Kingdom's production (1).

The government encourages the private sector

to expand its investment in agriculture industries

for its role in contributing to the national income,

providing job opportunities and diversification of

the economic base, by providing several agricultural

subsidy programs, which contributed to the growth

and development of the Agricultural Sector, such as

subsidies aimed at encouraging the private sector to

enter into agricultural investment. There are several

agencies which ensure such subsidies, such as the

Ministry of Agriculture, which provides subsidies

for cattle; the Agricultural Bank which provides

subsidies for various agricultural inputs, such as

pumps and agricultural machinery and equipment,

and also the Grain Silos and Flour Mills Organization

that purchases wheat from farmers at encouraging

prices in addition to other subsidy programs such

as agricultural researches, guidance and services,

credit facilities along with streamlining technology

transfer and adaptation measures.

Trade Sector

The trade sector in Saudi Arabia witnessed real

growth during 2004. The preliminary GDP results

by type of activity indicated that growth of this

sector was 4.8 % and 7.9 % nominal growth (2). The

contribution of the wholesale, retail, restaurants,

and hotels in GDP at 2004 current prices reached

6.2%. The General Index for wholesale prices

increased from 117.2 points in 2003 to 120.8 points

in 2004 and to 124.2 points in the first quarter of

2005.

The percentages of monthly expenditure on various

goods reflect the importance of the trade sector

in Arriyadh City which is considered a significant

commercial center in the Kingdom and the

Province. The monthly expenditures, in Arriyadh

City, on consumer goods are estimated at 26% for

foodstuff, 8% for clothes and 11% for furniture(3).

With respect of licenses for stores, the issue of

which is supervised by Ministry of Municipal & Rural

Affairs (MOMRA) municipalities. The total number

of new and renewed licenses issued by Arriyadh

Region Municipality reached 56,020, or 25.4 % of

the total licenses issued in the Kingdom, of which

13,791 were for foodstuff, 1,073 for supermarkets

and 2,968 for commercial firms (4).

The number of Commercial Registers (CRs), the issue

of which is supervised by the Ministry of Commerce

and Industry and its branches, reached 176,424 up

to 2004 of which 8,556 CRs were issued in 2004 (5).

Construction & Building Sector (Contracting)

The Building and Construction Sector is crucial to

the development and support of infrastructure

and other productive sectors. During the past

five years, the Building and Construction Sector

experienced remarkable growth, resulting in the

value added of the sector which has grown from SR

41.7 billion in 2000 to SR 54.8 billion in 2005, and

contributed 4.8% of GDP in 2005, (current prices),

making the sector the fifth largest economic

activity among contributors to GDP during the

same year, at producers value (6).

The objective of the 8th Development Plan is

to achieve an annual growth rate of 6.7% in the

(1) Ministry of Agriculture, Agricultural Statistics, 2004(2) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report, 2005(3) CDSI, Central Department of Statistics & Information Cost of Living General Index, 2005(4) MOMRA, Ministry of Municipal & Rural Affairs, Municipalities Statistics, 2004(5) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 40, 2004(6) MOMRA, Ministry of Municipal & Rural Affairs, Department of Economic Studies

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sector, in order to increase the private sector’s role in the development of the Building and Construction

Sector, to implement the building and operational projects of the 8th Development Plan (1).

Buildings licenses issued in Arriyadh Region reached 9,606 in 2004 or 21.48% of total licenses issued in

the Kingdom which were 44,721 licenses. Most building licenses which were issued by Arriyadh Region

Municipality were intended for construction of residential and commercial buildings, reaching 8,483

licenses, representing 88.3% of total licenses issued in 2004 (2). State-of-the-art, distinguished buildings,

skyscrapers, sophisticated malls, and nicely designed buildings constitute the majority of new buildings

in Arriyadh City in recent years.

A large number of Saudi, mixed and foreign construction companies work in the construction field in

Arriyadh City. They cover all the sub-sectors of construction including, buildings, bridges, residential

and commercial buildings, construction of factories and maintenance of facilities. Arriyadh Building and

Construction Sector is further enhanced by the existence of more than 194 licensed factories, which

produce building materials, China wares, ceramics and glass (4). The Sector is also sustained by the

concessionary loans provided by the Real Estate Development Fund to citizens.

Real Estate Sector

The Real Estate Sector’s contribution to the GDP was 8.4% in 2005 in current prices (6). This Sector is

supported by the Real Estate Development Fund which granted special loans to Arriyadh City totaling

SR 392.7 million covering 1,309 loans in 2004. The Building and Construction activity is an important

component of the Real Estate Sector.

Subdivided Vacant land constitutes 44.5% of total land area in Arriyadh City, whereas un-subdivided

developed vacant land constitutes 27%.

The Comprehensive Strategic Plan for Arriyadh City has set up a number of general objectives and policies

to develop the housing sector to accommodate the City’s future demands. The City’s housing needs

Arriyadh City Construction Licenses – 2004 (3)

Type of building Number %

Residential / commercial 8,483 88.31

Industrial / commercial 868 9.04

Mosques / educational buildings/ medical 255 2.65

Government social buildings - -

Total 9,606 100

Classified Contractors Arriyadh Region 2005 (5)

Year Kingdom TotalArriyadh Region

Number % to Kingdom

2003 328 185 56.40

2004 332 183 55.12

2005 392 190 48.35

(1) Ministry of Economy & Planning, Eighth Development Plan, 2005 - 2009(2) CDSI, Central Department of Statistics & Information Statistical Yearbook, Issue 40, 2004 (3) MOMRA, Ministry of Municipal & Rural Affairs, Municipal Statistics, 2004 (4) CDSI, Central Department of Statistics & Information Statistical Yearbook, Issue 40, 2004(5) MOMRA, Ministry of Municipal and Rural Affairs, Classification of Contractors Agency, 2005 (6) CDSI, Central Department of Statistics & Information Statistical Yearbook, Issue 41, 2005, Preliminary Data

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are estimated at 495,000 units, at an annual rate of 27,500 units. This represents a good investment

opportunity for the private sector in the areas of building and construction and associated demand for

health, education and living services (1), etc.

Insurance Services Sector

The Saudi Insurance Sector witnessed significant developments in 2004, whereby Royal Decree M / 32,

dated July 13, 2003, was issued approving Cooperative Insurance Companies Control Law. The decree

appoints Saudi Arabian Monetary Agency (SAMA) to control and supervise the insurance and re-insurance

companies and the activities of entrepreneurs working on insurance related activities.

The By-Laws for the Cooperative Insurance Companies Control Law was issued on June 6, 2004. SAMA

emplaced licensing procedures for insurance and re-insurance companies, and control and supervisory

requirements, etc. Insurance business covers different areas, including medical, auto, aviation, energy,

fire, engineering, goods and miscellaneous insurance.

Approval to establish a number of insurance companies, as joint-stock insurance companies, was granted

in 2006.

Education Sector

Education in Arriyadh is provided by public and private sectors at the level of general

education for boys and girls of different grades, or at the level of technical education and

vocational training and higher education. Enrollment rate within the age category of 6 – 22

years in different educational levels (primary to college) reached 92%. This reflects a good

improvement compared to 88% in 1996. Rate of illiteracy was reduced from 11.5% in 1996 to

8% in 2006 (3).

- General Education

The three phases of general education in Arriyadh City (primary, intermediate and secondary) are under

the supervision of the Ministry of Education. In 2005 a total of 421,000 male students were enrolled in

government schools in Arriyadh in all educational phases, from kindergarten, primary, intermediate to

secondary, while the total number of female students reached 396,288 (4). It is worth mentioning that

private schools accommodate 15% of the total number of enrolled students.

Arriyadh City Insurance Services as of End of 2004 (2)

Type of business Number Kingdom % to Kingdom

Companies 32 62 32.65

Brokers/underwriters 15 31 15.31

Consulting Bureaus 0 1 0

Insurance operation audit bureaus 3 4 3.06

Total 50 98 51.02

(1) ADA, Arriyadh Development Authority, Analytical Study For Land Use Survey in Arriyadh City 2005(2) SAMA, Saudi Arabian Monetary Agency , 41st Annual Report, 2005(3) ADA, Arriyadh Development Authority, Household Survey 2004 (4) Web site of the Ministry of Education, www.moe.gov.sa

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management. As of 2005 there were 10,874

students enrolled in these colleges (3). GOTEVOT

also supervises Secondary Institutes, of which

there are six Governmental Institutes in Arriyadh;

two industrial, one commercial, one for technical

controllers and two agricultural. GOTEVOT also

supervises vocational training centers which prepare

national workforce as electricians, auto mechanics,

carpenters, welders, sewage networks, general

mechanics, sewing, printing, etc. It also supervises

Private Sector Institutes & Training Centers and

grants operating licenses. These Institutes confer

upon graduate students post intermediary and

post secondary school diplomas, or attendance

certificates to those who attended medium or short

period training courses in computers, commercial

sciences, electronics, and others. As of 2004,

there were 266 institutes and training centers in

Arriyadh, of which 65 were training institutes, 183

training centers, and 18 commercial and technical

controllers units. With respect to private training

facilities in Arriyadh, in 2005, there were 36

technical training institutes, 228 training centers,

and 17 secondary technical institutes (4).

Both Saudi Commission for Health Specialties and

Ministry of Health supervise a number of health

institutes. The Council of Ministers Resolution

No. 3108/MB dated April 10, 2005, assigned the

responsibility of private training facilities for women

to the General Directorate for Private Training. There

are 23 private training facilities for women Kingdom

wide, of which 20% are in Arriyadh City (5).

- Universities

Three of the largest Government universities in

the Kingdom are located in Arriyadh, namely,

King Saud University, Imam Mohammed bin Saud

Islamic University, where each has an integrated

university city with state-of-the-art facilities, in

addition to Arriyadh University for Women, founded

at the beginning of 2004, which was originally the

Teachers’ College. There are also a number of private

universities, namely Prince Sultan University, Arab

Open University, Al-Faisal Specialized University,

College of Dentistry and Pharmacology, and Al-

Yamamah College, in addition to Prince Nayef

Security University, which is of government nature.

These universities and colleges offer academic

programs of different disciplines, i.e. Sharia,

Medicine, Engineering, Management, Technology

and Social Sciences. They confer Diplomas, Bachelors,

Masters and Doctoral degrees. These universities

accept both male and female students. 60,868

students were enrolled in King Saud University in

2005 and 28,000 students in Imam Mohammed bin

Saud University, in Arriyadh (1)

.

- Technical Colleges, Vocational Institutes &

Training Centers

The General Organization for Technical Education

& Vocational Training (GOTEVOT) operates and

supervises a number of technical colleges, vocational

institutes and training centers throughout the

Kingdom on the basis of a strategy focusing on

training programs tailored to address the labor

market requirements and the skills needed by each

profession. Two colleges are located in Arriyadh,

the Technical College and Telecommunication

and Information College (2). The Technical College

provides a wide range of training programs, i.e.

mechanical, electrical, electronics, computer,

industrial chemistry, building techniques and

(1) Ministry of Higher Education, Higher Education Statistics, Academic Year 2005, as stated in CDSI’s Statistical Yearbook Issue 41(2) General Organization for Technical Education & Vocational Training (GOTEVOT), Annual Report 2005(3) Ibid(4) Ibid(5) Ibid

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- Teachers’ & Women’s Colleges

Teachers’ colleges are specialized colleges which

qualify teachers. They provide qualification

and training programs for teachers and school

principals and the like. In Arriyadh City there

were 4,090 male students and 28,417 female

students enrolled in these colleges in 2005 (1).

Tourism Sector

Arriyadh City enjoys several attractive tourist

features, including recreation facilities to citizens,

residents aliens and visitors. The City includes

several historical sties such as Al-Masmak Palace,

Al-Dereya archeological sites, King Abdulaziz

Historical Center in downtown Arriyadh City,

which comprises historical features, museums,

libraries, public squares, parks and gardens.

Arriyadh City has a number of public parks, the

most famous of which is Salam Park in the City

Center and Al-Watan Park within King Abdulaziz

Historical Center, in addition to sport clubs, Malaz

Zoo which includes different species of animals

and birds. The Zoo is equipped with recreation

and children play facilities. Arriyadh contains

stylish shopping malls, state-of-the-art buildings

which are recognized not only in the City but

region wide. Special sidewalks were constructed

prepared in some areas of Arriyadh City, equipped

with lights and trees for those who like to exercise,

especially families.

Arriyadh City is known for many recreation

projects undertaken by the Private Sector, such

as the indoor and outdoor recreation cities,

spread all over the City, particularly in some

areas, which are now famous for being recreation

sites, such as on the Eastern Ring Road and Al-

Thumamah Road and others. Several projects

are currently underway, which will add to the

attractive features of Arriyadh City. An example

is the development of areas around Wadi Hanifa

and Al-Thumamah Park, which are supervised by

Arriyadh Development Authority. These projects

constitute good investment opportunities and

serve as additional entertainment and recreation

places to the inhabitants of Arriyadh City. Arriyadh

hosts the famous annual Janadriya festival for

National Heritage and Culture, which is attended

by national and international guests. Arriyadh

also hosts important annual and periodical

international exhibitions of different purposes,

the most important of which is the international

book exhibition.

The fact that the headquarters of all ministries

and government agencies are located in Arriyadh

assist the City in hosting international conferences,

which offer more opportunities for this special type

of tourism “Conference Tourism”. Also students

from all regions come to Arriyadh for university

and college education, and for medical treatment,

since Arriyadh houses well-known governmental

and private advanced medical facilities.

In Arriyadh, there are a number of hotels of

different classes receiving visitors to the City. As of

2004, Arriyadh had 58 hotels as follows: (2)

Class Number Number of Rooms

Premium Class 9 2,451

First Class 18 2,712

Second Class 21 1,629

Third Class 10 426

Total 58 7,218

(1) Ministry of Education Website www.moe.gov.sa(2) Supreme Commission for Tourism, Tourism Statistics, 2004

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Additionally, there are about 260 units

comprising 5,066 furnished apartments

which are available for leasing, distributed

as follows:

- First class 65 units 1,871

apartments

- Second class 125 units 2,175

apartments

- Third class 70 units 1,020

apartments

Arriyadh Region Municipality in collaboration

with the Supreme Commission for Tourism are

planning to jointly implement a number of

projects, i.e. parks within residential quarters,

municipal squares, botanical gardens, and

lay the foundation of infrastructure for King

Abdullah International Gardens, which are

good investment opportunities to the Private

Sector.

Health Sector

Health services are offered by three major

sectors in the Kingdom and Arriyadh,

namely; Ministry of Health facilities, other

government agencies facilities, and private

sector facilities.

Arriyadh City houses a number of Ministry

of Health’s hospitals. These include King

Fahad Medical City, Arriyadh Medical

Center, Prince Salman Hospital, Al-Yamamah

Hospital, Al-Iman Hospital, Pediatrics

Hospital, Psychology Health Hospital, Al-

Amal Hospital, TB & Pulmonary Diseases

Hospital and Convalescence Hospital. It

also houses 63 Primary Health Care Centers

spread throughout the City. These hospitals

provide free treatment, diagnosis and

surgery services to citizens.

Additionally, there are other medical facilities

that are affiliated with other government

agencies. These are: university hospitals, King

Faisal Specialist Hospital, General Presidency

for Youth Welfare Hospital, Armed Forces

Hospital, King Abdulaziz Medical City of the

National Guard, Security Forces Hospital,

King Khalid Eye Specialist Hospital, General

Organization for Social Insurance (GOSI)

Hospitals, and Schools Health Care Units.

The Private Sector provides paid medical

services in Arriyadh through several medical

facilities. As of 2004, there were 19 private

hospitals, 383 clinics, 511 dispensaries, 22

medical laboratories, 14 physiotherapy

centers, 452 optical shops, 15 dental centers,

1,170 pharmacies, 199 drug stores and 42

scientific offices (1).

King Fahad Medical City in Arriyadh is one

of the largest medical and most modern

projects in the Middle East. It includes a

number of specialist hospitals, which employ

qualified national and expatriate medical

staff .The City includes (2):

- Pediatrics hospital with a capacity of 246 beds.

- Gynecology and Obstetrics hospital with

a capacity of 236 beds.

- Medical Rehabilitation Center with a

capacity of 159 beds.

- General Hospital with a capacity of 459

beds.

- Outpatient & Support Services Clinics

that include 33 clinics, x-ray facilities,

pharmacy, and a laboratory. A Medical

College will be established as part of the

final phase (3)

(1) Ministry of Health, Statistical Yearbook, 2004(2) Ministry of Health – Achievements during the Seventh Development Plan , 2000 - 2004(3) Minister of Health Decree 66662 /10/ 1 Issued on June 9, 2004 to Set-up the College. 40 Students were admitted in Scholastic Year 2005

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Financial and Banking Services Sector

The finance and banking sector is one of the most

important economic sectors as it provides huge

investment potential, through the expansion

of existing banks or the establishment of new

ones. Another opportunity lies in King Abdullah

Financial Center, which will be established in

Arriyadh and is expected to open in 2009 (2). As of

2005, there were 13 banks operating in Arriyadh

including Gulf International Bank which has its

headquarters in Bahrain, as it opened a branch

in Arriyadh in 2000, and Emirates Bank which

was opened in 2002. Arriyadh houses the head

quarters of ten (10) Saudi commercial banks

which add economic advantages to the City. The

banking sector of Saudi Arabia is supervised by

the Saudi Arabian Monetary Agency (SAMA). The

key indicators of Saudi banks for the first quarter

of 2005 are as follows (3):

- There are 1,224 bank branches in the Kingdom,

519 of which are in Arriyadh Region.

- 4,588 ATM’s.

- 189 Investment Funds.

- 568,284 subscribers to Investment Funds

- Banks credit granted: SR 452,501 million, of

which SR 250,841million are short term credit

(one year or less), SR 53,495 million are medium

term credit (1 - 3 years) and SR 148,164 million

are long term credit (over three years).

- Total bank deposits: SR 447,853 million.

- Total assets: SR 681,454 million. (Unified

Financial Position of Commercial Banks)

- Value of banks investments in securities:

SR 177,525 million.

On July 13, 2003 a Royal Decree was issued to

create the Cooperative Insurance Companies

Regulations. The decree appoints Saudi Arabian

Monetary Agency (SAMA) to control and supervise

the insurance and re-insurance companies and the

activities of entrepreneurs working on insurance

related activities and to establish a database on

the insurance market in the Kingdom.

Communications & Information Technology

Sector

Communications and IT play a decisive role in

communities’ development process. Information

and knowledge become important factors of

Medical Facilities & Services of the Ministry of Health In Arriyadh 2004 (1)

Description Arriyadh Kingdom % to Kingdom

Medical centers 349 1,848 18.89

Hospitals 39 213 18.31

Beds 6,025 30,020 20.07

Physicians 3,308 18,621 17.76

Nurses 7,055 41,356 17.06

Pharmacists 199 1,167 17.05

Support medical staff 3,676 21,802 16.86

Smoking clinics 7 29 24.14

Health college 2 16 12.50

Health institute 4 27 14.81

Emergency center 46 219 21.00

Ambulance 147 765 19.22

(1) This Table Was Derived From the Statistical Yearbook of the Ministry of Health, 2004(2) Future Symposium, Arriyadh, 9 _10 May 2006(3) Central Department of Statistics & Information (CDSI), 41st Statistical Yearbook, 2005

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Working Telephone Lines (landlines) in Arriyadh City Years (2001 – 2005) (4) (Thousand Lines)

Year Number

2001 783

2002 811

2003 855

2004 899

2005 1,112

Mobile Lines in Arriyadh City Years (2001 – 2005) (5) (Thousand Lines)

Year Number

2001 663

2002 734

2003 846

2004 1,070

2005 1,106

production, as they facilitate productivity in other sectors.

Telecommunication and Internet infrastructure are the

nerve centers of modern communities.

The Telecommunications sector in the Kingdom in general

and in Arriyadh in particular, experienced fundamental

changes after the privatization of the sector and the

establishment of Communications and Information

Technology Commission (CITC). The Kingdom is heading

towards information and knowledge based community,

through the e-government program, which is based on the

National Plan of Information Technology through (1):

- Making Telecommunication and IT services available to

all community members.

- Providing an educational and training environment that

ensures that the majority of citizens possess adequate

skills to deal with Telecommunication and IT applications.

- Pushing the economic & social sectors towards achieving

advanced levels of IT applications.

- Making the Telecommunications and IT sectors a major

source of revenue generation.

As part of the government initiative, to encourage

investments in the Telecommunications and IT industries

and motivate private companies to take advantage

of technology applications, as e-commerce, Arriyadh

Development Authority in collaboration with Arriyadh

Chamber of Commerce & Industry announced plans

to create a Telecommunications and IT City on an area

of 800,000 m2, on land owned by the Public Pension

Agency. The City will add new economic dimensions and

a gateway to commercial and industrial firms to enter

the open market at the regional and international levels.

It will also assist in the attraction of foreign investments

and large hi-tech companies. Signs indicating that

Arriyadh City has become a society of technology are:

- Application of Information Technology in banking

transactions (payment of utility bills, passports,

traffic and aviation services, etc).

- Use of IT in most private and public sectors organizations.

- Fast expansion of mobile phone use through the two

service providers Saudi Telecom (Al-Jawal) and Etihad

Itisalat (Mobily), where the number of mobile lines in

Arriyadh has grown to 1.1 million lines in 2005,

representing 29% of total lines of 3,863 thousands lines

Kingdom wide (2).

- Introduction of G3 mobile services.

- Continued growth of fixed lines subscribers in 2005, to

over 1.1 million in Arriyadh City alone (3).

- A rapid increase of internet usage.

(1) Ministry of Economy and Planning – Eighth Development Plan 2005 - 2009(2) CDSI, Central Department for Statistics & Information Statistical Yearbook, Issue 41, 2005(3) Ibid(4) Ibid(5) Ibid

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Theme Four:

High Commission for the Development of

Arriyadh and its Role in Developing the City

Introduction:

The high Commission for the Development

of Arriyadh was established by virtue of a

resolution of the Council of Ministers dated

June 19, 1974. The responsibility of ADA

is to implement plans to develop the City

in economic, social, cultural, urban and

environmental areas. ADA sets up policies

that improve the level of services so as to

contribute to the welfare, and quality of life

for its citizens. ADA derives its legality and

authority from the Council of Ministers that

defined the basis of its role in a series of

resolutions including its founding resolution.

The major responsibility of ADA is to set

up comprehensive plans for the City and

emplace basic programs for implementation,

coordination and construction of projects.

Comprehensive Strategic Plan for Arriyadh

City

The most remarkable efforts of Arriyadh

Development Authority are in the area of

overall planning and development of the

City in the Comprehensive Strategic Plan.

It symbolizes integrated and renewable

organizational environment of a strategic

nature that organize and direct urban

activities in a way that accommodates future

requirements, benefit from modern facilities

and in general avoid the negative sides of

the growth of cities, particularly problems

arising from the fast growth of cities, as is the

case of Arriyadh City.

The Comprehensive Strategic Plan of Arriyadh

City comprises several elements as follows:

Element One: Future Outlook of the City which

aims at achieving the following objectives

- Introduce the City as the Capital of the

Kingdom

- A City of humanity, welfare and prosperity

- A modern oasis that lives in harmony

with the desert environment through

the optimum use of technology and

environmentally successful structural

planning

- A center of science and culture

enlightenment

- A financial and commercial center

- A beautiful City with distinguished and

stylish design, integrated with social and

cultural life, and a center for Islamic Arts &

Culture

Element Two: Arriyadh Urban Plan

The Urban Plan consists of several sub-plans

which serve as a mechanism for policy

implementation. The most important

features of these plans are:

- Structural Plan for Arriyadh City reflects

all the urban and functional aspects of

the objectives, strategies and different

urban policies which are incorporated in

the Comprehensive Strategic Plan. The

Plan defines distribution of land use,

major activities, business centers, city

transportation system, and a network of

public utilities. It specifies the environment

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protection areas, open areas, directions

and boundaries of urban development.

The Structural Plan covers all parts of

Arriyadh City within the boundaries of the

development protection having an area of

4,900 Km2 and forecasted population size

of 7.2 million by 2024 (1).

– Local Structural Plans which aim to clarify

policies and controls emplaced for certain areas

of great importance for sites. Most important

of these plans is the Structural Plan for the City

Center, Structural Plans for urban areas and

Structural Plans for hub centers.

– Land Usage Plan which is considered one of the

most important tools for the plans and policies

of the Comprehensive Strategic Plan. It defines

the current and future use of land up to 2021.

– Zoning Regulations: It divides the city into zones

in accordance with the Land Usage Plan and

sets up rules and regulations and recommends

development standards with respect to density,

height and other terms to ensure privacy and

protection of property, environment, heritage and

urban issues. It also lists several of procedures and

steps required for regulations related to planning

licenses, building licenses, and encouraging

distinguished construction designs.

Element Three: Transportation Plan

The objective of this Plan is to secure safe and

convenient transportation to accommodate

existing and future requirements, taking into

consideration the high rate of population

growth, provided transportation system is

integrated with the continued urban growth of

the City.

Element Four

Economic Development Plan: The objective is to

achieve a balanced socio-economic development

with a diversified economic base, increase the City’s

sources of revenue, limiting the flight of revenue,

take full advantage of the City’s characteristics and

competitiveness and enhance its role as a financial,

commercial and Information Technology center.

Element Five

Environment Management and Protection: It

aims to achieve a sustainable environment while

planning for the City of the future, preserve natural

resources, and improve environment quality. It

also aims to achieve an optimum use of resources

to accommodate needs of future generations.

Element Six

Housing Availability Plan: It sets up a mechanism

for development of the housing sector to

address increasing demand, improve residential

environment and make available basic needs of

the community.

Element Seven

Public Utility Plan: Upgrading the standards of

public utility (electricity, water, telephone and

sanitary waste) and applying the concept of

optimum management resources.

Element Eight

Urban Management Plan: Make arrangements

to develop existing systems to ensure a

well coordinated future growth of the City.

This will be achieved through integrated

planning, application of decentralization

of decisions to allow the private sector

and residents to participate in the decision

making process.

(1) ADA, Arriyadh Development Authority, Population Forecasts Study, Arriyadh City, 2004 - 2024

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The approval of the Comprehensive Plan

for Arriyadh City will undoubtedly reshape

the future of the City for the next 20 years.

There are several investment opportunities

available to the private sector, including

building materials, housing, transportation,

tourism & recreational services, health, and

educational services, etc.

Arriyadh Metropolitan Structure Plan 2021

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Theme Five: Arriyadh Chamber of Commerce and Industry & The Enhancement of Investment Climate

Arriyadh Chamber of Commerce &

Industry (RCCI) was established in 1961 to

maintain, protect and develop interests

of the private sector through integrated

set of services. The most important

services it provides are as follows:

- Highlight investment opportunities

within and without the Kingdom

- Highlight new investment fields and

recommend viable opportunities

- Publish directories and information

guides regarding activities of

the private sector and national

economy in general

- Provide legal advice, settle

commercial disputes and clarify

rules and regulations

- Prepare studies and specialized

researches and provide advice on

economic issues

The Chamber of Commerce & Industry

in Arriyadh, plays a vital role concerning

investment in Arriyadh City. The Chamber

has prepared a work strategy covering

the period 2005 - 2009 to improve

investment environment in Arriyadh. The

objective of the strategy is to motivate

the private sector to invest in sectors of

comparative advantage, and to improve

the investment environment in Arriyadh.

It provides services to its members

through a number of administrative and

technical units:

- Research and Studies Center

- Data Center

- Economic Data Bank

- Tools Center

- Small and Medium Business Center

The Chamber provides economic

related information and guidance to

businessmen on different investment

opportunities and the appropriate

communication channels with respect to

import and export from and to various

parts of the world. (1).

It actively participates with other

investment agencies in the Kingdom and

Arriyadh Region, in “Arriyadh Economic

Forum” held once every two years. The

second Economic Forum was held from

4 - 6 December 2005 on the basis of the

directives and auspices of the Forum,

the Custodian of the Two Holy Mosques,

King Abdulla Bin Abdulaziz, Chief of

the Supreme Economic Council. The

Forum calls for an enhanced role of the

private sector, who is a real partner and

stimulator of economic growth in the

face of the socio-economic challenges

that faces the Kingdom. Selective leading

businessmen participated in the Forum

to discuss critical issues and recommend

solutions. The discussed issues included

“ways to develop efficient public-

private sector partnership”, the theme

of “transparency and accountability

in the economic sector”, or the theme

of “high-tech industrial zones” or the

(1) For more information see RCCI’s Website, www.riyadhchamber.org.sa

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membership of the WTO and many other

themes which will promote awareness

among the business community.

Arriyadh Economic Forum produced a

set of recommendations which intend

to improve and promote the investment

environment in the Kingdom and Arriyadh

Region. Following are the most important

of these recommendations (1):

- The importance of enforcing agreements

signed between the Saudi Arabian General

Investment Authority “SAGIA” and other

government agencies to eliminate investment

obstacles discussed at the Forum

- Improve privatization process and assigning

it to a dedicated independent agency, which

would directly report to highest executive

authority to ensure efficient and speedy actions.

- Ensure complete transparency of the

privatization processes for the Private Sector,

and enforce regulations that encourage

competition and prevent monopoly.

- Invest in value-added basic industries

- Establish joint-stock companies for

cooperative & medical insurance, real

estate financing, courier services, and

electricity distribution.

The third session of the Economic Forum is

expected to be held in the fourth quarter

of 2007 to discuss critical issues, including

financial and human resources development,

development of infrastructure, legal process

and the private sector future role in the

development process.

(1) RCCI, 2nd Arriyadh Economic Forum, 4 – 6 December 2005

KINGDOM OF SAUDI ARABIA AND THE ENHANCEMENT OF THE INVESTMENT CLIMATE

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State Budget

The actual revenues for fiscal year 2005 amounted

to SR 555 billion, compared to planned revenues

of SR 280 billion, i.e. a surplus of SR 275 billion.

The actual expenditures amounted to SR 341

billion, an increase of SR 61 billion from the

planned expenditures for the same year (1).

With respect to the 2006 fiscal year, public

revenues were estimated at SR 390 billion,

and the expenditures were estimated at SR

335 billion, while the expected surplus was

estimated at SR 55 billion. These figures exceed

the estimated revenues and expenditures of the

2005 budget by 39.3% and 19.6% respectively,

where a balanced budget of SR 280 billion for

both revenues and expenditure was estimated.

The state budget included new programs and

projects as well as new stages of approved

ongoing projects with total costs of SR 126

billion. Budgetary allocations amounted to

SR 87.2 billion for the education and human

resources sector, SR 31 billion for the health

sector, SR 11.6 billion for the municipal services

sector, SR 9.8 billion for communications

and transport sector and SR 22.5 billion

for the industrial, agriculture, water and

infrastructure sectors, and subsidized the Real

Estate Development Fund by SR 9 billion, the

Saudi Credit Bank by SR 3 billion and the Saudi

Industrial Fund (SIDF) by SR 13 billion(2).

As for Fiscal Year 2007 budget, public

revenues were estimated at SR 400 billion

and expenditures at SR 380 billion, which was

considered the highest ever in the Kingdom. It

allocated SR 96.7 billion for the education and

human resources sector, SR 39.5 billion for

the health and social services sector, SR 13.6

billion for the transport and communications

sector, SR 24.8 billion for agriculture and

water sectors, SR 15.5 billion for the municipal

services sector and SR 20 billion for the Public

Investment Fund (3).

Gross Domestic Product (GDP)

Preliminary figures show that there is

growth in GDP, at current prices (excluding

import duties), by 23.7% during fiscal year

2005, to SR 1,150.6 billion (4) compared

to growth of 16.8% during the previous

(1) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report 2005(2) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(3) "Asharq Alawast" Newspaper, Issue 10258, dated August 20, 2006; see also "Aleqtissadia" Newspaper, Issue 4817 dated August 19, 2006 (4) Central Department of Statistics & Information expects GDP to be about SR 1,301.2 billion in 2006

Distribution of Budget Allocations for Fiscal

Year 2006 by Major Sectors:

3.46%1.36%8.00%3.72%

2.93%

33.07%

18.75%2.53% 0.17%

26.03%

Theme One: The Kingdom’s Macro-Economic Indicators

Infrastructure Development

Municipal Services

Defence & National Security

Public Admistration, Facilities & General Items

Specialized Government LendingInstitutions

Subsidies

Human Resources Development

Trasportation

Economic Resources Development

Health & Social Development

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year. This is attributed mainly to the

growth of the oil sector by 42.8% during

the year, compared to 28.4% growth in the

previous year, as a result of improvement

in oil prices. Preliminary figures also show

growth of the non-oil sector to 7.8% during

the same year compared to 8.5% in the

previous year. Also, the private sector grew

by 8% compared to 7.5% in the previous

year, while the government sector grew to

7.5% during 2005 compared to 10.4% in the

previous year. Furthermore, the preliminary

Gross Domestic Product for the Period 2002 - 2005(2)

YearsValue (Billion Saudi Riyals)

At Current Prices At Constant Prices

2002 699.7 629.8

2003 796.6 678.2

2004 929.9 713.9

(2005) (Preliminary Figures) 1,150.6 760.5

Contribution of Some Economic Sectors to GDP At Current Prices

of 2005 (3)

Sector Share (%)

Industry 9.7

Agriculture 3.3

Mining and Quarrying 48.5

Construction 4.8

Electricity, Gas and Water 1.0

Services 34.2

Private Sector Contribution to GDP 30.1

figures show GDP growth, at fixed prices of

1999, (excluding import duties) by 6.5% in

2005, reaching SR 760.5 billion compared

to 5.3% in the previous year. The oil sector

declined to 5.9% compared to 6.7% in the

previous year. The non-oil sector also grew

by 8.6% in 2005, compared to 4.6% in the

previous year. With respect to the private

sector, it grew by 6.6% compared to 5.3%.

This sector contributed by 44.2% in the

GDP, thereby maintaining its share of the

previous year (1).

(1) SAMA, Saudi Arabian Monetary Agency- 42nd Annual Report, 2006 (2) Ibid (3) Ibid

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Balance of Payments

Preliminary figures show that the Saudi Balance of

Payments current account for the year 2005 achieved a

surplus of SR 340 billion, an increase of 74.6% compared

to the previous year, which represents about 29.3% of

the GDP (1).

The continuous surplus of the current account is

attributed mainly to the improvement of the oil exports.

Foreign Trade

The Kingdom’s total exports during fiscal year

2005(2) , amounted to SR 677.1 billion, i.e. an

increase of SR 204.7 billion or 43% compared to

the previous year 2004, where the value of total

exports stood at SR 472.5 billion. In terms of

quantity, total exports during this year amounted

to 469 million tons compared to 463.4 million

tons in 2004, with an increase of 5.9 million tons or

1%. On the other hand, imports during fiscal year

2005 amounted to SR 222.8 billion an increase

of SR 55.2 billion or 33% over the previous year

2004(3). In terms of quantity, the volume of total

imports amounted to 42 million tons compared

with 31.2 million tons in 2004, i.e. an increase of

10.8 million tons or 35%.

Major Non-Oil Exports in 2005 (4)

– Mineral Products: SR 606.4 billion, an increase

of 46% compared to the previous year. This

represents 98.6% of the total non-oil exports

– Chemical products: SR 42 billion, an increase of

35%, representing 6% of the total exports.

– Metal Products: about SR 5 billion, an increase

of 11%, representing 1% of the total exports

– Food stuff: SR 4.4 billion, an increase of 19%,

representing 0.1% of the total exports

Major Imports in 2005 (5)

– Machinery, Equipment and Electric Appliances:

SR 54.2 billion, or 24% of the imports, A change

of 46% from the previous year 2004

– Transport Equipment: SR 46.7 billion or 21% of

total imports, a change of 30% from the previous

year

– Food-stuff: SR 33 billion or 15% of total imports,

a change of 31% from the previous year

– Metals & Related Products: SR 23.8 billion or

11% of total imports, a change of 42% from the

previous year

– Chemical, Plastic & Rubber Products: SR 26.6

billion or 12% of total imports, a change of 24%

from the previous year

– Textiles and Clothing: SR 9.7 billion or 4% of total

imports, a change of 20% from the previous year.

Cost of Living Index

The Cost of Living Index for the whole population

of the Kingdom, including Arriyadh, amounted to

99.6 in 2005, according to the base year 1999,

an increase of 0.4%, compared with 98.9 in the

previous year 2004 (6).

Wholesale Price Index

The general Wholesale Price Index amounted

to 124.2 in 2005, using 1998 as the base year(7),

with an increase of 3.5 points compared to

the previous year. The Increase of the index is

attributed to increase in prices of all categories of

food items, live animals, raw materials except fuel,

animal and vegetable oils, chemical products and

manufactured goods.

This index measures the average change in the

prices of goods and services only in the Kingdom’s

primary markets. The index comprises a sample of

160 items distributed over 10 major categories

of the international classification codes related

to trade. Some items, such as weapons, and their

values were excluded from the total value of

(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(2) CDSI, Central Department of Statistics & Information, Foreign Trade Statistics, Exports, 2005 (3) CDSI, Central Department of Statistics and Information, Foreign Trade Statistics Imports, 2005 (4) CDSI, Central Department of Statistics and Information, Export Statistics(5) CDSI, Central Department for Statistics and Information, Imports Statistics (6) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(7) Ibid

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items. The value of the index amounted to 124.2

in 2005, compared to 120.7 in the previous year.

This represents an increase of 3.5 points or 2.9%

compared to 3.1 % in the previous year. This

increase is attributed to the increase in all major

categories of the index (1).

Per Capita Income

Preliminary figures show an increase in the per

capita income in the Kingdom by 20.5% in 2005,

to reach SR 50,227 compared with an increase of

14% in the previous year (2).

Labor Market Structure During 2005 (3)

- Total number of labour force in the Kingdom is

about 6.2 million workers.

- Total number of Government employees is about

783.2 thousand employees:

- Saudis (712.8 thousand): 91%

- Non-Saudis (70.4 thousand): 9%

- Total employees in the private sector:5.4 million

- Saudis (0.62 million): 11.6%

- Non-Saudis (4.74 million) 88.4%

- Employed by Construction & Building Sector

(1.9 million): 36.2%

- Employed by Wholesale & Retail Trade Sector

(1.4 million): 26.3%

- Employed by Social & Personal Services Sector

(0.6 million): 11.7%

- Employed by Electricity, Gas and Water Sector

(0.03 million) 0.6%

Transport & Telecommunications

Infrastructure

- Roads

The total length of paved roads network, which

meets a higher degree of safety and links all

cities and villages of the Kingdom, reached 44.8

thousand kilometers by the end of 2005.

- Railroads

Railroads in the Kingdom experienced remarkable

development. Advanced networks, as well as several

modern passenger stations, were established. Moreover,

high speed trains were introduced, leading to improved

passenger and freight services. It is noteworthy to note

the Council of Ministers approval for the establishment

of North-South Railroad Company, owned by the Public

Investment Fund, prior to the end of 2006, leading

to remarkable improvement in transport services (4).

Approval was also given regarding the establishment of

a Saudi Joint Stock Company under the name of Saudi

Railway Company (SAR) with a capital of one billion

Saudi Riyals (5).

The total number of train passengers in 2005, amounted

to about 1.1 million and the volume of freight to about

2.5 million tons during the same year (6).

- Airports and Air Transport:

The airports network in the Kingdom comprises

27 airports, including 3 international airports.

These are equipped with the most advanced

equipment and systems. The total number of

passengers through domestic airports amounted

to 27.5 million in 2005, while the total number

of passengers departing and arriving via the

international airports amounted to 3.8 million

and 3.3 million respectively (7).

(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(2) Ibid(3) Ministry Of Labor, as Stated in SAMA’s 42nd Annual Report, 2006(4) Alhayat Newspaper, Issue 4608, May 24, 2006(5) SAMA, Saudi Arabian Monetary Agency, Economic Development Report, Q2 2006(6) SGRRO, Saudi Government Rail Road Organization, 2005 Statistics (7) Saudi Arabian Airlines, Annual Report, 2005

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- Seaports

There are 8 commercial and industrial seaports

in the Kingdom. Large volumes of cargo are

handled annually at these ports. The total weight

of exported commodities in 2004 reached 76.5

million tons (excluding oil exports). The volume of

imported commodities amounted to 43.4 million

tons during the same year (1).

- Postal Services

The total number of working post offices in the

Kingdom in 2004, amounted to 478 main offices,

180 branch offices, 83 postal agencies, 4,933 points

for surface mail and 2,465 street mail boxes (2).

- Telephone Lines

Total number of working land telephone lines

in the Kingdom stood at about 3.8 million land

lines, according to 2005 statistics. The number of

working mobile telephone lines provided by Saudi

Telecom Company and Ettihad Itisalat, (Aljawal

and Mobily) exceeded 11.8 million mobile lines.

During the same year, the number of Internet

users reached more than 2.7 million (3).

Major Producing Sectors

- Agriculture

The Kingdom succeeded, during the preceding

years, in achieving self-sufficiency in basic crops.

Moreover, it started to export many agricultural

products such as wheat, dates, dairy products, eggs,

fish and animal products to some overseas markets.

- Industry

The cumulative number of operating factories in

the Kingdom amounted to 3,803 in 2005, with

total financing of SR 280 billion. These factories

employ around 373,400 workers. Moreover, the

Ministry of Commerce & Industry established 8

modern industrial parks in different Saudi cities.

These industrial parks are equipped with utilities,

and other facilities required for the establishment

and operation of these factories (4).

- Companies

The cumulative number of operating companies

in the Kingdom, based on licenses granted by

the Ministry of Commerce & Industry, amounted

to 13,539 in 2005. These include 131 joint stock

companies, 9,518 limited liability companies, 2,802

joint liability companies, 1,086 limited partnerships,

and 2 limited companies by shares (5).

- Banks

The Saudi Arabian Monetary Agency (SAMA)

plays the role of a central bank in the Kingdom.

There are 11 commercial banks operating in the

Kingdom. These are:

(1) Saudi Ports Authority, 2004 Statistics (2) Saudi Post Corporation, Annual Report, 2005(3) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(4) Ministry of Commerce & Industry, Unpublished Report, Department of Industrial Statistics, 2006(5) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report, 2005

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- National Commercial Bank

- Riyadh Bank

- Banque Saudi Fransi

- Samba Financial Group

- SABB

- Saudi Hollandi Bank

- Aljazira Bank

- Alrajhi Bank

- Arab National Bank

- Saudi Investment Bank

- Bank Albilad

Recently, Alenmaa Bank was founded in the first

quarter of 2006, but is still under formation. There

are also a number of branches of non-Saudi Banks,

such as: Emirates Bank, National Bank of Kuwait

and Gulf Bank. Moreover, branches will be opened

imminently for Muscat Bank and Deutsche Bank.

Performance & Future Outlook of the Saudi Economy

The Saudi economy represents more than one third

of the combined economies of all Arab countries.

The Kingdom is the major partner in the inter-

Arab trade and investment. It is also ranked the

first among Arab countries in terms of attracting

foreign investments. The Saudi economy witnessed

a marked improvement in its absorption capacity,

diversification of production base and creation of an

appropriate environment supporting attraction of

investments. The Kingdom’s accession to the World

Trade Organization (WTO) in 2005, upgrading of its

credit rating at the beginning of 2006, increase of

its competitiveness, which occupied the 38th rank

according to Doing Business Standards set by the

International Finance Institute of the World Bank,

which crowned the viable efforts of the Saudi

economy (1).

The Saudi economy continued to achieve high

rates of growth in all sectors during 2005. The

positive conditions in the world oil market as

well as persistent improvement of the domestic

investment environment have affected all

economic sectors. According to OPEC’s sources,

the average prices of Arab Light Crude increased

by 45.2% to reach US Dollar 50.15 per barrel

compared to US Dollar 34.53 per barrel in 2004.

Furthermore, relevant data provided by the

(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006

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Ministry of Petroleum and Mineral Resources shows

that there is a growth of average daily production

of oil in the Kingdom from 8.9 million barrels per

day in 2004 to about 9.35 million barrels per day in

2005, an increase of 5%. An increase in oil prices and

the quantity of production in 2005 has had tangible

impacts on all sectors of the Saudi economy. The rate

of GDP growth at current prices (excluding import

duties) increased by 23.7% to reach SR 1,150.6 billion.

Based on fixed prices, the GDP amounted to SR 760.5

billion with a growth rate of 6.5%, compared to 5.3%

in the previous year. Moreover, the State Budget

recorded a substantial surplus of SR 217.9 billion, or

18.8% of total nominal GDP.

The trade and industry sectors continued to achieve

remarkable growth rates. The Ministry of Commerce

& Industry has issued Commercial Registers for the

establishment of 1,321 new companies with total

capital of around SR 17.4 billion, compared to

about SR 10.5 billion in the previous year. The total

number of companies existing in the Kingdom

up to 2005 totaled about 14,800 company, with

combined capital of SR 239.4 billion, of which the

capital of the joint stock companies comprised

around SR51.5 billion.

In 2005, the Ministry of Commerce & Industry

issued Commercial Registers for 33,900 new

commercial establishments in different regions

of the Kingdom. The total production of cement

reached about 25.6 million tons, 1.1% more than

the previous year. The total area of industrial parks

(excluding Jubail and Yanbu) up to 2005 stood

at 47.4 million square meters. The number of

factories in these industrial parks amounted to

1,542 representing 40.5% of the total number of

factories in the Kingdom.

Total consumption of electricity increased

by 5.4% and the actual generating capacity

increased to about 29,051 MW. The number

of subscribers increased by 5.2% to more than

4.7 million, of which residential subscribers

represented about 82.5%.

Educational institutions continued to provide its

services to more than 5.1million male and female

students at different stages, including 4.4 million

students in public education and over 603,700

students in higher education, along with more than

74,100 students enrolled in General Organization

for Technical Education and Vocational Training

(GOTEVOT) colleges and institutes.

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The health sector registered growth in its human

and physical resources. The number of public and

private hospitals reached 364, which employed

about 43,000 physicians and more than 78,600

nurses. The number of hospital beds increased

to over 51,100, the number of public health care

centers increased to 1,848 and the private clinics

to 1,043 (1).

The Ministry of Labor’s (2) statistics for 2005

indicate that total employment in the private

sector reached around 5.4 million workers, of

which Saudis represent 11.6% and non-Saudis

88.4%.

Transportation activity in the Kingdom witnessed

a growth rate of 6.1% compared to 6.9% in

the previous year. The total number of SAUDIA

flights increased to 130,900 flights (domestic

and international) and the number of passengers

increased to about 16.9 million.

In the field of telecommunications, the number

of land telephone lines amounted to around

3.8 million, mobile telephones jumped to more

than 11.8 million and Internet users to over 2.7

million (3).

The government of the Kingdom continued its

economic reform program in order to achieve

sustainable economic development, create

job opportunities, enhance welfare of citizens,

encourage more participation by the private

sector in the development efforts, improve

foreign investment climate, develop the capital

market, maintain monetary and fiscal stability,

promote tourism, review labor law, continue the

privatization program and perform economic and

administrative restructuring following its accession

to the World Trade Organization (WTO).

Regarding future outlook of the Saudi economy,

the Eighth Development Plan (4) indicates increase

in economic growth, as well as investments of the

Government and Private Sector, and encouragement

of foreign capital investment. Accordingly, the

Plan calls for increasing total investment from SR

146.6 billion in 2004, to SR 243.9 billion by 2009,

increase of job opportunities and reduction of

unemployment through the creation of 1.2 million

job opportunities during the Plan period. Moreover,

the Plan anticipates diversification of economic

activities and sources of national revenue through

increased contribution of non-oil sectors to GDP.

The value added of these sectors is expected to

increase from about SR525.3 billion in 2004 to

around SR 677.2 billion in 2009. this is in addition

to expansion and development of public services

(health, education, housing, etc). By 2009, the

number of government hospitals will increase to

248 and the number of beds to 34,722, in addition

to increase of emergency health centers to 356

centers, support medical services, education and

housing. According to the Eighth Development

Plan, demand for housing is estimated to be around

one million units during the Plan period, and will

attempt to provide housing to needy families.

The future strategy of the Saudi economy

expects increase in the total value of crude oil

exports, from about SR 368.8 billion in 2004 to

about SR 398.5 billion in 2009, an average annual

growth rate of 1.56%. It also expects a surplus in

the trade balance as well as development in the

agriculture field (annual growth rate of 3.2%),

mining and quarrying (7.9%), petrochemicals (7.3%),

other manufacturing sectors (6.7%), electricity, gas

and water sector (4.2%), construction sector (6.7%),

real estate sector (5.8%) (5), as well as all other

economic sectors, which will grow in an integrated

manner leading to improvement in the standard

of living to citizens in conjunction with social and

economic stability.

(1) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(2) Ministry of Labor, Annual Report, 2005(3) SAMA, Saudi Arabian Monetary Agency, 42nd Annual Report, 2006(4) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009 (5) Ibid

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Theme Two: Policies and Measures Supporting Investment in the Kingdom

The Saudi economy has entered a new stage

of economic development and progress that

accelerated growth rates during the last few

years. Even more, higher rates of growth are

expected in the coming years, in line with the

regulatory measures which aim at boosting

economic development process, increasing the

volume of domestic and foreign investments and

strengthening the capital market. The expected

higher growth rates are also in line with the sectoral

measures which aim at reorganizing a number

of economic sectors to participate effectively in

the development process. These sectors include

- inter alia - insurance sector, tourism sector, gas

sector and mining sector. Measures aiming to

boost economic growth also include restructuring

a number of government agencies to improve

their efficiency (restructure of the Public Pensions

Agency, the judiciary bodies, and modernization

of the Department of Zakat and Income Tax). This

aims also to support the privatization strategy in

order to raise production efficiency and to increase

the private sector role in economic activities and

development (privatization of the industrial parks,

postal services, etc.)

Economic Activities Planned for Privatization (1)

Privatization represents one of the most important

constituents of the economic policy in the

Kingdom. This policy comprises the following: _ Water and Sanitary Waste

_ Desalination of Sea Water_ Telecommunications _ Air Transport and Related Services _ Rail Roads

Roads, which include:_ Management, operation & maintenance of

express roads for which there are no alternative

roads

− Construction & operation of new express roads_ Airport services_ Postal services_ Grain Silos & Flour Mills_ Seaports services_ Industrial Parks services_ Government shares in joint stock companies,

including Saudi Electricity Company, banks, Saudi

Basic Industries Corporation (SABIC), Saudi Mining

Company (MAA`DEN), Saudi Telecom Company as

well as government shares in local refineries_ Government shares in the capital of joint Arab

and Islamic investment companies_ Government Hotels_ Sports Clubs

Municipal services, such as: _ Establishment and operation of abattoirs_ Establishment and operation of public markets

and sales centers_ Establishment, operation and maintenance of

public parks_ Transport services and collection of municipal revenue_ Cleaning and waste disposal services

Educational Services, such as: _ Construction & maintenance of educational

facilities_ Printing of textbooks_ School related transport_ Students boarding houses_ Leasing & operation of schools and universities

facilities

(1) For further information see: 8th Development Plan, SAMA’s 41st Annual Report & Achievements of 7th Plan

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Social services, such as: _ Management & operation of social care

institutions_ Services related to placement of Saudis in the

private sector

Agriculture services, such as: _ Services related to health quarantines, diagnostic

laboratories and veterinary clinics

Health services, such as:_ Construction & operation of health facilities_ Patients transportation services

Economic Freedom & the Enhancement of

Investment Climate

The Kingdom has embarked, during the last five years,

on implementing an ambitious program of economic

reform. This concerted effort aims at encouraging

foreign capital inflow into the Kingdom, creation

of adequate job opportunities for the growing

number of citizens as well as achieving tangible GDP

growth. Relevant statistics published by the Central

Department of Statistics and Information indicate a

growth in GDP of 6.5% at fixed prices and 22.7% at

current prices in 2005. GDP has, for the first time ever,

exceeded the level of SR1 trillion. This is attributed

to many factors, including the increase in oil prices

in the global markets, economic reform policy and

the ongoing improvement in the investment climate.

These factors contributed together to acceleration of

economic growth and increase of local and foreign

investments.

Growth prospects for the year 2006 inspire optimism.

The impact of the same factors is likely to prevail,

leading to further growth in all sectors of the Saudi

economy. Moreover, the private sector is expected

to be a major beneficiary from the improvement in

the local business environment. Such improvement

will also contribute to attraction of more foreign

investment, and will enhance the level of confidence,

which will, in turn, lead to increase in local investment.

Regarding economic freedom and its relationship with

the investment climate in the Kingdom, the Economic

Freedom Index (1), issued by Heritage Foundation,

indicates that the Kingdom has obtained an average

of 2.99 points, which means that the Saudi economy

is “Mostly Free”, as indicated by the report.

Investment is the main engine of economic growth.

It affects growth as it forms an integral part of the

aggregate demand. Investment has a direct impact on

stimulation of domestic production and contributes

to accumulation of productive assets required to

maintain production capacity of the economy and

enhance its competitiveness.

Successive development plans paid due attention to

encouragement of investment and growth of fixed

capital in order to achieve strategic goals represented

in diversifying economic base and realizing sustainable

development. Remarkable achievements were

realized in this regard. Foremost among these are the

policies of economic reform, economic liberalization,

privatization and transparency. This has supported

the role of the private sector in the development

process, where private non-oil investments, up to

2004, constituted about 75.6% (2) of total investments.

(1) SAGIA, Saudi Arabian General Investment Authority Annual Report, Investment Performance, 2005(2) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009

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Private Sector Companies by Major Activities 2004 (4)

Sector Number Percent of Total (%)

Wholesale and Retail Trade 330,638 48

Agriculture, Hunting and Fishing 95,593 14

Manufacturing 88,066 13

Hotels and Restaurants 64,245 9

Other Activities 114,284 16

Total 692,826 100

Hence it became the main pillar of national economy.

The growing role of the private sector in fixed capital

formation represents a positive phenomenon, which is

expected to continue in the future, particularly under

governmental policies which support the investment

climate and boost efforts of the private sector. The

Government was keen to provide a positive climate

and opportunity for maximizing the role of the private

sector. The best evidence for that is the privatization

strategy, which provides promising investment

opportunities for this sector and, in the meantime,

enhances its role in socio-economic development. The

main activities covered by the recent privatization

process include the following (1):

- Granting a license for a second operator in the field

of mobile telephone services in 2004, and identifying

2006 as the deadline for granting a license for

a second operator in the field of land telephone

services.

- ARAMCO concluded a contract with a private

company 2004, to build and operate four power

generation stations.

- Transforming the Saudi Mining Company (MAA’DEN)

into a joint stock company, where 50% of its projects

will be offered, completely and undivided, for public

subscription.

- Issuing the New Mining Code as per Royal Decree No.

M/47 in 2004. This decree reflects the consideration

paid by the Government to participation of the

private sector in this field. It provides attractive

incentives to encourage investment in the mineral

resources sector, for Saudi as well as foreign investors.

Such incentives include, inter alia, full exemption for

mining equipment from import duties.

- Issuing of the Council of Ministers Resolution No.

90 in 2004, regarding opening skies for domestic

air transport in an “Open Sky Policy” for national

companies. Accordingly, two domestic airlines were

established: NAS Airlines and SAMA Airlines.

- Offering 50% of Government shares in the

National Cooperative Insurance Company for public

subscription.

The investment climate in the Kingdom is further

enhanced by giving the private sector the leading role

in investment and economic development through

investment in various economic sectors.

SAGIA’s statistics indicate that the total number of

licensed private sector projects, up to 2004, amounted

to 2,247, with total financing of SR 57.5 billion (2), while

1,540 licenses were granted to foreign investors to

establish industrial, agricultural and services projects

with total capital of SR 39 billion (3). With respect to

joint Saudi / foreign investment, licenses were granted

to 707 projects with total financing of SR 18.5 billion,

as shown in the licensed projects table:

(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) SAGIA, Saudi Arabian General Investment Authority, Data Published by Investment Department(3) Ibid(4) CDSI, Central Department of Statistics & Information,, Establishments Survey Data, 2004

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Licensed Joint Saudi – Foreign Investment Projects 2004 (1)

Sector NumberTotal capital (SR, million) Share in Capital (%)

Saudi Foreign Total Saudi Foreign

Industry 306 8,348 6,777 15,125 55.2 44.8

Services 399 1,556 1,755 3,311 47.0 53.0

Agriculture 2 37 54 91 4.65 59.5

Total 707 9,941 8,586 18,527 53.66 46.34

The Saudi share in the industrial, agricultural and

services projects amounted to 17.3% with a value

of more than SR 9.9 billion, while the share of

foreign investors amounted to 82.7% with a value

of SR 47.5 billion. This enhances the role of the

investment strategy which aims to attract foreign

capital and encourage the Saudi private sector

to improve its efficiency and competitiveness

and keep abreast of the global economic

developments.

The Kingdom is still endeavoring to prepare

a comprehensive long-term strategy for

restructuring the economy. It has endorsed

the establishment of many regulatory bodies,

issued trade related laws, and negotiated aiming

at signing a number of bilateral agreements

concerning free trade, and coordination of

policies and trade regulations among GCC States.

All these efforts are directed towards facing

globalization challenges and reaping its fruits in

the 21st Century.

The Kingdom & World Trade Organization (WTO) (2)

The Kingdom signed the accession agreement to

join the World Trade Organization on November 11,

2005, to become officially member No. 149, after

more than ten years of negotiations. The Kingdom’s

accession to WTO aims to integrate the Kingdom

into the world economy and to shift the Saudi

economy from a local Arab economy to a global

one. The agreement comprises three sections;

all of them come under the accession protocol

document signed by the Minister of Commerce &

Industry on behalf of the Kingdom’s Government.

Signing of the agreement is considered as an official

endorsement by the Kingdom of accepting the

terms and conditions of accession stated in the table

of unified commitments concerning agricultural

and industrial commodities sector, which amounts

to 7,177 commodities representing the first section

of the agreement. The services sector includes 12

main activities, 155 sub-activities and 4 methods

for delivery of services, and represents the second

section. The report of the working team, which

includes 316 paragraphs that explain legislative,

legal, investment, economic, trade, financial,

technical, health and environmental policies in

the Kingdom represents the third section of the

agreement.

According to this agreement, the Kingdom obtained

59 exemptions, foremost among which are:

- Using the principle of gradual penetration to

markets in increasing foreign capital invested in

services (49% at the time of accession, increasing

to 51% after one year of accession and to 70%

after three years of accession).

- Exempting the Kingdom from implementing

the government procurements agreement. It

is an agreement of some parties (of specific

membership) and not a multilateral one. The

(1) SAGIA, Data Published by Investment Department(2) See Ministry of Commerce & Industry Website: www.commerce.gov.sa

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country has the right to purchase national

products of goods and services and is exempted

from the principle of national treatment.

- Continuing with provision of loans from industrial

and agricultural banks and maintaining exemption

of imported products from import duties.

This agreement will bring many benefits to the

Kingdom, the most significant among them are:

•The consumer is free to choose goods and

services available in the local market, which has

become an integral part of the global market. The

consumer is free to choose the products of the

highest quality at the minimum possible price.

•Consumer confidence in the available goods

and products will be free of commercial deceit

and manipulated prices. This is because local and

foreign goods will be subject to strict rules and

controls, such as meeting international standards,

health measures and the protection of intellectual

property rights.

•More opportunities for Saudi products to enter

into the markets of all WTO 148 member countries,

which enjoy low custom ceilings and open

economic and trade policies. Moreover, Saudi

exports will no longer be subjected to aggressive

measures from any country, as was the case prior

to accession to the WTO.

•Resorting to Trade Disputes Settlement Board

of the WTO which is characterized with its prompt

decisions and enforcement of the measures aiming

at achieving fairness to all member states.

The Impact of the Kingdom’s Accession to WTO

on the Saudi Economy (1)

The Kingdom’s accession to the WTO is clear

evidence of the adequacy of its economic, fiscal

and legislative environment. This accession is likely

to lead to marked enhancement of Kingdom’s

investment climate and higher value added to

the Saudi economy in general. In particular, this

accession will enhance the level of confidence

in the Saudi capital market and encourages

competent companies to enter this market,

particularly in the long run.

With respect to the capital market, accession to the

WTO represents an important event for the financial

services sector, mainly securities investment in

the Saudi Capital Market. Such importance stems

from the commitments resulting from accession, a

matter which will enhance the investment climate

in general. The commitments are in harmony

with general objectives set by the Capital Market

Law through activation of the section related to

opening the door for non-banking institutions to

practice important activities related to securities

in the Kingdom (such as activities of dealing and

administration). This is also consistent with the

strategic objectives set by the Capital Market

Authority in this regard.

Regarding the impact of accession to WTO

on tariff protection, industries depending on

continuity of such protection will be affected to

a limited degree. Custom duties will decrease for

396 commodities out of 458 currently protected

by the 20% category as well as 197 commodities

out of 492 currently protected by category 12%.

However, the decrease of tariffs will not be large,

since most of them were reduced from 20% to

15% and the protected ones from 12% to 10% or

to 6.5%. At the beginning of the accession, the

custom duties of some commodities protected

by 20%, such as sweets and chocolates, will be

reduced to 8%, lubricants to 10%, steel pipes to

8% and plastic products, paper, steel and furniture

to 15%. After three years of accession, computer

(1) See Ministry of Commerce & Industry Website: www.commerce.gov.sa

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sets and related accessories as well as telephone

sets (land and mobile) will be exempted, and after

five years from the date of accession, the custom

duties of the chemical materials protected by the

20% and 12% categories will be reduced to 6.5%.

Such materials include fertilizers, soap, perfumes

and plastic products.

As a result of the Kingdom’s accession to the WTO,

Saudi companies will face intensive competition

from multinational companies. This implies that

some small enterprises which used to operate

inefficiently in the past, despite high costs of

production and operation, just by benefiting from

protection policy, will be forced to exit the market

unless they merge with larger national or foreign

companies, or try to improve the level of efficiency

and competitiveness. Moreover, some goods

and services, which currently enjoy generous

government support, will no longer receive such

subsidies. Multiplying the productivity of the

economy and diversifying its activities, support

of foreign investment and its integration with

national investment, as well as other strategic

bases required for development of the economy

and community, will constitute the factors which

maintain the material and human resources of the

economy and to cope, in a flexible manner, with

changes resulting from accession to the WTO.

Saudi Capital Market (1)

The Arab Motor Company was the first joint stock

company in the Kingdom. It was founded in

1932, but was subsequently liquidated. The Arab

Cement Company, founded in 1954, was the first

Saudi joint stock company to be listed in the stock

market.

It was decided, in 1983, to trade securities through

commercial banks only. In 1984, SAMA issued a

circular explaining the methods and conditions of

trading shares.

To overcome the constraints which faced the

process of trading shares, the ESIE system was

adopted in 1990. This system was replaced by

TADAWUL system in 2001, which is based on

the latest international technologies. During

this period, non-Saudis residing in the Kingdom

were allowed to invest in the Saudi Capital

Market via mutual investment funds. The Royal

Decree No. 9 was issued in 2003, endorsing the

Capital Market Law. Royal Decree No. 114/A was

also issued in 2004, regarding formation of the

(1) SAMA, Saudi Arabian Monetary Agency, 4th Q Economic Development Report, 2005

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Development of the Saudi Capital Market (2)

Years General IndexNumber of

Transactions(Thousand)

Number of Shares(Million)

Value of Traded shares

(SR, billion)

2000 2258.3 489 555 56,3

2001 2430.1 605 692 83,6

2002 2518.1 1,033 1736 133,8

2003 4437.6 3,763 5,566 596,5

2004 8206.2 13,319 10,298 1,774

2005 16712.6 46,607 12,281 4,139

Capital Market Authority to be entrusted

with management and supervision of the

market. It is noteworthy that the Capital

Market Authority is an autonomous body.

The Saudi Capital Market is the largest Arab

market where daily average transactions

amount to about 300,000, with an average

value of SR 22 to 25 billion per day. Until

the third quarter of 2006, the number of

companies listed in the Market was 82,

including 10 companies in the banking

sector, 30 companies in the industrial

sector, 21 companies in the services

sector, 8 companies in the cement sector,

9 companies in the agricultural sector,

2 in the telecommunications sector, and

one company in each of electricity and

insurance sectors. The number of the listed

companies is expected to reach 86 by the

end of 2006.

The Saudi Capital Market witnessed

steady progress since 2002, due to many

stimulating factors, such as: increasing

oil prices, increased repatriation of Saudi

capital since the September 11, 2001

events, privatization programs, allowing

the private sector to invest in economic

sectors which were previously restricted

to the public sector, increased public

awareness regarding benefits of investing

in Saudi Capital Market, increased scope

for bank facilities provided to investors,

tendency by expatriates to invest in

mutual funds, steady growth of the GDP,

accession of the Kingdom to WTO as well

as increasing number of companies with

more family companies being transformed

into joint stock companies listed in the

capital market.

It is noteworthy to know that a total of 3.7

billion shares were traded in 2005 with a

total value of SR 1,483.8 billion. The market

value of the issued shares amounted to

SR 2,423 billion and the total number

of transactions reached 17.167 million(1)

during the same year. The following table

shows development of Saudi Capital

Market during the period 2000 - 2005. It

is noteworthy to note that the value of the

General Index (TASI) amounted to 20,600

points during the first month of 2006.

(1) SAMA, Saudi Arabian Monetary Agency, 4th Q Economic Development Report, 2005(2) SAMA, Saudi Arabian Monetary Agency, Statistical Review Circular, 2nd Q 2006

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Growth Rates of Corporate Profits for Major Sectors of the Capital Market (First nine months of 2005) (1)

Sector Rate of Growth of Profits (%)

Agriculture 97.87

Insurance 88.67

Banks 61.26

Services 53.85

Industry 51.17

Telecommunications 21.84

Electricity 17.86

Cement 2.34

The industrial sector showed a high degree of coherence during 2005 reflecting development and

expansion of projects pertaining to large companies in the oil, gas and petrochemical sectors, as well

as major regional industries such as steel and aluminum, along with cement and services sectors.

The following table shows corporate profit in the major sectors of the Saudi Capital Market during

the first half of 2005:

With respect to mutual funds of commercial

banks, the value of their total assets amounted

to SR 138 billion in 2005 with an annual growth

rate of 127.1%. The number of participants

was 663,000, with an annual growth rate of

186.5%, while the number of active funds

amounted to 199, with an annual growth rate

of 5.9 % (2).

The future prospects of the Saudi Capital

Market are promising. New joint stock

companies will be listed and government

shares in some companies will be sold. These

are in addition to reduction of the nominal

value of the share from SR 50 to SR 10, allowing

expatriates to trade shares in addition to

investment in mutual funds, allowing GCC

citizens to invest in the Saudi Capital Market,

and adopting the most advanced technology

in the market, as well as diversifying activities

for joint stock companies or others. All of this

was crowned by announcing the establishment

of “King Abdullah Financial Center” which will

provide an attractive working environment

for the increasing number of Saudis who

are expected to join the Financial Sector.

The Financial Center will include a Financial

Academy, offices, residences, corporate head

quarters for companies and banks in the

financial sector, in addition to various services.

The Financial Center will be constructed on

land North of Arriyadh City with an area of 1.6

m² and will cost between SR 25 - 35 billion

which is expected to be completed within a

period of three years (3)

The Kingdom obtained a credit rating of (A+),

based on its strong financial position of being

the world largest oil exporter, as stated in Fitch

Ratings report, which represents one of the five

international specialized agencies in credit

ratings. This report supports a previous report,

published by Standard & Poor sat the beginning of

(1) SAMBA Financial Group, SAMBA Local Mutual Funds, 4th Q Report, 2005(2) SAMA, Saudi Arabian Monetary Agency, Economic & Statistic Research Administration, 2005(3) Al-Hayat Newspaper, issue # 15741, May 10, 2006

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2006, which gave the Kingdom a rating of (A1) (1)

regarding the same rating in addition to a rating

(A) regarding Arriyadh’s commitment to foreign

currency. Upgrading of the Saudi credit rating is

attributed to many reasons, foremost among them

are: improvement of domestic and external

financial statements, continuity of economic

and structural reforms represented in the

accelerated pace of private sector growth,

and decreased local political risks.

Real Estate Investment & Companies

The Saudi Real Estate Sector is of particular

importance to national economy. This

is reflected in the provision of housing

units, edifices, shops, industrial parks and

recreational, health and educational facilities

required by society and the economy in

general. This Sector also participates in

provision of different government facilities.

The Real Estate Sector has forward and

backward linkages, with about 80 -100 sub-

sectors of the economy, particularly building

materials and contracting sectors.

The Real Estate Sector comprises two main

sub-sectors: Real Estate Bureaus and Real

Estate Companies. These are Saudi joint stock

companies, which are well known and enjoy

the confidence of different groups benefiting

from their services. They are managed by the

private sector and are specialized in real estate

investment and development. Some have

crossed the barriers of the Arab World, and

are present particularly in Dubai and Sharjah.

Others have crossed the borders of local and

Arab depth to regional and international levels

through concluding strategic partnerships

and coalitions with a number of the largest

international real estate companies.

The Real Estate Development Fund provides

easy term loans to support investment in this

sector. It is noteworthy to note in this respect,

to refer to the Royal directives regarding

increase of the Fund’s capital by SR 9 billion

from the State Budget’s surplus of 2006, to

enable the Fund meet the steady growth of

demand for loans. This will boost the role of

the Real Estate Sector and encourage relevant

companies and firms. Private companies

operating in this Sector will build, during the

Eighth Development Plan 2004 - 2009, about

875,000 housing units out of the total expected

demand of one million housing units. Around

280 million m² of residential land is likely to

be available for the Real Estate Sector so that

it can meet housing demands. The Real Estate

Development Fund will provide about 75,000

loans with a total value of SR 22,500 million for

construction of about 90,000 (2) housing units

in different regions of the Kingdom. Moreover,

relevant studies indicate that total demand

for housing is likely to reach about 2.4 million

units by 2020, that requires an investment of

SR 1.2 trillion to meet such demand (3) .

No doubt the Real Estate Sector in the

Kingdom is facing major challenges and

great responsibilities. Hence, it is imperative

for this Sector to concentrate on forming

joint stock real estate companies. This form is

considered the best for the economic activity

that believes in separation of ownership from

management. It also allows for the attraction

of substantial capital as well as coordination

with other related agencies such as banks,

real estate finance companies, contracting

companies, and real estate mortgage and

installments companies.

(1) Al-Hayat Newspaper, issue # 15841, August 18, 2006(2) All Figures are Derived from the 8th Development Plan, 2005 - 2009(3) Study by SAMBA Financial Group, April 2006

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10 times per person per year, due to holding large

amounts of cash at home.

The monetary policy aims at achieving stability

of prices, the exchange rate of the Saudi Riyal,

providing liquidity to all sectors of the economy

and ensuring the stability of the financial system.

The inter-bank interest rate in the Kingdom

increased markedly during 2005 as a result of the

monetary policy in effect and in line with rising

interest rates in the global markets. The inter-bank

interest rate (SIBOR) for a period of three months

amounted to 4.97% (3) during the fourth quarter

of 2005.

Total bank deposits during 2005 reached SR 482

billion. Total commercial banks liabilities (bank

credits and investments) amounted to SR 595.9

Development of the Banking System

The Kingdom of Saudi Arabia has a modern banking

system in terms of the quality of service and

efficiency of regulations. The banking sector in the

Kingdom comprises eleven national and joint banks

in addition to branches of Gulf banks such as: Gulf

Bank, Emirates Bank, Muscat Bank and Kuwait Bank,

in addition to several licenses granted for opening

branches of foreign banks. The total number of

bank branches in the Kingdom amounted to 1,282(2)

by the second quarter of 2006.

SPAN Cards are the most common used of all other

credit cards. They are used for direct withdrawal of

cash from the holder’s current account. However,

the use of cash machines (ATMs) may be as low as

(1) Ministry of Economy & Planning, Demand Analysis of the Eighth Development Plan, 2005 - 2009(2) Eight Development Plan, 2005 - 2009(3) SAMA, Research & Statistics Administration, Economic Development, 4th Q, 2005

Demand for Housing by Administrative Provinces and Type of Demand during the 8th Development Plan 2005 - 2009 (1)

Provinces

New DemandReplacement

DemandTotal

Number (Thousand)

%Number

(Thousand)%

Number (Thousand)

%

Riyadh 160 25.5 20 19.5 180 24.7

Makkah 170 27.0 25 24.4 195 26.7

Madinah 34 5.4 5 4.9 39 5.3

Qassim 20 3.2 5 4.9 25 3.4

Eastern Province 118 18.8 20 19.5 138 18.9

Assir 30 4.8 5 4.9 35 4.8

Tabuk 13.5 2.2 4 3.9 17.5 2.4

Hail 15 2.4 3 2.9 18 2.5

Northern Borders 7 1.1 1.5 1.5 8.5 1.2

Jazan 30 4.8 5 4.9 35 4.8

Najran 7 1.1 2 1.9 9 1.2

Baha 11 1.8 5 4.9 16 2.2

Jouf 12 1.9 2 1.9 14 1.9

Kingdom 627.5 100 102.5 100 730 100

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billion. Commercial banks claims on the private sector amounted to SR 435.9 billion. Total foreign assets

of commercial banks stood at SR 91.4 billion while total foreign liabilities amounted to SR 65 billion.

These figures, in general, are higher compared to the previous year, and reflect remarkable growth in the

credit and investment activities of banks (1).

The Saudi Arabian Inter-bank Express Transfers (SARIE) represents a great stride in the field of automated

banking services and trade transactions in the Kingdom. This system constitutes the foundation for a

number of payment and financial settlement systems. Since its adoption by the end of 1990, SARIE has

progressed steadily in terms of technology and techniques of banking. The National Bank of Kuwait was

linked to SARIE system in 2006 and Muscat Bank and Deutsche Bank are planning to join this system

shortly.

The Saudi Pay Network (SPAN) continued to witness good progress in terms of transactions made. The

number of ATMs amounted to 5,377 by the second quarter of 2006. The number of ATM cards issued by

local banks exceeded 9 million. Moreover, the number of points of sale continued its growth reaching

about 48,700 by the second quarter 2006 (2). The following table shows performance indicators of the

banking sector in 2005:

Performance Indicators of the Banking Sector 2005 (3)

ItemValue

(SR, billion)Annual Rate of Growth

(%)

Total Bank Deposits 482 12.0

Total Commercial Banks Liabilities 595.5 21.6

Total Claims on Government Semi Government 159.5 33.1

Total Claims on Private Sector 435.9 38.9

Total Foreign Assets of Commercial Banks 91.4 12.0

Total Foreign Liabilities of Commercial Banks 65 42.2

(1) SAMA, Research & Statistics Administration, Economic Development, 4th Q, 2005(2) SAMA, 2nd Quarterly Report, 2006 (3) Table Derived from SAMA's 4th Quarterly Economic Development Report, 2005

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of all industrial firms. The third component

is the Coastal Resort which is composed of

a number of hotels overlooking the sea as

well as super residential apartments. The

fourth component is the Financial Island, the

fifth is the residential district while the sixth

component is the educational zone, which will

include model schools for all levels of general

education, colleges, institutes and research

centers that will sponsor Saudi talented and

gifted students and direct the Saudi economy

towards new horizons.

King Abdullah Economic City will be the largest

joint venture ever seen by the Kingdom with a

total cost of SR 100 billion. After completion,

KAEC will be the largest integrated economic

city in the world to be implemented by the

private sector. KAEC is expected to provide

about one million job opportunities (2).

KAEC was listed in the Saudi Stock Market via a

joint stock company (EMMAR Economic City) in

July 2006, where 30% of the capital was offered

for subscription. It represents the first split

offer without subscription allowance. This is

the second Emirates investment in a joint stock

company as partner with the government; the

first being Etihad Itissalat (Mobily).

• Prince Abdulaziz Bin Mussaed Economic

City in Hail

This economic city will be established on

an area of 156 million m² with a total cost

of SR 30 billion over ten years. This economic

city is being developed by an investment

consortium under the supervision of SAGIA. The

city will provide about 30,000 job opportunities,

thereby contributing to economic development

of the region. It will also constitute a vital pillar

of development of national economy. The

Economic Cities

The economic strategy of the Government

includes, within the economic development

program, establishment of multi-activities

economic cities, which are more coherent with the

new position of the Saudi economy, particularly

after the Kingdom’s accession to WTO. That

entails the construction of more infrastructure for

the establishment of gigantic projects, attraction

of national and foreign expertise, attraction of

foreign investments as well as preparation of

an investment environment on scientific basis

to attract investors and value added industries.

Three economic cities were announced so far.

These are:

• King Abdullah Economic City (KAEC)

This is the first, and the most important,

economic city. It occupies a land area of 168

million m² along the Red Sea Coast and about

35 kilometers away from Rabigh Industrial City.

KAEC comprises six major components (1). The

first is the Sea Port which will be constructed

with state – of – the – art technology and stands

on an area of 2.6 million m². The second is the

industrial park which will occupy an area of 8

million m² and comprises a number of facilities

constructed especially to meet the needs

(1) Eastern Province Chamber of Commerce & Industry, Economic Magazine, Issue No.404, 2006(2) See SAGIAs Website www.sagia.gov.sa

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Center, Medical Studies and Biological Science

Complex as well as integrated health services,

residential areas and shopping centers (1).

The City comes into existence to keep abreast

of substantial economic progress experienced

by the Kingdom, support the information

sector in general, add new advantages to the

industrial sector in particular, and provide a

wide range of investment opportunities to

the Private Sector.

• Jazan Economic City (2)

Jazan Economic City (JEC) is located 50 kilometers

North of Jazan City on a total area of 100 million

m² on a coastal strip with a length of 12 Km and a

depth of 8 Km inland. More than SR 100 billion of

industrial, commercial and housing investments

are expected in JEC following completion of the

infrastructure of the city.

private sector will enjoy adequate investment

opportunities in this city, which will include

the establishment of an international airport,

a dry port, a center for supply and handling as

well as a station for road passengers. It will also

include the establishment of many districts for

educational, agricultural, industrial, mining,

tourism and housing services.

• City of Economic Knowledge in Madinah

This City is the first of its kind in the Kingdom.

It is based on knowledge industries and the

third of SAGIA’s series of economic cities

within its plan for repatriation of Saudi Capital

and the attraction of foreign investment.

The City will occupy an area of 4.8 million

m², of which the built area will be around

9 million m², including 250 thousand m2

of office space, 4,000 shops and stores and

30,000 housing units. The total value of

expected investment is about SR 25 billion.

This City, which is designed to accommodate

200,000 people, will provide around 20,000

job opportunities.

The City will comprise many major

components including Taiba Technology and

Knowledge Economy Complex, Advanced

Technological Studies Institute, Prophet’s

Sunna Museum, Islamic Civilization Studies

(1) See SAGIA's Website www.sagia.gov.sa (2) Al-Hayat Newspaper, Issue No. 15921, November 6, 2006

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Eventually, it will contribute to the creation of

about 500,000 jobs, directly and indirectly.

JEC will concentrate on heavy, energy-

intensive industries in which the Kingdom

enjoys unique comparative advantages. JEC

will benefit from its strategic location near the

most important shipping lines in the Red Sea

and near the Indian Ocean. This will facilitate

transportation of the industrial products of

this city to Asia, Africa and Europe. The City,

which enjoys integrated facilities, will meet

the requirements for the establishment of

different secondary industries, particularly

the support of agricultural and fishing

industries in line with the comparative

advantages of the Jazan Region. The City will

provide a large number of job opportunities

for the residents of Jazan region, assigning

special areas for activities related to

agricultural, animal and fish products. Such

areas include the Research & Development

and Support Zone and provision of specialist

services for these products.

Jazan Economic City also comprises the

establishment of a regional center for

distribution of iron ore and granules in the

Middle East Region. The Center will assist

in establishing basic and manufacturing

steel industries in the Economic City. It will,

furthermore, enhance the transport activity

in the seaport. The Center will be established

and operate in accordance with the latest

environment-friendly technologies.

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Theme Three:

Rules & Related Investment

Regulations in the Kingdom

Labor Law (1)

Royal Decree M / 21 was issued on November 15, 1969,

endorsing the Labor and Workmen’s Law, By-Laws, and

related decisions which regulate work in companies.

The Law identifies the duties of employers towards

workmen as well as the rights of workman. All issues

related to this law were assigned to the former Ministry

of Labor and Social Affairs.

As a result of development witnessed by the economic

companies and the need for substantial measures

regarding the law, following the transformation of the

Ministry of Labor & Social Affairs into two ministries

(Ministry of Labor & Ministry of Social Affairs), Royal

Decree M / 51 was issued on September 27, 2005,

endorsing the new labor law under supervision of

Ministry of Labor.

The provisions of this law apply to any contract under

which any person undertakes to work for an employer

and under his direction or supervision against

compensation. The law also applies to workmen in

government and public corporations including those

working in pastures or farming, charity institutions

and agricultural firms which employ ten workers or

more. It also applies to workers in agricultural facilities

processing their products, permanent operators of

agricultural machinery, part-time workers, within the

limits of safety, occupational hazards, and training

contracts regarding those not working with their

employer.

The following shall be exempted from the provisions

of this law: members of the employer’s family who

constitute the only employees of the firm, housemaids,

marine workers in vessels with capacities less than

500 tons, agricultural workers other than those

stated in Article 5 of the law and non-Saudi workers

recruited for a specific task for a duration not

more than two months, in addition to players and

directors of sports clubs.

Foreign Investment Law (2)

The Foreign Investment Law was issued as per Royal

Decree M / 1 on April 10, 2000, and relevant By-laws

were issued as per Council of Ministers’ Resolution

1 on April 10, 2000. Both are referred to as “Foreign

Investment Law”. According to this Law, foreigners

(other than Saudis and GCC nationals) are not allowed

to have any business or activity inside the Kingdom

without obtaining licenses therefrom. The main

objective of the Foreign Investment Law is to make

investment in the Kingdom more attractive and to

streamline licensing procedures.

SAGIA is responsible for granting licenses to foreign

investors, and is also responsible for granting licenses

for activities not listed in the “Negative List” (3) and

activities not subject to regulation by another law. The

Foreign Investment Law and the “Negative List” make

investment in the Kingdom clearer and represent a

framework regulation rather than a comprehensive

regulatory group.

Excerpts from the law allowing possession and

investment of real estate by foreigners, issued

as per Royal Decree M / 15 on July 19, 2000.

> The foreign investor, who obtains a license

to undertake a business, shall have the right to

possess the required real estate for operation

of his business and providing housing for

himself and his staff.

> In case the license includes purchase of

buildings or vacant land for construction of

buildings, then the total cost of the project

(1) Ministry of Labor, Labor Law, For More Information See www.mol.gov.sa(2) For more information re Foreign Investment Law & By-laws See SAGIA's Website: www.sagia.gov.sa . (3) Negative List: Activities Which Exclude Foreign Cos. from Investment in: e.g. Early Operation in Oil Activities (Exploration, Drilling,

& Production), Some Industrial Activities, e.g. Military Equipment Industry, Military Uniforms, etc. For more information re the negative list see SAGIA’s Website: www.sagia.gov.sa .

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should not be less than SR 30 million, while the

Council of Ministers has the right to reduce this

amount. However, the law stipulates that the

property should be utilized within five years.

> Non-Saudis, residing legally in the Kingdom

are allowed to possess real estate for private

residence as per a license granted by the

Ministry of Interior.

Main Features of the Foreign Investment Law

- All foreign investors in the Kingdom should obtain

licenses

- Foreign investors may enjoy 100% ownership of

projects they establish in the Kingdom

- SAGIA is fully responsible for attracting foreign

investment to the Kingdom and providing licenses

through its One-Stop-Shop

- SAGIA exerts utmost efforts to streamline foreign

investment licensing. It is committed to study and

review all applications within 30 days

- According to the new Law, all fields are open to

foreign investment except those clearly prohibited

- Licensed foreign investors shall enjoy the same

treatment enjoyed by national investors. This makes

them eligible for easy-term loans provided to specific

projects as well as for custom duty exemption

- With respect to expropriation, foreign investors

are treated on equal footing with national entities.

Expropriation or confiscation of foreign investments

shall not take place except in cases of public interest

and against fair compensation

- Foreign businesses in the Kingdom shall no longer

be in need for Saudi Sponsorship as per residence

regulation. They have the right to sponsor their

workers

- Reduction of corporate profit tax, which exceed

SR 100,000, from 45% to 20% and cancellation of

temporary tax exemptions. This allows the foreign

companies to carry forward their losses.

Capital Market Law

The Capital Market Law was issued by Royal Decree

M / 30 dated July 31, 2003. The Law provides legal and

institutional framework for the capital market, and

contributes to its development in accordance with

latest international standards, as well as enhancing the

efficiency of operation and trading systems.

Main Features of the Capital Market Law are (1):

- The establishment of the Capital Market Authority

(CMA) as an autonomous body which is financially

and administratively independent and reports directly

to the Council of Ministers. The CMA enjoys all

powers required to perform its tasks as stated in the

law

- The establishment of a market for trading of

securities in the Kingdom under the name of “Saudi

Capital Market” which is incorporated as a joint stock

company

- The establishment of the “Securities Deposit Center”

as the sole agency in the Kingdom which is

authorized to carry out transactions related to

deposit of securities traded in the Kingdom, as well as

marketing, clearing and registering their ownership.

It is also sole agency authorized to register property

rights of securities traded in the market

- The forming of a committee for settlement of disputes

related to securities as well as an appeals committee

- The consideration of liability for all practices which

are based on deceit and forgery or trading of shares

according to information given by insiders and

imposing penalties on any one who commits or helps

others to commit such practices

Corporate Law (2)

The Saudi Corporate Law was issued by Royal Decree

M / 6 dated July 22, 1965. The law is composed of

234 articles and was amended several times. The law

identifies the types of companies in the Kingdom as

follows:

(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) For more information see Ministry of Commerce & Industry Website: www.commerce.gov.sa

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Limited Liability Company

- Limited Liability Company is usually referred

to as a limited proprietary partnership

- Number of partners not less than 2 and not

more than 50

- Shares cannot be offered for public

subscription

- Not allowed to practice banking, insurance

or investment activities

- 100% foreign ownership is allowed according

to the new Foreign Investment Law as from

November 3, 2001

- Minimum amount of capital shared by

partners is SR 500,000 in the event all

partners are Saudis. In the event all or some

partners are non-Saudis, the minimum

amount of capital will depend on the type

of activity to be practiced by the company

Joint Stock Company

- The Joint Stock Company takes two forms:

Public or “Open” Joint Stock Company,

where the shares are offered for public

subscription; Private or “Closed” Joint Stock

Company which does not offer any shares

for public subscription

- Minimum subscribed capital is SR 10 million in

case shares are offered for public

subscription (This capital may be increased

by the Ministry of Commerce in certain

situations)

- Minimum subscribed capital is SR 2 million

in the case of a Closed company (This

amount may be increased by the Ministry of

Commerce in certain situations)

- 25% of the subscribed capital should be paid

upon incorporation of the company

- The number of shareholders should not be

less than 5

- The capital is divided into shares of equal

nominal value of SR10

- The legal liability of shareholders is limited

to the value of their shares

- This type of company is the only one allowed

to practice banking and insurance activities

in the Kingdom

- Every member of the Board of Directors

should possess shares with a minimum value

of SR 10,000

Joint Liability Partnership

- It is usually referred to as a joint liability

company.

- Two or more partners are responsible

severally or jointly for the debts of the

company even from their personal funds

- Not allowed to practice banking or insurance

activities or brokerage in gold or silver

- Not allowed to offer its shares for public

subscription

- Incorporated in the same manner as a limited

liability company

Simple Liability Partnership

- It is usually referred to as a mixed liability

company

- There is one partner at least who is

responsible for the debts of the company

even from his personal funds

- Not allowed to practice banking or insurance

activities or brokerage in gold or silver

- Incorporated in the same manner as a limited

liability company

In addition to the previous types, there are

other types of companies, which are seldom

incorporated. These are:

Limited Partnership by Shares

- There is one partner at least who is

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responsible for the debts of the company

even from his personal funds

- At least four sleeping partners

- The subscribed capital should not be less

than SR one million

- 50% of the capital should be paid in cash or

kind upon incorporation of the company.

Company with Variable Capital

- The capital might change according to

incorporation documents

Cooperative Company

- A limited liability company or a joint stock

cooperative company might be established to

achieve a specific purpose such as reduction

of prices for certain products or services

Joint Venture Company

- It is an anonymous company known only to

the partners. It does not enjoy any autonomy

and is not subject to required procedures

of disclosure or obtaining a commercial

register.

Foreigners are allowed ownership in these

types of companies.

Commercial Register Law (1)

The Saudi Commercial Register law was

issued as per Royal Decree M / 1 dated July 10,

1995. According to this law, every merchant

whose capital reaches SR 100,000 or more

is required to register within 30 days from

the date of opening a commercial store or

from the date of possessing a commercial

store, or from the date his capital reached the

said amount. He shall submit an application

to obtain a Commercial Register from the

nearest center whether it is a main office or a

branch office or an agency.

The law also stipulates that all companies

incorporated in the Kingdom shall obtain

a Commercial Register within 30 days from

validation of its articles by the Public Notary.

The same applies for the branches of the

company.

It is conditional to obtain a Commercial

Register that the firm must be a member of the

nearest Chamber of Commerce & Industry.

Trade Agencies Law (2)

The Saudi Trade Agencies Law was issued as

per Royal Decree M / 11 dated July 22, 1962.

This includes the amendments regulating

the relations with the trade agencies of the

companies which grant such agencies.

The law stipulates that the Trade Agent must

be Saudi, with a Commercial Register, that the

capital of the companies assuming the role of

the Trade Agencies must be fully owned by

Saudis, and that all members of the Board

of Directors of such companies and their

authorized signatories must be Saudis.

Trade Marks Law (3)

The Saudi Trade Marks Law was issued by

Royal Decree M / 5 dated February 5, 1984.

The law includes procedures for registering,

(1) For more information see Ministry of Commerce & Industry, CR Law, Website: www.commerce.gov.sa (2) Ibid(3) For more information see text of Royal Decree M/5 dated 5 / 2 / 1984 , or Website: www.arablaw.org

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publicizing, renewing, canceling, transferring

the ownership, mortgaging and placing a lien

on trade marks, as well as licensing contracts,

joint trade marks and relevant fees.

According to this law, any distinguished

names or signatures, words, letters, numbers,

pictures, stamps or any sign or combination

of signs are considered as trade marks if

they are suitable to differentiate industrial,

commercial, agricultural or handicraft

products or forests utilization projects or a

natural resource or to evidence that the item

which will carry the trade mark is owned by

the owner of the trade mark for the sake of

processing, purifying, inventing or trading or

as an evidence of providing a service.

According to this law, the following groups

are allowed to register trade marks:

- Natural or legal persons

- Foreigners residing in the Kingdom who have

permission to undertake trade or handicraft

works

- Foreigners nationals of countries which have

reciprocal relations with the Kingdom

The rights of the owner of the registered

Trade Mark continue for ten years and

may be extended to a similar period upon

requesting renewal. It should be noted that

this law superseded the former “Distinctive

Trade Marks Registration Regulation” issued

by Royal Decree 8763 dated September 12,

1939.

Customs Law (1)

The Saudi Customs policy has a religious and

security objective represented in preventing

the entry of items which are against Islamic

beliefs or Saudi traditions and values or

cause harm to the society and its stability. It

also has an economic objective represented

in imposing custom duties on the imported

goods according to identified tariff

categories, facilitating export procedures

and protecting national industries. Moreover,

the law has a social objective which aims at

exempting necessary goods from custom

duties or imposing a very low tariff rate on

the imported ordinary goods.

The Customs Department, in keeping abreast

of the modernization process, simplification

of customs procedures as well as provision of

necessary information to concerned parties

with respect to Customs Law, has issued the

following, in line with the Customs Law and

relevant By-laws (2):

- Customs Provisions

- Directory of temporary entry of imported

goods free of duties provided they are re-

exported

- Directory of unloading goods in the customs

zones

- Directory of customs release documents

- Directory of goods which are subject to

provisions particularly precious goods

- Directory of zones designated for depositing

imported and exported goods

It should be noted that the Kingdom is a

member of the World Customs Organization,

the Harmonized System of Custom Duties

since 1990, and the Custom Cooperation

Council in Brussels as per Royal Decree M /

68 dated February 2, 1973. The Kingdom also

concluded an agreement among the States

of the Arab League for facilitation of trade

exchange and organization of transit trade

since 1953. This is in addition to implementing

a unified tariff for all Arab countries.

(1) Ministry of Finance, Saudi Customs(2) See General Customs Directorate Website: www.custom.gov.sa

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Income Tax Law

The new Income Tax Law (1) was issued by

Royal Decree M / 1 dated March 6, 2004. The

relevant by-laws were issued by Ministerial

Resolution 1535 dated July 28, 2004. The

new law includes many direct and indirect

tax advantages with the aim of creating

an attractive investment climate in the

Kingdom, attracting foreign investments

and enhancing the role of the private sector

in economic development in light of local

and international developments. The main

features of the new Income Tax Law are as

follows:

- Clarity and transparency

- Adoption of moderate tax rates

- Carrying forward losses for unlimited

number of years

- Adoption of group & accelerated assets

depreciation approach

- Adoption of self allocation

- Endorsement of deduction tax for the first

time

- Clear identification of the rights and duties

of the tax department and tax payers

- Enhancing the mechanism of tax collection

(clear measures to prevent tax evasion and

irregular provision of tax declarations)

- Implementing the right of the tax payer to

appeal to the Grievance Board for the first

time in the Kingdom (2)

Standards & Measures Law (3)

The Saudi Weights and Measures Law was

issued by Royal Decree 29 on January 27,

1964. This law includes identification of

the standard decimal units adopted in the

Kingdom. These are:

- Units of Length: The Meter and its parts

- Units of Weight: The Kilogram and its parts

- Units of Volume: The Liter and its parts

- Units of Area: The Square Meter and its

parts

These units are related to corresponding

international standard units. The law stipulates

that all companies and firms, importing goods

to the Kingdom or producing goods in the

Kingdom or exhibiting goods for sale, shall

put these units on such goods or packages.

Insurance Law

The Saudi Insurance Law was issued per Royal

Decree M / 32 on July 31, 2003 (4). The law

aims at setting a regulatory framework for

the local insurance market which includes

health insurance, and insurance against

(1) Ministry of Finance, Informative Bulletin re the new Income Tax Law, 2004(2) For more information see Department of Zakat and Income Tax Website www.dzit.gov.sa (3) Ministry of Commerce & Industry Website: www.commerce.gov.sa (4) 8th Development Plan 2005 - 2009

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vehicle accidents, aviation accidents, fire,

engineering, goods as well as miscellaneous

accidents. The law also aims at enhancing

the regulatory role of SAMA in the field of

insurance, identifying management criteria

and requirements to ensure the quality

of environmental services and to protect

customers and investors of this sector.

This law will enhance competition in this

sector and achieve further improvement of

insurance services provided by specialized

companies, brokers, agents, consulting

bureaus and insurance auditing bureaus.

Social Insurance Law (1)

The Saudi Social Insurance Law was issued

by Royal Decree M / 2 dated November 15,

1969 and became effective in February

1973. The law was amended by Royal Decree

M / 33 on November 29, 2000 and became

effective as of March 25, 2001.

This law regulates two types of contributions

to the social insurance system:

- Occupational hazards, where the system

provides compensation in case of work

injuries (the employer pays 2% of the worker’s

wage irrespective of his nationality).

- Pensions, where the system provides

compensation in case of occupational

disability, old age and death (18% of the

wage equally between the worker and

employer on 50:50 basis and it is applied

for Saudis only). The insurance branches

may be expanded to provide other types

of compensation in line with the law.

The occupational hazards branch is

applied, on obligatory bases, on all workers,

irrespective of gender, age or nationality.

The pension branch is applied, on obligatory

basis, on all Saudi workers irrespective of

gender. However, worker’s age should be less

than sixty at the time of applying the law. (2)

General Environment Law (3)

This law aims to protect the environment

against pollution, public health;

conservation, and the development and

rational utilization of natural resources. It

also aims to make environmental planning

an integral part of the comprehensive

development planning in the industrial,

agricultural and urban fields. Besides, the

law intends to enhance environmental

awareness, to deepen the sense of

responsibility towards environment

protection on the part of individuals and

groups, and to enhance voluntary efforts in

this regard.

The law obliges everyone who undertakes

production or service activities or others

to take necessary measures to ensure

protection of the environment and not

to exceed the approved environmental

safety limits as stated in the by-laws. The

existing projects, at the time of issuance

of this law, will be given a grace period of

five years to rearrange their situations in

line with this law. In case it is proved that

this period was insufficient, it might be

extended by a decision made by the Council

of Ministers based on a recommendation

by the concerned Minister. Credit funds

are to adhere to environmental standards

as a prerequisite for financing any

project (Articles 15 & 16 of the General

Environmental Law).

(1) General Organization for Social Insurance (GOSI) - Social Insurance Law (2) For more information see GOSI Website: www.gosi.gov.sa (3) Presidency of Meteorology & Environment, General Environmental Law, for more information see PME Website: www.pme.gov.sa

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Theme Four:High & Related Major Investment Authorities in the Kingdom

Supreme Economic Council

The Supreme Economic Council represents the

highest economic authority in the Kingdom.

It is concerned with works and tasks needed to

enable the Council of Ministers to practice its

responsibilities and authorities. The Supreme

Economic Council is chaired by the Custodian

of the Two Holy Mosques with HRH the Crown

Prince as Vice Chairman. The membership of the

Council includes Ministers of Labor, Commerce &

Industry, Petroleum & Mineral Resources, Finance,

Economy & Planning, Water & Electricity & two

State Ministers in addition to Governor of SAMA.

The main authorities of the Council are:

- Preparation of the economic policy and

appropriate alternatives

- Coordination among Government agencies

whose works are directly related to national

economy

- Following up of economic policy

implementation and related Council of

Ministers resolutions regarding economic

affairs

- Study the general frame of the development

plan, fiscal policy, draft State Budget, trade

policies at local and external levels as well as

rules which govern labor and capital markets,

and policies related to improving investment

climate and competition

- Draft regulations and rules related to economic

affairs

The most important resolutions made by the

Supreme Economic Council during the period

2002 - 2004), are (1):

- Identification of rules which govern participation

of the private sector in Government electronic

transactions according to sharing of expected

income principle

- Approval of sale of all Government (Public

Investment Fund) shares totaling 50% in the

National Insurance Company

Major Resolutions Made in 2003

- Approval of North-South Railroad Project

- Approval of the draft Capital Market Law

- Approval regarding allowing joint stock

agricultural companies to deliver their wheat

production to the Grain Silos & Flour Mills

Organization

- Endorsement of the Income Tax Law

Major Resolutions Made in 2002

- Approval of privatization strategy

- Executive program for railroad expansion

- Approval of draft regulating the Saudi Post

Corporation

- Approval of bases & criteria for participation

of private sector in the saline water desalination

projects

- Approval to establish a holding joint stock

company in petroleum services (Petroleum Services

Company) as a public- private partnership

- Approval to increase the capital of Saudi Telecom

Company and sale of 30% of Government shares therein

- Endorse regulations related to disposal of

municipal properties

- Endorse list of facilities, activities and services to

be privatized

- Endorse list of activities exempted from foreign

investment

All these resolutions are directly related with the

investment climate in the Kingdom (2).

(1) Supreme Economic Council Resolutions, 2004(2) For more details see Supreme Economic Council Website www.sec.gov.sa

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Supreme Council for Petroleum & Mineral

Affairs (1):

The Supreme Council for Petroleum & Mineral

Affairs was formed per Royal Decree 212 / A

on January 3, 2000. The Council is concerned

with making decisions related to all affairs of

petroleum, gas and other hydrocarbons. In this

capacity, the Council’s authorities include:

- Identifying and endorsing strategies and

policies concerning oil, gas and other

hydrocarbons in light of prevailing circumstances

and national interests

- Setting the general policy for Saudi ARAMCO

- Deciding on all investment matters related

to all post-production stages. This includes

endorsement of all agreements and contracts

concluded with specialized companies. In

this context, Royal Decree M / 240 was issued

on February 14, 2000 entrusting the Council

to decide on works related to gas exploration

and other hydrocarbons except oil, including

their extraction and production. This also

includes approval of agreements and

contracts signed with specialized companies

- Deciding on all investment matters related

to oil, gas and other hydrocarbons. This also

includes exploration and production, approval

of agreements related to development and

operation and other investment contracts

with specialized companies

- Studying draft international agreements in

oil, gas, and minerals fields

- Follow-up implementation of these policies

and strategies and requesting any information

or reports from specialized agencies, if

deemed necessary for carrying out its tasks.

The Council is also responsible for studying

and approving general policies of mining and

reviewing related agreements and contracts.

In this context, Royal Decree M / 30 was issued

on November 1, 2000 endorsing the Council

of Ministers Resolution 177 dated October

17, 2000, which entrusts the Supreme

Council of Petroleum & Mineral Affairs to

assume duties of Supreme Council for Saudi

Arabian Oil Company (Saudi ARAMCO) as of

January 3, 2000.

The Council approved the gas strategy in the

Kingdom per Resolution No. 13 dated June

6, 2001. This strategy aims at ensuring gas

supplies from hydrocarbon sources as well

as achieving maximum economic and social

returns for the Kingdom from utilization of

its natural gas resources. This will be best

realized through a plan that aims to meet

local demand for gas and related liquids up to

2025. This strategy looks forward to develop

an integrated gas industry and provide gas

supplies to the Saudi economy at competitive

prices. That will assist in diversifying sources of

income through establishment of prosperous

industries, particularly petrochemical

industries, along with supply of electricity and

water in a manner that ensures the welfare of

the Saudi society.

The strategy calls for development of

gas supplies and intensifying exploration

operations to increase the Kingdom’s

gas reserves. It also aims at providing

all regions of the Kingdom with gas in a

gradual manner, using ethane and methane

in an optimal manner that ensures growth

of national economy and diversification of

income. According to the strategy, Saudi

ARAMCO will continue exploration works

in its zone of operations as well as operation

(1) Supreme Council for Petroleum & Minerals, General Secretariat, Special Report from Secretary General to the Council 2006

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of gas networks. Furthermore, the strategy

recommends opening the door to investors

for exploration and development of non-

associated gas outside the operations zone

of Saudi ARAMCO, as well as attraction of

foreign investments to the gas sector and

downstream operations of the oil sector.

Saudi Arabian General Investment

Authority (SAGIA)

The Saudi Arabian General Investment

Authority (SAGIA) was established in 2000, to

achieve the goal of taking care of investment

affairs in the Kingdom, including foreign

investment, as well as preparing Government

policies related to local and foreign

investment, proposing executive plans

and regulations required for providing an

adequate investment climate, follow-up and

evaluation of local and foreign investments,

and defining investment opportunities in

various economic sectors.

The investment climate has improved

markedly since the establishment of

SAGIA. The Foreign Investment Law was

promulgated to provide foreign investors

with the following incentives (1):

- Allow foreign investors full ownership

(100%) of their investment projects

- Provide foreign investments with same

benefits, incentives and guarantees

provided to national investments

- Reduce Corporate Tax from 45% to 20%

- Allow foreign investors to repatriate their

invested capital, profits and accrued interest

to their countries of origin

- Partners in any foreign investment project

have the right to waive their shares amongst

themselves and others

- Licensed foreign investment projects have

the right to obtain industrial loans at easy

terms from the Saudi Industrial Development

Fund and other credit institutions

- Licensed foreign investment projects

have the right to possess commercial and

residential buildings needed to implement

their licensed industrial activities

- Foreign investors have the right to make

use of bilateral agreements of investment

protection and promotion signed with the

Government

- It is forbidden to confiscate or expropriate

any investment, wholly or partially, except

upon a decision made by a court of law and

after payment of fair compensation

- Foreign investors may obtain more than

one license for practice of the same activity

or different activities

- Licensed projects may sponsor foreigners

working in the project

- SAGIA, as an agency responsible for

encouraging investment, is responsible for

improvement of investment climate and

quality of investment services

To streamline the procedures of licensing,

SAGIA identified a period of not more than 30

days for granting the license, provided that

all requirements are met in the application.

SAGIA also endeavors to review and improve

investment climate to make it more

competitive relative to other countries.

This includes identification and removal

of constraints which impede investment

activities, increasing degree of transparency,

providing relevant information to investors

and simplifying procedures. All these

contribute effectively to the increase

of investment licenses. Total value of

(1) Arab Investment Journal, Issue 8, October.2005, Interview with HE Governor of SAGIA

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investments licensed by SAGIA, since its

establishment and up to July 17, 2005,

amounted to about SR 143 billion (1).

During the last two years, SAGIA concentrated

on achieving a balance in its activities so as to

attract local as well as foreign investments,

putting in mind the fact that large sums of

Saudi capital (around US$ 700 billion to US

Dollar one trillion) are invested abroad. This

amount which averages around US Dollar

850 billion represents a major concern for

SAGIA which is exerting utmost efforts for

this amount to be repatriated.

In light of directives by the Custodian

of the Two Holy Mosques, King Abdullah

Bin Abdulaziz Al-Saud, to achieve further

improvements in investment climate of

the Kingdom, the list of the constraints

was reduced in 2005 from 126 to only

15.(2). SAGIA’s Directors are endeavoring to

overcome the remaining constraints which

impede investment in the Kingdom.

SAGIA surveyed the actual Foreign Direct

Investment (FDI) made during 2005 (3). The

preliminary findings of the survey indicated

that the cumulative FDI in the Kingdom up to

the end of 2005 reached about SR 97.7 billion

(excluding investments related to exploration

of oil, gas and minerals). Total foreign and

joint investments in 2005 amounted to

about SR 30.4 billion up 95% in comparison

with 2004, where actual investments stood

at SR 15.6 billion. Japan came at the top of

countries investing in the Kingdom with total

value of SR 8.7 billion followed by the United

Arab Emirates, Bahrain, and the United

(1) Arab Investment Journal, Issue 8 October.2005, Interview with HE Governor of SAGIA(2) Arab Investment Journal, Issue.8, October.2005(3) SAGIA: Preliminary Survey Results of Direct Foreign Investment in the Kingdom 2005.

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States of America. It should be noted that

most foreign investments in the Kingdom

are concentrated in the industrial sector (1).

SAGIA also prepared a work strategy, for

the period 2005 – 2010, which comprised

six initiatives: Services, Marketing,

Regional Development, Attraction of new

investors, Development of sectors that have

comparative advantages, and Improvement

of investment climate. The strategy is based

on many criteria, such as the effective

economic impact, the possibility of fast

implementation, low costs, removal of any

complications related to implementation

and the ability to ensure human resources.

In its strategy for the coming period, SAGIA

concentrates on attracting foreign and local

investments for three major sectors selected

according to comparative advantages, size,

and diversity of economic impacts. These

sectors are energy, transport and information

technology.

Total number of projects granted licenses

by SAGIA up to 2005 amounted to 3,343

projects, with total capital of SR 279.6

billion. The total number of industrial

projects increased to 1,324 projects with

total value of SR 129.6 billion, total services

projects to 2,010 with a total value of

SR 149.5 billion, while total number of

agricultural projects reached 9 with a total

value of SR 0.5 billion (2).

It is noteworthy to know that SAGIA has

recently published “Think Magazine”

which aims at promotion of investment

opportunities in the Kingdom. The Magazine

is distributed to heads of 500 large

companies throughout the world (3).

(1) Riyadh Chamber of Commerce & Industry, Riyadh Trade Journal, Issue 523, April 2006, Interview with HE Governor of SAGIA(2) SAGIA, Saudi Arabian General Investment Authority, Investment Performance Annual Report, 2005(3) See SAGIA’s Website: www.sagia.gov.sa

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Value of Foreign Direct Investments (FDI) in the Kingdom by Major Countries up to the end of 2005 (1)

No. Country Number of Projects

FDI(SR million)

FDI(USD million)

1. USA 265 35,341 9,424

2. Japan 35 17,154 4,575

3. UAE 85 11,677 3,114

4. Netherland 48 4,870 1,299

5. Kuwait 101 3,162 843

6. UK 128 2,291 611

7. Bahrain 72 2,280 608

8. Jordan 349 2,211 589

9. Taiwan 5 1,407 375

10. France 79 1,366 364

11. Syria 336 1,314 350

12. Lebanon 242 1,287 343

13. Switzerland 46 1,195 319

14. Italy 34 1,137 303

15. Germany 90 1,057 282

16. Finland 10 1,017 271

17. Sweden 15 884 236

18. Palestine 251 826 220

19. Pakistan 136 799 213

20. Yemen 146 676 180

21. Egypt 187 604 161

22. Canada 74 313 84

23. India 56 304 81

24. Cayman Island 24 301 80

25. R. of Korea 38 233 62

26. Norway 10 181 48

27. Denmark 8 162 43

28. Singapore 5 107 29

29. Turkey 32 98 28

30. Belgium 11 94 25

31. Others 219 3,398 906

Total Value of Investment 97,747 26,066

(1) SAGIA, Saudi Arabian General Investment Authority, Annual Report, 2005

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Supreme Commission for Tourism (SCT)

The Supreme Commission for Tourism

(SCT) was established in 2000, as an

autonomous body entrusted with

tourism affairs in the Kingdom, including

development of tourism, increasing role

of the private sector in tourism, and

removing constraints which impede

development of tourism. Tourism is

considered a major contributor to

national economy, and the private sector

plays a major role in establishing tourism

investment facilities.

The vision of the Commission is to achieve

(unique, valuable tourism development

which produces social, cultural, economic,

and environmental benefits based on

Islamic values)(1), transforming the tourism

sector into a producing sector capable of

attracting Saudi citizens to tour within

the Kingdom, increasing investment

opportunities, developing national

manpower, and provide job opportunities

for Saudis. Accordingly, tourism

development would be considered a

national economic project.

This vision is translated into action

through a scientific approach adopted

by the Commission. This approach

aims at achieving an integrated project

for national tourism development

and institutional development of the

tourism sector, developing tourism

regulations (draft national tourism

security regulation, draft general tourism

regulation), establishing effective

partnership and cooperation with related

agencies, developing and marketing

of tourism related products (Tourism

Promotion and Marketing Strategy)

such as festivals and tourism events,

post-Umrah tourism, tourism guidance,

etc. The approach also aims at training

Saudis and providing job opportunities

in the tourism sector, preparing a social

tourism strategy (tourism awareness

programs, tourism and society, tourism

culture in the educational process),

enhancing international tourism relation

(Arab e-tourism project), representing the

Kingdom in World Tourism Organization

and other organizations, preparing

a tourism information strategy, and

preparation a glossary of tourism

terms. Moreover, an adequate tourism

investment climate will be created

through instruments which encourage

investment, such as tourism development

companies, tourism business services

centers, liberalization of the tourism

services markets and establishment of an

e- tourism market.

In the context of implementation of the

strategic tourism policies in the Kingdom,

the School Tourism Education Program

(SMILE) was launched in September 2005

in collaboration with the Ministry of

Education. This program aims at spreading

tourism culture in schools.

Moreover, in December 2005, an

agreement was reached with the

Ministry of Interior to issue tourism visas.

Furthermore, Jeddah Satellite Channel

was launched as the first Saudi Channel

specialized in tourism affairs. This channel

aims at encouraging domestic tourism.

(1) Supreme Commission for Tourism, SCT Manual of Methodology & Initiatives for Implementation of the National Tourism Strategy.

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Capital Market Authority (CMA)

The Capital Market Authority (CMA) is an

autonomous Government agency reporting

directly to the Chairman of the Council of Ministers.

CMA is responsible for supervision, regulation

and development of the capital market as well as

issuing rules, regulations and directives required

for enforcement of the provisions of the Capital

Market Law in order to create a sound investment

climate in the Market and to enhance trust and

confidence in it. CMA is also responsible for

ensuring adequate disclosure and transparency

for the companies listed in the Market as well as

protecting investors and traders of securities.

CMA has the authority of regulating and

developing the Capital Market, developing

systems and techniques of agencies dealing with

securities trading and protecting investors from

illegal practices, forgery and deceit, and from

trading according to insider information. By doing

so, CMA aims at achieving efficiency, justice and

transparency of trading securities and developing

measures and controls needed to reduce risks

related to trading. It also aims at regulating

issue of shares, controlling activities of agencies

under its supervision and regulating disclosure

of information related to securities and issuing

agencies. CMA is managed by a Board of Directors

composed of five full-time members appointed by

Royal Decree.

In its first action, CMA issued rules organizing the

Market on December 14, 2003 (2). These are:

- Market Conduct Rules, including measures for

prevention of market deception and manipulation,

prohibition of trading based on information

provided by insiders, measures related to

responsibility of incorrect data, controls related to

behavior and conduct of the licensed party, etc.

- Rules of Offers of securities (public and private)

as well as exempt offers and the responsibility

regarding invalidity of documents, etc.

- Rules of Registration and listing provisions and

abiding by such provisions and other measures

which regulate the process of registration for

those willing to register their securities in the

official list

CMA has listed a number of joint stock companies,

operating in various economic fields, in the Capital

Encouraging Tourism Investment as Seen by the Commission (1)

InitiativeDate of Start

Date ofCompletion

% ofAchievement

Identifying and Addressing Tourism Investment Constraints 2001 2005 100

Proposed Tourism Development Companies 2004 2007 35

Tourism Business Services Centers 2003 2005 25

Development of Tourism Destinations 2002 2007 20

Study the Possibility of Financing Tourism Development 2003 2005 20

Review & Update Investment Regulation in the Tourism sector 2002 2007 Ongoing

Liberalize Tourism Services Market 2002 2007 60

Study e-Tourism Market Project (SETS) 2003 2005 50

(1) Supreme Commission for Tourism, SCT Manual of Methodology & Initiatives for Implementation of the National Tourism Strategy.(2) Al Eqtissadia Newspaper, Issue 4071, December 2004

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Market. It also reduced the nominal value of the shares

of the listed companies from SR 50 to SR10 thereby

splitting each share into five shares and allowing non-

Saudis residing in the Kingdom to trade in shares. CMA is

exerting maximum efforts to develop rules and measures

which protect the rights of shareholders and to make the

market one of the most effective economic tools in the

process of economic development in the Kingdom.

Communications & Information Technology

Commission (CITC) (1):

The Communications & Information Technology

Commission (CITC) is a Government organization that

was founded in 2001. It is responsible for regulation of the

telecommunications and information technology sector

in the Kingdom so as to provide high quality services at

affordable costs. CITC endeavors to create an adequate

environment for the growth of communications and

information technology market and to encourage fair

competition.

CITC also protects interests of service users, controls

performance of licensed service providers, and

endeavors to provide an adequate climate for investment

in communications and information technology sector.

The major tasks of CITC are:

- Encouraging investment in communications and

information technology services

- Granting licenses for provision of communications and

internet services

- Protecting interests of users and controlling licensed

service providers

- Encouraging free market for provision of services

- Implementing policies, plans and programs approved

for development of the communications and

information technology sector

The Major achievements made by CITC during 2005,

include the following:

- Prepare specialized studies on communications and

information technology market in the Kingdom and

studying optimal ways for opening the market for

competition

- Grant licenses for new and other existing activities

(such as, a second license for provision of mobile

telephone services, two licenses for provision of third

generation (3G) services, two licenses for provision

of data as well as additional licenses for provision of

internet and SMS services)

- Prepare the National Digitalization Plan

- Prepare the policy of universal service and the right of

universal use, and many other achievements.

The Number of land telephone subscribers amounted to

about 4 million up to 2005

The number of mobile telephone subscribers exceeded 13

million up to 2005, with a penetration rate of 57% of the

population

The number of internet users exceeded 3 million with a

penetration rate of 13% of population

The share or contribution of the communications and

information technology sector to GDP amounted to about 6%.

Communications & Information Technology Commission

(CITC)

It is noteworthy to note that the Kingdom’s

experience regarding liberalization of this sector

comprised the following stages (2):

- Stage One: Transforming the telecommunications

agency in 1998 into a business oriented

company named Saudi Telecom

Company (STC)

- Stage Two: Restructuring and regulating the sector

through issuance of the

telecommunications law and

relevant by-laws in addition

to establishment of CITC in 2001

- Stage Three: Partial privatization of STC by offering

30% of its shares at the beginning of

2003 through public subscription

(1) CITC, Communication & Information Technology Commission, Introductory Bulletin, See: www.citc,gov.sa (2) Ibid

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- Stage Four: Starting liberalization of the market

and allowing competition by granting

new licenses for provision

of communication services via

V Sat, granting a second license

for provision of mobile telephone

services (GSM) in addition to licenses

granted for (3G) services in the fourth

quarter of 2004

- Stage Five: Achieving full liberalization of the

market (licenses for establishment

of networks and provision of

communication and

information technology services

according to best international practices

Royal Commission for Jubail & Yanbu:

The Royal Commission for Jubail and Yanbu was established in

1975. Its headquarters is located in Arriyadh. The Commission

is governed by a Board of Directors responsible for preparation

of policies and manage their implementation through two

General Directorates located in Jubail and Yanbu Industrial

Cities. The Commission was entrusted with the responsibility

of implementing physical and social infrastructure required for

the development of Jubail and Yanbu regions and transforming

them into two industrial cities. The major missions of the

Commission are:

- To promote, assist, service and encourage the development of

basic, downstream and light industries that would utilize the

Kingdom’s natural resources to produce value added products

for local consumption and export

- To plan, develop, construct, operate and maintain various

infrastructure and services needed for these industries

- To urge these industries to employ Saudi nationals and upgrade

their skills and capabilities

- To maintain balance between industrial development and

protection of the environment

- To encourage Saudi and foreign private sectors to invest in the

two cities

- To coordinate with other related agencies such as Saudi

ARAMCO, Seaports Authority and others to facilitate supply of

feedstock and services needed by such industries

An amount of SR 84 billion was invested for

development of Jubail and Yanbu Industrial

Cities. The result was establishment of 233

industries with total investments of around SR

244 billion. This brings total investments in the

Royal Commission to about SR 328 billion and

total job opportunities to more than 107,000.

Moreover, the populations of the two cities,

which amount to around 154 thousand persons,

enjoy the most modern life style.

“Chairman, Royal Commission for Jubail &

Yanbu”

The Royal Commission received many local,

regional and international prizes in recognition of

its efforts exerted in different fields (environment

protection, city planning, and plantation).

The share of the two industrial cities in the GDP

amounts to SR 58,202 billion or 8.06%, and their

share of the non-oil GDP is 12.5%. The share of

the two cities of the industrial production of the

Kingdom is 60% and their share of total non-oil

exports is 80%. They employ about 19 % (1) of the

total industrial employment of the Kingdom.

The most important investment opportunities in

Jubail and Yanbu Industrial Cities are:

- Industrial investment opportunities:

establishment of joint industrial ventures with

foreign companies

- Commercial investment opportunities:

provision of developed commercial land to

companies

- Residential investment opportunities:

establishment of housing projects to meet the needs

of the two cities

It should be noted that total investments

made by the Royal Commission and the private sector

(1) Royal Commission for Jubail & Yanbu , Website: www.rcjy.gov.sa

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in the two cities increased markedly by the end of 2005

recording about SR 12.2 billion including

SR 7.9 billion invested by the Commission and

SR 4.3 billion by the private sector. The total number of

industrial projects amounted to 358 including 40 basic

industries, 70 secondary industries and 248 support

industries (1).

The most eminent investment projects of the Royal

Commission, at present, are Jubail 2 and Yanbu 2

projects with total costs of about SR 14 billion for Jubail

project of which SR 3.5 billion is for stage 1 which

is expected to be completed by 2007 .The project

is likely to attract around SR 210 billion. The cost of

Yanbu 2 project is about SR 50 billion and it comprises

many investment opportunities in the fields of studies

and design, services, construction, operation and

maintenance, and others. The project is expected to

be completed by the beginning of 2009 (2). Moreover,

upon completion, Yanbu 2 project is expected to

attract about SR 115 billion of investments leading to

establishment of 34 basic and secondary industries and

224 light industries. Hence, total investments in Yanbu

Industrial City, after completion of Yanbu 2 project by

2019, will exceed SR 200 billion and will provide about

116,000 job opportunities in the next few years (3).

Saudi Organization for Industrial Estates & Technology

Zones (4)

The Basic legislation to set up the Saudi Organization

for Industrial Estates & Technology Zones was endorsed

by Council of Ministers Resolution 235 on November 13,

2001.

The Organization took over the tasks of administering

the industrial estates from the Ministry of Commerce

& Industry on April 27, 2005 per Council of Ministers

Resolution 265 dated November 28, 2004.

Since then, the Organization commenced preparation

of its future plans in line with long-term objectives and

strategies of industrial development adopted by the

Government, and on the basis of offering additional

projects for development of industrial land to the

private sector to meet the growing demand for and

services thereto. The Organization also started to

establish technology zones which employ the findings

of research, innovations and high tech industries that

enjoy high value added, in addition to rehabilitation

of the existing industrial estates. The plans of the

Organization are:

> Projects of new industrial estates development:

These include the following:

- Part 1 of phase 1 of Sudair Industrial Estate with a total

land area of 10 million m². Nov. 2005 - Nov. 2008

- Phase 1 of Jeddah 2nd Industrial Estate, with land area

of 3.5 million m² Jan. 2006 - Oct. 2007

- Phase 4 of Dammam 2nd Industrial Estate, with land

area of 4 million m² Oct. 2006 - Oct. 2009

- Phase 1 of Jazan Industrial Estate, with land area of 2.6

million m² Oct. 2006 - July 2008

> Rehabilitation of five projects, including improvement

of water and sanitary waste in the existing industrial

estates in Arriyadh, Jeddah, Dammam, Hassa & Qassim.

These will be implemented by the private sector on

BOT basis, with a total cost of about SR 160 million July

2006 - May 2009

> Undertaking operation and maintenance projects of

existing industrial estates by the private sector on

leasing contracts following the end of the present

contracts of SR 40 million per year financed by the

Government

(1) Royal Commission for Jubail & Yanbu, Planning & Investment Department, Internal Bulletin, 2006(2) Ibid (3) Royal Commission for Jubail & Yanbu, Website: www.rcjy.gov.sa (4) Saudi Organization for Industrial Estates & Technology Zones, Projects Report, 2006

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> Implementing 8 projects related to supply of electricity

services to the new industrial estates of Sudair, south

of Jeddah, Dammam, Jazan, Najran, Hail, Jouf and

Tabuk with a total capacity of 310 MW and total cost

of SR 350 million.

> Establishing technology zones in various regions of the

Kingdom, including:

- Industrial Technology Zone for Information,

Telecommunications and Electronics at King Khaled

International Airport

- Information Technology Zone of the Public Pensions

Agency in Alnakhil Quarter, Arriyadh.

The total cost required for establishment of technology

zones in the Kingdom during the Eighth Development

Plan 2005 - 2009 is about SR 766 million, and the

total cost of the Organization’s projects pertaining

to expansion in industrial estates and rehabilitation

of the existing ones together with establishment of

the technology zones is SR 2,656 million during the

Eighth Development Plan (1) .

Saudi ARAMCO

The Arabian American Oil Company (ARAMCO) was

established in 1933, when it undertook the concession

of oil exploration. The company became wholly

owned by the Government of Saudi Arabia in 1980,

and in 1988, undertook management and operational

responsibilities. A Royal Decree was issued in 1993,

which stipulated the merging of all refineries and oil

producing facilities in Saudi ARAMCO, which undertook

responsibilities regarding most of the Kingdom’s works

in gas and petroleum sectors, starting with exploration

and production, up to refining, transportation and

marketing.

Saudi ARAMCO is considered a major pillar of the Saudi

economy. It obviously contributes towards the GDP

growth and provision of Government revenues as well

as export proceeds.

Saudi ARAMCO operates 92 oil fields and 13 gas fields

throughout the Kingdom, including the Red Sea region.

The proven extractable reserves in fields operated and

supervised by Saudi ARAMCO stood at 264.2 billion

barrels in 2005. These reserves constitute about 23% (2)

of total world reserves.

The Company ranks the fourth in the world regarding

gas reserves, which accounts for 243.6 trillion m³

according to the company’s estimations for 2006 (3). The

Company ranks eighth in terms of refining capacity. The

Company owns and operates the second largest fleet of

tankers in the world. It ranks first among oil companies

in the world for the sixth consecutive year, according to

the Petroleum Intelligence Weekly Bulletin.

– Saudi ARAMCO owns the second largest fleet

of tankers in the world

– Saudi ARAMCO employs about 54,500

employees 87% of which are Saudis

– The Company is 100% owned by the

Government of Saudi Arabia

– The Company has affiliates, joint ventures,

offices and companies in China, Egypt,

Greece, Japan, Netherlands, Philippines,

South Korea, Singapore, UAE, UK and USA.

Saudi ARAMCO and Sumitomo Chemical Ltd.

Of Japan signed a partnership agreement to

establish a joint venture to develop a huge

and integrated complex in the field of refining

and petrochemical products at Rabigh on the

Western coast of the Kingdom in 2005

– The main refineries are: Ras Tannura Refinery

with a capacity of 325,000 bpd and 200 barrels

condensates; Jeddah Refinery with a capacity

of 84,000 bpd; Riyadh Refinery with a capacity

of 122,000 bpd; Yanbu Refinery with a capacity

of 235,000 bpd, and Rabigh Refinery with a

capacity of 370,000(4) bpd

– Headquarters: Dhahran, Kingdom of Saudi Arabia

(1) Saudi Organization for Industrial Estates & Technology Zones, Projects Report, 2006(2) Ministry of Economy & Planning, Achievements of Development Plans, Facts & Figures, 23rd Issue 1970 - 2006(3) Ibid(4) Ibid

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Production laboratories were launched in Qatif and

Abu Saafa with production capacity of 800,000

bpd of crude oil, in addition to production of huge

quantities of accompanying gas of 370 million

standard cubic feet per day according to the

company’s statistics for 2004 (1). Furthermore, the

largest oil field in the world was discovered, which

is Al-Ghawar oil field, in the Eastern Province. In

addition the largest submerged oil field in the

world was discovered, which is Al-Safanyah oil

field, in the Arabian Gulf. Investment opportunities

in the Company are reflected in domestic joint

ventures refineries projects such as:

- Saudi ARAMCO / Exxon Mobil Refinery (SAMREF),

a joint venture owned on 50:50 bases with Exxon

Mobil Company, 400,000 bpd

- Saudi ARAMCO / Shell Refinery (SASREF), a joint

venture owned on 50:50 bases with Royal Dutch

Shell, 305,000 bpd

- Saudi ARAMCO Petroleum Lubricating Oil

Refining Company (Luberef): Saudi ARAMCO

owns 70% while Exxon Mobil owns the remaining

shares, 4.4 thousand bpd

- Saudi ARAMCO Petroleum Lubricating Oil

Company (Petrolube): Saudi ARAMCO owns 71%

while Exxon Mobil owns the remaining shares,

6.5 million barrels/day.

- The Company enjoys diversification of its

investment opportunities represented by

international joint ventures reflected in its

partnership with five international ventures

which are:

- Petron Corporation which is the Philippine

National Oil Company. Saudi ARAMCO owns

40% of Petron since 1994

- Motiva Enterprise: This is a joint venture

between Saudi ARAMCO (32.5%), Texaco of

the USA (32.5%), and Shell (35%). Operations

of this joint venture are concentrated on the

Gulf and Eastern Coasts of the United States.

The Company owns four refineries

- S. Oil Corporation, a South Korean oil refining

company. Saudi ARAMCO owns 35% of this

company’s shares.

- Motor Oil Hellas and Avin Oil: a Greek refining

and marketing company. Saudi ARAMCO

owns 50% of the company’s refineries.

Saudi Basic Industries Corporation (SABIC)

SABIC is the largest non-oil industrial

company in the Middle East. It ranks tenth in

the list of the top international petrochemical

companies. SABIC was established in 1976 (2)

to invest the Kingdom’s natural hydrocarbon

and mineral resources. Its Head Quarters

is located in Arriyadh. SABIC’s production

network in the Kingdom encompasses 17

industrial companies, most of which are

in Jubail Industrial City on the Arabian Gulf

Coast, while the others are in Yanbu Industrial

City on the Red Sea Coast. Dammam City

in the Eastern Province hosts one of these

companies. In 2006, a SABIC affiliated

company was established in Yanbu Industrial

City, which is Yanbu National Petrochemicals

Company (YANSAB). SABIC owns SABIC Europe

Petrochemicals Company, with two major

manufacturing locations in Geleen in the

Netherlands and Gelsenkirchen in Germany,

in addition to three industrial complexes in

Bahrain with joint Gulf capital funding.

- The Government of the Kingdom owns 70% of

SABIC while the remaining shares are owned

by Saudi and other GCC nationals. SABIC’s

products account for some 80% of the

petrochemicals exports at present

(1) Saudi ARAMCO, Website: www.saudiaramco.com (2) SABIC, Saudi Basic Industries Corporation Annual Report, 2004

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- SABIC ranks Second in the list of the largest

international companies in the production of ethylene

glycol, methanol, MTBE, ranks Third in production of

polyethylene, fourth in production of poly olefins,

and sixth in production of poly propylene

- SABIC owns a 20% share of the Bahrain

Aluminum Company, 31.3% of Gulf Aluminum

Rolling Company, 20% of the National Chemicals

Transportation Company, 25% of the Jubail Yanbu

Utility Company, 20% of TAP - Line, and 16.67% of

A.R.G.

This production network comprises a high tech system

to develop technology and applications, provide

actual support services to product consumers, in the

form of (SABIC Industrial Research & Development

Complex) in Arriyadh City, hi tech centers in Jubail

Industrial City, India, Holland, and the United States,

in addition to an advanced marketing network

spread, with its branches, offices and warehouses

around the world establishing long term ownership

relationships with consumers in various continents.

SABIC manages its operations through a group of

specialized working strategy units, which are: basic

chemicals, intermediaries, poly olefins, poly chloride

phenyl, polyester, fertilizers and minerals, in addition

to Joint Services Unit, which offers services to various

units including other centralized units.

In 2005, the Company achieved huge profits that

amounted to SR 19.2 billion in comparison with

SR 14.2 million in 2004, since production increased

to 46.7 million tons, an increase of 9%, and sales

volume to 36.6 million tons, an increase of 9% also.

Among the most significant achievements of SABIC

in 2005 was that it obtained a credit rating (A) as well

as offering YANSAB shares for public subscription,

which are traded in the domestic stock exchange, in

addition to the completion of Al- Fanar project in the

third quarter of 2005 (1).

SABIC’s plan is to achieve total annual production

capacity of 60 million MT in 2008, and total

investments in its on-going and planned projects to

more than SR 30 billion (2).

Saudi Arabian Mining Company (MA’ADEN)

The Ministry of Petroleum and Mineral Resources

supervises mining activities in Saudi Arabia

including those of MA’ADEN, that was established

in accordance with the Royal Decree M / 17 dated

March 22, 1997, with a capital of SR 3.8 billion and

is wholly owned by the State. The Ministry also

encourages investment in the domain of mining

and provides possible services and consultation

to support this activity. Furthermore, the Ministry

supervises issuance of mining licenses and deeds in

line with pertinent adopted rules and regulations.

During 2004, the new Mining Investment

Law was issued by Royal Decree M / 47 dated

October 4, 2004 to regulate investment in the

field of mining in Saudi Arabia.

By the end of 2004, the number of valid mining

licenses reached 1,179 licenses, including 43

survey permits, 28 exploration licenses, 31 small

mines licenses and 32 mining concessions,

including 15 concessions for exploration of

cement ore and 17 mining concession for

utilization of precious metals, basic metals and

industrial metals, 1,045 permits for building

materials, which utilized about 233.9 million

tons of various metal ores such as limestone,

silica, salt, gypsum etc (3).

The activity of MA’ADEN constitutes part of the

mining activities related with the Deputy Ministry

for Petroleum and Mineral Resources.

The Company owns four mines for production

of gold, which are Mahd Al-Dahab, the first gold

producing mine in the Kingdom, Al Hajar Mine,

Sukhaibrat Mine and Balgha Mine.

(1) SABIC, Saudi Basic Industries Corporation, Annual Report, 2005(2) Ibid (3) Deputy Ministry for Petroleum and Mineral Resources, Special Report on MA’ADEN, 2005

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MA’ADEN has four projects under development, Al-Amar

Gold Mine (Riyadh Region), Al-Ghazala Governorate

Magnesite Mine (Hail Region), Phosphate Project

(Northern Frontiers), Al-Zubaira Bauxite Project (Qassim

and Hail Regions).

The Company has obtained 16 exploration licenses

for various sites throughout the Kingdom. It also

possesses 5 concessions for gold mining and one

concession for magnesite. In 2003, the Company

obtained two new licenses for exploration of

precious and associated metals as well as one

survey permit. The Company announced its

intention to offer 50% of all of its shares in projects

for public subscription (2) soon after the issuance

of the Council of Ministers’ Resolution 109 of May

24, 2004, calling for the privatization of MA’ADEN.

Among the most significant developments to be

realized in the field of mining during the coming

years is the establishment of (Ras Al-Zour Mining

City) to become the first integrated mining city in

the Kingdom.

Saudi Ports Authority

Established in 1965, the Saudi Ports Authority

started to take active measures to realize its

objectives. The Authority re-organized ports,

qualified them and upgraded their efficiency. It

implemented a series of projects, thus ensuring

an integrated set of ports, the number of which

reached 8 (6 Commercial and 2 Industrial Ports)

on the Red Sea and Arabian Gulf. These ports

encompass 186 berths at a depth of 11 - 32 meters

with an annual capacity of 266 million tons. These

ports are provided with state-of–the art handling

equipment and marine craft, as well as pertinent

supporting services (3).

Following completion of necessary infrastructure

in all ports, the Authority followed two paths to

keep abreast of new developments in the marine

arena, as ports shifted from mere commodity

handling facilities to economic entities with direct

impact on the economy and trade simultaneously,

and as a result of the changing trade patterns and

systems:

First: On-going development of the ports

capabilities through increasing depth at the

entrances and basins of berths in main ports to

receive various size vessels.

Second: Providing new services consistent with

contemporary developments as well as a keenness

to upgrade the standard of performance and

improve productivity in general.

Production of MA’ ADEN during 2000 - 2004 (1)

Year Type Gold

(Thousand Ounces)Silver

(Thousand Ounces)Copper

(ton)Zinc(ton)

2000 116.7 279.7 804 2,520

2001 139.2 321.1 839 1,911

2002 147.5 384.5 587 1,209

2003 282 559.5 627 1,797

2004 265.8 466 652 -

(1) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report 2005(2) Al Eqtisadiah Newspaper, Issue 4515 of February 20, 2006 (3) Saudi Ports Authority, King Fahad Port, Jubail Industrial City, Introductory Bulletin

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Theme Five:

Financial Services & Credit Funds In

The Kingdom

Saudi Industrial Development Fund (SIDF) (1)

The Saudi Industrial Development Fund (SIDF)

was established in accordance with a Royal

Decree in 1973 as a government financing and

developmental body linked with the Ministry

of Finance. SIDF assumes a key role in the

support and realization of the objectives of

the country’s five – year development plans in

the field of industrial development, through

supporting projects in this sector and creating

investment awareness in the Kingdom. This

support is represented by providing medium

and long term soft loans to the private sector

as well as providing consulting services

in technical, administrative, financial and

marketing domains.

SIDF started operation with a capital of SR 500

million. Due to the growing and high demand

by the private sector for the Fund’s loans, its

capital was increased to SR 20 billion after

allocation of SR 13 billion from the budget of

fiscal year 2006, in accordance with a Royal

decree issued by the Custodian of the Two

Holly Mosques. Accordingly, SIDF has raised the

maximum limit of industrial projects loans to

SR 600 million, instead of SR 400 million.

The following are the most important strategic

objectives SIDF seeks to accomplish in the

context of supporting industrial development

process in the Kingdom:

- Enhance competitiveness and expand the

industrial base of the private sector

- Realize industrial integration among various

sectors

- Encourage and develop the role of small and

medium enterprises (SMEs)

- Attract foreign capital and ensure technology

transfer and assimilation

The policies and measures adopted by SIDF

regarding provision of loans are reflected in

providing such loans to industrial projects

carried out by the private sector (including

projects with foreign partners), encouraging

intensive linkages and making use of other

economic sectors, such as adherence to using

local materials and procurement of locally

produced building materials, and awarding

work tenders (engineering, accounting,

consulting etc) to Saudi firms which possess the

necessary experience.

Following are the main policies pertaining to

the SIDF’s lending rules:

- Individuals, national and foreign companies

with industrial licenses in Saudi Arabia can

request loans form the Fund.

- The terms of loans provided by the Fund shall

not exceed 15 years. The loans are repaid in

accordance with specific maturity schedules

consistent with expected cash flows of the

projects enjoying such loans.

- The Fund finances industrial projects at a rate

that reaches up to 50% of the costs of fixed

assets, start-up expenses and working

capital, provided that not more than one

year has passed since the start of commercial

production. The Fund does not finance

purchase of used machinery.

- The Fund mortgages fixed assets of the project

as well as ensuring personal guarantees from

partners in limited liability companies.

(1) Saudi Industrial Development Fund, SIDF Report on Activities, Achievements, Programs & Tasks 2006

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- The Fund stipulates contribution of projects’

owners that they finance not less than 25% of

their projects’ costs.

- Approved loans shall be disbursed in accordance

with actual implementation of projects and in

line with supporting documents.

In order to ensure continued growth of the

industrial sector, SIDF allocated SR 500 million

to finance development of infrastructure of

industrial estates and technology zones which

are established on land owned by the Saudi

Organization for Industrial Estates & Technology

Zones, as well as land owned by the private

sector. In the context of its efforts to support

small and medium enterprises, SIDF adopted

Kafala SMEs Finance Program with a view to

overcome problems of obtaining adequate

financing for such enterprises.

This program was established with a capital

of SR 200 million with contributions from local

banks and Ministry of Finance. The program

depends on the guarantee mechanism as it

guarantees 75% of the value of the finance not

exceeding SR 2 million, provided that properties

of the enterprise shall be mortgaged in favor

of the funding body until the whole finance

amount is repaid.

Following are the program’s procedures:

- The small or medium enterprise interested

in investment shall submit a request to a

commercial bank to obtain financing. In

the event the firm does not have sufficient

collateral, then it requests financing under the

Kafala Program.

- The bank submits an application to the Kafala

Program to guarantee the finance requuired.

- Kafala Program administered by SIDF shall

review the request in accordance with

principles adopted for issuance of the Kafala

(Guarantee) in favor of the bank financing the

firm.

The total number of industrial projects

that benefited from SIDF’s loans since its

establishment up to the end of 2005, fiscal year

reached 1,942 industrial project, with total

allocations valued at about SR 52 billion of

which SR 35.2 billion has already been disbursed.

The remaining amount will be disbursed as per

time schedules adopted for implementation of

projects, for loans which are already approved.

The total amounts repaid to SIDF stands at SR

25.4 billion (1), reflecting the significant success

of industrial development and the response

of investors as well as their understanding

of the role SIDF plays in boosting industrial

development process in the Kingdom.

(1) Saudi Industrial Development Fund, SIDF Report on Activities, Achievements, Programs & Tasks, 2006(2) Saudi Industrial Development Fund, SIDF Management Special, Report 2006

Number & Volume of Accumulated Approved Loans by Industrial Sector since Establishmentof the Fund up to 2005 (2)

Sector Number of projects Size of loans (SR million)

Consumer Industries 550 10,773

Chemical Industries 473 18,610

Cement Industry 22 6,176

Building Materials Industry 299 5,180

Engineering Industries 561 10,775

Other Industries 37 495

Total 1,942 51,973

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Real Estate Development Fund (REDF)

The Real Estate Development Fund was established in accordance with the Royal Decree 27 of July 1, 1974,

to provide loans to citizens in order to help them establish their own houses as well as for investment

purposes. The Fund started its tasks with a capital of SR 250 million.

The Fund provides exemption of 10% for accelerated repayments only. REDF was subsidized from the 2006

budget by SR 9 billion. The value of total loans provided by REDF since its inception up to the end of 2004,

amounted to about SR 127.6 billion, while the total value of outstanding loans by the end of the same year

reached SR 69 billion.

In 2004, REDF provided loans valued at about SR 1.8 billion, while repayments stood at about SR 2.1

billion.

Public Investment Fund (PIF)

The Public Investment Fund (PIF) was established by Royal Decree M / 24 of August 17, 1971, to finance

some business oriented production projects due to their significant importance to the development of

national economy. The Fund provides the basic factors of such projects, which the private sector cannot

solely provide, due to insufficient experience, capital, or both.

The Fund provides loans to local refinery projects, manufacturing of lubricants, petroleum products

storage facilities, crude oil and petroleum products distribution pipelines, export refineries, steel

factories, fertilizers and petrochemicals factories as well as loans for purchasing planes for SAUDIA, water

and electricity companies, holy sites projects, etc.

It also holds shares in the capitals of such companies as cement, electricity, insurance, public transport,

agriculture, gas, petrochemicals, services and real estate.

The Fund also holds shares, in the name of the Government, in several joint Arab companies as well as

Arab bilateral companies.

The value of total loans provided by the Fund, up to the end of 2004, stood at about SR 64.6 billion, while

repayments reached about SR 48.7 billion, while the value of outstanding loans amounted to SR 15.9

billion. The value of actual total disbursement of loans declined by 37.8% compared with the previous

year, to reach SR 0.84 billion. Furthermore, repayment of loans reached about SR 11.4 billion, a significant

increase of 2096.6 % (2).

Saudi Fund for Development (SFD)

The Saudi Fund for Development was established in accordance with Royal Decree M / 48 of September 1,

1974 and started operation on March 11, 1975. The objective behind establishment of this Fund is to provide

(1) Table derived from the 41st Statistical Yearbook, of Central Department. of Statistics & Information, 2005(2) Saudi Arabian Monetary Agency, 41st Annual Report, Plus Website of Ministry of Finance regarding the Public Investment Fund www.mof.gov.sa

Activity of REDF (SR million) (1)

Item 2003 2004 % of Change

Actual Expenditure 2,261 1,773 -21.6

Repayments 2,117 2,097 -9

Outstanding Loans 69,408 68,996 -6

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soft loans to the governments of developing

countries with a view to contribute in financing

priority development projects. In 2001, the Fund

assumed the task of financing national exports

to contribute towards diversification of national

income sources through provision of facilities

regarding finance and guarantees necessary for

the development of Saudi non-oil exports, along

with supporting developmental projects needs

for national products and increasing the volume

of trade exchange with friendly countries.

The finance insurance and export guarantee

service actually started at the beginning of

September 2003 by launching its first product

represented in the export finance guarantee

document to Saudi exporters, with a view to

meeting their needs for carrying out export

operations and encouraging them to compete

with others in external markets to win export deals

and various projects. Up to the end of 2004, the

Fund issued 13 Saudi export finance guarantee

documents for 172 importers, with an export

value of SR 221.62 million (1).

Saudi Arabian Agricultural Bank (SAAB)

The Saudi Arabian Agricultural Bank (SAAB) was

established by Royal Decree 58 of April 30, 1963 as

a public credit institution specialized in providing

finance for various agricultural activities in all

regions of the Kingdom. The Bank also assists in

the development of the agriculture sector and

enhancement of its production efficiency by

introducing the best and state–of–the art scientific

and technical methods through providing interest-

free soft loans to farmers to enable them to secure

such industry prerequisites as machinery, irrigation

pumps, agricultural equipment, livestock, poultry,

fish and aviary farming equipment, etc. The Bank’s

capital totaled SR 10,838,621,000.

SAAB provides loans and credit facilities to help

in the development, promotion and activation of

the agricultural sector, including the following (2):

- Growing, storing and marketing agricultural and

forestry products as well as livestock and poultry

breeding and fish farming.

- Land reclamation.

- Credit facilities for providing water supply

required for above purposes.

SAAB’s loans are concentrated on the following

two types:

1. Ordinary Agricultural Loans

These loans are extended to finance cultivation

of field crops of all sorts, operation of fruit farms,

honey bee keeping projects, fishing boats and

agricultural equipment.

2. Specialized Agricultural Loans

These are for commercial projects in which large-

scale economic resources are invested in order to

build organized, well established and economically

feasible production projects such as: egg-laying

poultry farms, meat fattening poultry farms, meat

fattening and egg-laying mother poultry farms,

dairy products processing farms, agriculture

projects using air-conditioned green houses, sheep

breeding and fattening projects, fish and shrimp

breeding projects.

The value of total loans approved by the SAAB(3)

since its inception in 1966, up to 2004, reached

about SR 37.1 billion, allocated to fund 416,800

loans that contributed to activating and

modernizing the agricultural sector, as well as the

establishment of specialized agricultural projects.

During 2004, the amount of loans approved by

the Bank amounted to about SR 1,044 million,

compared with SR 612.2 million in the previous

year, an increase of SR 431.7 million, or 70.5%.

These amounts were allocated for funding 5,136

medium and long term loans compared to 2,259

(1) Saudi Fund for Development, Annual Report, 2004, see also SFD Website www.sfd.gov.sa(2) SAAB, Saudi Arabian Agriculture Bank, Informative bulletin(3) Ibid

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loans in the previous year, an increase of 2,877 loans, or 127.4%.

The amount of total subsidies provided by the Bank since inception of its subsidy activities in 1974 up to

the end of 2004 reached about SR 12.5 billion, to encourage farmers to use mechanization and modern

science in their agricultural business. The total amount of subsidies rendered during 2004 stood at about

SR 246.2 million, compared with about SR 249.7 million in the previous year (1).

Saudi Credit Bank (SCB)

The Saudi Credit Bank (SCB) was established by Royal Decree M / 44 on November 9, 1971 (4). According to the

provisions of its articles of association, the Bank was established as a financially and legally independent entity,

eligible for acquisition, disposal and litigation. The Bank was established to extend interest free loans to Saudi citizens

with limited financial resources, to help them overcome their financial difficulties. Its loans are extended in return for

sufficient mortgage or acceptable guarantee from a creditworthy individual or firm to ensure repayment of the loan.

The Bank extends loans, the value of each not exceeding SR 20,000, according to specific conditions such as:

(1) SAAB, Saudi Arabian Agriculture Bank, Annual Report, 2004(2) SAMA, Saudi Arabian Monetary Agency, 41st Annual Report, copied from SAAB(3) SAAB, Saudi Arabian Agriculture Bank, Annual Report, 2004(4) Ministry of Finance, Saudi Credit Bank, Informative Bulletin

Distribution of Subsidies Approved by SAAB by Fields During2003 & 2004 (SR million) (3)

Purpose2003 2004

Value (%) Value (%)

Machines and Pumps 148.8 59.6 145.6 59.1

Agricultural Machinery 99.3 39.8 97.4 39.6

Poultry Breeding Equipment 1.6 0.6 2 0.8

Transport of Imported Cattle 0.0 0.0 1.2 0.5

Total 249.7 100 246.2 100

Distribution of loans Approved by SAABby Purpose During 2004 (SR million) (2)

Purpose2003 2004

Value (%) Value (%)

Agricultural Projects 216.6 35.4 152.5 14.36

Well Drilling 67.5 11 83.7 8

Agri. Machinery 85.1 13.9 225.2 21.6

Pumps 39 6.4 95 9.1

Palm Seedling 22.8 3.7 68.5 6.6

Irrigation Equipment 46 7.5 116 11.1

Machines 32.8 5.4 76 7.3

Sort-term Loans 17 2.8 7.9 0.8

Other 85.5 14 219.2 21

Total 612.3 100 1,044 100

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– A loan applicant must be in actual need of the loan.

– His annual income should not exceed SR 36,000

– He should not have outstanding loans from SCB.

– Submitted guarantee should conform to SCB’s by-laws and relevant regulations.

SCB provides loans for purposes such as marriage, home repair and other social loans including family loans,

vocational loans (not exceeding SR 200,000) and taxi drivers loans which commenced in May 2002. Since its

inception and up to the end of 2004, the bank provided about 509,900 loans with a total value of SR 8.4 billion, of

which about 20,900 loans were disbursed during 2004. The volume of outstanding loans by the end of the same

year reached about SR 1 billion (1) .

The value of repaid loans by the end of 2004 reached about SR 403 million, an increase of about 9.1% compared

to 2003 (3).

Human Resources Development Fund (HRDF) (4)

The establishment of the Human Resources Development Fund, as an administratively and financially independent

entity, came as a result of a clear vision for a strategic Saudi objective, the attainment of which represent an

unprecedented challenge reflected in Saudization of the private sector’s jobs. The establishment of the Fund

came as an effective mechanism to contribute towards providing qualified and well trained Saudi youth (both

male and female) with a view to realize the strategic objective which will provide the nation with social, security

and economic benefits.

The Fund was established per Council of Ministers’ Resolution 107 of July 31, 2000 and Royal Decree M / 18 dated

August 5, 2000, as an administratively, financially and legally independent entity located in Riyadh, to translate

the efforts of those responsible for the country’s policy into actions on the ground, by enabling Saudi youth to

acquire knowledge and skills necessary to occupy the private sector’s jobs, thus bringing about positive impacts

on national economy. In order to realize its general objective of training and employment of national manpower

in the private sector, the Fund carries out the following activities:-

- Rendering assistance with a view to train and employ national manpower in the private sector.

- Contribution in the costs of training national manpower to join the private sector.

- Shouldering a percentage of the salaries of those employed in the private sector firms after training them.

(1) Saudi Credit Bank, Annual Report, 2004(2) Ibid(3) Ibid(4) Human Resources Development Fund, Annual Reports, 2004

Performance of SCB During 2004 (2)

Type of Loan No. Value (SR million)

Social Loans: 20,121 396.4

- Marriage 16,992 336.6

- Home Repair 2,676 52.2

- Family 453 7.6

- Vocational 27 1.8

- Taxi Loans 793 53.2

Total 20,941 451.4

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commercial banks increased by 36.3%, to reach about

SR 16.6 billion (2).

It is noteworthy to note that commercial banks tended,

since 1999, to expand relatively in extending consumer

loans to individuals for purposes of real estate finance,

purchase of cars, equipment and other purposes (3).

The private sector enjoyed the largest portion of the

banks’ credit expansion process. According to the

classification of the bank credit extended to this sector

by economic activity in 2004, the credit extended to

sectors of various activities increased by about SR 40.6

billion, or 49.4%, to reach SR 122.7 billion, an increase

of 9.9% than the previous year(4).

Most of these increases are attributed to increased

credit extended for consumption loans. Furthermore,

credit extended to the finance sector went up by about

SR 22 billion, or by 184.9%, to reach SR 33.8 billion and

the credit extended to the trade sector grew by about

SR 10.9 billion, while credit extended to services and

construction sectors increased by about SR 3.5 billion

and 1.1 billion respectively (5).

Since 2005, work started on implementing the

project of generalizing employment requirements

for the leading posts of commercial banks as well

as developing regulatory legislation to set limits for

extending credit facilities to finance subscription

in initial public offerings. Licenses were issued for

establishment of following: Muscat Bank in Arriyadh,

a Saudi Joint Stock Company named Al-Bilad Bank,

Deutsche Bank, BNP Parisbas Bank, and J.P. Morgan

Chase Bank, to open branches in the Kingdom and

commence banking activities. The Custodian of

Two Holy Mosques King Abdullah Bin Abdulaziz also

directed in the second half of 2006 to establish Al-

Enma`a Bank with a capital of SR 15 billion, of which

70% is to be offered for public subscription.

According to data from banks’ unified financial position

for 2005, the commercial banks continued to realize good

performance in terms of increased assets and deposits as

- Supporting the finance of field programs, plans and

studies aimed at the employment of Saudis to

replace foreign labor.

- Providing loans to firms involved in training national

manpower.

- Conducting research and studies related to its

activities in the field of national manpower training.

Centennial Fund (1)

The Centennial Fund was established by Royal decree on

July 7, 2004, as a Saudi private charity foundation. The

Fund aims at rendering assistance to Saudi youth of both

genders to establish their own commercial projects as a

source of living, and hence run their own business.

The Fund provides interest free loans ranging between

SR 50,000 and SR 200,000, to be repaid as of the sixth

month of commencement of commercial operations.

The loan is repaid in monthly installments over five years.

The Fund also provides counseling services for three years

as of the start of commercial operations. This is done

through volunteer businessmen or businesswomen with

outstanding practical experience who support emerging

investors. The Fund also streamlines Government

procedures regarding establishment of commercial

projects in collaboration with SAGIA, which signed a

memo of cooperation with the Fund.

Commercial Banks & Bank Financing

Commercial banks are among the finance agencies

which support investment activities in the Kingdom.

The Banking sector in the Kingdom realized tangible

development during 2005, when the Saudi Banks’

assets increased by 20.2% to reach SR 655.4 billion.

The total number of bank deposits went up by 18.5%

to reach SR 422.3 billion while banks’ claims from

both public and private sectors increased by 20.9%

to reach SR 490.2 billion. Foreign assets of local

banks increased by 14.4% to about SR 92.8 billion,

or increased by SR 11.7 billion in 2004. Profits of

(1) Eastern Province Chamber of Commerce & Industry, SME 3rd Forum, Paper by The Fund’s Director General, 2005 (2) SAMA, Saudi Arabian Monetary Agency, 41st , Annual Report 2005(3) Ibid(4) Ibid(5) Ibid

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Theme Six:

Eighth Development Plan and

Investment Outlook In The Kingdom:

The Eighth Development Plan is expected

to achieve preparation and approval of

more important national strategies, such as:

long term strategy for Saudi Economy up to

2024; National Strategy for Post Secondary

Education; National strategy for Export

Development and National Strategy for

Eradication of Poverty. In light of the above,

general indicators of national economy are

reflected in increased economic growth

rates, increased employment rates, growth of

private sector’s contribution to the economy

and national income, diversification of the

economic base, improvement of the balance of

payments in favor of Saudi Arabia, realization

of a high degree of economic equilibrium and

price stability, and achievement of balanced

development in all regions of the Kingdom.

Furthermore, these indicators will be reflected

in the increased integration among GCC

States and enhancement of Arab economic

cooperation and accelerated integration in

national and international economy.

General Objectives and Strategic Bases of the

Eighth Development Plan 2005 - 2009 (1),

is illustrated in the following:

Objectives Strategic Bases

• Safeguard Islamic teachings and values,enhance national unity, enhance the security and social stability and deepen the Arab and Islamic identity of the Kingdom.

• Continue to improve services providedto Hajj and Umrah pilgrims, to ensure performance of religious rites with ease and convenience

• Raise the standard of living, improvethe quality of life and provide job opportunities to citizens, through acceleration of the development process and increasing the rates of economic growth, as well as qualitative and quantitative expansion of education, health and social services.

• Increase the share of Saudi manpowerin total employment in various sectors, pay attention to upgrading their efficiency and productivity through training and re-training, and continue to substitute Saudi manpower for non-Saudis.

• Place emphasis on the welfare of

women, upgrade their capabilities and remove constraints which impede their participation in development activities, in line with Islamic values and teachings.

• Expand the provision of health care and social welfare services.

(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009

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Objectives Strategic Bases

• Develop human resources, upgradecompetency and enhance their contribution to meet requirements of national economy.

• Diversify the economic base with dueemphasis on promising areas, such as manufacturing industries, particularly energy intensive industries and their derivatives, in addition to mining, tourism and information technology industries.

• Improve productivity of the nationaleconomy, enhance its competitiveness and make it adaptable and flexible while facing economic changes and developments at the national, regional and international levels.

• Enhance the private sector’sparticipation in socio-economic development.

• Achieve a balanced developmentthroughout all regions of the Kingdom and reduce the development gap among them.

• Develop science and technology,concentrate on information, support and encourage scientific research and technology development with a view to enhancing the efficiency of the Saudi economy, and keeping abreast of the knowledge economy.

• Conserve and develop water resourcesand ensure rational utilization.

• Take care of needy groups of citizensand pay attention to management and reduction of poverty by concentrating on economic policies and programs which lead to higher economic growth along with achieving balanced development in all regions of the Kingdom.

• Develop all aspects of education andtraining systems. Upgrade their output in conformity with changing needs of society, labor market and requirements of development process. In addition, keep abreast of advances in knowledge and technology, and pay attention to the promotion and dissemination of culture.

• Improve the quality of public servicesand increase their supply in line with the growing needs of the population along with improving performance of the responsible agencies.

• Enhance the utilization of economic resources with due emphasis on rationalization as a basic factor as well as improve performance of responsible agencies.

• Continue to build infrastructure inline with growing demand, improve performance and place emphasis on maintenance and replacement of areas in disrepair.

• Continue to pay attention to preparinga climate conducive to boosting private sector participation in socio-economic development, while intensifying government initiatives to encourage private, domestic and foreign investments and bolstering competitiveness of domestic products.

• Privatize additional public facilities,

activities and services. Consideration should be given to raising citizens’ share in the ownership of assets within

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Objectives Strategic Bases

• Protect the environment and developsuitable systems within the context of sustainable development requirements.

• Continue to strengthen and promotethe Kingdom’s relations with Arab, Islamic and friendly countries.

the framework of competition and transparency.

• Develop tourism and improve associatedservices and facilities along with conserving the environment and national heritage.

• Adopt a population policy that takesinto consideration the quantitative and qualitative changes of the population and their geographical distribution, and enhances correlation between demographic changes and directions of sustainable development.

• Distribute resources and services amongthe Kingdom’s regions in a manner that would ensure reduction of development disparities among them and enhance their comparative and competitive advantages.

• Create a strong foundation for nationalscience and technology capable of innovation, expand Information & Telecommunications Technology (ITT) applications and improve data bases to support the national economy.

• Continue with the process of administrative development and creation of a regulatory environment conducive to economic development and efficiency.

• Adopt fiscal and monetary policies thatcontribute to accelerating economic growth, realizing a higher employment level and enhancing economic stability.

• Reduce public debt to reasonable levelsand develop appropriate mechanisms to realize financial stability in the long run.

• Adopt an integrated management of water resources and optimize utilization of these resources, while emphasizing their rational use and developing their sources and conservation techniques.

• Encourage private firms, enterprises and individualsto participate in benevolent and voluntary activities in the social, health and educational domains, along with inculcating the concept and significance of these activities and improving their methods and performance techniques.

• Continue to pay due attention to protection ofthe environment against pollution. Develop sound environmental protection regulations, protect and promote wildlife, and ensure conservation of natural resources and rationalize their utilization.

• Promote integration among the Gulf Cooperation Council (GCC) States and strengthen the Kingdom’s relations with Arab, Islamic and friendly countries as well as international economic blocks.

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Eighth Development Plan & Economic Policy

The Kingdom adopts the market economy principle.

However, Government economic policies remain

significantly in place to ensure that economic activities

are within the framework of approved development

strategy to deal with unexpected and unfavorable

economic events. Thus, the Eighth Development Plan

demonstrates the significance of integrated function of

macro-economic policies as well as the importance of

economic reform policies aimed at enhancing market

economy mechanisms. The Plan also highlights the

importance of encouraging the private sector in carrying

out its tasks in the context of boosting economic growth

as well as the importance of Government investment in

infrastructure projects with a view to improve economic

climate in general and investment environment in

particular, thereby raising economic growth rates, job

opportunities and improving standards of living. In light

of the above, the State’s economic role encompasses

regulating general economic equilibrium through

macro-economic policies, a matter which was adopted

by the Eighth Development Plan through maintaining

price inflation within 0.6% (1) as an annual rate over the

coming five years.

It is noteworthy to note that stability is expected to

continue regarding exchange rates of the Saudi Riyal

to support economic stability. Growth, rationalization

and restructuring of public expenditures are also

expected to continue with a view to effectively meet

the requirements of socio-economic development in

light of high population growth, and to be financed

in a growing manner through actual oil and non-oil

finance sources. In the domain of investment policy,

the Eighth Development Plan aims at ensuring an

adequate investment climate for Saudi and foreign

private sectors along with raising Government

investment in vital development projects.

Eighth Development Plan & Private Sector

Investments

The Kingdom’s development plans, including the

Eighth Development Plan, adopted the strategy of

paving the way for the private sector to assume many

economic activities. This policy has had its impact on

supporting the activity of the private sector, boosting

its importance in the economy, developing its

capabilities and improving its economic efficiency in

its investment and production concept. This has not

only enabled the private sector to mobilize capital to

finance projects, but also to use modern management

methods and adopt advanced technologies.

The Government policies have been keen to ensure

a favorable economic climate and opportunities

necessary for boosting the developmental role of the

private sector. Thus, the private sector witnessed a

real average annual growth rate of 4.3% as well as an

increased contribution in GDP from 52.4% to 54.6%

by the end of 2004 (2).

Main Indicators of the Private Sector’s Role in the National Economy 2004 (3)

Indicator Value

Value Added (SR billion) 390.2

Share in GDP (%) 54.6

Total Private Sector Investments (SR billion) 110.3

Number of Companies 194,745

Number of Operating Factories 3,652

Size of Work Force In Private Sector (1000 Workers) 7,076

Size of Saudi Work Force (1000 Workers) 2,512

Percentage of Private Sector Work Force To Total Work Force (%) 85.4

Percentage of Saudi Workforce At The Private Sector (%) 35.5

(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) Ibid(3) Table derived from the 8th Development Plan, 2005 - 2009

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The share of the private sector in GDP for 2004, accounted for 27.3% in the oil and gas sector, 18.7% in the

non-oil Government sector and 54% in the non-oil sector. The Eighth Development Plan’s development

strategy aims at enhancing the private sector’s efforts and contribution to the diversification of economic

base, boosting its future role in production activities through improving investment climate, and raising

the contribution of the process of development. This strategy also aims at boosting its consultation

channels and partnership between the public and private sectors, along with removal of any contradiction

between existing regulations and investment laws, increasing the share of the private sector in boards of

directors of public institutions, and development of a comprehensive base for investment affairs, as well

as finalization of the organizational and control framework supporting the privatization strategy. In light

of the above, the private sector is expected to achieve the following growth rates:

Eighth Development Plan & Investment Requirements

The investment strategy of the Kingdom is based on several key pillars such as (2):

- Ensuring integration of Government and private investments.

- Increasing non-oil Government revenues to the level of financing a significant part of operational

expenditures and Government services away from oil revenues.

- Reducing operational expenditures (current) through privatization and expanding cooperation between

the public and private sectors.

- Increasing savings and Government investments and adopting an investment plan not influenced by

fluctuations of oil revenues.

Against the above background, the general strategic objectives of development in the Kingdom are

reflected in increase of the rate of private and public domestic savings, increase of net Government capital

formation and repatriation of Saudi savings and investments from abroad, as well as encouragement of

Foreign Direct Investment investment(FDI).

Growth Rates of the Private Sector During the Eighth Plan 2005 - 2009 (1)

Description Rate %

Increasing Real GDP514.3

(billion SR)

Increasing Relative Contribution in GDP 57.5

Growth of Private Consumption (Average Annual Rate) 3.5

Growth of Private Investment Consumption (Average Annual Rate) 10.4

Growth of Petrochemicals Sector (Average Annual Rate) 7.3

Growth of other Manufacturing Industries Sector (Average Annual Rate) 6.7

Growth of Trade Sector (Average Annual Rate) 5.2

Growth of Finance Sector (Average Annual Rate) 6.1

Growth of Total Manpower (Average Annual Rate) 2.2

Growth of Saudi Manpower (Average Annual Rate) 7.2

(1) Table derived from the 8th Development Plan, 2005 - 2009(2) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009

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Figures and ratios are rounded to the nearest decimal point

(1) Ministry of Economy & Planning, Macro-economic Forecasts

Targeled Investments During the 8th Plan at Fixed Prices in 1999 (1)

Item

7th Development Plan 2000 - 2004

8th Development Plan Target 2005 - 2009

Value (Actual)

(SR billion)

%Value

(Expected)(SR billion)

%

A. Non-Oil sectors 598.1 89.6 920.3 88.1

1. Producing sectors 277.1 41.5 438.7 42.0

1.1 Agriculture, Forests and Fisheries 18.8 2.8 32.5 3.1

1.2 Non-oil Mining- Quarries 1.4 0.2 3.5 0.3

1.3 Manufacturing Industries 94.0 14.1 178.7 17.1

1.3.1 Oil Refining 8.9 1.3 12.1 1.2

13.2 Petrochemicals 52.0 7.8 101.5 9.7

1.3.3 Other Conversion Industries 33.1 5.0 65.0 6.2

1.4 Electricity, Gas and Water 154.4 23.1 207.8 19.9

1.5 Construction 8.5 1.3 16.4 1.6

2 Private Sector 227.4 34.1 365.2 35.0

2.1 Trade, Restaurants and Hotels 25.6 3.8 35.7 3.4

2.2 Transport and Communications 24.7 3.7 45.3 4.3

2.3 Finance, Insurance, Business and Real Estate Services 166.7 25.0 262.6 25.1

2.3.1 Real Estate services 145.7 21.8 227.3 21.7

2.3.2 Finance, Business and Insurance Services 21.0 3.1 35.3 3.4

2.4 Community and Personal services 10.4 1.6 21.5 2.1

Total non-oil Private sector 504.5 75.6 803.9 77.0

3. Government Services 93.6 14.0 116.4 11.1

B. Crude Oil and Natural Gas 69.0 10.4 124.5 11.9

Total Investments 667.1 100 1044.8 100

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Following are the strategic projects in the Eighth Development Plan which are expected to be implemented by both the public and private sectors, and constitute basic investment activities in the these fields as well as other integrated fields.

(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009

Strategic Projects in the Eighth Development Plan (1)

Activity Size/Outputs

1. Gas Projects

Agreements were concluded for four major projects regarding exploration and production of natural gas with the participation of international firms, to be implemented during the 8th Development Plan

Exploration area is about 330,700 m²

2. Expansion of Saudi ARAMCO’s production

capacity

Expansion of crude oil production capacity Addition of 1.5 million bpd to the production capacity

3. Expansion & development of refining capacity.

Renovation of Rabigh refinery with a foreign partner

Increase refining capacity by 30% during the plan period

Development of Rabigh refinery to an integrated complex for refining & petrochemicals

4. Petrochemical projectsThe increased availability of natural gas will lead to new opportunities for the growth of petrochemical industries. This has resulted in the announcement of a considerable number of new investment projects to be undertaken by SABIC, as well as private domestic and international companies

Establishment of a new complex in Yanbu for ـ production of:

- 1.3 million tons of ethylene- 800 thousand tons of polyethylene- 700 thousand tons of ethylene glycol

Establishment of a new ethylene glycol plant at ـJubail, by SABIC, with a production capacity of 625 thousand tons/year

Establishment of a Butane-1 plant with ـ a production capacity of 130,000 tons/year in Jubail, by PETROCHEMYA, a subsidiary of SABIC. The International Methanol Company will establish ـ a 970,000 tons/year methanol plant in Jubail.The National Petrochemical Industrialization ـ

Company will establish a plant for production of 500,000 tons of acetic acid, 275,000 tons of vinyl and 1.8 million tons of methanol

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5. Railway Projects

Work is underway on the integrated plan for expansion of the railway finalization of a network with the participation of the private sector.

- Construction of a 1,683 Km railway to connect phosphate and bauxite mines in the Northern Part of the Kingdom to Jubail Industrial City.- Construction of a 946 Km railway linking Jeddah with Dammam, and passing through Riyadh.- Connection of Makkah with Madinah via Jeddah along with a link to Yanbu city.- Connection of Dammam with Jubail industrial city (115 Km)

6. Mining Projects

During the 8th Development Plan period, work is expected to commence on implementation of major phosphate and bauxite projects with the involvement of foreign investors, and are linked with the railway projects

Establishment of an integrated phosphate ـ fertilizer project with a capacity of 2.9 million tons/year including four sulphuric acid plants, three phosphoric acid plants and three DAP plantsCompletion of the bauxite project which ـ includes development of Al-Zubairah Bauxite mine with a production capacity of 3.3 million tons/yearEstablishment of an ammonium refinery with a ـ capacity of 1.4 million tons/year and an ammonia melting furnace at Ras Zour North of Jubail City

7. Telecommunications & Information Technology More mobile and land telephone services will be ـ provided during the 8th Development Plan so that the number of subscribers will reach about 13 million for mobile telephone and about 7 million for land telephone by the end of the Plan

8. Electricity Generation and Water Desalination

The Water & Electricity Company was established to promote establishment of several independent water desalination and power generation projects. During the 8th Development Plan period, several power generation and transmission projects will be launched on (BOT) and (BOO) basis

Establishment of power generation plants ـ which will contribute about 10,996 MW as well as 1,330 MW expected to be provided in coordination with desalination plantsEstablishment of power transmission lines to ـ provide electricity to 1,126 villages and hamlets and to add about 1,163.2 thousand customers

9. Water & Waste Water Projects

Expansion of water distribution and waste water networks and increasing waste-water treatment plants

Expansion of water distribution network to ـ increase coverage rate to 80 percentExpansion of waste water networks to increase ـ coverage rate to 50 percentIncreasing the rate of waste-water treatment to ـ about 40 percent of waste-water volumeIncreasing desalination capacity from 1,070 ـ million m³ per year to 1,650 million m³ per year

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Investment Opportunities in the City of Arriyadh

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Theme One: Investment Opportunities Provided by Government and Other Agencies

Arriyadh is a strategic center for national and

foreign investments, and one of the important

commercial centers in the Middle East. Arriyadh

is looking to become a world class financial

center.

In addition to its strategic location, Arriyadh’s

position is further enhanced by other merits,

among them is being the Administrative Capital of

the Kingdom Saudi Arabia, where all investment

agencies are located. The administrative and

legal procedures were developed to improve

the investment environment. In this regard,

custom exemptions procedures were developed

and simplified to ensure faster transactions

within no more than one month, and other

encouraging factors such as: electronic share

of information project, facilities provided by

the Saudi Fund for Development to subsidize

export financing, and granting facilities by

Saudi Industrial Development Fund. In addition

visa procedures were simplified allowing

easy entry to businessmen visiting Saudi

Arabia, and setting-up of offices for the Saudi

Arabian General Investment Authority (SAGIA)

in Saudi Embassies abroad, not to mention

that the Kingdom’s Strategic Investment Plan

implemented through SAGIA aims at achieving

the ambitious objective to become one of the

world’s top ten competitive countries included

in the “Doing Business Competitiveness Report “

published by the World Economic Forum (1).

Arriyadh Development Authority (ADA)

Development of Historical Dereya:

Dereya is the capital of the first Saudi State

and the starting point of Sheikh Mohammed

bin Abdulwahab call “dawaa”. The City lies on

the bank of Wadi Hanifa and contains valuable

national heritage elements. Therefore, Arriyadh

Development Authority has approved a program

to develop Historical Dereya, aiming to preserve

the historical urban texture of the City and take

advantage of this heritage to serve various activities,

provide basis for cultural and socio-economic

development of the region, encourage dependence

on local expertise in economic development and

promote private sector investments in this urban

and economic development.

The development of Historical Dereya (2) is an

important theme which aims at taking full

advantage of the economic potential of Dereya

in the areas of local and international tourism,

cultural and national heritage services. The

program will take advantage of the rural and

historical features of Dereya, to develop and

modernize its economy and integrate it into

the modern economy of Arriyadh. The program

includes plans to rehabilitate the infrastructure,

public services, development of land to ensure a

sustainable development.

The program will be integrated with Wadi Hanifa

development program and adjoins in its economic

side with the development of recreational and

open zones, environment and resources protection,

recycling of resources, development of the agro-

economy in order to upgrade the urban value of

the entire region.

The economic development process will produce

a number of small and large scale investment

projects in the areas of tourism services, recreation,

cultural, commercial and real estate, etc.

(1) Saudi Arabian General Investment Agency, SAGIA’s Strategy, 2005 - 2010(2) ADA, Tatweer Bulletin, Issue 43, 2006

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Type of Business Description

Hotels

- Turaif Heritage Hotel (Boutique)

- Bujairy Heritage Hotel (Boutique)

- Four Stars Hotel

- Turaif Hotel and Resort

Each hotel contains 24 rooms which provide luxury accommodation to families and individuals

Located at Al-Dhahra quarter to serve businessmen

The resort will consist of (120 - 150) rooms with gardens, squares and unique view overlooking Turaif quarter

Residences & Apartments

New Apartments

Service Apartments

Apartment Buildings at Al-Bujairy and Al-Dhahra quarters. Each Building consists of 40 apartments

Consisting of 10 apartments for the residence of families and businessmen at the farms area

Restaurants & Cafés

Traditional Saudi Restaurant

Qasr Moudi Restaurant

Street Cafés (Cafés Trottoirs)

A restaurant with inner & outer open spaces at Turaif quarter which will serve traditional Saudi dishes

A restaurant at Turaif quarter which will provide high quality service to families and individuals

A street with a number of cafés and cafeterias with spacious balconies at Al-Bujairy and Al-Dhahra quarters

Shopping Centers

Agricultural Products Market (Souk)

Oriental & Western Commercial Outlets at the Central Area

Administrative buildings (Business Oasis)

Market for vegetables, meat, & organic products with a few restaurants and cafeterias

Sells daily needs of residents and visitors

Office buildings surrounded by green areas at Al-Dhahra quarter. It includes H.Q. of companies and hi-tech industries such as computers, fashion, demonstrative design, and jewelry. The objective of the Oasis is to offer a convenient and unique business environment within the natural environment of Al-Dereya.

Recreational Activities & Parks

Health Club & Traditional Bath (Turkish)

Horses Museum & Center

Restore & use Turaif traditimol bath It is a city in the Wadi area which provides training in horse and camel riding. It also includes a museum which provides information on the history and traditions of Arabian horses

Tourism Services

Turaif Sector

Commercial Tourism Office

Mobile Fast Food Buffets

Snack Bars Kiosks

Mini buses with (20 - 25) seats run in two lanes which provide tours in Turaif area. It serves ordinary people as well as VIP’s and residents of hotels

Office space for tourism companies, rent-a-car and other commercial services at Al-Dhahra quarter

Mobile carts which provides snacks and soft drinks to visitors at Turaif and Bujairy quarters

Fixed units where fast food and soft drinks are sold, spread all over Turaif, Bujairy and Al-Dhahra quarters

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Wadi Hanifa Development Project (1)

Wadi Hanifah (Hanifah Valley) the longest and most

important valley near Arriyadh, is a unique natural

feature, and extends over 120 kilometers in length

through the City. It runs North-West to South-East

of the City. The valley, which is fed by over forty

tributaries, contains the remaining features of the

traditional environment in the area, i.e. villages,

gardens and farms. The valley is rich with agricultural,

heritage and recreational resources. Therefore,

development of the valley would offer potential

recreational and agricultural resources to the City

residents.

Since 1986, Arriyadh Development Authority (ADA)

has set up strategies to develop the Valley and

preserve its natural environment. The Valley was

declared a protected natural zone. In 1998 ADA

formed a committee to prepare an integrated

project to develop the Valley within a predetermined

timeframe.

The development project of the strategic master

plan offers great investment opportunities to the

private sector:

− Implementing the water canal project

− Establishing permanent monitoring stations

− Fencing public land and protected environmental

zones

− Establishing natural water treatment projects

− Establishing models of promotional pockets

− Establishing a set of observation points, pedestrian

walkways and landscape the site

− Establish a main road at the Valley, side roads and

roads that link promotional pockets

− Establishing landscaping project

The project, which is sponsored by Arriyadh

Development Authority aims to raise the urban

value of the surroundings of the Valley and to stop

environmental destruction, find a source of water

for irrigation purposes and provide additional

recreational space to the people of Arriyadh. The

project will also create employment opportunities to

city inhabitants, and will attract public-private sector

investments in tourism, recreation and agriculture

activities. The Land Usage Plan designated land for

parks, recreation areas, gardens, tourism, cultural

events, camping facilities, and new agricultural sites

along the 120 Km length of Wadi Hanifa Oasis. ADA has

approved the development plan and accompanying

projects. Work on the project was divided into three

major phases: Phase I started in 2003, and covers the

area from Wadi Hanifa Dam to Al-Hayer which is now

completed. Phase II started in 2004 for the part of

Valley form Amariya Road up to the Dam. Costs of the

two phases were estimated at SR 359 million (2).

Electric Train System Project (3)

Arriyadh Development Authority in its Public

Transport Plan approved the project of an electric

rail network in the City, which offers an investment

opportunity to the private sector. Preliminary

engineering design and technical specifications for

the first phase of the project are completed. The first

phase contains two primary axis which are: Olaya Rail,

which will start from the North of the Northern Ring

Road and extend South to the Public Transportation

Center (Depot) on the Southern Ring Road, with a

total length of 25 Km. The axis of King Abdullah Road

which will start from King Khalid Road at King Saud

University and extend East to Khalid Bin Al-Waleed

Street with a total length of 16 Km. There will be 34

(1) Arriyadh City Website – www.arriyadh.com (2) Arriyadh Development Authority, Comprehensive Strategic Plan for the Development of Wadi Hanifa (3) Arriyadh Development Authority

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stations along the two routes, including five main

stations for switching from buses to train.

The train will be equipped with advanced, convenient

and air-conditioned wagons, with different service

categories, one of which will be dedicated to

families. Wagons will be provided with telephone

and internet services, and instructions facilities to

passengers from admin and control.

The feasibility study of the project shows that the

operation of the train on King Abdullah and Olaya

routes will result in large benefits, which will exceed

project cost by six times. It offers great benefits

such as cutting the daily trips of vehicles by around

250,000 trips. It will also cut the total distance

traveled by private vehicles by 4.48 million Km / day,

cut the vehicles travel time by 89,000 hours / day. The

project will save 400,000 liters of gasoline / day and

will therefore, reduce the emission of air pollution

and improve the quality of air and will reduce the

average of road accidents by 21 accidents / day.

The project will produce the following investment

opportunities:

− Operation phase (national and international

professional operation and maintenance companies)

− Move passengers to train stations

− Develop projects alongside the railway (housing,

commercial and recreational projects)

− Expansion projects (connect rail service to King Khalid

Airport, industrial zones, railway station and Saudi

Public Transport Co. (SAPTCO) depot, etc) (1).

New Suburbs of Arriyadh

It is natural for suburbs to develop around large

modern cities like Arriyadh. Therefore, Arriyadh

Development Authority sponsored the idea of

planning model suburbs as independent cities to

create investment opportunities to the private sector,

starting with feasibility studies of infrastructure

projects and ending with different services projects.

ADA commenced with two suburbs to the East and

North of the City, where structural master plans

were prepared by specialized bureaus. The North

suburb which will be on an area of 163 Km² will

include diversified economic activities, including a

technology zone, university, medical city and suburb

center. The suburb population is expected to be

around 675,000 by 2028, and will generate 133,000

job opportunities.

The Eastern suburb will occupy 184 Km², will include

a dry port, industrial services, suburb centers, a

recreation city, and a public services zone (university

and medical city). The population is expected to

grow to 500,000 by 2028. The suburb will generate

100,000 job opportunities (2).

New Urban Centers of Arriyadh

The structural plan of Arriyadh City which was

prepared by ADA was approved to develop

Arriyadh City to convert in the future from a unified

central system to multi central systems, achieving

decentralization by constructing urban / auxiliary

centers in every sector of the City contributing in

distribution of economic activities and admin and

residential services on new residential areas.

Each of these urban centers serves a sector of the City

and represents a pole to concentrate activities and

basic services of high caliber necessary for residents

of these sectors, within a circle whose radius is 10

Km. It is expected that these urban centers would

have the ability to absorb the needs of residents in its

vicinity, which are estimated to be between 600,000

and 1 million.

These centers shall encompass public and private

duties to include admin and Government centers,

economic activities, edifices, corporations, banks,

shopping centers, and social, cultural and recreational

services. They will also include residential compounds

with high population density.

(1) Arriyadh Development Authority, Special Report on the Electric Train System(2) Arriyadh Development Authority, Special Report, 2004

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ADA has recently approved standards and planning

controls, and structural reliefs for the urban

centers. ADA publicized the centers in the media,

issued necessary marketing pamphlets, and made

available to proprietors, developers and investors.

ADA also prepared clear competition standards

regarding these centers, since it is expected

to offer these standards soon to proprietors,

developers and investors to choose the urban

centers sites and develop them (1) .

Thumamah Park

Thamamah Park is in the center of the

Comprehensive Strategic Plan for the city

of Arriyadh, where an implementation plan

was developed by ADA to attract private

investment in the project.

At its meeting of November 18, 2006 (2), ADA

requested Riyadh Chamber of Commerce &

Industry to provide a visionary plan for the

development of Thumamah park with the

participation of investors from promotion

centers, financing companies and banks.

Development of Al-Dhahira Area

Dhahira area lies in the heart of Arriyadh City, an

area of 750,000 m² and surrounded by main roads

with flourishing commercial activities, where the

most prominent commercial centers are located.

Due to its strategic location in the heart of the

City and the center of the administrative hub,

ADA approved the formation of a consortium

which includes Riyadh Development Company,

Public Pension Agency, and General Organization

for Social Insurance (GOSI), Al-Meaqlia Company

and other interested land and real estate owners

in the area, investors and real estate companies.

The task of this new consortium is to develop Al-

Dhahira, specifically to set up development plans,

suggest a mechanism to work with multi-owners of

land and real estate in the targeted area, develop

infrastructure, develop parts of the area as pioneer

projects which may motivate other companies. It

aims too to mobilize other developers to complete

the project, purchase and develop the remaining

parts. All work will be carried out under the direct

supervision of ADA. The developer will be allowed

to suggest any building heights and usage.

However, this will be subject to comprehensive

urban and traffic studies. After the development

process is complete, the area will be appropriate

for several urban activities such as:

− Headquarters for large companies and banks

− First class shopping centers

− First class housing accommodation

− A network of open squares and pedestrian

walkways to link the area

These activities represent a great investment

opportunity to both the private and foreign

investors (3) .

Public Pension Agency

Information Technology & Telecommunications

City Project

The Information Technology & Telecommunications

City Project is currently being implemented by

the Public Pension Agency in North Arriyadh, in an

area of 800,000 m², and offers a great investment

opportunity to the private sector.

The project includes activities which are

directly related to information technology and

telecommunications (ITT), e.g. administrative

buildings to ITT companies, production facilities

for software production and maintenance

companies, research and development “R&D”

facilities. The project will foster technology

and research laboratories, manufacturing and

assembly of hi-tech models, in addition to support

(1) Arriyadh Development Authority(2) Ibid(3) Ibid

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services facilities, .e.g. hotels, restaurants,

recreation, auditoriums, Government services

buildings and housing for management and

professional workers. The project is part of

the Comprehensive Strategic Plan which was

prepared by ADA. Additionally, ADA together

with Arriyadh Chamber of Commerce &

Industry set up a proposed executive plan, the

core of which is to establish the Information

Technology and Telecommunications City. (1)

The city will attract foreign investments and

large ITT companies, and will eventually

produce other technology services to Saudi

Arabia’s business sector and will contribute

positively to the GDP and offer added value

to the national economy.

King Abdullah Financial Center

Saudi Arabia’s financial sector witnessed rapid

development, particularly, after joining the World

Trade Organization (WTO), allowing foreign

financial companies and banks to invest in the

Kingdom. Arriyadh City constitutes an important

financial center, offering good investment

environment in financial activities. King Abdullah

Financial Center, which will be similar to London’s

Canary Wharf Financial Center, was announced on

May 16, 2006. The objective is to offer a world class

business environment and house all companies

that work within the financial sector and related

industries under one roof.

The Center was designed to accommodate

existing and potential demand for class “A”

business offices equipped with high-tech state-

of-the-art buildings. The Center will be located

in North Arriyadh having an area of 1.6 million

m² and will include a world standard financial

academy to provide training for Saudi youth in

all financial disciplines. The Center will host the

headquarters of the Capital Market Authority,

stock market companies and other financial

services companies, e.g. insurance, banks, financial

(1) Arriyadh Development Authority, Tatweer Bulletin, Issue 45, 2006

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services, accounting and auditing and law offices,

assessment offices, consulting firms, IT companies

and support service offices (education, trading, etc).

King Abdullah Financial Center will be completed and

ready for business in three years. The Center will be

the Middle East financial capital, and the first in terms

of size, organization and technological specifications.

Construction work is expected to start in 2007. The

Public Pension Agency will be the leading investor

in the project, where a dedicated company owned

by the Agency will be established (1). The Center will

attract other investments, and will offer employment

opportunities to the national workforce. The project

will be a real addition to the urban development in

the City, and will offer good investment opportunities

to the private sector.

Supreme Commission for Tourism (SCT)

The Supreme Commission for Tourism took the initiative

to develop tourism with a special focus on resolution of

the problems that obstruct investment in this sector,

and is offering inducements to attract more investment,

by liberalizing tourism services markets, review of the

laws that control investments in the sector.

The most important investment opportunities offered

by the Supreme Commission for tourism are (2):

- Tourism development companies which motivate

the private sector to invest tourism facilities and services

- Tourism services centers that provides comprehensive

services for tourism investment and promotion of

investment opportunities in the tourism industry

– Electronic tourism marketing (SETS) which provides

a good opportunity for the private sector to develop

tourism products and present information to

tourists. It can be electronically sold.

– Tourism marketing and promotion programs

which are exclusively or partially offered by the

private sector in association with the public sector,

e.g. festivals and tourism events.

– Tourism markets which accompany business

tourism

such as conferences, cultural, sports, arts and

special events, in addition to tourism education and

training. These activities bring opportunities to the

private sector.

– Development of tourism sites: There are 168

tourism sites available for development, 28 of

which are inside the tourism development zones.

They offer investment opportunities to the private

sector. There are other investment opportunities,

e.g. tourism villages projects, skating facilities,

women’s recreational centers, restaurants, picnics

organization centers, etc (3).

Information Initiatives & Tourism Research

- The Supreme Commission for Tourism, set in 2001

a website on the Internet for its General Secretariat,

which is updated daily: www.sct.gov.sa

- In 2003 SCT developed portals for national

tourism

on the Internet to be the basic referral site to the

tourist in matters of tourism in the Kingdom:

www.sauditourism.gov.sa

- Set-up and operate the Tourism & Information

Research Center (MAS) to become the main referral

center with respect of collating and providing

tourism information, preserving and documenting

them, and publication of tourism studies, reports

and statistics, accurately and regularly

Saudi Electricity Company

As part of the privatization strategy, the Saudi

Electricity Company offers projects and investment

opportunities to the private sector throughout

the Kingdom. The most important of these

opportunities in Arriyadh is the establishment of

gas electricity generation plants in some of Arriyadh

quarters and provinces. Some of these opportunities

(1) Arriyadh Development Authority, Tatweer Bulletin, Issue 45, 2006 (2) SCT, Supreme Commission for Tourism, Guide & Initiative of SCT to Implement the General Strategy to Develop National Tourism(3) See SAGIA, Investment Opportunities in the Kingdom, 2006 for more information or refer to SAGIA’s Website www.sagia.gov.sa

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are Al-Mezahmiya power station, Salboukh, Al-Ashera,

overhead electricity distribution lines and many other

projects with costs up to tens of billions Saudi Riyals (1) .

The volume of investments in electricity generation

and distribution during the next ten years is

estimated at SR 53 billion of which SR 8 billion is for

the distribution sector. Accordingly, the electricity

company has opened several investment projects to

the private sector at an estimated cost of SR 48 billion

during the period 2006 - 2017 (2).

Arriyadh Region Municipality

Arriyadh Region Municipality offers several projects

and opportunities to the private sector. The following

are the most important investment opportunities

which were launched during 2006 (3):

– Collection of paper and cardboard waste project

– Fifty eight sites are available for lease and

installation of advertisements signboards

(Uni Ball)

– Lease of 20 sites to be used for ads. Signboards on

the barriers of buildings under construction

– Lease of 200 light poles to be used for illuminated ads

– Lease of 15 sites on pedestrian bridges to be used

as advertisement boards

– Lease of 100 sites on bridges and tunnels to be

used as advertisement boards

– Lease of 50 sites as advertisement boards on the

backside of street names

Arriyadh Chamber of Commerce & Industry

Arriyadh Chamber of Commerce & Industry

endeavors to boost national and joint venture

investments and make new investment opportunities

available to small and medium enterprises. As part

of this effort, the Chamber published an investment

opportunities directory including 91 investment

opportunities, 53 of which are in Arriyadh City, while

the remaining opportunities are in the Arriyadh

Region. The investment projects were selected

and prepared in coordination with consulting

firms. The Chamber takes into account selection

of projects that will make the highest returns for

investors and the national economy and to comply

with requirements of foreign capital investment.

Investment opportunities are concentrated in the

following categories (4):

– Building Materials

– Medical Preparations

– Garments, Textiles and Shoes

– Electronic Industries

– Adverting & Promotion Agencies, and Travel

& Tourism Agencies

– Auto Leasing Offices

– Auto Spare Parts & Tires Sale Centers

– Training & Recruiting Girls as Security Guards

For further information, please refer to Riyadh

Chamber of Commerce & Industry, Web Site:

www.riyadhchamber.org.sa

(1) See SAGIA, Available Investment Opportunities in the Kingdom, 2006 (2) SAGIA, Annual Report on Investment Performance, 2005(3) Arriyadh Region Municipality, Speech by Deputy Mayor on Developments & Projects, 2006(4) Riyadh Chamber of Commerce & Industry, Directory of Investment Opportunities, Small Service Projects 2006

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Theme Two: Investment Opportunities in Various Economic & Service Sectors

Industrial Investment Opportunities in

Arriyadh City

Factories in Arriyadh Region, as in other parts of

the Kingdom, enjoy a number of concessions and

benefits offered by the State, including provision

of land at nominal prices, raw materials, machinery

and spare parts custom exempted, supply of

electricity at reduced prices, the possibility of

obtaining concessionary loans to finance new, or

expand existing, factories and support of exports.

The Saudi Organization for Industrial Estates and

Technology Zones recently concluded studies

which approve specifications for development and

operation of industrial cities by the private sector.

Investment opportunities in the development

and operation of industrial cities will be offered

to the private sector during the course of this year.

Arriyadh is currently working on the development

of Part 2 of Phase 4 of the Second Industrial

Zone which will produce several investment

opportunities to the private sector. Moreover, the

development and operation of Sudair Industrial

City, 120 Km from Arriyadh City will be offered

on competition basis. Sudair Industrial City is

a good industrial location due to its excellent

geographical location, not far from Arriyadh City,

availability of electricity supply and finally the

Jubail – Arriyadh natural gas pipeline, which feeds

Arriyadh City, passes through the city of Sudair.

Studies were conducted on how to develop the

industrial city of Sudair and attract private sector’s

investment in light of the Strategic Regional Plan

of Arriyadh City. Arriyadh Development Authority

approved the following: (1)

• 100 million m² of total space will be allocated to the

industrial city, provided that a general structural

plan for the industrial estate will be set up,

and land will only be allocated for industrial

purposes and related services including: technical

education, industrial research, commercial services

and housing, business services, transportation

facilities, e.g. train stations (passengers and cargo)

and support services.

• The remaining 160 million m² will be developed

and allocated to an economic development project

with several economic activities. This should be

coordinated with concerned agencies, .e.g. The

Saudi Organization for Industrial Estates and

Technology Zones, SAGIA, Arriyadh Development

Authority, Riyadh Chamber of Commerce and

Industry and others.

• A special development strategy will be

implemented, taking into consideration offering

concessions to attract investments and to

enhance the role of the industrial sector and

other economic sectors in increasing revenues

of the region, provision of job opportunities and

exploitation of natural resources.

• The Saudi Organization for Industrial Estates

and Technology Zones will continue to carry on

the development works of Part 1 of Phase 1 of the

project (10 million m2) which will connect Sudair

to the electricity network.

The industrial city of Al-Kharj, 80 Km from Arriyadh

City (2) has a total area of 99,000 m2 (3). It is currently

under study for construction and development. It

will offer investment opportunity to the private

sector to integrate with other opportunities in

Arriyadh City.

Several industrial investment opportunities available

(1) Arriyadh Development Authority (2) Arriyadh Development Authority, Investment Climate in Arriyadh City, 2005(3) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005

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to the private sector in Arriyadh, are offered to both national

and foreign investors, such as:

– Vehicle tires

– Medicines, vaccines, antibiotics, and other support

medical accessories

– Household refrigerators

– Pottery and reflective and colored glass industries

– Plastic sanitary ware

– Water and gas meters

– Garments, threads, blankets and beddings

– Elevators and refrigerators and air-conditioning

compressors

Detailed information on the above opportunities such as

the production capacity of each project, total cost, and

expected revenue, etc. can be found at the website of SAGIA,

where 400 investment opportunities, mostly industrial, are

featured. Some of the projects are available in Arriyadh.

Commercial Investment Opportunities in Arriyadh City

Commercial works in the area of distribution of

goods, wholesale and retail trade, pharmacies,

distribution of medicines, commercial agency

services, except concession rights, are exclusively

for Saudi investors. The State has enacted a

number of rules and regulations that control

trading activities. Wholesale and retail trade

dominates the commercial activity in Arriyadh,

where there were 189,599 CRs in 2005 (1).

In addition to the permits issued by Arriyadh

Region Municipality that offer several investment

opportunities in wholesale and retail trade to

small and medium size enterprises, as follows:

− Computers and accessories

− Electric appliances

− Sanitary ware, plumbing accessories, paints and

electrical materials

− Garments and fabrics

− Industrial hardware, tools and equipment

− Building materials

− Office and home furniture

Real Estate Investment Opportunities in

Arriyadh City

The Real Estate Sector in Arriyadh is characterized

as rich investment opportunities, as the City faces

a shortage of houses which can be purchased by

low and medium income groups. The City also

faces a shortage of apartments for rent, and a

shortage of business offices in the City Center.

Various parts of Arriyadh City, particularly the

North and North West of the City, are witnessing

a construction boom. New office space is being

built in the City Center. GDP of the private sector

is expected to grow by over 5% (3) in the next five

years. This growth will multiply demand for office

space of high quality, which is currently limited

in number. In general, Arriyadh is expected to

attract more businesses and capital during the

coming few years, which will increase the demand

for office buildings and housing in the City and

its suburbs. This will offer excellent investment

opportunities in the real estate sector. Building

and construction investments are expected to

amount to SR 150 billion by 2010 (4).

According to studies released by Arriyadh

Development Authority, the City will have a need

for 495,000 housing units by 2024, an annual

Commercial Establishments in Arriyadh Region 1999 - 2005 (2)

Year Number

1999 4,402

2000 6,742

2001 9,323

2002 11,540

2003 11,158

2004 12,748

2005 11,502

(1) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005(2) Ibid(3) AlHayat Newspaper, Economy Page, Issue 15724, April 23, 2006 (4) Eastern Province Chamber of Commerce & Industry, Eqtesad Magazine, Issue 40, 2006

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growth rate of 27,500 units (1). Studies conducted by a real estate company estimated Arriyadh demand

for new housing units to grow to 482,000 units during the period 2004 – 2024 (2). Commercial buildings,

large and medium residential compounds, residential and commercial towers will represent good

investment opportunities in Arriyadh’s Real Estate Sector.

Arriyadh Development Authority recently approved new standards and regulations for buildings

in certain areas of Arriyadh City. The building codes and regulations were upgraded for the City

Hub (the area between King Fahad Road and Olaya Street) and also along King Fahad Road and

Olaya Street. According to the new standards, restrictions for height of buildings at the Hub, and

the West bank of King Fahad Road were removed, whereas the heights of buildings East of Olaya

Street were doubled.

Proprietors and developers will have the choice to apply the new or the old building codes.

Estimated Demand for New Housing in Arriyadh 2005/2024 (3)

Period Estimated Units %

2004 - 2009 104,375 21.65

2009 - 2014 113,126 23.46

2014 - 2019 124,965 25.91

2019 - 2024 139,759 28.98

Total 482,225 100.00

Educational Investment Opportunities in

Arriyadh City

Investment in human development is the corner

stone of a nation’s growth and prosperity.

During the past years, the Government of

Saudi Arabia has spent billions of Riyals on the

education sector. SR 66.8 billion was allocated to

the education sector in the 2005 budget (4). The

Government continues to encourage the private

sector to invest in the education sector where

rules and regulations were established for this

purpose. Licenses for private educational facilities

are issued by a number of agencies, as follows:

− Primary, Intermediate and Secondary schools are

licensed and supervised by the Ministry of

Education.

− Technical Colleges and Vocational Training

Centers are licensed and supervised by GOTEVOT.

− Universities and University Colleges are licensed

and supervised by the Ministry of Higher

Education.

The Government offers the private sector the

opportunity to build and furnish schools for lease

to the State. At the end of the lease period the

Government will own the building. There are also

investment opportunities in the area of printing

school books, transportation and housing for

students. The Government is expected to allocate

over US Dollar 8 billion (5) during the next ten

years in support of higher education projects

and make this available to the private sector

which will motivate investors to respond to the

(1) ADA, Arriyadh Development Authority, Population Study of Arriyadh City, 2004(2) AlEqtesad Newspaper, Real Estate Page, Issue 4552, March 2006 (3) Ibid(4) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005(5) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009

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market requirements for private universities and

colleges.

The demand for private university education for

both genders and the inability of Government

universities to accommodate the current students

will attract private sector investment. Statistics of

the Eighth Development Plan show that, by the

end of 2009 Arriyadh Region will have a capacity

for 55,584 Kindergarten students, 102,616 Primary

school students, 41,000 High Education students(1).

This will require educational infrastructure and

offer a good investment opportunity to the private

sector.

The establishment of Human Resources

Development Fund is true evidence of the

Government’s commitment to the expansion of

education and training towards a higher level

of employment among the Saudi citizens. Huge

financial concessions are available to national

and foreign investors, particularly to those able

to bring new experiences and advanced hi-tech

educational aids and instructional materials. The

private sector is currently establishing education

and training companies in light of the General

Organization for Technical Education & Vocational

Training (GOTEVOT) estimates that over 16,000

students will join technical colleges and over

14,000 will join training institutes during the

period 2005 - 2009 (2).

Moreover, colleges, institutes and schools owned

by foreign investors will generate investment

opportunities in the area of transportation of

students and printing of books. A mega project

will be jointly implemented by a group of

investors, to build 3,000 schools on BOT basis at

a total cost of SR 13 billion (US Dollar 3.4 billion).

(1) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(2) GOTEVOT, as stated in the 8th Development Plan, 2005 - 2009

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The private sector will continue to establish joint

stock companies which will serve in the education

sector (primary, secondary and higher education)

as an investment in the knowledge-based industry

to supply skilled workforce which is critical to

economic growth and social coherence. Existing

investment opportunities in Arriyadh are as

follows:

– Information Technology College

– Tourism and Hotels College

– Talent Development Centers (children & youth)

– Vocational Training Centers

And many other investment opportunities (1)

Health Investment Opportunities in Arriyadh City

The health sector of the Kingdom of Saudi Arabia

is the largest in the region with respect to volume,

activity and opportunities, with an average

annual expenditure of SR 30 billion, 80% of

which is public sector and 20% private sector(2). A

world class health infrastructure of hospitals and

medical centers was implemented during the past

years throughout the Kingdom.

The private health sector in Arriyadh is expected to

grow in terms of medical facilities which provide

medical treatment and diagnosis, or cooperative

medical insurance. The latter is expected to

experience rapid growth, benefiting from the

Royal Decree M / 10 dated August 12, 1999(3) which

mandates the medical insurance coverage of

resident foreigners. The decree formed a council

of medical insurance headed by the Minister

of Health. The council will be responsible for

qualifying cooperative insurance companies and

approve medical facilities which will be selected to

provide medical treatment to insured patients. The

By-laws of the medical insurance were issued via

Minister of Health Resolution 460/23/S dated June

7, 2002 (4). In support of these measures, the Saudi

Government had already transferred ownership of

some public hospitals to the private sector. The

Comprehensive Health Care Program is currently

being prepared. It is expected to produce a series

of opportunities to national and foreign investors

in the area of medical equipment, medical care,

pharmaceutical industries, management and

consultations, in addition to establishing and

operation of medical facilities which will in turn

generate more opportunities to the private

sector. The Eighth Development Plan 2005 - 2009

estimates Arriyadh requirements at 235 primary

health care centers, 8 hospitals, 5 health colleges

and 98 emergency centers (5). In addition, there

are other investment opportunities available in

fitness, weight loss, cosmetic surgery, medical

rehabilitation, care of persons with special needs,

and other opportunities (6) .

(1) SAGIA – Available Investment Opportunities, 2006(2) Ministry of Economy & Planning, 8th Development Plan, 2005 - 2009(3) Ministry of Health Website: www.moh.gov.sa (4) Arriyadh Trade Magazine, Terms of Medical Cooperative Insurance By-laws, Issue 479, 2002(5) Ministry of Economy and Planning, 8th Development Plan, 2005 - 2009(6) See SAGIA’s Website for more Available Opportunities in the Health Sector

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Investment Opportunities in Personal Services

In addition to large scale investment

opportunities and the mega projects which

require large capital investments and

sophisticated technologies, stated within

the chapters of this report, there are several

investment projects available to individuals

or small to medium enterprises. Despite the

absence of studies which provide detailed

information on the actual requirements of the

City, there is clear evidence that the need for

personal and household services does exist.

Examples are:

• The urban development and expansion during

the last three decades of the former century was

not accompanied by equal growth of modern

establishments which provide personal services

to residents

• Whilst there are a fair number of sophisticated

firms of medium size which provide personal

services to Arriyadh City residents, the vast

majority of firms still offer modest services due

to the small volume of its services, provided in

the traditional way by firms owned and managed

by individuals.

• Implementation of the Eighth Development Plan,

will lead to further expansion in the City’s

facilities, in addition to mega projects which are

currently being established such as the Financial

Quarter in Arriyadh. This will increase the demand

for personal services and will therefore open

the door for new investments in these services.

Accordingly, there will be a need for sophisticated

firms which are capable of providing high quality

services, particularly in, but not limited to, the

following areas:

− Auto Repair Workshops and Cars wash

Except for workshops of auto dealers, the

vast majority of workshops are of individual

nature and modest services. The City

provides several investment opportunities to

set up state-of-the-art integrated workshops,

which possess huge capabilities to provide

full repair and maintenance services, e.g.

mechanical, electrical, body repairs, paints,

washing, car polish, calibrating and tires

replacement, oil change, parts sales, towing

off-road vehicles, with the available option

to offer maintenance services on contract

basis.

− Car Parks

Due to the increased number of vehicles and

the lack of adequate parking lots, the City

is currently in need of multi-storey parking,

particularly in areas with commercial

activities, providing parking services on

temporary basis or long term during

vacations.

− Household Maintenance Services

A vast majority of Arriyadh households will

require periodic maintenance services in

areas of electricity, air-conditioning, water

networks, sanitary connections etc. Such

services are mostly provided by individually

owned establishments, which provide only

one type of maintenance of poor quality by

personnel of questionable qualifications.

Arriyadh City provides great investment

opportunities where qualified household

maintenance companies can be established

to provide professional maintenance services

by qualified technicians, guaranteed and

with fixed prices.

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− Laundry Services

Although laundry shops are available throughout

Arriyadh, few of them provide good quality

service. There is a need for companies that

can provide good services, collect and deliver

laundry from / to homes.

− Personal Services Offered to Ladies

Although there are large numbers of modest

establishments which provide personal services

to ladies, e.g. hair dressing, preparing brides,

sewing women’s clothes, still the City has a

requirement for modern and integrated beauty

services.

− Taxi Services with Paging System

Despite the large number of taxis and limousine

services operating in Arriyadh City, there is still

a need for establishing taxi companies which

can receive customers request and contact

the nearest car to head to the customer.

Such companies could also provide school

transportation services.

− Family Restaurants

Arriyadh City has a large number of restaurants

which serve fast food, traditional, Oriental and

Western dishes. However, Arriyadh still provides

excellent investment opportunities in this line

of business. Demand exists for restaurants that

provide good service to customers, a family

ambiance, with diversified menus, parking lots

and children’s playgrounds.

− Gas Stations

The majority of gas stations still request cash

payments. A chain of gas stations that will accept

credit card payments and offer, in addition to

gasoline, other services, such washing, oil change,

etc. will be a welcome addition to Arriyadh City. It

is obvious that there is a need for more enterprises

that provide services of personal nature.

Statistical Tables

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125

PageDescriptionS/N

128Distribution of Population by Gender in Arriyadh City, 20061

128Job Opportunities by Economic Activity in Arriyadh City2

128Private Sector’s Workforce as Shown in GOSI Records In Arriyadh City, 20043

129Operating Factories in Arriyadh City as of 20054

129Industrial Projects Financed by SIDF as of 20045

129Existing Industrial Cities in Arriyadh City as of 20046

129Area of Used and Unused Land in Arriyadh City by End of 20047

130Cultivated Land and Total Production in Arriyadh City as of 20048

130Commercial Registrations of Businesswomen by Activity in Arriyadh City as of 20049

130Building Licenses Issued in Arriyadh City During 200410

131Lengths of Existing, Under Construction & Proposed Roads in Arriyadh City as of End of 200411

131Licenses of Commercial Activities Issued in Arriyadh City During 200412

131Total Telephone Lines in Arriyadh City as of 200413

131Network of Mail Services as of 200414

132Air traffic at King Khalid International Airport (KKIA) 200515

132Numbers of Foreigners Arriving and Leaving Through (KKIA) 200516

132Electricity Consumption and Number of Customers in the Central Region During 200417

132Medical Services and Facilities of the Ministry of Health in Arriyadh City as of 200418

133Private Medical Facilities and Health Services in Arriyadh City as of 200519

133General and High Education Indicators in Arriyadh City as of 200520

133Selected Economic Indicators of the Kingdom21

Statistical Tables Index

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Table No. 1Distribution of Population by Gender in Arriyadh City 2006

Nationality Gender Male Female Total

Number % Number % Number %

Saudi 1,569,436 53 1,410,086 47 2,979,522 100

Non-Saudi 947,778 62 571,845 38 1,519,620 100

Total 2,517,214 56 1,981,931 44 4,499,142 100

Table No. 3Private Sector’s Workforce as Stated in GOSI Records in Arriyadh City 2004

(2)

Economic Activity Workforce Arriyadh Kingdom % to Kingdom

Posts & Communications 28,588 78,501 36.42

Trade 238,699 957,124 24.94

Building and construction 235,301 834,079 28.21

Mining and quarry 3,346 75,543 4.43

Social services 133,149 368,782 36.11

Agriculture and fishing 13,521 40,214 33.62

Manufacturing Industries 89,596 311,163 28.79

Electricity & Water 19,449 54,987 35.37

Finance & Real Estate 33,637 72,158 46.62

Other Activities 5 1,206 0.41

Total 795,291 2,793,757 28.47

Table No. 2Job Opportunities by Economic Activity in Arriyadh City(1)

Economic Activity Growth Ratio% 2004 2005

Productive Sectors 4.40 124,422 307,607

Agriculture, Forestry & Fishing 1.26 54,572 7,013

Mining and Quarries 3.93 231 745

Industry 6.84 31,170 125,050

Electricity, Water and Gas 6.55 3,079 11,669

Building Sector 5.04 35,269 99,130

Services Sector 4.48 275,289 69,655

Private Sector Services Sector 5.19 122,122 353,328

Retail, Wholesale, Restaurants & Hotels 5.29 50,777 149,968

Transportation, Storage and Communications 6.55 9,427 35,722

Financial Sector, Insurance & Real Estate 6.89 11,799 47,786

Social and Personal Services 4.73 13,694 36,153

Household Services 4.04 36,425 83,698

Public Sectors 5.02 42,266 118,286

Education 4.81 32,061 85,957

Social and Health Services 5.64 10,204 32,328

Government Services 3.29 110,902 219,042

Total Employment Opportunities (Workforce) 4.45 963,709 1,783,137

(1) ADA, Arriyadh Development Authority, Tatweer Bulletin, Issue 45, 2006(2) (GOSI) General Organization for Social Insurance, Annual Statistical Book Issue 26, 2004

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Table No. 4Operating Factories in Arriyadh City as of 2005 (1)

Industrial Activity No. of Factories WorkforceTotal Financing

(SR million)

Foodstuff and beverages 116 14,012 4134.76

Textiles, Garments and Leather 85 11,476 2077.60

Wood products and furniture 82 6,952 1173.59

Paper Printing & Publishing 85 7,326 2496.93

Chemical Industries & Plastic Products 258 23,153 8132.92

Building material, chinaware, Ceramics & Glass 163 17,723 7197.26

Basic metal industries 65 6,339 1674.56

Metal products, machinery and equipment 344 32,942 9727.89

Miscellaneous industries 31 3,267 481.57

Total 1,229 123,190 37097.08

Table No. 7 Area of Used and Unused Lands in Arriyadh City by End of 2004 (4) Hectares

Type of Use Type of Land Used Developed Undeveloped Total

Residential & Commercial 77,607.26 79,522.36 33,337.85 190,467.47

Industrial 27,273.89 27,354.87 12,131.30 66,760.06

Agricultural 3,819.00 3,819.00 7,181.00 14,819

Greenland and Parks 4,001.90 4,001.90 8,998.10 17,001.9

Others 4,647.60 4,641.60 9,758.40 19,047.6

Total 117,349.65 119,339.73 71,406.65 308,096.03

Table No. 5Industrial Projects Financed by SIDF as of 2004 (2)

Sector Number Loan Value (SR million)

Chemical Products 154 2,409.4

Plastic Products 166 2,516.8

Cement 3 1157.3

Building Material 91 3113.9

Engineering Products 228 1573.4

Others 21 167.1

Total 663 10,937.9

Table No. 6Existing Industrial Cities in Arriyadh City as of 2004 (3)

Industrial City PhaseArea

(1000 m2)Project Value(SR million)

Implementation Status

Number of Productive Factories

First One 451 35 Developed 51

Second

First 5,080 196 Developed

662

Second 6,920 296 Developed

Part 1 of phase 3 1,300 76 Developed

Part 2 of phase 3 2,486 10.6 Being developed

Fourth 891 48 Being developed

Housing 2,109 -Some facilities are

complete Total 19,237 661.6

(1) Ministry of Commerce & Industry, Industrial Database, Information Center, Special Bulletin(2) SIDF, Annual Report, 2004(3) Ministry of Commerce & Industry, 20 Years of Achievements(4) MOMRA, Ministry of Municipal & Rural Affairs, Municipal Statistics, Issue 55, 2004

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Table No. 8Cultivated Lands & Total Production in Arriyadh City as of 2004 (1)

Description

Kingdom Arriyadh % to Kingdom

AreaHectares

ProductionTons

AreaHectares

ProductionTons

AreaHectares

ProductionTons

Grains 685,350 3,195,002 129,864 624,354 18. 95 19.54

Vegetables 110,618 2,479,487 56,588 1,235,897 51. 16 49.84

Fodder 168,198 2,633,106 84,689 1,312,105 50. 35 49.83

Fruits 208,577 1,454,318 43,124 266,110 20. 68 18.30

Total 1,172,743 9,761,913 314,265 3,438,466 26. 80 35.22

Table No. 9Commercial Registrations of Businesswomen By Activity In Arriyadh City as of 2004 (2).

Activity Number of Commercial Registrations %

Agriculture and Animal Products 444 2.22

Foodstuff and beverages 1,930 9.63

Fabrics and ready made clothes 3,124 15.59

Home and Office Furniture 564 2.81

Leather Products 993 4.96

Household appliances 2,871 14.33

Building materials and metals 1,346 6.72

Hardware, machinery and equipment 2,466 12.31

Vehicles and spare parts 515 2.57

Fuel, chemical materials and insecticides 72 0.36

Perfumes, cosmetics and medicines 2,686 13.40

Jewelry and precious material 45 0.22

Photography equipment, decorations and frames 1,122 5.60

Watches and watches parts 149 0.74

Optical glasses 35 0.17

Children toys 310 1.55

Other activities 1,367 6.82

Total 20,039 100.00

Table No. 10Building Licenses Issued in Arriyadh During 2004 (3)

Type of Use LicensesLand space

(m2)

Built Space

(m2)

Building levels

Level space

(m2)

Length of Walls (meters)

Commercial/ Residential 8,483 9,177,150 1,946,049 33,348 8,389,939 269,831

Commercial / Industrial 868 2,463,237 735,615 1,261 793,454 45,615

Education/Health/Mosque 255 951,467 88,091 622 251,875 8,914

Social / Government - - - - - 0

Total 9,606 12,591,854 2,769,755 35,231 9,435,268 324,360

(1) Ministry of Agriculture, Department of Statistics, 2004(2) Arriyadh Chamber of Commerce & Industry, Directory of Available Investment Department Opportunities, Small Business 2006 (3) Ministry of Municipal & Rural Affairs, Municipal Statistics, Issue 55, 2004

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Table No. 12License of Commercial Activities Issued in Arriyadh City During 2004 (2)

Type of Activity License New Renewal Total Kingdom % to Kingdom

Grocery 2,310 11,481 13,791 55,757 24.73

Supermarket 288 845 1,133 2,542 44.57

Commercial Establishments. 1,256 1,712 2,968 27,649 10.73

Industrial workshops 535 1,013 1,548 5,645 27.42

Furniture & Decoration 745 1,684 2,429 9,142 26.57

Maintenance of appliances 1,142 2,687 3,829 10,987 34.85

Auto repairs 513 1,907 2,420 14,892 16.25

Plumbing 350 820 1,170 6,187 18.91

Fuel and auto service 194 950 1,144 6,165 18.56

Personal services 758 2,765 3,523 26,676 13.21

Others 4,362 17,763 22,125 55,334 39.98

Total 12,453 43,627 56,080 220,976 25.38

Table No. 11Lengths of Existing, Under Construction & Proposed Roads in Arriyadh City as of End of 2004 Km (1)

Type Activity Asphalt, tree-lined roads with street lights

Asphalt only Number of Light Poles

Existing Roads 1,115,000 5,715,000 72,000

Motorways Under Construction 95,000 2,355,000 1,460

Proposed Roads 280,000 185,000 7,500

Total 1,490,000 8,255,000 80,960

Table No. 14 Network of Mail Services as of 2004(4)

Description Arriyadh Kingdom % Arriyadh/Kingdom

Primary Post Offices 93 478 19.5

Branch Posts Offices 16 180 0.89

Posts agencies 36 83 43.37

Points of Surface mail 955 4,933 19.36

Street Post Boxes 561 2,465 22.75

Customers Post Office Boxes 130,244 423,795 30.73

Post Agencies Boxes 59,000 114,968 51.32

Table No. 13 Total Telephone Lines in Arriyadh as of 2005 (3)

Description Arriyadh Kingdom % to Kingdom

Total Capacity 1,470,316 5,359,945 27.43

Working lines 1,112,162 3,844,484 28.93

Mobile phones 1,106,174 3,863,061 28.63

(1) MOMRA, Ministry of Municipalities & Rural Affairs, Municipal Statistics, Issue 55, 2004(2) Ibid(3) CDSI, Central Department of Statistics & Information, Statistical Yearbook, Issue 41, 2005(4) Ibid

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Table No. 15Air Traffic at King Khalid International Airport (KKIA) (2005) (1)

DescriptionFlights Passengers Cargo (Tons)

SAUDIAForeign Airlines

SAUDIAForeign Airlines

SAUDIAForeign Airlines

Arrivals 27,853 5,685 4,108,903 899,171 90,683 31,279

Departures 27,853 5,685 4,073,769 899,319 61,330 5,956

Table No. 16Numbers of Aliens Arriving & Departing Through (KKIA) (2005) (2)

Description Number %

Arrivals 1,062,425 32.93

Departures 1,079,323 45.96

Table No. 18Medical Services and Faculties of the Ministry of Health In Arriyadh as of 2004 (4)

Description Arriyadh City Kingdom %

Number of Hospitals 39 213 18.31

Beds 6,025 30,020 20.07

Health Care Centers 349 1,848 18.89

Physicians 3,308 18,621 17.76

Nurses 7,055 41,356 17.06

Pharmacists 199 1,167 17.05

Medical Assistants 3,676 21,802 16.87

Technical Non-Medical Staff 1,239 6,402 19.35

Administrative 1,667 10,018 16.64

Employees 6,730 42,114 15.98

Doctors / 100 beds = 38.7

Nurses / 100 Doctors = 224.1

(1) Table Derived from Central Department of Statisties & Information, Statistical Yearbook, Issue (41)2005 (2) Table Derived from Ministry of Economy & Planning, & CDSI, Issue 41, 2005 (3) Table Derived from SAMA, Annual Report, Issue 41, 2005 (4) Ministry of Health, Statistical Yearbook, 2004

Table No. 17Electricity Consumption & Number of Subscribers, Central Region During 2004 (3)

CategoryCustomers Consumption

Number 78% Kilowatt/Hour %

Residential 1,080,269 78.71 22,232,365 55.87

Commercial 207,231 15.10 4,216,071 10.60

Government 31,948 2.33 6,441,817 16.19

Agriculture 27,552 2.01 1,922,447 4.83

Industrial 2,801 0.20 2,864,838 7.20

Street lights 5,976 0.44 667,724 1.68

Mosques 15,004 1.09 481,728 1.21

Hospitals 1,305 0.09 872,199 2.19

Charity Organization, 414 0.03 90,097 0.23

Total 1,372,500 100 39,789,286 100

Total Kingdom 4,491,717 142,194,458

Central Region % 32.2 28

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Table No. (21)Selected Economic Indicators on the Kingdom

(3)

2001 2002 2003 2004 2005

Population Estimates (million) 20.98 21.49 22.02 22.67 23.1

GDP in Current Prices (SR billion) 686.3 707.1 804.6 938.8 1160.7

GDP in Fixed Prices (SR billion) 1999 = 100 636.4 637.2 686.0 722.2 769.5

Retraction Ratio of Non-Oil GDP Prices 99.7 99.0 102.1 105.9 106.9

Inflation Rate (Consumer Prices) -1.1 0.2 0.6 0.4 0.7

Total Money Supply (M3) (SR billion) 340.2 390.4 417.5 496.1 553.7

Average Oil Prices / Barrel, Arabian Light (US$) 23.06 24.32 27.69 34.53 50.15

Average of Riyal Exchange Rate of the SR (Year 2000=100) 102.3 90.0 89.1 84.4 82.3

Currency Circulated to Total Money Supply 14.5 13.4 13.3 12.1 11.6

Deposits to Total Money Supply 85.5 86.6 86.7 87.9 88.4

Net Foreign Assets at Local Banks (SR billion) 39.8 52.5 41.0 47.1 26.4

Interest Rates, Average 3 Months Deposits (Local Currency) 3.92 2.23 1.63 1.73 3.75

Banks Capital Adequacy Ratio (Basel Standards) 20.3 21.3 19.4 17.8 17.8

Actual Public Revenues (SR billion) 228.2 213.0 293.0 392.3 564.3

Actual Public Expenditures (SR billion) 255.1 233.5 257.0 285.2 346.5

Budget Surplus or Deficit to GDP -4.0 -2.9 4.5 11.4 18.8

Commodity Exports (SR billion) (*) 254.9 271.7 349.7 472.5 680.4

Imports (CIF) (SR billion) 116.9 121.0 138.4 167.8 222.8

Current Account Surplus to GDP 5.1 6.3 13.1 20.7 29.3

Current Account (SR billion) 35.1 44.5 105.2 194.7 340.0

Local Stock Market Index (1985 = 1000) 2,430.1 2,518.1 4,437.6 8,206.2 16,712.6

Table No. 19Private Medical Facilities and Health Services in Arriyadh as of 2005

(1)

Descriptions Arriyadh Kingdom % to Kingdom

Number of Hospitals 19 113 16.81

Number of beds 2460 11,135 22.09

Number of dispensaries 383 1,043 36.72

Private clinics 511 1,285 39.77

Number of laboratories 22 81 27.16

Physiotherapy centers 14 38 36.84

Optical shops 452 1,359 33.26

Dentures facilities 15 114 13.16

Drug stores 199 384 51.82

Pharmacies 1,170 4,314 27.12

Scientific offices 42 56 75

Doctors * 2,337 12,788 18.27

Nursing staff 2,104 17,810 11.81

Pharmacists 169 1,056 16

Medical Assistants 494 6,985 7.07

Technical Non-Medical Staff 317 3,636 8.72

Administrative 1,434 9,634 14.88

Employees 846 9,710 8.71

Table No. 20General and High Education Indicators in Arriyadh as of 2005 (2)

Descriptions Number of Students

General Education (under the supervision of Ministry of Education 392,497

General Education (Girls Education Affairs) 396,288

King Saud University (enrolled students) 60,868

Imam Mohammed bin Saud Islamic University (enrolled students) 28,401

(1) Table Derived from Ministry of Health Statistical `Yearbook, 2004

* Includes Dentists (2) Table Derived from both Ministries of Education & Higher Education Statistics, Academic Year 2004 / 2005 (3) SAMA, Saudi Arabian Monetary Agency, Annual Report, Issue 42, 2006

* Includes oil and non-oil exports, re-exports and ships fuel

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S/N Address Telephone Fax Mailing Address

1 Presidency of National Guards 4912222 4916928 Arriyadh 11173

2 Ministry of Defense & Aviation 478900 4026457 Arriyadh 111565

3 Ministry of Interior 4011111 4069279 Arriyadh 11134

4 Ministry of Foreign Affairs 4055000 4023707 Arriyadh 11124

5 Ministry of Justice 4057777 4059716P.O. Box 7775Arriyadh 11472

6 Ministry of Culture & Information 4068888 4350794P.O. Box 5705Arriyadh 11161

7 Ministry of Telecommunications & IT 4522222 4522608 Arriyadh 11112

8 Ministry of Petroleum & Mineral Resources 4787777 4761123P.O. Box 247Arriyadh 11191

9 Ministry of Municipal & Rural Affairs 4569999 4563196P.O. Box 955Arriyadh 11136

10 Ministry of Commerce & Industry 4012222 4038421 Arriyadh 11162

11 Ministry of Economy & Planning 4011444 4052051P.O. Box 358Arriyadh 11182

12 Ministry of Higher Education 4415555 4419004 Arriyadh 11153

13 Ministry of Health 4015555 4026395 Arriyadh 11176

14 Ministry of Labor 4778888 4789175 Arriyadh 11157

15 Ministry of Finance 4050000 4033130 Arriyadh 11177

16 Ministry of Education 4046666 4037229 Arriyadh 11148

17 Ministry of Transport 4043000 4035743 Arriyadh 11178

18 Ministry of Agriculture 4016666 4044592 Arriyadh 11195

19 Ministry of Water & Electricity 2056666 2052749 Arriyadh 11233

20 Ministry of Civil Service 4026666 4035665P.O. Box 94737Arriyadh 11416

21 Ministry of Social Affairs 4778888 4789175 Arriyadh 11157

22 Supreme Economic Council 4801052 4803750 Arriyadh 11272

23 Supreme Council for Petroleum & Mineral Affairs 4883331 4829331P O Box 66680Arriyadh 11432

24 Secretariat General of the National Plan for IT Project

4625004 4625003P.O. Box 5964Arriyadh 11432

25 Supreme Commission for Tourism 4808850 4808844P.O. Box1267Arriyadh 11431

26 Arriyadh Development Authority (ADA) 4831444 4833085P.O. Box 94501Arriyadh 11614

27 Saudi Arabia General Investment Authority (SAGIA)

4484533 4481234P.O. Box 3437Arriyadh 11471

28 Saudi Arabian Standards Organization (SASO)

4520000 4520086P.O. Box 8218Arriyadh 11482

Addresses of Some Public & Private Authorities

133

S/N Address Telephone Fax Mailing Address

29 Royal Commission for Jubail & Yanbu 4794445 4793275P.O. Box 84214Arriyadh 11671

30 Saudi Commission for Industrial Estates & Technology Zones 2831331 4775235

P.O. Box 84214Arriyadh 11671

31 Communications & Information Technology Commission (CITC) 4618000 4618002

P.O. Box 75606Arriyadh 11588

32 Capital Market Authority (CMA) 2797777 2797770P.O. Box 25022Arriyadh 11311

33 Arriyadh Region Municipality 4112222 4118686 Arriyadh 11146

34 General Organization for Social Insurance (GOSI) 4777735 Ext. 1200P.O. Box 878Arriyadh 11421

35 Saudi Arabian Monetary Agency (SAMA) 4662200 1662439P.O. Box2992Arriyadh 11169

36 Public Pension Agency 4025100 4053645P.O. Box18364Arriyadh 11168

37 Grain Silos & Flour Mills Organization 4643500 4631943P.O. Box3402Arriyadh 11471

38 Saudi Government Rail Road Organization (SGRRO)

4480811 4489400P.O. Box 40471Arriyadh 11499

39 Saudi Ports Authority 4050005 4082739P.O. Box 5162Arriyadh 11188

40 General Organization for Technical Education and Vocational Training (GOTEVOT)

4052770 4065876P.O. Box 7823Arriyadh 11472

41 Saudi Water Conversion Corporation (SWCC) 4631111 4641630P.O. Box 5968Arriyadh 11422

42 Saudi Exports Promotion Center 4053200 4065196P.O. Box 16683Arriyadh 11474

43 King Abdulaziz City for Science & Technology (KACST)

4883555 4883756P.O. Box 6086Arriyadh 11442

44 Saudi Customs 4013334 4043412P.O. Box 3483Arriyadh 11197

45 Central Department of Statistics & Information (CDS)

4014138 4059493P.O. Box 3735Arriyadh 11481

46 Grievance Board 4021724 4034296P.O. Box 1138Arriyadh 11138

47 Saudi Arabian Airlines 4500000 4569383P.O. Box 2836Arriyadh 11461

48 Saudi Fund for Development 4640292 4627450P.O. Box 1887Arriyadh 11149

49 Saudi Industrial Development Fund (SIDF) 4774002 4775138P.O. Box 4143Arriyadh 11149

50 Real Estate Development Fund 4792222 4786232P.O. Box 67778Arriyadh 11517

51 Human Resources Development Fund 2790804 2790803P.O. Box 67778Arriyadh 11517

52 Higher Education Fund 2180260 2180255P.O. Box 295654Arriyadh 11351

53 Saudi Arabian Agricultural Bank 2118888 2198013 Arriyadh 11126

54 Saudi Credit Bank 4797200 4797204P.O. Box 1138Arriyadh 11138

55 Saudi Press Agency (SPA) 4193333 4193492 P.O. Box 7186

56 King Saud University 4670000 4678126P.O. Box 2454Arriyadh 11451

134

S/N Address Telephone Fax Mailing Address

57 Imam Mohammed bin Saud Islamic University 2580000 2580707P.O. Box571Arriyadh 11432

58 Nayef Security Sciences Arab University

2463444 2464713P.O. Box 6830Arriyadh 11452

59 Prince Sultan Private University 4548489 4548317P.O. Box 66833Arriyadh 11586

60 Institute of Public Administration 4768888 4768878P.O. Box 205Arriyadh 11141

61 General Presidency for Youth Welfare 4018888 4010376P.O. Box 956Arriyadh 11185

62 General Audit Bureau 4056770 4032057P.O. Box7185Arriyadh 11128

63 Saudi Arabian Red Crescent 4740027 4740430 Arriyadh 11129

64 General Presidency for Environment Protection and Meteorology

2211584 2211581P.O. Box 1158Jeddah 21431

65 Saudi Arabian Basic Industries (SABIC) 2258000 4013831P.O. Box 5101Arriyadh 11422

66 National Shipping Company of Saudi Arabia 4785454 4777478P.O. Box 8931Arriyadh 11492

67 Saudi Arabian Mining Company (Ma’aden) 4740857 4721333P.O. Box 68861Arriyadh 11537

68 Saudi Telecom Company 4527000 4525229P.O. Box 87912Arriyadh 11652

69 Ittihad Itisalat Company 2735050 0560316677P.O. Box 9979Arriyadh 11423

70 Saudi ARAMCO 4410200 038738190-P.O. Box 5000Dhahran 31311

71 National Company for Cooperative Insurance 2180100 2180102P.O. Box 86959Arriyadh 11632

72 Council of Saudi Chambers of Commerce & Industry

4053200 4024747P.O. Box 1183Arriyadh 11474

73 Riyadh Chamber of Commerce & Industry 4040044 4020110P.O. Box 596Arriyadh 11421

74 Al-Rajhi Bank 4601000 4776781P.O. Box 28Arriyadh 11481

75 Al-Bilad Bank 4798888 2916069P.O. Box 140Arriyadh 11411

76 National Commercial Bank

6493333 Jeddah4787877 Arriyadh

P.O. Box 3555Jeddah 21481

77 Al-Jazira Bank 61580702/ 65332782/P.O. Box 6277Jeddah 21442

78 Arab National Bank40235034029000

4027747P.O. Box 56921Arriyadh 11564

79 Riyad Bank 4013030 404207P.O. Box 22622Arriyadh 11416

80 Saudi Investment Bank 4778433 4776781P.O. Box 3533Arriyadh 11481

81 SAMBA Financial Group 4774770 Ext. 1200P.O. Box 833Arriyadh 11421

82 SABB 4050677 Ext. 4632P.O. Box 9084Arriyadh 11413

83 Banque Saudi Fransi 4042222 4042311P.O. Box 56006Arriyadh 11554

84 Saudi Hollandi Bank 40102884067888Ext. 656

P.O. Box 1467Arriyadh 11431

135

Name of Organization Web Address

Ministry of Water & Electricity www.mowe.gov.sa

Ministry of Economy & Planning www.planning.gov.sa

Ministry of Higher Education www.mohe.gov.sa

Ministry of Education www.moe.gov.sa

Ministry of Foreign Affairs www.mofa.gov.sa

Ministry of Civil Service www.mcs.gov.sa

Ministry of Petroleum & Mineral Resources www.mopm.gov.sa

Ministry of Labor www.mol.gov.sa

Ministry of Social Affairs www.mosa.gov.sa

Ministry of Information & Culture www.saudinf.com

Ministry of Commerce & Industry www.commerce.gov.sa

Ministry of Justice www.moj.gov.sa

Ministry of Health www.moh.gov.sa

Ministry of Agriculture www.agrwat.gov.sa

Ministry of Transportation www.mot.gov.sa

Ministry of Finance www.mof.gov.sa

Ministry of Interior – General Security www.security.gov.sa

Ministry of Municipal & Rural Affairs www.momra.gov.sa

Shura Council www.shura.gov.sa

Governorates

Governorate of Arriyadh www.riyadh.gov.sa

Governorate of Eastern Province www.easternemara.gov.sa

Governorate of Madinah www.imaratalmadinah.gov.sa

Governorate of Tabuk www.tabuk.gov.sa

Governorate of Hail www.hail.gov.sa

Governorate of Al-Baha www.albaha.gov.sa

Governorate of Makkah www.makkah.gov.sa

Governorate of Aseer www.emartaseer.gov.sa

Web Addresses of Selective Organizations

136

Government OrganizationsName of Organization Web Address

Supreme Commission for Tourism www.sct.gov.sa

Arriyadh Development Authority www.arriyadh.com

Saudi Arabian General Investment Authority (SAGIA) www.sagia.gov.sa

Royal Commission for Jubail & Yanbu www.rcjubail.gov.sa

Communications & IT Commission (CITC) www.citc.gov.sa

Saudi Arabian Standards Organization (SASO) www.saso.org.sa

Saudi Geological Survey www.sgs.org.sa

Saudi Commission for Health Specialties www.scfhs.org

Capital Market Authority (CMA) www.cma.org.sa

National Commission for Wildlife Conservation & Development www.ncwed.gov.sa

Saudi Organization of Certified Public Accountants (SOCPA) www.socpa.org.sa

National Shipping Company of Saudi Arabia www.nscsa.com

Public Pension Agency www.pension,gov.sa

Saudi Ports Authority www.ports.gov.sa

Saudi Arabian Monetary Agency (SAMA) www.sama.gov.sa

General Organization for Social Insurance (GOSI) www.gosi.gov.sa

Saudi Fund for Development www.sfd.gov.sa

Saudi Industrial Development Fund (SIDF) www.sidf.gov.sa

Real Estate Development Fund www.redf.gov.sa

General Presidency for Environment Protection & Meteorology www.mepa.org.sa

Saudi Customs www.customs.gov.sa

King Abdulaziz City for Science & Technology (KACST) www.kacst.edu.sa

General Audit Bureau www.gab.gov.sa

General Directorate for Passports www.passport.gov.sa

Saudi Arabian Agricultural Bank www.saab.gov.sa

King Abdulaziz Foundation for Research & Archive www.darh.org.sa

Arriyadh Traffic Department www.r-t.gov.sa

Department of Zakat & Income Tax (DZIT) www.dzit.gov.sa

Saudi Stock Market www.tadawul.com.sa

Saudi Money & Business Directory www.allsaudi.com/defaultara.asp

Saudi Press Agency (SPA) www.spa.gov.sa

Saudi Arabian Airlines www.saudiairlines.com

Presidency of Civil Aviation www.pca.gov.sa

137

Government OrganizationsName of Organization Web Address

Supreme Commission for Tourism www.sct.gov.sa

Arriyadh Development Authority www.arriyadh.com

Saudi Arabian General Investment Authority (SAGIA) www.sagia.gov.sa

Royal Commission for Jubail & Yanbu www.rcjubail.gov.sa

Communications & IT Commission (CITC) www.citc.gov.sa

Saudi Arabian Standards Organization (SASO) www.saso.org.sa

Saudi Geological Survey www.sgs.org.sa

Saudi Commission for Health Specialties www.scfhs.org

Capital Market Authority (CMA) www.cma.org.sa

National Commission for Wildlife Conservation & Development www.ncwed.gov.sa

Saudi Organization of Certified Public Accountants (SOCPA) www.socpa.org.sa

National Shipping Company of Saudi Arabia www.nscsa.com

Public Pension Agency www.pension,gov.sa

Saudi Ports Authority www.ports.gov.sa

Saudi Arabian Monetary Agency (SAMA) www.sama.gov.sa

General Organization for Social Insurance (GOSI) www.gosi.gov.sa

Saudi Fund for Development www.sfd.gov.sa

Saudi Industrial Development Fund (SIDF) www.sidf.gov.sa

Real Estate Development Fund www.redf.gov.sa

General Presidency for Environment Protection & Meteorology www.mepa.org.sa

Saudi Customs www.customs.gov.sa

King Abdulaziz City for Science & Technology (KACST) www.kacst.edu.sa

General Audit Bureau www.gab.gov.sa

General Directorate for Passports www.passport.gov.sa

Saudi Arabian Agricultural Bank www.saab.gov.sa

King Abdulaziz Foundation for Research & Archive www.darh.org.sa

Arriyadh Traffic Department www.r-t.gov.sa

Department of Zakat & Income Tax (DZIT) www.dzit.gov.sa

Saudi Stock Market www.tadawul.com.sa

Saudi Money & Business Directory www.allsaudi.com/defaultara.asp

Saudi Press Agency (SPA) www.spa.gov.sa

Saudi Arabian Airlines www.saudiairlines.com

Presidency of Civil Aviation www.pca.gov.sa

Name of Organization Web Address

Chambers of Commerce

Council of Saudi Chambers of Commerce & Industry www.saudichambers.org.sa

Riyadh Chamber of Commerce & Industry www.riyadhchamber.org.sa

Chamber of Commerce & Industry – Eastern Province www.chamber.org.sa

Chamber of Commerce & Industry – Madinah www.madcci.org.sa

Chamber of Commerce & Industry- Jeddah www.jcci.org.sa

Chamber of Commerce & Industry - Makkah www.makcci.com

Saudi Daily Newspapers

Riyadh Newspaper www.alriyadh-np.com

Al-Jazeera Newspaper www.al-jazirah.com

Al-Watan Newspaper www.alwatan.com.sa

Al-Eqtisadiya Newspaper www.aleqt.com

Al-Youm Newspaper www.alyaum.com

Arab News www.arabnews.com

Okaz Newspaper www.okaz.com.sa

Saudi Gazette www.saudigazette.com.sa

Local Banks

Al-Rajhi Bank www.alrajhibank.com.sa

Al-Bilad Bank www.bankalbilad.com.sa

National Commercial Bank www.alahli.com

Riyad Bank www.riyadhbank.com

SAMBA Financial Group www.samba.com.

Arab National Bank www.anb.com.sa

SAAB www.sabb.com.

Al-Jazira Bank www.baj.com.sa

Banque Saudi Fransi www.alfransi.com.sa

Saudi Investment Bank www.saib.com.sa

Saudi Hollandi Bank www.shb.com.sa

This Report was Prepared By

MIDDLE EAST CONSULTING CENTER

Change Management Experts

P.O Box 27925 Riyadh 11427Tel +966 -1- 216 8740 / 216 8840

Fax: + 966 - 1 - 216 8730 www.mcc-ksa.cominfo@mcc-ksa.com

Dar Alarkan Company was established in 1994. In 2005 ,the Company changed

into a closed stock company with total capital of R.S 5.4 million. The Company

had a strong start having one objective in mind: to be a first home provider

for middle class Saudi families.

Company’s Vision and Mission

Dar Alarkan is an innovator in the field of modern and future real estate. This

pioneering role relies on our vision which mainly depends upon securing the

most suitable housing for the Middle income class and helping them to get

convenient financing schemes.

Objectives

To become a leading regional real estate development company, and to

develop residential units to satisfy society’s demand.

Projects

Dar Alarkan today is the leading Real Estate Development Company in KSA.

In the beginning of 2005, the Company had an objective to build 65,000

residential units distributed among the major regions in the Kingdom. Dar

Alarkan today is the leading Real Estate Development Company in KSA.

Dar Alarkan branches are spread over Riyadh, Khobar, Makkah, Jeddah,

Madinah, and Yanbu.

For any further clarification and information

please contact:

Head Office .Riyadh, Maazer Street, adjacent

to Marriott Hotel

Toll Free number: 800 - 123 - 3333

Fax: 00966 1 206 - 9898

TEL 00966 1 206 - 9888

P.O. Box 105633, Riyadh 11656

Kingdom of Saudi Arabia

Web Site: www.alarakan.com

E-Mail : Info@alarakan .com

Tel: 966 1 4883331Fax: 966 1 4829331P.O.Box: 94501 Riyadh 11614Kingdom of Saudi Arabia

ARRIYADH DEVELOPMENT AUTHORITYwww.arriyadh.com