Saudi powers ahead
While the world fears another recession, Saudi’s economy continues to grow. It dominates the Gulf economy – as it would any single currency – but it has its problems, too.
November 22, 2010 12:37 by Samuel Potter
HOW DOES SAUDI ARABIA PLAN TO DIVERSIFY ITS ECONOMY AND CREATE NEW JOBS?
• Saudi Arabia has pledged to spend $400 billion until 2013 to upgrade its infrastructure and has launched a plan to build five economic and industrial cities to create new jobs. But delays are stalling many projects while analysts point to the competition from more established locations like Dubai.
• Several international firms have pulled out of projects due to a credit squeeze after the global financial crisis. But given the huge reserves accumulated from years of high oil prices, the kingdom can keep funding the main industrial projects.
HOW RAPID IS POPULATION GROWTH?
• The population is projected to rise by 15.4 percent to 29.3 millions within five years, mainly due to imports of skilled labour for major projects meant to diversify the Gulf kingdom’s oil-based economy, according to a Reuters poll.
• Growth of expatriate ranks from around 6.2 million now is expected to outpace that of Saudi nationals, indicating that the kingdom will rely on foreigners to go ahead with its development plans.
• With population officially at 25.4 million, Saudi Arabia offers its nationals social benefits but they are below those granted by other Gulf Arab oil producers such as Kuwait and Qatar, which have much smaller native populations.
• The kingdom does not publish regular jobless data, a sensitive issue for authorities since it would highlight fissures in wealth distribution in one of the world’s wealthiest countries. Unemployment among Saudi women stands at 28.3 percent, the labour minister was quoted as saying in June.
HOW DOES SAUDI ARABIA PLAN TO SOLVE HOUSING PROBLEM?
• The kingdom has recognised the challenges of providing housing and land for the mushrooming population but a mortgage bill to help facilitate funding has not been approved yet despite years of preparations.
HOW SUCCESSFUL IS EDUCATION REFORM?
• Officials seem to understand the need for an overhaul of the education system to hone the skills of its graduates for the job market. But, wary of clerics’ opposition, the government has not yet taken a serious drive at reforming the curriculum.
• Billions are spent on building new universities and schools and equipping old ones with computers. But diplomats say up to 60 percent of school curriculums deal with religion.