Saudi Arabia Economy Profile 2014 & Future Economy Scope

Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 16% of the world’s proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings. Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Diversification efforts are focusing on power generation, telecommunications, natural gas exploration, and petrochemical sectors. Over 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors, while Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population, which generally lacks the education and technical skills the private sector needs. Riyadh substantially boosted spending on job training and education, most recently with the opening of the King Abdullah University of Science and Technology – Saudi Arabia’s first co-educational university. As part of its effort to attract foreign investment, Saudi Arabia acceded to the WTO in 2005. The government began establishing six “economic cities” in different regions of the country to promote foreign investment and planned to spend $373 billion between 2010 and 2014 on social development and infrastructure projects to advance Saudi Arabia’s economic development.

What after OIL in Saudi Arabia?

Saudi Arabia, the Middle East’s biggest economy and the world’s largest oil producer, is running out of its black gold. Some estimate that the wells will run dry as early as 2030. That’s a huge deal. Oil revenue reached $312 billion this year and accounts for almost half the economy and 90 percent of export revenue. It also makes the kingdom the Persian Gulf’s economic powerhouse.

That’s why diversification is no longer a luxury. .

Here are the companies leading the way forward:

SABIC : Global petrochemical leader Size: $103.4 billion market value CEO: Mohamed Al-Mady

Recently crowned the Middle East’s big-biz king, SABIC is among the world’s largest petrochemical companies. Petrochemical usually means plastics and fertilizer, but SABIC is looking ahead with a host of new polycarbonate technologies, like solar panels, a film for touch screens and the first polycarbonate automobile wheel. Though it’s rolling back European operations, it’s venturing eagerly into the U.S., attracted by the shale oil boom. And with Saudi Arabia about to crack open its stock market to foreign investors, non-oil multinationals are poised for global prominence. Expect SABIC to receive the most lavish treatment from foreigners.

Glowork: Leading the kingdom’s startup revolution Size: Acquired for $16 million by SAS Holdings Founder: Khalid Alkhudair

To kick their country’s oil addiction, Saudi leaders have launched hundred-million-dollar venture funds and incubators nationwide. The goal? A knowledge-based economy by 2025. The pre-eminent career portal for Saudi women is a poster child for the kingdom’s startup offensive, not to mention female workplace empowerment. Glowork’s market is potentially tremendous: A third of women are unemployed, and because most of them are college educated, they represent a real opportunity cost. And a government cost, too, because the jobless receive $800 a month from the government — a total of $1.6 billion down the drain, according to Alkhudair.

  Saudi Aramco: Jolly green oil giant