Economy of Saudi Arabia

The economic development of modern Saudi Arabia is characterized by a high proportion of the oil industry, with a gradual expansion of production in related industries and a number of manufacturing industries.

According to cheeroutdoor, Saudi Arabia’s GDP, calculated at purchasing power parity, was $241 billion. GDP per capita $10,600 (2001). Real GDP growth 1.6% (2001). Share of Saudi Arabia in the world economy (share of GDP) at current prices approx. 0.4% (1998). The country produces almost 28% of the total GDP of the Arab countries. In 1997, Saudi Arabia provided 13.9% of world oil production and 2% of gas. Inflation 1.7% (2001).

Number of employed 7.18 million people (1999). Most of those employed in the economy, approx. 56% is represented by immigrants.

Sectoral structure of the economy in terms of contribution to GDP (2000): agriculture 7%, industry 48%, services 45%. The extractive industry in 2000 accounted for 37.1%, the manufacturing industry – approx. 10%, Structure of GDP by employment: services 63%, industry 25%, agriculture 12% (1999). According to 1999 data, the largest number of employed people is 2.217 million people. – was in the field of finance and real estate, 1.037 million people. – in trade, restaurant and hotel business, 1.020 million people. – in construction. The rest were employed in other sectors of the service sector and in industry, incl. OK. 600 thousand people – in processing.

Many of the well-known large Saudi companies have grown out of traditional family business groups. The industrialization of Saudi Arabia was carried out with the leading role of the state, so the economy is still dominated by companies and corporations with a high share of state capital, private capital is present in them on shares with state capital. There are companies with foreign capital participation. The Saudi National Bank Al-Rajhi Banking and Investment Corporation grew in the 1970s and 1980s. from the oldest money-changing office of the Al-Rajhi family, which owns 44% of the bank’s shares. National Industrialization Co. and National Agricultural Development Co. are the first large companies in the country, respectively, industrial and agricultural development, created with a predominance of private capital. Saudi ARAMCO State Oil Company and PETROMIN State Holding Company for Oil and Mineral Resources, with its system of subsidiaries in various fields of the oil industry from oil production to the production of oils, gasoline, etc., includes 14 large companies and is the basis of the entire industry structure. Some of these companies have foreign equity participation (McDermott, Mobile Oil Investment). A similar structure exists in petrochemistry and heavy industry, the central place being occupied by the holding company SABIC (Saudi Basic Industries Corp.), established in 1976, 70% of whose capital is owned by the state. The role of private capital in this sector of the economy is higher. Among the large companies are Kemya, Sharq, Ibn Sina, Hadid, Sadaf, Yanpet. In other sectors of the economy, Arabian Cement Co. (cement production), Saudi Metal Industries (steel fittings), Az-Zamil Group (real estate, marketing), etc. There are various banks and insurance companies in the country.

The main industry is oil and gas, which provides the production of the most significant share of Saudi Arabia’s GDP. It is controlled by the state through state authorized organizations and companies. To con. 1980s The government completed the buyout of all foreign shares in the oil company Saudi Aramco. In the 1960s and 70s. in the country there was a rapid increase in oil production: from 62 million tons in 1969 to 412 million in 1974. This coincided with the outbreak of the world energy crisis in 1973 after the Arab-Israeli war. In 1977, Saudi oil exports generated $36.5 billion in revenue. In the 1980s oil prices have fallen, but the oil and gas industry continues to generate significant revenues (ca. 40 billion US dollars per year), amounting to ca. 90% of the country’s income from exports. Oil development is carried out in state-owned fields. It is extracted from 30 major deposits and exported through a system of pipelines, oil storage facilities and ports on the coast of the country. In 2000, 441.4 million tons of oil and 49.8 million m3 of gas were produced. Saudi Arabia plays an important role in the Organization of the Petroleum Exporting Countries (OPEC). In 2001, the country’s quota in OPEC production was more than 7.54 million barrels. oil per day.

In the field of gas utilization, the largest project was the construction in 1975–80 of a unified system for the collection and processing of associated gas, through which gas is exported and supplied to petrochemical enterprises. Production volume – 17.2 million tons of liquefied gas (1998). In the field of oil refining, there are 5 largest oil refineries in Yanbu, Rabah, Jeddah, Riyadh and Ras Tannur. The latter processes more than 300 thousand tons. Most of the production is fuel oil and diesel fuel. The production of automobile and aviation gasoline, fuel for jet engines has been launched.

Large SABIC-controlled facilities located in the industrial centers of Al Jubail, Yanbu and Jeddah carry out petrochemical and metallurgical production. In 1990-96, the volume of production increased from 13 to 22.8 million tons. 12.3 million tons of petrochemical products, 4.2 million tons of fertilizers, 2.8 million tons of metals, 2.3 million tons of plastics were sold on the market. By 1997, the volume of SABIC production reached 23.7 million tons, and by 2000 it was planned to increase production capacity to 30 million tons. Among the petrochemical products are ethylene, urea, methanol, ammonia, polyethylene, ethylene glycol, etc.

The mining industry is underdeveloped. In the beginning. 1997 State-owned mining company established. Gold deposits are currently being developed northeast of Jeddah. In 1998, approx. 5 tons of gold, 13.84 tons of silver. Salt and gypsum are being developed.

From the beginning 1970s In Saudi Arabia, the building materials industry developed rapidly due to the construction boom. The basis of industry is the production of cement, which increased from 9,648,000 tons in 1979 to 15,776,000 tons in 1998. Glass production is well developed.

The metallurgical industry is represented by the production of reinforcing steel, steel rod, and some types of shaped steel. Several enterprises have been built.

In 1977, the plant of the Saudi-German truck assembly company began to produce products. There is a small shipyard in Dammam that manufactures oil barges.

Important industries are seawater desalination and energy. The first desalination plant was built in Jeddah in 1970. Now water is supplied from the coast to the central cities. In 1970-95, the capacity of desalination plants increased from 5 to 512 million US gallons of water per year. Approx. 6000 cities and towns across the country. In 1998 electricity generation was 19,753 MW, in 1999 production capacity reached 23,438 MW. In the next two decades, an annual increase in electricity demand of 4.5% is expected. It will be necessary to increase its production to approx. 59,000 MW.

The light, food and pharmaceutical industries are developing rapidly. Light industry is mainly represented by handicraft-type enterprises. The country has more than 2.5 thousand enterprises for the production of food products, tobacco products, 3500 carpet, textile, clothing and footwear, more than 2474 woodworking, 170 printing houses. The government encourages the development of manufacturing enterprises with private capital. As a result of the issuance of licenses in the 1990s. the most priority were the creation of production of petrochemical goods and plastics, metalworking and mechanical workshops, the production of paper products and printing products, food, ceramics, glass and building materials, textiles, clothing and leather products, woodworking.

The share of agriculture in the country’s GDP in 1970 was only 1.3%. Between 1970 and 1993, the production of basic foodstuffs increased from 1.79 million to 7 million tons. Saudi Arabia is completely devoid of permanent watercourses. The lands suitable for cultivation occupy less than 2% of the territory. Despite this, agriculture in Saudi Arabia, subsidized by the government and using modern technology and machinery, has become a dynamic industry. Long-term hydrological surveys, begun in 1965, have identified significant water resources suitable for agricultural use. In addition to deep wells throughout the country, Saudi Arabia’s agriculture and water industry uses more than 200 reservoirs with a total volume of 450 million m3. The Al-Hasa agricultural project alone, completed in 1977, has made it possible to irrigate 12,000 ha. hectares and provide jobs for 50 thousand people. Other major irrigation projects include the Wadi Jizan project on the Red Sea coast (8,000 ha) and the Abha project in the Asira Mountains to the southwest. In 1998, the government announced a new $294 million agricultural development project. 1990s increased to 3 million hectares, the country began to export food products, food imports decreased from 83 to 65%. According to the export of wheat SA in the 2nd half. 1990s ranked 6th in the world. More than 2 million tons of wheat, more than 2 million tons of vegetables are produced, approx. 580 thousand tons of fruits (1999). Barley, corn, millet, coffee, alfalfa and rice are also grown.

Animal husbandry is developing, represented by the breeding of camels, sheep, goats, donkeys and horses. An important industry is fishing and fish processing. In 1999, approx. 52 thousand tons of fish. Fish and shrimps are exported.

The length of railways is 1392 km, 724 km have two tracks (2001). In 2000, 853.8 thousand passengers and 1.8 million tons of cargo were transported by rail. Road transport has more than 5.1 million vehicles, of which 2.286 million are trucks. The length of roads is 146,524 km, incl. 44,104 km of paved roads. In the 1990s completed the construction of the Trans-Arabian Highway. Pipeline transport includes 6,400 km of pipelines for pumping oil, 150 km for pumping oil products and 2,200 km of gas pipelines, incl. for liquefied gas. Maritime transport has 274 vessels with a total gross tonnage of 1.41 million tons, of which 71 large vessels have a capacity of over 1000 tons. 1000 t, including 30 tankers (including for the transport of chemicals), cargo ships and refrigerators, there are also 9 passenger ships (2002). 90% of goods are delivered to the country by sea. The fleet transported 88.46 million tons of cargo in 1999. The largest ports are Jeddah, Yanbu, Jizan on the Red Sea coast, and a number of other ports are being expanded. Dammam is the 2nd largest trading port and the country’s largest port in the Persian Gulf. Another major port in the Gulf is Jubail. The largest oil port is Ras Tanura, through which up to 90% of oil is exported. There are 25 commercial airports in the kingdom. The largest international airports are King Abdelaziz in Jeddah (the halls can simultaneously accommodate 80 thousand pilgrims, cargo turnover is about 150 thousand tons per year), the airport. King Fahd in Dammam (12 million passengers per year), airports in Riyadh (15 million passengers per year) and Dhahran. Others are airports in Haile, Bisha and Badan. Saudi Arabia is the largest airline in the Middle East. 11 transported in 1998

In Saudi Arabia, the communication system has 3.23 million fixed telephone lines and more than 2.52 million mobile phone users, approx. 570 thousand Internet users (2001). 117 TV channels are broadcast. The country is actively involved in the creation of a pan-Arab satellite communications. There are several national TV and radio channels and approx. 200 newspapers and other periodicals, incl. 13 daily.

Trade is a traditional area of economic activity in Saudi Arabia. Imports are mainly industrial and consumer goods. To encourage national industry, a 20% duty is imposed on goods that compete with locally produced goods. The import of alcohol, drugs, weapons, and religious literature into the country is strictly regulated. Other sectors of the service sector are related to real estate, financial transactions, in which the activities of foreigners are limited.

Until recently, the development of tourism was mainly associated with the service of pilgrims coming to Mecca. Their annual number is approx. 1 million people In con. 1990s the decision was made to make foreign tourism the most important branch of the service sector. In 2000, approx. $14.4 billion. There were 200 hotels in the country.

Economy of Saudi Arabia