Global Arab Network | UK conference highlights huge scale of developments in Saudi Arabia

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UK conference highlights huge scale of developments in Saudi Arabia

Global Arab Network - The Middle East Association

Friday, 07 October 2011 21:53

Global Arab Network - The strength of Saudi Arabia’s economy, the Kingdom’s continuing industrial diversification efforts and the mindboggling sums being spent on social and economic infrastructure were brought to the attention of UK companies at the Middle East Association’s “Opportunity Arabia 8” conference held in London, Global Arab Network reports.

The conference, which was chaired by Sir Alan Munro and attended by around 180 delegates, was organised in partnership with the Saudi Committee for International Trade and sponsored by British Offset, SABB, Clariant-Tamimi, YbA Kanoo, BAE Systems, Zamil Offshore, Media Consortia International and Ahmad Nasser Albinali Holding Co.

Introducing the conference, Sir Alan Munro described Saudi Arabia as being “on a roll”, and developing into a mature, diversified economy with an enhanced international profile. A powerful lineup of speakers covered the latest developments and opportunities in the Kingdom, the UK’s most important trading partner in the MENA region, which accounted for £3.1 billion of UK exports in 2010.

They underlined the breathtaking scale of developments, from the $57 billion programme to build 500,000 houses to the $27 billion new Jeddah international airport; from the massive King Abdullah Economic City with its own $5 billion port, to the $68 billion Jubail II development that will house 25 new world scale industries.

Also highlighted was the growing requirement for local content, capacity building and the transfer of knowledge and skills to help the Kingdom to address the urgent challenge of providing jobs for its growing young population and to further develop its economy.

Nadia Bakhhurji, President of Nadia Bakhurji Architectural & Interior Design Consultants, and Board member of the Saudi Council of Engineers noted, “we are at a critical stage of the economy, with huge projects on the horizon,” while Hoda Al Helaissi, Head of Languages, King Saud University commented, “The overall impression is one of a booming country that in a few short years has transformed itself ...to a competitive and flourishing nation where the atmosphere is ripe for professional adventures and new business ventures that go beyond the world of oil.”

It is not only the economic and business landscape that is experiencing far-reaching change – social attitudes are changing too. Many more parents are now allowing their daughters to travel abroad to pursue higher education, for example, and women are entering the workforce in increasing numbers, although constraints still exist.

Lots to offer

In a keynote address Baroness Symons stressed that “the UK and Saudi Arabia have lots to offer each other”, underlining the $400 billion stimulus package for capital projects to stimulate the economy and provide jobs, noting that 60% of the Saudi population is under 25. She highlighted efforts to boost diversification and regional development with the economic cities and industrial clusters, the developments underway in construction, engineering, mining, transport and communications, and the headway that British companies are making in the expanding healthcare and education sectors.

While acknowledging the contribution of delegations and high level visits such as the recent visit of Lord Green and the Duke of York, she called for an elevation of British Government engagement with the Kingdom and an increase in the number of ministerial visits. Further business to business and government to government interaction is needed, she said. “Forging those relations will bring a sustainable future not only to Saudi Arabia but also to the UK.”

Sir Sherard Cowper Coles echoed the call for increased political support and ministerial visits to boost connectivity between the two Kingdoms. There is huge business potential and scope for doing much more. Saudi Arabia offers ‘”rewards without limit” to those who visit and have strategic patience, he said, not only in terms of business but also in terms of friendship with “intelligent, brave and enterprising Saudis who want to connect with exporters and investors.”

Omar Bahlaiwa, Secretary General, Saudi Committee for International Trade, noted Saudi Arabia’s massive $435 billion GDP, its resources in terms of possessing 25% of world oil reserves (700 billion barrels proven reserves) and the fourth largest gas reserves, as well as its status as tenth largest global exporter and 21st largest global importer. He highlighted the Kingdom’s attractions to investors and improvements in the business climate which have enabled it to move up to eleventh place in the World Bank’s 2010 Ease of Doing Business rankings.

He commented that industry is “booming,” and that “industrial clusters are the future in Saudi Arabia.” He urged foreign investors to come to this “promising” market, highlighting the availability of finance through the Saudi Industrial Development Fund, as well as the availability of land, infrastructure and manpower, and the thirst for technical know-how and technology. The Kingdom offers over $1 trillion in investment opportunities, and there are opportunities for SMEs as well as the big companies, he said, particularly in developing areas such as tourism.

Thamer Jan, Commercial Manager, SABB, endorsed this positive view of the strength of the Saudi economy and its international competitiveness. The Kingdom is expected to continue to buck the global downturn and stay on the growth plan, he said, forecasting economic growth of 4-5% a year between 2011-2013. He noted the rising international trade flows, particularly with Asia and the Middle East, the increase in FDI (the Kingdom is the largest recipient of FDI in the Arab world) and the stimulus package which is promoting growth. However, population growth, unemployment and addressing the shortage of affordable housing remain key challenges.

Diversification drive

The petrochemicals and mining sectors are at the forefront of the Kingdom’s diversification drive. The $20 billion Dow Chemicals/Saudi Aramco chemicals complex will be one of the world’s largest petrochemicals facilities. Leslie McCune, MD Chemical Management Resources, presented the increasingly complex picture of the Kingdom’s petrochemicals development, with opportunities evolving to reflect the Kingdom’s priorities such as adding value in Kingdom, local sourcing, providing employment and promoting R&D.

The mining sector continues to develop as Saudi Arabia’s ‘third pillar of industry’; the Kingdom has rich resources of phosphates, copper, bauxite, gold and other minerals. The focus has been on attracting private sector investment and expertise. Kier Construction has a joint venture with Ma’aden to develop and operate the Al Jalamid phosphate mine, potentially the world’s largest phosphate project.

High priority to education and training

The high priority attached to education and training, which receives an allocation of $36.7 billion (25%) of the 2011 budget, was underlined. Chris Innes Hopkins, Director UK Trade & Investment , Saudi Arabia, highlighted recent developments including the ‘Tatweer’ education reform programme, the expansion of the King Abdullah scholarship programme which enables 120,000 Saudi students to study abroad, the Princess Noura University for women, (one of the largest university complexes in the world), the expansion of technical and vocational training and the growth in partnerships between higher education institutions. On the vocational training side, TQ is providing technical and vocational training at the Saudi Petroleum Services Polytechnic, and a forthcoming UKTI/TVET mission will include a roundtable meeting with HE Adel Faqih, the Minister of Labour.

Hoda Al Helaissi, King Saud University highlighted the growing need for professionals, the expansion of higher education and the growing numbers of women entering higher education. The provision of further training programmes for women could help raise the proportion of women in the workforce, currently only 15%.

The healthcare sector is another fertile area for cooperation, as Dr Ameed Hamid, Director, Saudi-British Medical Forum, outlined. The Ministry of Health plans 12 new hospitals, the expansion of existing facilities, the continuation of its programme to build 700 new primary care centres, as well as medical schools at the Kingdom’s universities, and a further 50 private sector hospitals are also planned. An MOU signed with the Saudi Minister of Health, Dr Abdullah Alrabeea, envisages UK/Saudi cooperation in hospital management and operation, renovation and building, recruitment, pharmaceutical industries partnerships, research and training.

The conference also covered the investment environment and taxation regime, and provided a wealth of information and advice on doing business with the Kingdom. The strong message from all speakers was the need to visit regularly or have a local presence to build the all important relationships on which success depends.

Delegates were also urged to take note of the recently introduced ‘netaqat’ initiative, which represents an intensification of the Saudisation programme – it tightens restrictions on the employment of expatriates and applies a points system to encourage Saudisation. Companies that fail to provide sufficient jobs for locals can be penalised by having visa applications for their expatriate staff refused.

Opportunities up to 2020 (According to Saudi Committee for International Trade)

$200 billion     Physical Infrastructure
$92 billion     Petrochemical expansions
$90.7 billion    Electric Power Generation
$88 billion     Water Desalination
$70.7 billion     Telecom and IT
$53.5 billion     Tourism and Leisure Development
$50 billion     Natural Gas Production
$28.3 billion    Agricultural Expansion
$10.7 billion     Education and Training

Global Arab Network

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Last Updated on Friday, 07 October 2011 22:05

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