History of Saudi Arabia

The rise of Islam in the 620s CE, the subsequent religious importance of the Arabian cities of Makkah Makkah al-Mukarramah, and Medina (the two holiest places in Islam), and the discovery of large oil reserves in the early twentieth century, have given the rulers of this territory significant influence beyond the peninsula.

Early history

People of various cultures have lived in the peninsula over a span of more than 5,000 years. The Dilmun culture, along the Persian Gulf, was contemporaneous with the Sumerians and ancient Egyptians, and most of the empires of the ancient world traded with the states of the peninsula. Except for a few major cities and oases, the harsh climate historically prevented much settlement of the Arabian Peninsula. The earliest known events in Arabian history are migrations from the peninsula into neighbouring areas. About 3500 BC, semitic-speaking peoples of Arabian origin migrated into the valley of the Tigris and Euphrates rivers in Mesopotamia and became the Assyro-Babylonians (see Babylonia and Assyria).

 Islamic conquest

 Muslim history

The religion of Islam became predominant beginning in the 7th century. Prophet of Islam Muhammad began preaching at Makkah before migrating to Medina, from where he united the tribes of Arabia into a singular Arab Muslim religious polity. With Muhammad's death in 632, his companions unanimously agreed on nominating Abu Bakr as his successor. Abu Bakr's immediate task was to avenge a recent defeat by Byzantine (or Eastern Roman Empire) forces, although he first had to put down a rebellion by Arab tribes in an episode known as the Ridda wars, or "Wars of Apostasy".

The territory of the Caliphate in 750

His death in 634 resulted in the succession of Umar as the caliph, followed by Uthman ibn al-Affan and Ali ibn Abi Talib. These four are known as al-khulafā' ar-rāshidūn ("Rightly Guided Caliphs"). Under them, the territory under Muslim rule expanded deeply into Persian and Byzantine territories.

When Umar was assassinated in 644, the election of Uthman as successor was met with increasing opposition. In 656, Uthman was also killed, and Ali assumed the position of caliph. After fighting off opposition in the first civil war (the "First Fitna"), Ali was assassinated by Kharijites in 661. Following this, Mu'awiyah, who was governor of Levant, seized power and began the Umayyad dynasty.

These disputes over religious and political leadership would give rise to schism in the Muslim community. The majority accepted the legitimacy of all the four caliphs, and became known as Sunnis. A minority disagreed, and believed that Ali was the only rightful successor; they became known as the Shi'a.After Mu'awiyah's death in 680, conflict over succession broke out again in a civil war known as the "Second Fitna". Afterward, the Umayyad dynasty prevailed for seventy years, and was able to conquer the Maghrib and Al-Andalus (the Iberian Peninsula, former Visigothic Hispania) and the Narbonnese Gaul as well as expand Muslim territory into the Indian subcontinent.While the Muslim-Arab elite engaged in conquest, some devout Muslims, Zahid, began to question the piety of indulgence in a worldly life, emphasizing rather poverty, humility and avoidance of sin based on renunciation of bodily desires. Devout Muslim ascetic exemplars such as Hasan al-Basri would inspire a movement that would evolve into Sufism.

For the Umayyad aristocracy, Islam was viewed as a religion for Arabs only; the economy of the Umayyad empire was based on the assumption that a majority of non-Muslims (Dhimmis) would pay taxes to the minority of Muslim Arabs. A non-Arab who wanted to convert to Islam was supposed to first become a client of an Arab tribe. Even after conversion, these new Muslims (mawali) did not achieve social and economic equality with the Arabs. The descendants of Muhammad's uncle ‘Abbas ibn ‘Abd al-Muttalib rallied discontented mawali, poor Arabs, and some Shi'a against the Umayyads and overthrew them with the help of their propagandist and general Abu Muslim, inaugurating the Abbasid dynasty in 750. Under the Abbasids, Islamic civilization flourished in the "Islamic Golden Age", with its capital at the cosmopolitan city of Baghdad.

Despite its spiritual importance, in political terms Arabia soon became a peripheral region of the Islamic world, in which the most important states were based at various times in such far away cities as Cairo, Damascus, Delhi, Esfahān, and Istanbul. From the 10th century to the early 20th century Makkah and Medina were under the control of the Sharif of Makkah, but at most times the Sharif owed allegiance to the ruler of one of the major Islamic empires based elsewhere.

First Saudi State (1744-1818)

The First Saudi State was established in the year 1744 (1157 A.H.) when Sheikh Muhammad ibn Abd al Wahhab and Prince Muhammad ibn Saud formed an alliance to establish a religious & political sovereignty determined to cleanse the Arabian Peninsula of perceived heretical practices and deviations from orthodox Islam. It collapsed as a result of the Ottoman-Saudi war.

Second Saudi State (1824-1891)

Second Saudi State

After a rebuilding period following the ending of the First Saudi State, the House of Saud returned to power in the Second Saudi State in 1824. The state lasted until 1891 when it succumbed to the Al Rashid dynasty of Ha'il. Rashidi Arabia endured from 1891–1902, when Ibn Saud reconquered Riyadh, the first of a series of conquests leading to the creation of the modern nation state of Saudi Arabia in 1932.

1900s to 1940s

 Unification of Saudi Arabia

Third Saudi State (present day) (Saudi Arabia)

The Third Saudi state was founded by the late King Ibn Saud of Saudi Arabia. In 1902 Ibn Saud captured Riyadh, the Al-Saud dynasty's ancestral capital, from the rival Al-Rashid family. Continuing his conquests, Abdul Aziz subdued Al-Hasa, the rest of Nejd, and the Hejaz between 1913 and 1926.

Boundaries with Jordan, Iraq, and Kuwait were established by a series of treaties negotiated in the 1920s, with two "neutral zones" created, one with Iraq and the other with Kuwait. On January 8, 1926 Abdul Aziz Ibn Saud became the King of Hejaz. On January 29, 1927 he took the title King of Nejd (his previous Nejdi title was Sultan). By the Treaty of Jeddah, signed on May 20, 1927, the United Kingdom recognized the independence of Abdul Aziz's realm (then known as the Kingdom of Hejaz and Nejd). In 1932, these regions were unified as the Kingdom of Saudi Arabia. The discovery of oil on March 3, 1938 transformed the country. The country's southern boundary with Yemen was partially defined by the 1934 Treaty of Taif, which ended a brief border war between the two states.

1950s to 1960s

The founder of modern Saudi Arabia, King Abdul Aziz, converses with President Franklin Delano Roosevelt on board a ship returning from the Yalta Conference in 1945.

Approximate image showing the land exchanged between Jordan and Saudi Arabia.

King Abdul Aziz died in 1953 and was succeeded by his eldest son, Saud, who reigned for 11 years. In 1964, Saud was forced to abdicate in favour of his half-brother, Faisal, who had served as Foreign Minister.

Because of fiscal difficulties, King Saud had been persuaded in 1958 to delegate direct conduct of Saudi Government affairs to Faisal as Prime Minister; Saud briefly regained control of the government in 1960-62. In October 1962, Faisal outlined a broad reform program, stressing economic development. Proclaimed King in 1964 by senior royal family members and religious leaders, Faisal also continued to serve as Prime Minister. This practice has been followed by subsequent kings.

The mid-1960s saw external pressures generated by Saudi-Egyptian differences over Yemen. When civil war broke out in 1962 between Yemeni royalists and republicans, Egyptian forces entered Yemen to support the new republican government, while Saudi Arabia backed the royalists. Tensions subsided only after 1967, when Egypt withdrew its troops from Yemen.

In 1965 there was an exchange of territories between Saudi Arabia and Jordan in which Jordan gave up a relatively large area of inland desert in return for a small piece of seashore near Aqaba. Saudi forces participated in the Six-Day (Arab-Israeli) War of June 1967 on the Jordanian side, the government later provided annual subsidies to Egypt, Jordan, and Syria to support their economies.

The Saudi economy and infrastructure was developed with help from abroad, particularly from the United States, creating strong links between the two dissimilar countries, and considerable and problematic American presence in the Kingdom. The Saudi petroleum industry under the company of ARAMCO was built by American petroleum companies, U.S. construction companies such as Bechtel built much of the country's infrastruture, Trans World Airlines, built the Saudi passenger air service; the Ford Foundation modernized Saudi government; the U.S. Army Corps of Engineers built the country's television and broadcast facilities and oversaw the development of its defense industry.

 1970s

1970s in Saudi Arabia

The Saudi-Kuwaiti neutral zone was administratively partitioned in 1971, with each state continuing to share the petroleum resources of the former zone equally. During the 1973 Arab-Israeli war, Saudi Arabia participated in the Arab oil boycott of the United States and Netherlands. A member of the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia had joined other member countries in moderate oil price increases beginning in 1971. After the 1973 war, the price of oil rose substantially, dramatically increasing Saudi Arabia's wealth and political influence. The location and status of Saudi Arabia's boundary with the United Arab Emirates is not final; a de facto boundary reflects a 1974 agreement.

In 1975, King Faisal was assassinated by a nephew, who was executed after an extensive investigation concluded that he acted alone. Faisal was succeeded by his half-brother Khalid as King and Prime Minister; their half-brother Prince Fahd was named Crown Prince and First Deputy Prime Minister. King Khalid empowered Crown Prince Fahd to oversee many aspects of the government's international and domestic affairs. Economic development continued rapidly under King Khalid, and the kingdom assumed a more influential role in regional politics and international economic and financial matters.

During the 1970s and 1980s, more than 30,000 Saudi students per year went to the United States, while more than 200,000 Americans have lived and worked in the Kingdom since the discovery of oil.

 1980s

1980s in Saudi Arabia

A tentative agreement on the partition of the Saudi-Iraqi neutral zone was reached in 1981. The governments finalized the partition in 1983. King Khalid died in June 1982. Fahd became King and Prime Minister in a smooth transition. Another half-brother, Prince Abdullah, Commander of the Saudi National Guard, was named Crown Prince and First Deputy Prime Minister. King Fahd's brother, Prince Sultan, the Minister of Defense and Aviation, became Second Deputy Prime Minister. Under King Fahd, the Saudi economy adjusted to sharply lower oil revenues resulting from declining global oil prices. Saudi Arabia supported neutral shipping in the Persian Gulf during periods of the Iran-Iraq war and aided Iraq's war-strained economy. King Fahd played a major part in bringing about the August 1988 cease-fire between Iraq and Iran and in organizing and strengthening the Gulf Cooperation Council (GCC), a group of six Persian Gulf states dedicated to fostering regional economic cooperation and peaceful development.

1990s

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2009s

 1990s in Saudi Arabia

In August 1990, Saddam Hussein's forces invaded Kuwait. Iraqi troops began massing on the border of Kuwait and some feared that they were about to invade Saudi Arabia. King Fahd allowed American and Coalition soldiers to be stationed in Saudi Arabia to counter the Iraqi threat. Many Muslims were angered by this move, because it allowed foreign armies to be stationed in their holiest land.

King Fahd played a key role before and during the 1991 Persian Gulf War: Saudi Arabia accepted the Kuwaiti royal family and 400,000 refugees while allowing Western and Arab troops to deploy on its soil for the liberation of Kuwait the following year. King Fahd's action also consolidated the coalition of forces against Iraq and helped define the tone of the operation as a multilateral effort to re-establish the sovereignty and territorial integrity of Kuwait.

Building #131 after the Khobar Towers bombing, which was the second major terrorist attack against Western troops in Saudi Arabia, 1996

Acting as a rallying point and personal spokesman for the coalition, King Fahd helped bring together his nation's GCC allies, Western allies, and Arab allies, as well as non-aligned nations from Africa and the emerging democracies of eastern Europe. He used his influence as Custodian of the Two Holy Mosques to persuade other Arab and Islamic nations to join the coalition. During the Persian Gulf War, Iraq fired Scud missiles into Saudi Arabia and even penetrated its northern border. These attacks were repelled, and Iraqi forces were expelled from Kuwait. American forces as well as some multinational contingents continued to occupy bases in the kingdom. However, American or foreign forces no longer occupy bases in the kingdom.

King Fahd suffered a stroke in November 1995. The foreign military presence caused militants to orchestrate attacks inside Saudi Arabia. In November 1995, a Saudi National Guard base was bombed, killing seven people. In June 1996, a truck bomb killed 19 American servicemen at the Khobar towers in Al-Khobar. These bombings caused the monarchy to focus on militancy inside their own kingdom, yet they denied there was much of a problem.

 2000s

2000s in Saudi Arabia

A June 2000 treaty further delineated portions of the boundary with Yemen. The border between Saudi Arabia and Qatar was resolved in March 2001. The border with Oman also is not demarcated. With the largest proven oil reserves in the world, structurally high oil prices due to increasing demand from the emerging industrial giants such as China and India, and the destruction of the neighbouring Iraqi military (which was a threat to Saudi hegemony), Saudi Arabia has become one of the economic powers in the Middle East. Saudi Arabia is increasing investments in infrastructure, science and technology which, it is hoped, will lead to further economic growth.

After the September 11, 2001 attacks, it became known that 15 of the 19 suspected hijackers were Saudi. Saudi Arabia became the focus of worldwide attention once again, as it was questioned whether the government was indeed cracking down on radicals. The Saudi government pledged their support to the War on Terror, and vowed to try to eliminate militant elements. However, in May 2003, an insurgency in Saudi Arabia began, believed to be conducted by al-Qaeda affiliates. This consisted mainly of attacks on foreigners in an attempt to expel them from the country and hurt the Saudi government. While the number of attacks dropped significantly in 2005, they exposed the vulnerability of the country. Concern was also voiced over the large number of Saudis fighting American soldiers in Iraq following the 2003 invasion.

King Fahd died in July 2005. He was succeeded by his brother Crown Prince Abdullah, who had handled most of the day-to-day operations of the government.

(source:wikipedia)

Economy of Saudi Arabia

Saudi Arabia has an oil-based economy with strong government control over major economic activities. Saudi Arabia possesses 25%  of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC.

Saudi Arabia's economy is a centrally planned economy. Private enterprises do exist, they are however regulated by the Saudi government.

Economic overview

The petroleum sector accounts for roughly 45% of budget revenues, 55% of GDP, and 90% of export earnings. About 40% of GDP comes from the private sector. Roughly five and a half million foreign workers play an important role in the Saudi economy, for example, in the oil and service sectors. The government is encouraging private sector growth to lessen the kingdom's dependence on oil and increase employment opportunities for the swelling Saudi population. The government has begun to permit private sector and foreign investor participation in the power generation and telecom sectors. As part of its effort to attract foreign investment and diversify the economy, Saudi Arabia acceded to the WTO in 2005 after many years of negotiations. With high oil revenues enabling the government to post large budget surpluses, Riyadh has been able to substantially boost spending on job training and education, infrastructure development, and government salaries.

Macro-economic trend

Current GDP per capita of Saudi Arabia soared by a world record-breaking 1,858% in the Seventies riding on the back of the global oil boom. However, this bubble was unsustainable and consequently the GDP per capita shrank by 58% in the Eighties. However successful diversification efforts helped register a growth of 20% in the Nineties.

This is a chart of trend of gross domestic product of Saudi Arabia at market prices estimated by the International Monetary Fund with figures in millions of Saudi Arabian Riyals.

Year Gross Domestic Product US Dollar Exchange Inflation Index

(2000=100) Per Capita Income

(as % of USA)

1980 546,602 3.59 Saudi Arabian Riyals 95 43.84

1985 376,318 3.62 Saudi Arabian Riyals 92 49.33

1990 437,334 3.74 Saudi Arabian Riyals 91 33.13

1995 533,504 3.74 Saudi Arabian Riyals 101 28.29

2000 706,657 3.74 Saudi Arabian Riyals 100 26.50

2005 1,152,600 3.74 Saudi Arabian Riyals 100 32.53

For purchasing power parity comparisons, the US Dollar is exchanged at 3.41 Saudi Arabian Riyals only. Mean wages were $14.74 per manhour in 2009.

As of August 2009 it was reported that Saudi Arabia is the strongest Arab economy according to World Bank.

Saudi oil reserves are the largest in the world, and Saudi Arabia is the world's leading oil producer and exporter. Oil accounts for more than 90% of the country's exports and nearly 75% of government revenues. Proven reserves are estimated to be 260 billion barrels (41 km³), about one-quarter of world oil reserves.

More than 95% of all Saudi oil is produced on behalf of the Saudi Government by the parastatal giant Saudi Aramco. In June 1993, Saudi Aramco absorbed the state marketing and refining company (SAMAREC), becoming the world's largest fully integrated oil company. Most Saudi oil exports move by tanker from Persian Gulf terminals at Ras Tanura and Ju'aymah. The remaining oil exports are transported via the east-west pipeline across the kingdom to the Red Sea port of Yanbu. A major new gas initiative promises to bring significant investment by U.S. and European oil companies to develop nonassociated gas fields in three separate parts of Saudi Arabia. Following final technical agreements with concession awardees in December 2001, development should begin in 2002.

Due to a sharp rise in petroleum revenues in 1974 following the 1973 Arab-Israeli war, Saudi Arabia became one of the fastest-growing economies in the world. It enjoyed a substantial surplus in its overall trade with other countries; imports increased rapidly; and ample government revenues were available for development, defense, and aid to other Arab and Islamic countries.

But higher oil prices led to development of more oil fields around the world and reduced global consumption. The result, beginning in the mid-1980s, was a worldwide oil glut, which introduced an element of planning uncertainty for the first time in a decade. Saudi oil production, which had increased to almost 10 million barrels (1.6 million m³) per day during 1980-81, dropped to about 2 million barrels/day (300,000 m³/day) in 1985. Budgetary deficits developed, and the government drew down its foreign assets. Responding to financial pressures, Saudi Arabia gave up its role as the "swing producer" within OPEC in the summer of 1985 and accepted a production quota. Since then, Saudi oil policy has been guided by a desire to maintain market and quota shares.

However, beginning in late 1997, Saudi Arabia again faced the challenge of low oil prices. Due to a combination of factors--the East Asian economic crises, a warm winter in the West caused by El Niño, and an increase in non-OPEC oil production--demand for oil slowed and pulled oil prices down by more than one-third.

Saudi Arabia was a key player in coordinating the successful 1999 campaign of OPEC and other oil-producing countries to raise the price of oil to its highest level since the Gulf War by managing production and supply of petroleum. That same year, Saudi Arabia established the Supreme Economic Council to formulate and better coordinate economic development policies in order to accelerate institutional and industrial reform.

Saudi Arabia has announced plans to invest about $46 billion in three of the world’s largest and most ambitious petrochemical projects. These include the $27 billion Ras Tanura integrated refinery and petrochemical project, the $9 billion Saudi Kayan[dead link] petrochemical complex at Jubail Industrial City, and the $10 billion Petro Rabigh refinery upgrade project. Together, the three projects will employ more than 150,000 technicians and engineers working around the clock. Upon completion in 2015-16, the Ras Tanura integrated refinery and petrochemicals project will become the world’s largest petrochemical facility of its kind with a combined production capacity of 11 million tons per year of different petrochemical and chemical products. The products will include ethylene, propylene, aromatics, polyethylene, ethylene oxide, chlorine derivatives and glycol.

SABIC

The Saudi Arabian Basic Industries Corporation SABIC was established by a royal decree in 1976 to produce chemicals, polymers and fertilizers. In 2008, SABIC was Asia's largest (in terms of market capitalization) and most profitable publicly listed non-oil company, the world's 4th largest petrochemical company, ranked 186th as world's largest corporation on the Fortune Global 500 for 2009, the second largest producer of ethylene glycol and methanol in the world, the third largest producer of polyethylene and overall the fourth largest producer of polypropylene and polyolefin. Standard and Poor's and Fitch Ratings claimed SABIC to be the world's largest producer of polymers and the Persian Gulf region's largest steel producer for 2005 and assigned SABIC 'A' corporate credit rating. In 2008, Fortune 500 ranking records SABIC revenues at $40.2 billion, profits at $5.8 billion and assets standing at $72.4 billion.

Expansion operations and investments are projected to amount to USD20 billion in 2007 and USD70 billion until 2020. The overall total production in 1985 was 6.3 million metric tons (mmt); by the end of 2008 it had reached 56 mmt and by 2020, SABIC intends to produce over 135 mmt per year.[7] SABIC established in June 2006 "SABIC Sukuk Company" to issue Islamic bonds (Sukuk) that are estimated to range between SAR1 billion (USD266.67 million) and SAR3 billion (USD800 million).

Net profits of SABIC in 2008 touched SR 22 billion (US$ 5.86 billion), while total assets stood at SR 272 billion (US$ 72.5 billion) at the end of 2008 and the value of current assets at the end of 2008 stood at SR 95 billion (US$ 25 billion).

Maaden (company)

Ma'aden was formed as a Saudi joint stock company on 23 March 1997 for the purpose of facilitating the development of Saudi Arabia’s mineral resources. Ma'aden's activities have focused on its active gold business which has grown in recent years to include the operation of five gold mines: Mahd Ad Dahab, Al Hajar, Sukhaybarat, Bulghah, and Al Amar. Ma'aden is now expanding its activities beyond its gold business with the development of its Phosphate Project, Aluminium Project, and Other Projects. In addition, since its formation, Ma'aden (through the Ministry of Petroleum & Mineral Resources) has collaborated with the Government and local legislators to develop a regulatory framework for the governance of the mining industry.

On 20 December 2009, Maaden signed an agreement with US aluminium giant Alcoa to build a $10.8 billion aluminium complex. Under the agreement, the two firms will build a 1.8 million tonnes per year aluminium refinery and a 740,000 million tonnes per year smelter in Ras Azzour. The smelter is slated to start production in 2013 while the refinery would come online in 2014.

Trade

Saudi Arabian exports in 2006

In recent years, Saudi Arabia sought to join the World Trade Organization. Negotiations have focused on the degree to which Saudi Arabia is willing to increase market access to foreign goods and services and the timeframe for becoming fully compliant with World Trade Organization obligations. In April 2000, the government established the Saudi Arabian General Investment Authority to encourage foreign direct investment in Saudi Arabia. Saudi Arabia maintains a negative list of sectors in which foreign investment is prohibited, but the government plans to open some closed sectors such as telecommunications, insurance, and power transmission/distribution over time. As of November 2005 , Saudi Arabia was officially approved to enter World Trade Organization.

Doing Business

The Kingdom of Saudi Arabia has been rated as the 13th most economically competitive country in the world, according to the International Finance Corporation (IFC)-World Bank annual "Doing Business" report issued for 2010. The report highlighted the rapid rate of economic growth among Middle Eastern countries, specifically Saudi Arabia, as a result of economic sector reform. For the fifth consecutive year, Saudi Arabia was ranked as the best place to do business in the entire Middle East and the Arab World. Since 2004, the Kingdom has advanced its overall Doing Business rankings, from 67th to 13th. A number of policy reforms to promote entrepreneurship are underway.

Saudi Arabian companies dominate 2009's "MEED 100", with companies listed on the Tadawul accounting for 29 out of the region’s 100 biggest publicly quoted companies ranked by market capitalisation. Just three of the 20 companies that have dropped out of the top 100 over the past year are listed on the Saudi stock exchange.

Diversification

As of 2007, non-oil manufacturing contributed 10% to Saudi Arabian GDP and less than 6% of total employment.

Through 5-year development plans, the government has sought to allocate its petroleum income to transform its relatively undeveloped, oil-based economy into that of a modern industrial state while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed rapidly. Oil wealth has increased the standard of living of most Saudis. However, significant population growth has strained the government's ability to finance further improvements in the country's standard of living. Heavy dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. The mismatch between the job skills of Saudi graduates and the needs of the private job market at all levels remains the principal obstacle to economic diversification and development; about 4.6 million non-Saudis are employed in the economy.

Saudi Arabia's first two development plans, covering the 1970s, emphasized infrastructure. The results were impressive — the total length of paved highways tripled, power generation increased by a multiple of 28, and the capacity of the seaports grew tenfold. For the third plan (1980-85), the emphasis changed. Spending on infrastructure declined, but it rose markedly on education, health, and social services. The share for diversifying and expanding productive sectors of the economy (primarily industry) did not rise as planned, but the two industrial cities of Jubail and Yanbu--built around the use of the country's oil and gas to produce steel, petrochemicals, fertilizer, and refined oil products--were largely completed.

In the fourth plan (1985-90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. The private sector became more important, rising to 70% of non-oil GDP by 1987. While still concentrated in trade and commerce, private investment increased in industry, agriculture, banking, and construction companies. These private investments were supported by generous government financing and incentive programs. The objective was for the private sector to have 70% to 90% ownership in most joint venture enterprises.

The fifth plan (1990-95) emphasized consolidation of the country's defenses; improved and more efficient government social services; regional development; and, most importantly, creating greater private-sector employment opportunities for Saudis by reducing the number of foreign workers.

The sixth plan (1996-2000) focused on lowering the cost of government services without cutting them and sought to expand educational training programs. The plan called for reducing the kingdom's dependence on the petroleum sector by diversifying economic activity, particularly in the private sector, with special emphasis on industry and agriculture. It also continued the effort to "Saudiize" the labor force.

The seventh plan (2000-2004) focuses more on economic diversification and a greater role of the private sector in the Saudi economy. For the period 2000-2004, the Saudi Government aims at an average GDP growth rate of 3.16% each year, with projected growths of 5.04% for the private sector and 4.01% for the non-oil sector. The government also has set a target of creating 817,300 new jobs for Saudi nationals.

Advertising expenditures have reached new peaks due to emphasis on value-added manufacturing.

 Investment

Saudi Arabia has one stock exchange the Tadawul and its financial markets are regulated by the Capital Market Authority (Saudi Arabia). The stock market capitalisation of listed companies in Saudi Arabia was valued at $646 billion in 2005 by the World Bank.

ICT Services

Saudi Arabia is currently enjoying a massive boom in its personal computer industry since the deregulation of 2002. PC per capita has exploded to nearly 43% of the population in 2005 from just 13% in 2002 leapfrogging over the rest of West Asia.

The electrical and electronics market was estimated to be around $3.5 billion in 2004.

The e-commerce market was estimated at just over $1 billion in 2001.

(source:wikipedia)