Opportunity Arabia conference Thursday 2nd October 2014 Omar Bahlaiwa Secretary General, Saudi Committee for International Trade 'The Kingdom of Saudi Arabia: The Gateway to Investment Opportunities in the Middle East'

1. The Kingdom of Saudi Arabia
The Gateway to Investment Opportunities in the Middle East

2. Saudi Arabia – Key Indicators.
Saudi Arabia Underlying
Strengths.
Investment in Saudi Arabia.
Foreign Trade of Saudi Arabia.
Saudi Estimated Budget - 2014.
Reforms to Enhance Saudi
Economy.
Towards Better UK–Saudi
Relations.
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CONTENTS

3. SAUDI ARABIA – KEY INDICATORS (2013)
• Area: 2000000 km2
• Population: 30 million
• GDP: $745 billion (preliminary)
• GDP per Capita: $24847.
• GDP Growth: 1.5 % (Current)
• GDP Growth: 3.8% (Constant)
• Non-Oil Sector GDP Growth: %7.
• Private Sector Growth rate:
9.4%.
• Exports:$367 billion
• Imports:$153 billion.
Currency
Saudi Riyal
SAR 3.75 = $1.00
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4. SAUDI ARABIA – KEY INDICATORS
Nominal GDP 2010 2011 2012 2013 2014F
$ Billion 526.8 669.5 734 745 767
% change 22.8 27.1 9.6 1.5 3
Real GDP (%
change)
2010 2011 2012 2013 2014F
Oil 0.3 11.0 5.7 -0.6 -1.4
Non-Oil Private Sector 10.3 7.7 6.0 5.5 5.2
Government 7.5 8.7 5.5 3.7 4.0
Total 7.4 8.6 5.8 3.8 3.6
Source: Jadwa Forecasts for 2014
Cont….
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5. SAUDI ARABIA – KEY INDICATORS
External Trade Indicators ($ Billion)
2010 2011 2012 2013 2014F
Oil Export Revenues 215.2 317.6 335.1 322.4 284.8
Total Export Revenues 251.1 264.7 388.4 377.0 342.1
Imports 97.4 120.0 141.8 152.7 159.4
Trade Balance 153.7 244.7 246.6 224.3 182.6
Current Account Balance 66.8 158.5 164.8 134.3 96.7
% GDP 12.7 23.7 22.4 18.0 12.6
Official Foreign Assets 445.1 544.0 656.6 725.7 767.1
Source: Jadwa Forecasts for 2014
Cont….
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6. SAUDI ARABIA -UNDERLYING STRENGTHS
• Strong GDP growth.
• Significant budget surplus .
• Price level stability.
• Owns 25% of world’s Oil reserves .
• Fourth Largest Natural Gas
reserve.
• The largest economy in the Arab
World, and among the top 20
Economies in the world (G20).
• The Largest producer of
Petrochemicals in the Arab World.
• Open economy, a member of
WTO.
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7. SAUDI ARABIA-UNDERLYING STRENGTHS
Cont….
• Political stability, member of many Arab
& International Organizations.
• An attractive environment for investment,
among the top 20 recipients of Foreign
Direct Investment in the world.
• Investment incentives, Income tax free,
financial facilities.
• Ranked 22 in ease of doing businesses
in 2013.
• 10th largest worldwide Exporter
(excluding intra-EU (27) trade).
• 21st largest worldwide Importer
(excluding intra-EU (27) trade).
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8. SAUDI ARABIA – UNDERLYING STRENGTHS
727
Saudi Arabia’s GDP vs other Gulf Nations
358
$ Billion
183 173
77
800
600
400
200
Cont….
0 27
Saudi Arabia U.A.E Qatar Kuwait Oman Bahrain
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9. SAUDI ARABIA – UNDERLYING STRENGTHS
727
Saudi’s GDP among MENA countries
794
$ Billion
549
257 208
98
1000
800
600
400
200
0
Saudi
Arabia
Cont….
Turkey Iran Egypt Algeria Morocco
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10. SAUDI ARABIA – UNDERLYING STRENGTHS
Saudi Arabia’s ranking in global competitiveness 2013/2014
Indicator Ranking Among Arabic
Countries
Cont….
Ranking Among
World Countries
Ease of doing businesses 1 22
Global competitiveness 3 20
Institutions 4 20
Infrastructure 4 31
Macroeconomic environment 2 4
Property rights 5 27
Health and primary education 5 53
Higher education and training 3 48
Goods market efficiency 4 27
Financial market development 3 27
Technological readiness 3 41
Market Size 1 23
Business sophistication 3 28
Innovation 3 30
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11. SAUDI ARABIA – UNDERLYING STRENGTHS
Cont….
Saudi Arabia’s ranking in Financial Stability Among MENA Countries
Country Ranking Among
MENA Countries
Ranking Among
World Countries
Saudi Arabia 1 1
Emirates 2 5
Kuwait 3 15
Morocco 4 32
Tunisia 5 35
Bahrain 6 37
Egypt 7 46
Jordan 8 49
Turkey 9 54
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12. INVESTMENTS IN
SAUDI ARABIA
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13. SAUDI ARABIA’S RANKING IN BUSINESS
ENVIRONMENT AMONG MENA COUNTRIES
Country Ranking Among
MENA Countries
Ranking Among
World Countries
Bahrain 1 16
Saudi Arabia 2 17
Emirates 3 22
Kuwait 4 29
Tunisia 5 32
Turkey 6 34
Jordan 7 40
Morocco 8 43
Egypt 9 48
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14. 16.4
Foreign Direct Investments
(Inflows) US Billions $ - 2011
6.4
$ Billion
5.5
4.7
1.1
0.3
18.
13.5
9.
4.5
0.
Saudi Arabia Egypt Emirates Qatar Oman Kuwait
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15. FDI TO SAUDI ARABIA BY COUNTRY - 2011
15
17%
9%
8%
9%
4%
5%
8%
4%
3% 2% 1%
USA
Kuwait
France
Japan
UAE
Bahrain
China
Germany
UK
Netherlands
Jordan
7%
FDI in Saudi Arabia 2011: 16.4 billion US$
USA is by far the largest investor in Saudi Arabia. Malaysia

16. INVESTMENT INCENTIVES IN SAUDI ARABIA
• No bureaucracy and one gate to investment “General Authority
for Investment Arabia (SAGIA).
• 100 % land and corporate ownership to foreigners.
• No restrictions on the re-transfer of capital.
• No taxes on personal income , taxes 20 % of the benefits on
foreign companies.
• The possibility of loss carry-over
to later years rather than
factoring them into tax
settlements of profitable years.
• Foreign investors have the
right to benefit from specialized
financial institutions (local and
international institutions).
King Abdullah Financial District
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17. ADVANTAGES OF INVESTING IN SAUDI ARABIA
• Liberalized Market
• Domestic Market of over 29
Million People
• Proximity to big Markets
• Low Labor Costs
• Major source of energy
• Guarantee of Transfers
• National Treatment
• Reliable Investment
Environment
Kingdom Tower, Jeddah
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18. ADVANTAGES OF INVESTING IN SAUDI ARABIA
Cont….
• Topped the list of GCC and West Asian countries in terms of direct
foreign investment.
• Topped the list of Arab host in terms of direct foreign investment,
with estimated flows of $ 38.2 billion, up 39% of the total.
• Top of the list of Arab host of inter-Arab investment interfaces, with
an estimated worth of $ 11.6 billion, up 60.4% of the total.
• Major investments in west Asia go to three countries: KSA, Turkey
and UAE.
• Kingdom concluded 41 bilateral agreements with various
worldwide countries, including 17 investment agreements, and 24
avoidance of double taxation agreements.
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19. PLANNED SAUDI INVESTMENTS UP TO 2020
Petroleum Projects $400 billion
Physical Infrastructure $200 billion
Petrochemical Expansions $92 billion
Electric Power Generation $90.7 billion
Water Desalination $88 billion
Telecom and IT $70.7 billion
Tourism and Leisure Development $53.5 billion
Natural Gas Production $50 billion
Agricultural Expansion $28.3 billion
Educational and Training $10.7 billion
Railways $99 billion
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20. INVESTMENT OPPORTUNITIES IN HOUSING
Ò King Abdullah decree to support the
Housing Sector through increased
allocations totaling $14.67 billion to the
General Housing Authority and the
Real Estate Development Fund.
Ò The royal decree to support the
Housing Authority in building up to
500,000 housing units for citizens.
Ò King’s initiative will bring down the
existing shortage of housing units from
1.2 million to 700,000.
Ò The decision to increase the real estate
loan from SR300,000 ($80 thousand) to
SR500,000 ($133 thousand) and build
as many as 500,000 housing units, was
reflected in the market with a boost in
demand for plots of land for building
houses and increased activities in the
real estate market.
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21. INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS
• Saudi Arabia is planning to invest heavily in
its railway infrastructure, with about SR 365
billion ($99.4 billion), by the year 2040.
Riyadh Metro line:
• Saudi Arabia awarded more than $22 billion
in contracts to develop a metro line in
Riyadh..
• It is the biggest infrastructure project to be
undertaken in the Kingdom of Saudi Arabia,
and is a cornerstone of the bold future for
Riyadh city.
• Six lines will serve the capital city’s center,
government facilities, universities,
commercial areas, the airport and the
financial district.
• Construction of the 175-kilometer (109-
mile), and 85-station network will be the
longest metro line in the world under
construction, and will create 15,000 jobs
over five years.
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22. INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS
• North-South railway:
• Is considers the largest freight rail project,
2,750 km long, and valued at an estimated
SR 37.87 billion ($10.1 billion).
• The project is of strategic importance in
terms of freight exports to the Gulf.
• Land bridge project:
• Is another important freight line valued at
SR 26.6 billion ($7.1 billion).
• The line links the port cities of Jeddah,
Dammam and Jubail, passing through
Riyadh.
• Haramain High Speed rail project:
• Is valued at SR 42 billion ($11.2 billion) and
built to transport pilgrims.
• Jeddah metro:
• Is another planned project valued at SR 35
billion ($9.3).billion).
Cont….
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23. FOREIGN TRADE OF
SAUDI ARABIA
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24. DEVELOPMENT OF SAUDI ARABIA’S FOREIGN TRADE
600
300
150
0
450
233
313
Billion Dollars
192
251
365
388
323
90
428
115
287
358
95 107
132
156
497
544
2007 2008 2009 2010 2011 2012
EXPORTS IMPORTS TRADE VOLUME
Today, Saudi Arabia is the 10th biggest exporter and the 21st
largest importer in the world. (excluding intra-EU (27) trade).
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25. TOP (10) FOREIGN TRADE PARTNERS -2012
SAUDI ARABIA EXPORTS TO
• USA 14%
• Japan 13%
• China 13%
• S . Korea 9.2%
• India 8.3%
• Singapore 3.6%
• Taiwan 3.4%
• Italy 2.7%
• Bahrain 2.7%
• U.A.E 2.6%
SAUDI ARABIA IMPORTS FROM
• USA 13.5%
• China 12.7%
• Germany 7%
• Japan 6.7%
• S. Korea 6%
• U.A.E 4.1%
• India 3.3%
• France 3.2%
• Italy 3%
• UKs 2.5%
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26. MAIN EXPORTS OF SAUDI ARABIA
• Petrochemical Products
• Electric Power Towers (High
Tension)
• Paper Industries
• Medicine
• Prefab. Steel Structure
Buildings
• Air Conditioning Materials
• Cleaning Materials
• Plastic Textiles
• Insulating Materials
• Plastic pipes and fittings and
bottles
• Miscellaneous Plastic Material
• Electric Cables
• Irrigation Industries
• Electric Poles
• Steel Angles for Electric Power
Towers
• Transparent Glass
• Carpets
• Cement
• Foodstuff
• Copper Wire , bars and jewelry
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27. SECTORAL BREAKDOWN OF SAUDI’S IMPORTS -2012
27
14%
12%
3%
14%
26%
31%
Food stuffs
Chemical products
Textiles& Textiles Articles
Base metals
Electrical machines
Others
Machines appliances &electrical gadgets have the highest
imports value during 2012 at rate of 26% of the total
imports value of Saudi Arabia.

28. ADVANTAGES OF SAUDI’S EXPORTED PRODUCTS
• More than 2000 commodity within 17
groups.
• Applying International Standard &
Specification.
• Accessibility to more than 148
International Markets.
• High Quality of Packaging.
• Suitable & competitive price.
• Financing programs.
• Ease of Transport.
• Air, sea & land cargo from various ports.
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29. SAUDI ESTIMATED BUDGET - 2014
 Expenditure $228 Billion
29
SECTORAL BREAKDOWN OF EXPENDITURE )%(
8%
7%
25%
13%
10%
Transport & Communications
Water, Agriculture, Industry
Education
Health & Social Development
Development Funds
 Revenues $228 Billion

30. REFORMS TO ENHANCE SAUDI’S ECONOMY
• Re-evaluation and issuance of new laws.
• Developing IT and Communication platforms.
• Attention to sectors in which Saudi Arabia has comparative and
competitive advantages.
• Creating more jobs for Saud youth.
• Enhance PPP Private / Public partnership.
• Accelerating Privatization Program.
• Support SME’s and Family Business.
• Promotion of Non-Oil Export.
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31. TOWARDS BETTER
UK–SAUDI
RELATIONS
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32. DEVELOPMENT OF KSA’S FOREIGN TRADE WITH UK
(MILLION US $)
2008 2009 2010 2011 2012
Exports to UK 950 697 923 1528 2040
Imports from UK 4060 3424 3442 3817 4192
Trade Volume 5010 4121 4365 5345 6232
Balance of Trade -3110 -2727 -2519 -2289 -2152
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33. Come and Share our Future with us.
www.csc.org.sa
Email: cit@csc.org.sa
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