|
GROWTH TARGETS DURING THE SIXTH DEVELOPMENT PLAN 1415-1419H., CORRESPONDING TO
1995-1999
Diversification of the Saudi economy by reducing dependency on crude oil as a major
source of income continues to be a key priority under the sixth development plan. Raising
non-oil merchandise exports depends on the ability of the Saudi industry to maintain and
further improve its competitiveness in domestic and international markets. This can be
achieved through higher productivity, aggressive marketing, better quality and competitive
prices.
The following is a summary of the development of major Saudi economic sectors during
the sixth development plan:
AGRICULTURE
Despite the tremendous challenge of desert farming, the Saudi Arabian agricultural
sector has expanded considerably, providing significant amounts of grains, fruits and
vegetables, and dairy and poultry products. Through a determined effort by the government
to support this sector as a major part of its diversification program, the Kingdom
currently exports wheat, and is self-sufficient in the areas of poultry, egg farming, and
selected fruits and vegetables.
Continued growth in the agricultural industry will depend upon the careful use of the
Kingdom's underground and rain water sources for irrigation. The Saudi Arabian government
has already launched an extensive desalination program which includes the world's largest
water pipeline from Jubail to Riyadh, supplying the rural areas with fresh water. Prime
targets in agricultural development include survey and land classification, increasing
land productivity, augmenting the capacity of flour mills and grain silos, and expanding
the production of meat.
This sector is expected to grow at an annual rate of 3.1 during the sixth plan (see
table 5). Production is expected to shift away from large-scale crop production, using
large volumes of scarce water resources, towards high value-added crops produced mainly in
areas which have renewable water resources and in greenhouses to meet the rapidly growing
demand for fresh fruits and vegetables.
COMMUNITY, SOCIAL AND PERSONAL SERVICES
Domestic household services are the dominant element in this sector. Despite the fact
that this sector is relatively small in terms of the value added, it accounts for a
significant proportion of total employment in the Kingdom. This sector is expected to grow
at an annual rate of 3.4 percent during the sixth development plan.
Table 5 *
Gross Domestic Product by Sector in the Sixth Plan 1995-1999
(at constant 1989 prices)
| |
Value Added
(SR Billion)
1419/20H
1414/15H |
Average
Annal Growth (percnt) |
Producing
Sectors
Agriculture, Forestry, Fishing
Other Mining, Quarrying
Manufacturing
-Petroleum Refining
-Petrochemicals
-Other Manufacturing
Electricity, Gas, Water
Construction
Service Sectors
Trade, Restaurants, Hotels
Transport, Communication
Finance, Insurance, Real Estate
and Business Services
-Real Estate
-Other
Community, Social and Personal Services
Government Services
Non-Oil Sectors
Crude Oil and Natural Gas
Other Items
Gross Domestic Product |
93.2
26.4
2.3
31.1
13.5
3.0
14.6
0.9
32.5
89.8
27.8
25.0
25.2
6.9
18.3
11.8
66.4
249.4
129.3
2.1
380.8 |
114.5
30.8
3.5
39.5
16.4
4.5
18.6
1.2
39.5
111.2
37.6
28.9
30.7
8.1
22.6
14.0
75.8
301.5
156.1
1.0
458.6 |
4.2
3.1
9.0
4.9
3.9
8.3
4.9
5.5
4.0
4.4
6.2
2.9
4.1
3.3
4.3
3.4
2.7
3.9
3.8
----
3.8 |
* Source: Ministry of Planning, Kingdom of Saudi Arabia
CONSTRUCTION
Rising prices are expected to limit the growth rate of the demand for residential
building to less than the growth rate of population. Government investment in
non-residential building and infrastructure will provide stimulus to the construction
industry only late in the sixth plan period. However, the construction sector is expected
to grow at an average annual rate of 4.0 percent.
CRUDE OIL AND NATURAL GAS
Oil remains the leading source of the Kingdom’s income despite considerable
economic diversification. The development of oil production can be traced to the Kingdom's
first oil exploration contract with the Standard Oil Company of California in 1933. By
1974, the Arabian American Oil Company (ARAMCO), a consortium of four U.S. oil companies,
was producing 8.2 million barrels a day and accounted for 96 percent of the country's oil
production. Saudi Arabia's interest in ARAMCO evolved from limited ownership and
participation to full ownership of the company by 1980 which was accompanied by a change
in the name to Saudi Aramco (see ad on page------and appendix XII for listing of sales and
marketing offices of crude oil and petroleum products). As a leading member of the
Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia has played an important
role as moderator in the stabilization of oil prices. The Kingdom has also been at the
forefront in advocating unified pricing and adherence to production quotas.
Moderate prices of oil are expected to prevail through the end of the sixth
development plan. Any shortfall in the production of non-OPEC producers due to declining
reserves, or any increase in world oil demand arising from the worldwide economic
recovery, is expected to be met by OPEC oil. Thus, this sector is expected to grow at an
annual rate of 3.8 percent.
| 
