Sustainable growth and Saudization – the process of providing more high-quality jobs to natives – seen as key to diversification efforts
Saudi Arabia seeks to become one of the world’s top-ten economies, and to build a robust diversified industrial base; thereby reducing its reliance on the hydrocarbon sector. As the economic powerhouse of the country and the center of its booming petrochemical industry, the Eastern Province plays a key role in this endeavor. The Eastern Province is also home to numerous other industries in sectors as varied as mining, metals, food, automotive and building materials.
And hence no wonder that sustainability has become the keyword among Saudi policymakers. How to ensure prosperity for future generations after the oil bonanza? How to ensure that the economy remains in the hands of Saudis? These are two of the main challenges behind the drive towards diversification and Saudization.
With a predominantly young population eager to find a place in the sun, the Saudi government has invested heavily in education over the past few years. “Human capital is the most important factor to ensure sustainable growth,” comments Abdullah Al Fozan, chairman of Al Fozan Group, the eponymous conglomerate specializing in retail, manufacturing, real estate and trading, which is headquartered in the Eastern Province. “The kingdom needs to encourage and develop talents and calibers that are able to compete in the international arena.”
“Another factor will be to diversify the economy from oil and oil-based industries into other areas and the government has been trying and will continue to encourage this initiative. Saudi Arabia in general and the Eastern Province in particular have made great efforts to diversify the economic base and improve the investment environment. This takes the shape of economic reform to raise competitiveness of the Kingdom internationally. Saudi has to provide the opportunity for the young to play a major role in the future of the country’s development.”
The government has recently earmarked four priority areas for sustainable growth: education, infrastructure, health and social services. And it has clearly indicated that in order to make an impact, private investments will be solicited to complement the massive public investments already planned.
“With the fact that oil is a finite resource and subject to price volatility, the private sector has to play an important role in providing sustainable growth to the kingdom,” says Mr. Al Fozan.
“This is evident in the government’s privatization initiatives for existing and new projects. There are many untapped areas where the private sector can provide value additions. First, it needs to expand and invest in value adding initiatives that will provide benefit to the economy as well as job opportunities to Saudis. Second, the private sector has to emphasize social responsibility by providing initiatives that will support the society and improve the quality of living for Saudis.”