Documents
Submitted for the Record by
Representative Randy "Duke" Cunningham |
|
Saudi
Arabia and Reform in the Arab World
The
Government of Saudi Arabia has implemented a number of
political and economic reforms to encourage political
participation, promote economic growth, increase foreign
investment and expand employment opportunities. The
Kingdom has been updating and modernizing its academic
curricula, and monitoring its religious schools. It plans
to hold municipal elections as part of a comprehensive
streamlining of local government. In addition, the Kingdom
is promoting its free market economy by privatizing twenty
major state enterprises, establishing fourteen regulatory
authorities to carry out reforms, improving foreign
investment laws, revising a broad range of commercial laws
and implementing intellectual property rights to foster
innovation. It is also becoming a more significant player
in international trade by seeking membership in the World
Trade Organization (WTO).
Political
Reform in the Kingdom of Saudi Arabia
In
January 2003, the Kingdom of Saudi Arabia presented a bold
initiative entitled "Charter to Reform the Arab
Position" to encourage economic and political reform
in the Arab world.
The
Charter urges Arab states to recognize the need for
internal reform and greater participation by citizens in
the political process as important steps toward the
development of Arab human resources and the
democratization of the Arab world.
The
initiative calls on Arab states to implement a Greater
Arab Free Trade Zone by the end of 2005. The goal of this
agreement is for Arab states to implement unified tariffs
and duties within 10 years, which will serve as the basis
for the establishment of a Common Arab Market (CAM). It
also encourages members of the League of Arab States to
modernize local economies, privatize government-owned
industries and open economic development opportunities to
outside investment and participation.
At
the end of the 16th Arab Summit in Tunis, May 22-23, 2004,
Saudi Arabia along with the other 21 members of the Arab
League issued the �Tunis Declaration� and pledged to
carry out political and social reforms, promote democracy,
expand popular participation in politics and public
affairs, and reinforce women's rights.
Saudi
Arabia and Political Initiatives and Legislation
In
1992, Custodian of the Two Holy Mosques King Fahd bin
Abdulaziz introduced three major political developments to
modernize the government within the framework of the
Kingdom's traditions:
On
November 29, 2003, King Fahd approved changes that would
enhance the legislative role of the Consultative Council.
The amendments to Articles 17 and 23 of the Consultative
Council System grant the Council the power to propose new
bills or amendments to regulations in force and debate
such proposals without prior approval from the King.
Elections
On
October 13, 2003, Saudi Arabia approved groundbreaking
plans to streamline local and municipal governments by
introducing elections for half of the members of each
municipal council to ensure that citizens have a strong
voice in local affairs. A one-year period was given to the
authorities responsible for managing and finalizing the
election procedures.
The
proposal for elections marked an important step in the
Kingdom's ongoing reform agenda and followed King Fahd's
address to the Consultative Council on May 17, 2003, where
he said: "I would like to confirm that we will
continue on the path of political and economic reform. We
will work to improve our system of government and the
performance of the public sector and broaden popular
participation in the political process."
On
July 10, 2004, Saudi Arabia announced that the basic
regulations and systematic procedures for the election
process had been established, and that committees had
worked through the details for establishing election
centers, registering voters and candidates and setting
deadlines in the election of members in 178 municipal
councils across all cities and villages in the Kingdom's
13 provinces.
On
September 7, 2004, the Minister of Municipal and Rural
Affairs Prince Met'eb bin Abdulaziz issued directives that
a committee be set up to supervise the upcoming municipal
elections in Riyadh Province. The committee, affiliated
with the Ministry's general committee for the election
process, will supervise implementation of the rules and
regulations and all other preparatory and executive works.
In
addition, Saudi Arabia briefed a visiting team of United
Nations experts on the measures completed by the Ministry
of Municipal and Rural Affairs relating to the elections,
and the UN team held meetings with the committees
supervising the process.
On
September 11, 2004, dates were announced for the three
phases of the election process: for Riyadh province,
February 10, 2005, with voter registration from November
23 to December 22, 2004; for the four southern provinces
and the Eastern Province, March 3, 2005, with voter
registration from December 14, 2004, to January 12, 2005;
and for the rest of the country, April 21, 2005, with
voter registration from February 15 to March 16, 2005.
Candidates can register for the three phases December 26
to 30, January 30 to February 3, and March 20 to 24,
respectively.
King
Abdulaziz Center for National Dialogue
On
August 3, 2003, Crown Prince Abdullah announced the
establishment of the King Abdulaziz Center for National
Dialogue to promote the public exchange of ideas as an
essential part of life in Saudi Arabia. So far, three
rounds of talks have taken place, covering standards of
education, the emergence of extremism, and the role of
women. The next national dialogue will be in October 2004
and will focus on youth issues. In his address to the
European Policy Centre on February 19, 2004, Saudi
Arabia's Minister of Foreign Affairs Prince Saud Al-Faisal
said: "The Center for National Dialogue was
established with a broad agenda including, but not limited
to, reassessment of the standards of education; dealing
with the emergence of extremism; the essential role women
should play in society; and institutional development.
Diversity and tolerance are the guiding principles."
National
Human Rights Association (NHRA)
In
March 2004, Custodian of the Two Holy Mosques King Fahd
bin Abdulaziz approved the establishment of the first
independent human rights organization in Saudi Arabia. The
National Human Rights Association (NHRA) implements the
international human rights charters signed by the Kingdom.
The NHRA, which includes a special panel to monitor
violations of women's rights, was formed following the
October 2003 human rights conference entitled "Human
Rights in Peace and War." The human rights conference
concluded with the issuance of the "Riyadh
Declaration," which states that respect for human
life and dignity is the foundation of human rights; that a
human being deserves respect, regardless of race, color or
sex; that violation of human rights is a crime deserving
severe punishment; that to hold a human being in custody
without legal basis is forbidden by Islamic laws; that
disregard for privacy and property rights is a violation
of human rights; and that tolerance of faith is required
by Islam, which also prohibits coercing people to follow a
certain religion.
Press
Law
On
July 17, 2001, the Kingdom endorsed a 30-article law to
restructure the press industry and allow journalists to
establish a trade association. On February 24, 2003, the
Saudi Journalists Association was officially established
to protect the rights of journalists in the Kingdom and
coordinate relations between journalists and the media
establishment, and on June 7, 2004, elected a nine-member
board that includes two women. In March 2004, the
Consultative Council passed a resolution urging the
Ministry of Culture and Information to encourage greater
freedom of expression in the Saudi media, and to open up
opportunities for investment in the media to the Saudi
private sector.
Education
In
Saudi Arabia today, there are eight public universities,
more than 100 colleges and more than 26,000 schools. Some
five million students are enrolled in the education
system, which boasts a student to teacher ratio of 12.5 to
1 -- one of the lowest in the world. Of the 5.2 million
students enrolled in Saudi schools, half are female, and
of the 200,000 students at Saudi universities and
colleges, women comprise more than half of the student
body. The government allocates about 25 percent of the
annual state budget to education. Recent initiatives
include:
-
In
February 2002, Saudi Arabia initiated a process of
evaluating and assessing its school curriculum. This
audit determined that about five percent of textbooks
contained possibly offensive language. A program was
put into place to eliminate such material and
textbooks and curricula have been updated and
modernized. Two pilot programs, one in Riyadh and one
in Jeddah, have been established to experiment with
new teaching methods.
-
In
October 2003, Dr. Maha Abdullah Orkubi was appointed
Dean of the Jeddah branch of the Arab Open University
(AOU), the first time for a Saudi woman to be
appointed to such a senior academic position.
Religion
During
2003, 2,000 imams who had been violating prohibitions
against the preaching of intolerance were disciplined or
removed from their positions, and more than 1,500 have
been referred to educational programs. The Ministry of
Islamic Affairs has begun a three-year program to educate
imams and monitor mosques and religious education to purge
extremism and intolerance. On April 27, 2004, at a
reception in New York co-sponsored by the U.S.-Saudi
Business Council and the Council on Foreign Relations (CFR),
Saudi Arabia's Minister of Foreign Affairs Prince Saud
Al-Faisal explained: "It is the religious
establishment in Saudi Arabia that in fact is proving to
be the body most qualified to de-legitimatize Al-Qaeda's
claims, the very religious community that is being
attacked and discredited." For more information about
the efforts of Saudi Arabia's religious establishment,
please consult the "Public Statements by Senior Saudi
Officials Condemning Extremism and Promoting
Moderation" report, which can be found on the Embassy
Web site at <www.saudiembassy.net>.
Judicial
Regulations
Saudi
Arabia has recently passed several important regulations
to ensure a fair and balanced justice system, including:
-
Law
of Procedure Before Shari'ah Courts
In September 2001, Saudi Arabia passed the Law of
Procedure Before Shari'ah Courts to regulate the
rights of defendants and legal procedures. In addition
to granting defendants the right to legal
representation, the law outlines the processes by
which pleas, evidence and experts are accepted by the
court.
-
Code
of Law Practice
In January 2002, the Code of Law Practice went into
effect in Saudi Arabia. The law outlines the specific
requirements necessary to become an attorney,
including education, registration and admission to the
courts as well as licensing. The law also defines the
duties and rights of lawyers, including the right of
attorney-client privilege.
-
Criminal
Procedure Law
In May 2002, the Criminal Procedure Law, a 225-article
bill, was passed to regulate the rights of defendants
and suspects before the courts and police. The law
protects a defendant's rights with regard to
interrogation, investigation, and incarceration and
also grants the defendant access to the Bureau of
Investigation and Prosecution. Members of the Bureau
of Investigation and Prosecution are to ensure,
through visits, that the rights of the defendants and
persons in custody are being protected. The law also
outlines a series of regulations that justice and law
enforcement authorities must follow during all stages
of the judicial process, from arrest and
interrogation, to trial and the execution of verdicts,
ensuring that the judicial process remains fair and
balanced.
In
April 2004, the Ministry of Justice organized a symposium
on the Kingdom's judicial system. The communiqu� declared
that
Shariah
[Islamic Law] is viable at all times and places; that
legal procedures should be filed in a manner that supports
the individual's rights and penal procedures should
reflect human dignity in accordance with Shariah; and that
equal rights should be extended to individuals with regard
to legal aid in all phases of penal lawsuits of a public
nature.
Economic
Reform in the Kingdom of Saudi Arabia
Saudi
Arabia and Economic Initiatives and Legislation
-
Applying
for accession to the World Trade Organization (WTO)
Saudi Arabia is one of the largest economies outside
the World Trade Organization (WTO). Recent steps
toward privatization and market liberalization have
called for fresh negotiations on Saudi Arabia's bid to
join the WTO. In the accession process, the Kingdom is
negotiating bilateral agreements with current WTO
members while adopting the organization's various
trade rules. The Kingdom of Saudi Arabia and the
European Union signed a bilateral agreement on August
31, 2003, guaranteeing free access to goods and
services. Moreover, Saudi Arabia has already signed 35
bilateral trade agreements with other members of the
WTO, including China, Japan, Canada, Brazil, Argentina
and Australia. Talks between Saudi Arabia and the
United States are ongoing in mid-September 2004.
On
July 5, 2004, the Council of Saudi Chambers of Commerce
and Industry (CSCCI) announced plans to set up early
next year a center that will provide technical and
support services to Saudi businesses in preparation for
the Kingdom's accession to the WTO.
-
Copyright
Law
On June 9, 2003, the Council of Ministers endorsed the
Copyright Law, a 28-article document that meets the
requirements of the World Trade Organization's
Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS), placing Saudi Arabia one step
closer to entry in the WTO. The law protects
intellectual property including print publications,
lectures, audio recordings, visual displays, as well
as computer programs and works of art. The law
establishes a range of fines and actions that can be
effected for copyright violations. Saudi Arabia has
also joined the Universal Copyright Convention and the
Berne Convention for the Protection of Literary and
Artistic Works to further protect intellectual
property and encourage continued development and
innovative thinking.
-
Patent
Law
On July 17, 2004, the Council of Ministers approved a
65-article law on patents, integrated circuits, plant
varieties and industrial designs. The new law also
meets the requirements of TRIPS and the Paris
Agreement for Industrial Property.
-
The
Capital Markets Law
On June 16, 2003, the Council of Ministers passed the
Saudi Arabian Capital Markets Law. The law will
stimulate and strengthen the Saudi economy and
increase the participation of Saudi citizens in the
capital markets. The law:
-
Establishes
the Saudi Arabian Securities and Exchange
Commission (SASEC) to protect investor interests,
ensure fair business, promote and develop the
capital market, license brokers and offer
securities to the public.
-
Establishes
the Saudi Arabian Stock Exchange (SASE), which
will incorporate the national securities
depository center.
-
Foreign
Investment Law
The Foreign Investment Law, enacted by the Saudi
Arabian General Investment Authority (SAGIA), was set
up to allow foreign investors to own property,
transfer capital and profits, claim full ownership of
their projects and enjoy a reduction in tax rates. The
law protects foreign investors from confiscation of
property without a court order or expropriation of
property, except for public interest, against an
equitable compensation. In August 2002, SAGIA passed
an amendment to the Executive Rules of the Foreign
Investment Act strengthening the legal framework,
allowing foreigners to, for instance, own land and
avoid double taxation.
-
U.S.-Saudi
Council for Trade and Investment
On July 31, 2003, Saudi Arabia and the United States
signed an agreement to strengthen commercial and
investment relations. As a result, the U.S.-Saudi
Council for Trade and Investment was established to
meet at least once a year to enable representatives of
both countries to review the signing of additional
agreements on trade, protection of intellectual
property rights, investment, vocational training and
environmental issues. There are 337 joint ventures
between the two countries with a total investment of
more than $21 billion. American companies are the
largest group of foreign investors in the Kingdom.
-
Enacting
the GCC Customs Union
The Customs Union was established on January 1, 2003,
by the Gulf Cooperation Council (GCC) to standardize
customs duties in the six member countries. In
accordance with the Customs Union, the Government of
Saudi Arabia approved the reduction to five percent of
customs for goods formerly charged between 7 and 12
percent. In addition, the GCC agreed to the principle
of a single port of entry. Most related laws and
regulations will be standardized by the end of 2005.
Saudi
Arabia and Agencies that Promote Reform
The
following is a list of agencies established to help
implement economic reform in Saudi Arabia.
-
Supreme
Economic Council (SEC)
In August 1999, Saudi Arabia announced the formation
of the Supreme Economic Council (SEC). The SEC
evaluates economic, industrial, agricultural and labor
policies to assess their effectiveness. Privatization
efforts have gained momentum since the creation of the
SEC, which oversees economic restructuring aimed at
opening up Saudi markets and attracting investments.
-
Supreme
Council for Petroleum and Minerals (SCPM)
Saudi Arabia established the Supreme Council for
Petroleum and Minerals (SCPM) in January 2000, as a
body responsible for policymaking on the exploitation
of petroleum, gas and other hydrocarbon materials. The
SCPM passed the Gas Initiative to develop natural gas
fields, transmission pipelines and petrochemical
projects in cooperation with international as well as
national companies.
-
Supreme
Commission of Tourism (SCT)
The Supreme Commission of Tourism (SCT) was
established in April 2000 to help the tourism sector
grow and encourage investment from the private sector.
Each year, two million Muslims from all over the world
visit Saudi Arabia to perform the Hajj, and many more
come to perform the minor pilgrimage of Umrah. The
Kingdom is a popular destination for non-religious
activities as well. The Kingdom is rich in history and
culture and has a variety of tourist attractions to
offer, including archeological sites, varied
landscapes and shorelines rich in marine life. On
March 15, 2004, the Cabinet approved a general
strategy for developing the nation's tourism to be
carried out by the SCT. The Kingdom's tourist industry
is expected to create 489,000 jobs, a number that
could reach as high as 2.3 million.
-
Saudi
Arabian General Investment Authority (SAGIA)
In April 2000, the Saudi Arabian General Investment
Authority (SAGIA) was set up to further promote
foreign investment and serve the business community as
a one-stop shop for licenses, permits, and other
business paperwork. The 2000 Foreign Investment Law
included property ownership rights for foreign
investors as well as reduced tax rates for businesses.
SAGIA works with the Supreme Economic Council (SEC)
and the Supreme Commission of Tourism (SCT) and serves
as a mediator between investors and the government.
-
Food
and Drugs Authority (FDA)
In March 2003, a Food and Drugs Authority (FDA) was
established to provide consumer protection and ensure
the safe utilization of all foodstuffs,
pharmaceuticals, medical devices and electronic
products.
-
The
Council of Saudi Chambers of Commerce and Industry
(CSCCI)
The Council of Saudi Chambers of Commerce and Industry
represents the regional Chambers of Commerce and
Industry at both national and international levels.
The Council monitors and researches economic issues,
helps encourage economic growth, organizes seminars
and conferences both within the Kingdom and abroad,
and creates foreign investment opportunities through
trade missions to other nations. In addition, the
Council's work has resulted in the issuance of new
regulations that allow foreign businessmen, investors,
and representatives of foreign firms to acquire entry
visas to the Kingdom without having to consult with
the Ministry of Foreign Affairs.
Economic
Indicators
The
best indicator of Saudi Arabia's economic growth is the
increase in the Gross Domestic Product (GDP), from $20
billion in 1970 to $211.20 billion in 2003. Saudi Arabia's
current economy is now the largest in the Middle East.
In
2003 and 2004, Saudi Arabia was given "A" credit
ratings by "Standard and Poor's" for long-term
local currency and foreign currency, based on the
Kingdom's macro-economic stability and substantial
external liquidity.
Today,
Saudi Arabia is the world's 25th largest
importer/exporter, with foreign trade of $78 billion. In
2003, trade between Saudi Arabia and the United States
totaled more than $22 billion.
Saudi
Arabia is the world's largest oil exporter and has the
world's largest spare production capacity. The Kingdom has
utilized oil revenues to expand and diversify the Saudi
economy to reduce its dependence on oil, which has
resulted in impressive gains in the non-oil sector. In
2003, the non-oil industrial sector is estimated to have
grown by 3.9%; the construction sector by 2.8%;
electricity, gas, and water by 6.2%; transport and
communications by 4.3%; and wholesale, retail,
restaurants, and hotels by 4.4% in real prices.
In
1975, Saudi Arabia had about 470 industrial plants with
overall investments estimated at $2.7 billion. By 2001,
the total number of factories in the Kingdom exceeded
3,300 with a total investment of more than $90 billion.
The
role of the private sector has increased substantially
with its GDP rising 28-fold in real terms from 1973 to
2002. Over that period, non-oil exports increased from $26
million to over $10 billion, and in 2003, the private
sector GDP is estimated to have grown by 3.7% in current
prices and 3.4% in real terms, according to Deputy
Governor of the Saudi Arabian Monetary Agency (SAMA)
Muhammed Al-Jasser in a speech in April 2004.
The
all-share index on the Saudi stock exchange stood at 4384
as of December 11, 2003, compared to 2518 at the beginning
of the year, representing an increase of more than 74%.
Value of shares traded amounted to $143.2 billion at the
end of November 2003, compared to $35.73 billion in 2002.
In May 2004, the index reached 6455.
In
the past decade, Saudi Arabia's 10 licensed commercial
banks have seen a substantial growth in domestic banking.
In 2003, combined capital and reserves of the banks
increased to $12.5 billion with total assets of $145
billion. Recently, eight leading money exchangers
operating throughout the Kingdom agreed to merge and form
the Al-Bilad Bank, which will be Saudi Arabia's eleventh
commercial bank. The Al-Bilad Bank has a capital of $.08
billion and is expected to launch its operations in the
first quarter of 2005.
"The
underlying goal of these reforms is to realize the
country's vast economic potential while creating new
opportunities both inside and outside Saudi Arabia, and to
expand and diversify the Kingdom's economy while creating
job opportunities for a rapidly growing
population."-- Ali Al-Naimi, Minister of Petroleum
and Mineral Resources, July 22, 2003.
Saudi
Arabia and Privatization
In
November 2002, the Kingdom of Saudi Arabia announced plans
to privatize many of its vital economic sectors. The
Supreme Economic Council (SEC) has taken overall charge of
the program, specifying the sectors to be privatized and
setting out a strategic plan and timetable for the
privatization program. Sectors open to privatization
include: telecommunications, civil aviation, desalination,
highway management, railways, sports clubs, health
services, government hotels, municipal services, education
services, operation and management of social service
centers, Saudi employment services, agricultural services,
construction and management of abattoirs, public parks and
recreation centers, and cleaning and waste collection.
Concrete examples of privatization efforts include:
-
Telecommunications
In December 2002, the Saudi Telecom Company (STC) was
privatized, and 30 percent of its shares were sold to
the public in an Initial Public Offering (IPO) that
raised more than $4 billion.
-
Postal
Services
In 2002, the Saudi government approved the transfer of
the responsibilities of the state-run postal services
from the Ministry of Posts, Telegraphs and Telephones
(PTT) to the private sector. In January 2003, Dr.
Khaled Al-Otaibi, Director General of Posts at the
Ministry of Posts, Telegraphs and Telephones
(subsequently renamed Telecommunications and
Information Technology), reported that privatization
of the postal services has been operating
successfully, with about 100 agencies established by
the private sector.
-
Saudi
Railway Organization (SRO)
On April 11, 2004, General President of the Saudi
Railways Organization (SRO) Khaled AlYahya confirmed
that three major rail projects have been approved by
the Supreme Economic Council (SEC) for immediate
implementation by the private sector. The first
project will extend the existing Dammam-Riyadh line to
Jeddah. The second will connect Makkah with Madinah
through Jeddah. The third will link Riyadh with the
phosphate and bauxite mines in the provinces of Qasim
and Northern Borders.
-
Airports
The Kingdom will privatize the management and
operation of local and international airports.
However, airport security will remain in the hands of
the government. Saudi Arabia has 24 domestic airports
and three international, in Riyadh, Jeddah and Dammam.
-
Saudi
Arabian Airlines (SAA)
Saudi Arabian Airlines is the largest airline in the
Middle East, with a fleet of 117 aircraft carrying
more than 12 million passengers per year to 50 cities
on four continents. Research has begun for its partial
privatization. The privatization effort promises to be
a successful endeavor resulting in increased revenues
and enhanced performance. In addition, the SEC
approved, in June 2003, the opening of the Saudi
aviation sector to private enterprise, giving private
companies the opportunity to provide domestic airline
services.
-
Ports
Authority
The Ports Authority has assigned several projects to
the private sector to expedite the handling of goods
and maritime services at the Kingdom's eight seaports.
For example, at the Jeddah Islamic Port and the King
Abdulaziz Port in Dammam, the King Fahd Vessel Repair
Yard (located at both ports) and the two areas for
processing re-exports are now leased by the private
sector.
-
Health
Care Sector
The Ministry of Health strongly supports the
privatization of some state-run hospitals, and in 2003
employed a private company to promote its pre- and
post-natal healthcare education program, with the
program introduced in more than 85 percent of the
Kingdom's hospitals. To further privatization efforts,
on October 28, 2003, the Minister of Commerce and
Industry, Dr. Hashem bin Abdullah Yamani, approved the
formation of a joint stock company for medical care
that will establish, own and manage health facilities,
including hospitals.
-
National
Company for Cooperative Insurance (NCCI)
On May 18, 2004, the SEC approved selling off
government shares in the Arab world's largest
insurance company, the National Company for
Cooperative Insurance (NCCI). The sale of government
shares in NCCI will help open up the Kingdom's
insurance market, which is estimated at more than $2.5
billion. NCCI has assets of about half a billion
dollars and is the only insurance company officially
licensed in Saudi Arabia.
-
Saudi
Arabian Mining Company "Ma'aden"
On May 19, 2004, the SEC approved the privatization of
the Saudi Arabian Mining Company "Ma'aden,"
which is wholly owned by the Ministry of Petroleum and
Mineral Resources. As a first step toward
privatization, "Ma'aden" is setting up a
unit to study and evaluate the precious and base
metals sector starting January 1, 2005.
"First
of all, I wish to make clear that the government of Saudi
Arabia has since the very beginning been extremely
supportive of the private economic sector."--Crown
Prince Abdullah, Asharq Alawsat, (Arabic daily), May 13,
2002.
Saudi
Arabia and Foreign Investment
In
April 2000, the Saudi Arabian General Investment Authority
(SAGIA) was set up to further promote foreign investment
and serve the business community as a one-stop shop for
licenses, permits, and other business paperwork. Since its
establishment, SAGIA has licensed more than 2,000 projects
worth around $15 billion.
Telecommunications
The
Saudi Communication Commission (SCC) was established on
December 29, 2001, to open up the market and enable
foreign companies to invest in telecommunications. On
August 10, 2004, the Council of Ministers licensed UAE's
Etisalat to establish and operate the second mobile phone
network that includes GSM service.
Insurance
A
new Insurance Law was passed on July 14, 2003, that will
establish legal structures governing insurance and
reinsurance transactions in the Kingdom. Foreign companies
are encouraged to invest in the insurance sector.
Saudi
Railway Organization (SRO)
In
January 2003, the Kingdom of Saudi Arabia short-listed
eight foreign companies to consult on the three railway
projects to connect the western Red Sea port of Jeddah
with the eastern Arabian Gulf port of Dammam, link Jeddah
to the holy cities of Makkah and Madinah, and give access
to mining projects in the north.
Energy
Sector
Agreements
worth more than $7 billion have been reached with
international oil companies for investments in the energy
sector, including a project with Royal Dutch/Shell and
TotalFinaElf, to develop upstream gas operations in the
southern part of the Empty Quarter [Rub' al-Khali]. These
are the first of what is expected to be a total of more
than $25 billion of investments over the next few years.
Mining
In
April 2003, the Minister of Petroleum and Mineral
Resources announced that a new mining strategy was being
finalized to bolster private investment in the mining
sector. The Mineral Investment Act was passed on September
13, 2004; it will create jobs and allow local and foreign
investors to explore the country's mineral resources. The
Kingdom is rich in minerals such as phosphate, iron ore,
bauxite, zinc, and copper.
Health
Care Sector
The
new laws facilitating the transfer of certain state-run
hospitals to the private sector will allow foreign
investors to own hospitals. The foreign investor does not
need to have a medical background and does not require a
Saudi sponsor.
Water
and Electricity Sector
In
August 2003, the Ministry of Water and Electricity invited
Saudi and international companies to bid on water
desalination and electricity projects worth more than $8
billion. The offers were extended in March 2004.
Saudi
Arabia and Oil
In
2003, Saudi Arabia's oil revenue totaled $85 billion. The
Kingdom has always acknowledged that unstable energy
markets and unrealistically low or high oil prices harm
both producers and consumers. Following the horrific
attacks on September 11, 2001, the Kingdom dispatched nine
million additional barrels of oil to the United States to
ensure price stability and availability. In the fall of
2002, in order to maintain market stability, Saudi Arabia
boosted oil production to compensate for the fall in
Venezuelan production, and in the spring of 2003, it
boosted output to compensate for the loss of Iraqi
production.
On
August 11, 2004, Saudi Arabia's Minister of Petroleum and
Mineral Resources Al-Naimi stated: "The Kingdom of
Saudi Arabia, in collaboration with the other OPEC
countries, endeavors to ensure the stability of the
international oil market and prevent oil prices from
escalating in a way that may negatively affect the world
economy or oil demand. To achieve this goal, the Kingdom
has increased its production during the last three months
to meet the growing demand for Saudi oil. This increase
amounted to more than one million barrels per day,
bringing to more than 9.3 million barrels daily the
average production of the Kingdom during the past three
months."
Saudi
Arabia and Economic Diversification
Over
the past three decades, the non-oil sector of the Saudi
economy has grown from 35 percent to more than 60 percent
of total GDP.
Production
of gas -- Natural gas is used for the Kingdom's
domestic consumption for power generation, seawater
desalination and various other functions, primarily in the
petrochemical industry. With 234 trillion cubic feet of
natural gas reserves in 2002, the Kingdom has the fourth
largest non-associated gas reserves in the world, and they
are still growing. Part of the Kingdom's oil and gas
strategy includes expanding the capacity of the gas
network from 3 billion to 7 billion cubic feet.
Mining
-- Saudi Arabia has the largest supply of mineral
resources in the region, including precious, base and
industrial minerals. The government is encouraging
enterprises for extracting and processing these
minerals--an area where U.S. companies play a major role.
Construction
Materials -- The Kingdom of Saudi Arabia is the
largest producer of construction materials in the Middle
East, and construction is the Kingdom's largest non-oil
industry. According to the National Commercial Bank (NCB),
the largest bank in Saudi Arabia, the construction and
building materials sector currently contributes an annual
$12 billion to the Saudi economy. Saudi Arabia's
construction products, including cement, tiles, marble,
glass, granite, cable, air-conditioning equipment and
fabricated iron and steel, are all exported throughout the
region.
Pharmaceuticals
-- Saudi Arabia has a $1.17 billion pharmaceutical market
estimated to grow at 15 percent annually. With more than
2,400 pharmacies and more than 4,600 registered drugs,
both generic and patented, Saudi Arabia is the largest
consumer of pharmaceuticals in the Gulf region. The United
States exported more than $82 million worth of
pharmaceuticals to the Kingdom in 2001, a 47 percent
increase from the previous year.
Banks
-- On October 6, 2003, during a visit by German Chancellor
Gerhard Schroeder, the Kingdom gave Deutsche Bank approval
to open a branch and operate as the first independent,
wholly foreign-owned bank in Saudi Arabia. Additional
possibilities for wholly foreign-owned banks in Saudi
Arabia include BNP Paribas Bank of France and J.P. Morgan
Chase Bank.
Stock
Exchange -- The Stock market has developed
significantly over the past decade and is, by far, the
largest in the Middle East. Value of shares traded
amounted to $143.2 billion at the end of November 2003,
compared to $35.73 billion in 2002.
Saudi
Arabia and Employment
The
following information is based on data on the labor force
from the Central Department of Statistics (CDS) of Saudi
Arabia's Ministry of Economy and Planning for the year
2002.
Employment
Figures
The
total population in Saudi Arabia increased from 12 million
in 1980 to more than 20 million in 2000. The Saudi labor
force is defined as all Saudis, 15 years of age and older,
who are either employed or seeking a job, and in 2002
amounted to 3.15 million (consisting of 2.68 million males
and 465,000 females) with an unemployment rate of 9.6
percent. The Kingdom is involved in various initiatives to
increase employment levels among young people and women.
The
Creation of Job Opportunities
The
Saudi government seeks to create jobs through the various
reforms addressed in this booklet such as economic
diversification, privatization, opening up the market and
other initiatives, including:
-
Saudization
Saudization is a measure that applies limitations to
the number of foreign workers employed in order to
slowly increase dependency on Saudi workers. In 2002,
the non-Saudi labor force amounted to 3.09 million.
The government continues to provide incentives to
create more employment opportunities for its citizens
as well as provide incentives for participation in job
training.
-
Centennial
Fund
On July 8, 2004, Custodian of the Two Holy Mosques
King Fahd bin Abdulaziz approved the formation of a
charitable foundation called the �Centennial Fund�
that will provide assistance to all Saudi citizens,
both men and women, who seek to achieve economic
independence by setting up small business enterprises.
On July 20, 2004, the Centennial Fund signed an
agreement with the Saudi Arabian General Investment
Authority (SAGIA) to work together in helping Saudi
entrepreneurs to translate their commercial ideas into
projects.
-
Employment
of Women
In 2002, there were 465,000 Saudi women in the labor
force; this represents 15 percent of the total Saudi
labor force. Saudi women are owners or part owners of
more than 22,000 businesses. Accounting, banking and
computer training centers have been established to
prepare women for jobs, and as a result, more
opportunities have opened up for women, including
those in the technological, automotive and other
industrial sectors.
Initiatives
and Actions Taken by the Kingdom of Saudi Arabia To Combat
Terrorism
Following
the horrific events of September 11, an international
coalition composed of more than 100 nations was formed to
combat terrorism. Saudi Arabia is an active partner in
this coalition and has been working diligently with the
United States and other nations to destroy terrorist
organizations and eliminate the threat they pose to the
international community.
Saudi
Arabia, as the birthplace and cradle of Islam, has a very
special role to play in the war on terrorism. Its
opposition to Al-Qaeda's hateful ideology sends a clear
message to the world that these extremists and their cult
do not represent the peaceful Islamic religion. This stand
has unfortunately made the Kingdom even more of a target,
but the people of Saudi Arabia are determined not to let
terrorism destroy their country or corrupt their faith.
The
attached report is a compilation of the Kingdom's
counter-terror efforts to date. The people of Saudi Arabia
remain staunch allies of the international community in
its campaign against terrorism.
In
its efforts to confront terrorism, Saudi Arabia has:
Questioned thousands of suspects; arrested more than 600
individuals; dismantled a number of Al-Qaeda cells; seized
large quantities of arms caches; extradited suspects from
other countries; and established joint task forces with
the United States.
"I
vow to my fellow citizens and to the friends who reside
among us, that the State will be vigilant about their
security and well-being. Our nation is capable, by the
Grace of God Almighty and the unity of its citizens, to
confront and destroy the threat posed by a deviant few and
those who endorse or support them. With the help of God
Almighty, we shall prevail."-- Crown Prince Abdullah
bin Abdulaziz, Deputy Prime Minister and Commander of the
National Guard, May 13, 2003.
Arrests
and Questioning of Suspects
Saudi
intelligence and law enforcement authorities have been
working closely with the United States and other countries
as well as with Interpol to identify, question and when
appropriate, arrest suspects. Since September 11, Saudi
Arabia has questioned thousands of suspects and arrested
more than 600 individuals with suspected ties to
terrorism.
Specific
Actions:
-
On
September 5, 2004, three security officers were killed
when their car caught fire after being hit by gunfire
while pursuing a suspect vehicle. The officers were
part of a security force carrying out operations in
the southern part of the city of Buraidah. Seven
militants were arrested in the operation. The deaths
of Sergeant Mufleh Saad Ruweishid Al-Rasheedi,
Sergeant Sayer Farhan Ghanim Al-Nomasi and Murif
Shakir Eid Al-Rasheedi bring to 36 the total of
security personnel who have lost their lives fighting
terrorism since May 2003.
-
On
September 3, 2004, one security officer, Yousef bin
Ayed Al-Harbi, was killed and three injured during
operations in Buraidah. Surveillance of a suspected
residence and vehicle led to an exchange of fire
between security forces and another vehicle. After a
pursuit through a residential neighborhood, the driver
of the second vehicle was killed, and another
individual involved in the incident was arrested.
-
On
September 2, 2004, the Ministry of Interior announced
that Abdullah bin Abdulaziz bin Ahmed Almughrin had
voluntarily surrendered to security authorities. He
was wanted for his involvement in setting up an
Al-Qaeda cell in the Eastern Province, three of whose
members were recently arrested. The cell is suspected
of preparing the attack in Al-Khobar on May 30, 2004.
Almughrin is also suspected of having links to other
parties, both inside and outside the Kingdom, that
have been planning acts of terrorism.
-
On
August 30, 2004, security forces in the Eastern
Province were carrying out investigations when a car
carrying four persons tried to break through security
barriers. In the ensuing exchange of fire, one of them
was killed, and the other three wounded, and arrested.
The search operation also led to the arrest of another
suspect, and the seizure of two vehicles that had been
under surveillance by the security forces.
-
On
August 11, 2004, Abdulrahman bin Obaid-Allah Al-Harbi
was killed in the vicinity of the Holy Mosque in
Makkah after he attacked security officers who were
trying to apprehend him. He was wanted for his
involvement with an extremist group and the
manufacturing of explosives.
-
On
August 5, 2004, Faris Ahmad Jamaan Al Showeel
Alzahrani, one of the leaders of the group that has
been calling for terrorist attacks, was arrested.
Saudi Arabia's most-wanted list now stands at 11 at
large, with 12 killed and three in custody.
-
On
July 22, 2004, Fayez bin Rasheed bin Mohammad Al-Khashman
Al-Dossary surrendered to security authorities in the
city of Taif, expressing the desire to benefit from
the grace period offered by Custodian of the Two Holy
Mosques King Fahd bin Abdulaziz.
-
On
July 20, 2004, in a raid on a suspected hideout in the
city of Riyadh, security forces killed two suspects,
one of whom, Isa Saad Mohammad bin O'ooshan, was on
the list of Saudi Arabia's most-wanted. Recovered
during the raid were the partial remains of Mr. Paul
Marshall Johnson, Jr., the American who was kidnapped
and murdered by Al-Qaeda in June.
-
On
July 17, 2004, Ibrahim Al-Sadiq Al-Bakri Al-Qaidi
arrived in the Kingdom from Damascus, where he had
surrendered to the Saudi Embassy, expressing the
desire to benefit from the grace period offered by
Custodian of the Two Holy Mosques King Fahd bin
Abdulaziz.
-
On
July 13, 2004, top Al-Qaeda suspect Khalid bin Odeh
bin Mohammed Al-Harbi, also known as Abu Sulaiman Al-Makki,
surrendered to Saudi authorities at the Saudi Embassy
in Iran and was later transported to Saudi Arabia.
-
On
July 3, 2004, the Ministry of Interior confirmed the
deaths of two militants, Rakan Muhsin Mohammed
Alsaykhan and Nasir Rashid Nasir Alrashid, who were on
the list of 26 most wanted that was published in
December 2003. The two died of wounds received in an
incident on April 12 in the Riyadh suburb of Al-Fayha,
in which a security officer lost his life.
-
On
July 1, 2004, terrorist Awad bin Mohammed bin All Al-Awad,
wanted for his involvement in the April 12 incident,
was killed and another suspect was arrested and has
been identified as Abdulrahman bin Mohammed bin
Abdulrahman Al Abdulwahab, wanted in connection with
the murder of a German resident in Riyadh on May 22. A
security officer, Private Muslih bin Saad Al-Qarni,
was killed in this incident.
-
On
June 30, 2004, a terrorist was killed in a shootout in
Riyadh, later identified as Fahd bin All Aldakheel
Algablan. Security forces seized, in addition to
weapons such as Kalashnikovs and pistols, a laboratory
for preparing explosive devices, equipment for forging
documents, and materials for medical treatment and
first aid.
-
On
June 23, 2004, in a televised address read on behalf
of Custodian of the Two Holy Mosques King Fahd bin
Abdulaziz by Crown Prince Abdullah bin Abdulaziz,
Deputy Prime Minister and Commander of the National
Guard, the government of the Kingdom of Saudi Arabia
offered those involved in terrorist activity a last
opportunity to repent and voluntarily surrender within
one month, or face resolute and determined force:
whoever surrendered would be assured due process in
accordance with Shariah [Islamic Law]. Hours later,
Sa'aban bin Mohammed bin Abdullah Al-Lailahi Al-Shihri,
wanted for the past two years, became the first
militant to accept the offer and surrender to
authorities. On June 28, 2004, Osman Hadi Al Maqboul
Almardy Alomary became the second to do so; he is on
the list of Saudi Arabia's 26 most-wanted that was
posted last December.
-
On
June 18, 2004, Abdulaziz Abdulmohsen Almughrin, head
of the deviant group that has been terrorizing the
Kingdom, and which was responsible for the brutal
murder of U.S. hostage Paul Johnson, was one of the
four suspects killed in a siege in the Maalaz area of
the city of Riyadh. The three others killed were
identified as Faisal bin Abdulrahman Al-Dakheel, Turki
bin Fehaid Al-Mutairi, and Ibrahim bin Abdullah Al-Duraihem.
One security officer was killed, and two others
wounded. Found at the scene were three cars, one of
which had been used in a recent attack on a BBC
journalist and his photographer; ammunition and
weapons, including sub-machine guns, rocket launchers,
pipe bombs and grenades; and a stack of identity
papers.
-
On
June 1, 2004, security forces killed two suspects
during a shootout in an isolated area of Al-Hada on
the Taif-Makkah road. The two suspects had been
identified as being implicated in the criminal
terrorist attack that took place in Al Khobar on May
29, 2004, that resulted in the deaths of 22 people,
including one American and three Saudis. Security
forces rescued 41 hostages in that incident; one of
the four terrorists was wounded and apprehended.
-
On
May 20, 2004, security forces killed four terrorist
suspects and injured another in a gunfight in Qasim
Province. The security forces came under heavy fire
from machineguns after locating five terrorist
suspects in a rest house in Khudairah, a village in
the area of Buraidah. Two security officers were
killed. Weapons and ammunition were confiscated.
-
On
May 1, 2004, four terrorists were killed after
carrying out an attack in Yanbu that left eight people
dead and twenty others wounded. The four belonged to
one family: Sameer Sulaiman Alansari, Sami Sulaiman
Alansari, Ayman Abdulqader Alansari, and Mustafa
Abdulqader Abed Alansari.
-
On
April 22, 2004, five terror suspects were killed
following a shootout with security forces in the Al-Safa
neighborhood in Jeddah. Four of them were identified
as Ahmad Abdulrahman Saqr Alfadhli, Khalid Mobarak
Habeeb-Allah Alqurashi, Mostafa Ibrahim Mohammad
Mobaraki, and Talal A'nbar Ahmad A'nbari, numbers 23,
11, 25, and 13 on the most wanted list published on
December 6, 2003.
-
On
April 18, 2004, the Ministry of Interior issued a
statement explaining the developments following
incidents on April 12 and 13, 2004; confirming that
security forces had seized two trucks loaded with
4,118 kilograms of explosives ready for detonation,
plus a car full of weapons; and adding that various
other items and weapons had also been seized at
different locations. Eight suspects have been arrested
in connection with these events.
-
On
March 15, 2004, security forces killed one of Saudi
Arabia's most wanted terror suspects: Khalid Ali Ali-Haj,
who was on the December 6 list of wanted terrorist
|
PRINT
OUT