A three-day Saudi-US Business Forum began in Atlanta, Georgia, on Monday with the participation of top government officials and business leaders to explore prospects of expanding cooperation and boost American investment in the Kingdom's key sectors.
"The forum will enable American companies to make use of the huge investment opportunities worth $385 billion offered by the Saudi government's ambitious development plan in infrastructure, health, education and other sectors," an official statement said.
Commerce and Industry Minister Abdullah Alireza, a member of the Saudi delegation, highlighted the strategic US-Saudi partnership, saying it will continue to evolve over the years. "This forum will work to ensure that this great potential is realized," he added.
The minister said the Kingdom is moving away from being the gas station of the world toward a sophisticated laboratory of excellence, innovation, and knowledge. "Saudi Arabia is the top market in the region, and potential US exports are forecast to more than double by 2015," he pointed out.
The forum will explore investment opportunities in the key areas of education, infrastructure, water and electricity, oil and gas and transport and logistics.
With a rapidly expanding population — and over 40 percent below the age of 20 — the Saudi government has prioritized the development of its human capital in an effort to increase employment opportunities for its nationals and provide its population with the necessary skills to meet the demands of its expanding economy.
In 2011, the government allocated $40 billion to education, manpower, and human resources development, amounting to 25.9 percent of the total budget. Saudi Arabia has developed world-class universities such as the King Abdullah University for Science and Technology and the Noura bint Abdulrahman University, which is the largest women-only university in the world.
Strategically located between eastern and western markets, Saudi Arabia recognizes its potential as a leading global transport and logistics hub. The Kingdom already boasts numerous land and sea routes to Eastern Europe, the Indian subcontinent, the Middle East and North Africa, and East Asia. The Saudi Arabian General Investment Authority (SAGIA), in collaboration with domestic and international partners, is making substantial investments in a sophisticated transportation network, economic cities, and related infrastructure.
Saudi domestic cargo demand is expected to grow by a 4-5 percent compound annual rate through 2020, while international flows are expected to grow at 5 percent and 7-8 percent for air and sea cargo respectively. A $100 billion investment is anticipated in the transportation and logistics sector over the next 10 years. These projects include seaports, airports, railways and road networks.
Saudi Arabia has embarked on building four giant economic cities in Rabigh, Hail, Madinah and Jazan, which require the critical infrastructure, telecommunications, power generation, utilities and transportation to support them. The Kingdom has launched unprecedented expansion programs that include the simultaneous construction of three major new rail lines, while upgrading all major airports and seaports.
The water and power generation sectors in Saudi Arabia are some of the fastest growing industries in the Middle East. Demand for electricity in the Kingdom is expect to reach 60,000 megawatts (MW) by 2020, up from the current production capacity of 50,000 MW. In an effort to meet the ever-increasing demand, while at the same time restructuring the industries for greater effectiveness, the Saudi Electricity Company will invest over $80 billion in generation, transmission, and distribution project in the next 10 years.
Encouraging participation from the private sector, the Saudi Government has initiated private ownership through independent water and power projects (IWPP) across the Kingdom. These developments also address the need for water desalination, treatment, storage, and distribution facilities, an area where the National Water Company plans to invest $2.7 billion over the next five years alone. Saudi Arabia is pursuing water conservation policies in concert with the World Bank and the United Nations and has established research programs that aim to use nanotechnology and solar energy to supply fresh water in a sustainable fashion.
Saudi Arabia is the world's largest producer and exporter of petroleum liquids and is currently the world's second largest crude oil producer behind Russia. At the same time, the Kingdom is the fastest growing consumer of energy in the Middle East as a result of its rapidly growing population and large-scale development programs. Due to new exploration, drilling operations, and refining capabilities, Saudi Arabia will ultimately account for more than half of the grassroots crude oil production capacity brought on-stream worldwide through 2020. Supplying over 10 percent of the world's oil, Saudi Aramco plans to spend $60 billion on upstream and downstream operations through 2014 in order to further advance the industry. Saudi Arabia is also aggressively pursuing the use of nuclear and solar energy with the announcement of the King Abdullah City for Atomic and Renewable Energy last April.
Despite the global economic downturn, the Saudi petrochemical industry has continued to expand with 80 new projects underway or in development. By 2015, Saudi Basic Industries Corporation (SABIC) is set to become the largest producer of petrochemicals in the world. Concurrent to the development of the petrochemical industry is the plastics sector, which the Saudi government has identified as one of five areas of concentration for its National Industrial Clusters Development Program. With massive development projects and inexpensive feedstock, Saudi Arabia is set to jump from the world's 7th largest producer of basic petrochemicals to 3rd in the next five years.