Preface
Glossary of terms
Table of Contents
List of Table
List of illustration
1. The National Economy during the seventh development plan ……………………………................	3

1.1 Introduction ...…….…………………………………..............	3
1.2 Economic Development Indicators …...……….…….........	4
1.2.1 Growth Rates …..……………………...............................	4
1.2.2 Gross Capital Formation ………………..……..................	8
1.2.3 Foreign Trade and the Balance of Payments …………….	10
1.2.4 Human Resources Development and Employment …...…	11
1.2.5 Public Finance – Government Revenue and Expenditure	13
1.2.6 Financial Sector ……………………………………….…	16
1.2.7 The Private Sector …...…………………………...............	22

2. Directions of the Eighth Development Plan	27

2.1 Introduction ……………………………..................................	27
2.2 Future Challenges …………………..…………....................	27
2.3 General Objectives and Strategic Principles of the Eighth Plan ………………………………..…………………..	30
2.3.1 The General Objectives ………………………………….	30
2.3.2 The Strategic Bases ………………………..…….............	32
2.4 General Framework of the Eighth Development Plan's Directions …………………………………………..…	34
2.4.1 Standards of Living and Quality of Life ……………….	34
2.4.2 Poverty Reduction Strategy ………………………...….	35
2.4.3 Balanced Regional Development ………………………	36
2.4.4 Human Resources Development …………………….…	38
2.4.5 Diversification of the Economic Base ………………….	40
2.4.6 Economic Stability ……………………………………..	41
2.4.7 Domestic and Foreign Investments …………………...	42
2.4.8 Institutional and Administrative Reform …………….…	43
2.4.9 Privatization ……………………………….....................	45
2.4.10 Public Finance ………………………….........................	46
2.4.11 Rationalization of Water ……………………................	46
2.4.12 Technology and Informatics ………...............................	47
2.4.13 Economic, Social and Cultural Impacts of Globalization	50
2.4.14 Increasing Women's Participation and Enhancing the Family Role in the Society ……………………...……..	52
2.5 Implementation of Directions ……...……...………………	53

3. The Long Term Strategy of The Saudi Economy ……………………………………………………..	57

3.1 Introduction ……..……………...…………………….........…	57
3.2 Strategic Issues and Challenges ……..………………..….	58
3.2.1 Raising the Standard of Living and Improving the Quality of Life …………………………………..…….…	58
3.2.2 Achieving of Sustainable Development …………………	58
3.2.3 Enhancement of Competitive ……………………………	61
3.2.4 Regional and Arab Integration ………………………...…	62
3.3 Supporting Factors for Confronting Challenges and Achieving Strategic Goals ………........................................	62
3.4 Targeted Paths of the Long Term Strategy ……………	65
3.4.1 Long Term Population Forecasts ……………………...…	65
3.4.2 Future Vision for the Saudi Economy ………………...…	66
3.4.3 Targeted Path for Improving the Quality of Life ………...	76
3.4.4 Targeted Path for Development of Scientific, Technological and Knowledge Capacities ….………..….	78
3.5 The LTS and the Eighth Development Plan ……..…...….	78

4. The National Economy in the Eighth development plan ……...…………………………….....	81

4.1 Objectives and Policies of the Eighth Development Plan …………………….……………………………………….	81
4.2 Major Socio-economic Objectives …………………….….	82
4.2.1 Boosting Economic Growth …………………..…..........	82
4.2.2 Increasing Employment Opportunities and Reducing the Unemployment Rate ……………………………………	86
4.2.3 Providing Care for Poor and Needy Families ….……....	86
4.2.4 Diversification of Economic Activities and Sources of National Income ………………………..........................	87
4.2.5 Expansion and Development of Public Services (Health, Education, Housing and Environment) …………...……	89
4.2.6 Emphasis on Regional Development …..……………....	90
4.2.7 Increasing Productivity and Improving Competitiveness	90
4.2.8 Increasing Exports ……..…………………………….....	91
4.2.9 Balance of Payments …………………………...............	92
4.2.10 Enhancing Integration with GCC States and merging with the Global Economy ………………………………	93
4.3 Economic Policies …................................................................	93
4.3.1 Macroeconomic Policies ……………………………….	94
4.3.2 Structural Economic Developments ……………..……..	96
4.4 Sectoral Objectives and Policies …………..……………..	97
4.4.1 Agriculture, Forests and Fishing ……………….………	98
4.4.2 Mining and Quarrying ………………………………….	98
4.4.3 Petroleum Refining …………………………..…………	99
4.4.4 Petrochemicals ……………………….................………	99
4.4.5 Other Manufacturing Industries ………...……...………	100
4.4.6 Electricity, Gas and Water ……………………………...	100
4.4.7 Building and construction ……………………...………	101
4.4.8 Commerce, Restaurants and Hotels …………….………	101
4.4.9 Transport and communications ……….……….……….	102
4.4.10 Real Estate …...............................................................…	103
4.4.11 Finance, Insurance and Business Services………..…….	103
4.4.12 community and personal Services …………………...…	104
4.4.13 Crude Oil and Natural Gas ………………………......…	104
4.5 Financial Requirements of the Development Agencies	105
4.5.1 Government Financial Expenditure ………………..….…	106
4.5.2 Government Financial Revenues ……..……………….…	108
4.6 Resources and Resource Utilization ……….………….…	109
4.6.1 Available Resources ………………..............................…	110
4.6.2 Utilization of Available Resources ………………………	110

5. Institutional and Administrative Development ………………………………………………	115

5.1 Introduction ………………………......................................…	115
5.2 Present Conditions …..………………………………………	116
5.2.1 The General Framework of Institutional and Administrative Development …………………….........…	116
5.2.2 Development of Economic Administration .......................	116
5.2.3 Development and Improvement of Public Services ......…	118
5.2.4 Development of Educational Administration ................…	119
5.2.5 Other Developmental Steps ...........................................…	120
5.3 Issues and Challenges .............................................................	120
5.3.1 Efficiency of the Projects Implementation Cycle ..........…	121
5.3.2 Policies Evaluation and Follow-up ................................…	122
5.3.3 Rationalization of Government Procurements Procedures	122
5.3.4 Implementation of Electronic Governance (e-government) …...……………………………………...	123
5.3.5 Internal and External Efficiency of the Public Sector ......	123
5.3.6 The Development Plan and the Role of the Private Sector	124
5.4 Development Strategy ...........................................................	125
5.4.1 General Objectives .........................................................…	125
5.4.2 Policies ...........................................................................…	125
5.4.3 Targets ..........................….............................................…	126

6. The Private Sector .....................................….............…	129

6.1 Introduction ......................................…....................................	129
6.2 Present Condition ......................................…..........................	130
6.2.1 Main Indicators of the Sector ........................................…	130
6.2.2 The Investment and Business Environment ......................	133
6.2.3 Privatization ......….....................................................……	134
6.3 Structural Features of the Private Sector ....................	137
6.4 Issues and Challenges .....................................................……	139
6.4.1 The Investment Environment .......................................…	139
6.4.2 The Investment Incentives System ................................…	140
6.4.3 The Labor Market and Saudization ...........................……	141
6.4.4 Constraints Facing the Development of the SMEs Sector	142
6.4.5 The Activation of the Saudi Stock Market ....................…	143
6.4.6 The Implications of the Kingdom's Accession to WTO …	145
6.4.7 The Privatization Implementation Program ..............…	147
6.4.8 Development of Non-Oil Merchandize Exports.................	147
6.4.9 Mobilizing Commercial Banks Resources ....................…	149
6.5 The Future Vision .....................................…............…………	150
6.5.1 Development of the Financial Services .............................	150