risk and opportunity - Managing risk for development - Project

1. Risk and Opportunity
Managing Risk for Development
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Beyond Oil Economy
KSA
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2. Risk and Opportunity
Managing Risk for Development
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 Saudi Arabia’s economy is one of the largest in the world.
 Saudi Arabian oil was first discovered in commercial quantities at DAMMAM
oil well No. 7 in 1938.
 Saudi Arabia is the world’s largest producer and exporter of oil, and has one
quarter of the world’s known oil reserves – more than 260 billion barrels.
 About 90 percent of government revenue deriving from oil.
Oil industry in KSA
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3. Risk and Opportunity
Managing Risk for Development
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 During the decade of 2003 to 2013, it almost doubled in size on the back of
a protracted oil boom.
 Sustained Oil- based growth industry since last decades.
 During 2003- 2013 long upturn, oil prices almost quadrupled from an annual
average of about $30 per barrel in 2003 to a sustained peak of about $110
in the period 2011 to 2013 before dropping back in 2014.
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Managing Risk for Development
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 Rise in prosperity over the past decade (an oil price from 2003 to 2013).
 The world’s 19th-largest economy.
 GDP doubled “Figure 1”
 Household income rose by 75 percent. “figure 2”
 6%Annual average GDP growth from 2003 to 2013 . “figure 3”
 Education today accounts for about 25 percent of government spending,
and about 60 percent of each age cohort goes on to tertiary education, a
proportion similar to that in France and Germany.
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Prosperity

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Managing Risk for Development
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 The number of physicians has almost doubled since 1990.
 Infant mortality has dropped by two-thirds.
 life expectancy in the Kingdom has risen by almost seven years to 76 years,
higher than in Hungary, Turkey, and China.
 1.7 million jobs were created
 Consider the world’s second-largest oil producer after the United States, and
that derives about 90 percent of its government revenue from oil.
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Managing Risk for Development
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 Saudi Arabia has a substantial number of social programs.
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Managing Risk for Development
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F-1
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Managing Risk for Development
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F-2
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Managing Risk for Development
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F-3
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Managing Risk for Development
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What happen to Oil prices?
 The prices of Oil extremely decreased internationally “2014-2015” !
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11. Risk and Opportunity
Managing Risk for Development
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What to do ?
 Diversity of national income.
 Preparation and Coping .
 Policies for transition
Transform the economy to become more sustainable and less oil-dependent.
to prevent economic difficulties- realize the potential of the non-oil economy
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Managing Risk for Development
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 Three important pillars for transformation:-
 A more productive workforce with higher participation.
 Economic reform
 Sustainable fiscal management
 All stakeholders, including the private sector, foreign investors, and households,
will need to be involved in this transformation
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Managing Risk for Development
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 Saudi Arabia’s intrinsic economic potential goes far beyond oil.
 The Kingdom has an abundance of rich deposits of metals and minerals
including copper and gold that were first discovered some 3,000 years ago.
 Red Sea beaches and archeological sites that could become domestic and
international tourist destinations
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Opportunities :-

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Managing Risk for Development
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 It has a bubbling retail sector and a young middle class that is starting to
embrace e-commerce.
 Concentration on the development of solar power
 It has a big domestic market for manufactured consumer goods
including automobiles with next to no production or assembly of its
own.
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Managing Risk for Development
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 It is one of the world’s leading players in petrochemicals, a sector that is
attracting billions of dollars of investment by foreign companies, including
Royal Dutch Shell and China National Petroleum Corporation.
 Eight sectors of the economy that could lead the way, helping to shift the
Kingdom’s economy from one that is driven by oil and public spending, to
a private-sector powerhouse .

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Managing Risk for Development
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 The sectors are Mining and Metals, Petrochemicals, Manufacturing, Retail
and Wholesale trade, Tourism and hospitality, Finance, Construction and
health care. “F-4”.
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Managing Risk for Development
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F-4

18. Risk and Opportunity
Managing Risk for Development
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The KSA has to confront the key external and internal challenges it faces .
Tapping into the massive potential of its economy, unleashing the private sector
to raise productivity.
Introducing a more market-oriented approach to fiscal management and
economic development.
END
Conclusion