Measuring the performance of SAGIA and its contribution to the development of the Saudi economy and its economic competitiveness

by

ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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ABSTRACT

In this study we try to explore the concept of SAGIA in a holistic context. The main focus of the research is on economy of Saudi Arabia and its relation with SAGIA. The research also analyzes many aspects of the Saudi Arabian economy and tries to gauge its effect on the economic progress of Saudi Arabia. Finally the research describes various factors which are responsible for the economic growth of Saudi Arabia and tries to describe the overall effect of SAGIA on the economy of Saudi Arabia.

Table of Contents

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the study1

Aim of the research2

Research Questions2

Significance of the Research2

CHAPTER 2: LITERATURE REVIEW3

Saudi Arabia3

Economy6

Agriculture7

Transport7

Currency and Foreign Trade7

Unexpected Oil Wealth8

SAGIA9

Al-Dabbagh's role in SAGIA's and Saudi Arabia's economic progress10

SAGIA will Strengthen Relationships12

Forecast of Saudi Arabia's economy12

The Business Sector of Saudi Arabia17

The Kingdom's Fiscal Policy20

Public Finance21

Balance of Payments and Trade22

Inflation24

Monetary Policy25

Money Supply26

Credit Facilities27

Foreign Direct Investments (FDls)28

Recent Economic Developments29

CHAPTER 3: RESEARCH METHODOLOGY32

Introduction32

Philosophical Framework or Paradigm33

Rationale for a Qualitative Study37

Research Design38

Literature Search38

Keywords39

Research Method39

Literature Selection Criteria39

Search Technique40

Theoretical Framework40

Researcher Bias40

Data Analysis Procedures40

Quality and Verification41

Reliability/Dependability42

Validity44

Ethical Considerations45

CHAPTER 4: DISCUSSION AND ANALYSIS47

Dependency on foreign labour50

Economic structural adjustment52

Fiscal reforms53

Long-term strategy for the Saudi economy54

SAGIA's contribution for the economic growth of Saudi Arabia55

SAGIA's ways to achieve growth in Saudi Arabia56

CHAPTER 5: CONCLUSION58

Saudi Arabia Economy and SAGIA58

Future of Saudi Arabian Economy61

REFERENCES65

CHAPTER 1: INTRODUCTION

Background of the study

The Saudi Arabian General Investment Authority (SAGIA) was established in 2000 by the Saudi government for the purpose of creating a highly competitive economic climate. The establishment of SAGIA was a result of the boom in the Saudi economy due to the surpluses generated from the rise of oil prices. In 2010, experts projected that Saudi Arabia will generate a budget surplus of over 100 billion Saudi Riyals (CPI Financial, 2010). It is important to note that Saudi Arabia is the biggest oil exporter and has the largest oil reserves in the world an. Also, oil revenue contributes to more than 85% of Saudi Arabian government revenues (CPI Financial, 2010).One of the strategies that have been set since the establishment of SAGIA is the 10x10 strategy.

The objective of this strategy was to place Saudi Arabia into the top 10 most competitive economies by 2010. However, according the 2010/2011 Global Competitiveness Report (Schwab, 2010), Saudi Arabia was ranked as number 21. Hence, the objective has not been met. The purpose of the Dissertation is to understand the reasons for the failure of Government of Saudi Arabia to meet the ...