Jeddah - Arabstoday
The debilitating debt crisis in euro zone economies and the continued economic growth in other advanced economies are among the major reasons impacting the global economy.However, Saudi Arabia, the biggest economy in the Middle East, is among a very few countries that has proved to be quite resilient and robust. “It is thanks largely to a number of effective reforms that were undertaken in the last few years,” said Khaled Al-Aboodi, the chief executive officer of Islamic Corporation for the Development of the Private Sector.Addressing the second day of the Modern Makkah Summit & Awards Conference at the Jeddah Hilton on Sunday, he said: “Saudi Arabia’s economy is expected to grow by 6.5 percent this year which is much higher than the average growth rate of both the developed as well as the developing countries.”He said the Kingdom has taken advantage of the strong economic outlook to accelerate initiatives for addressing some of the development challenges in housing, unemployment, and large-scale infrastructure in different regions of the country.“The infrastructure and real estate sectors in Saudi Arabia contribute more than 10 percent of the GDP and are among the fastest growing and most dynamic sectors in the Middle East,” he said.Al-Aboodi said Saudi Arabia is indeed leading the Gulf in terms of infrastructure and real estate projects worth SR1.5 trillion ($400 billion) over the next five years. The country has also the largest market potential in the construction and energy sectors throughout the Middle East which in turn experience enormous growth pattern.Highlighting the role of Makkah in the Kingdom’s economy, Al-Aboodi said Makkah region accounts for 11 percent of the Kingdom’s GDP and 21 percent of the nonoil national output. More than 25 percent of the factories are located in the region and major industries such as textiles, furniture, and utensils have created a huge number of job opportunities.l-Aboodi said the potential growth of the city and the region is endless, considering the population growth and religious tourism that are increasing by both number and volume every year. Makkah city will attract Haj and Umrah traffic that will triple soon and which translate itself to huge economic opportunities for the region.He said Makkah will need 100,000 housing units in 30 years. There are currently many investment initiatives and plans in place to improve the infrastructure and housing sectors of the holy city.He said some of the biggest projects initiated by the government in collaboration with the private sector include: Al-Mashaaer, the Harmain, Al-Haram, the Makkah Mass Road, Fourth Ring Road and the King Abdullah Makkah Construction.ICD, he said, has succeeded in addressing some of the development needs of the region, and has been involved in a few of the important initiatives related to the private sector development in the Makkah region and specifically in the holy city.He said ICD is directly involved in two — Al-Manafea and Arabio — projects in the Makkah region.Since inception, ICD’s cumulative gross approvals allocated to the various projects in the Kingdom reached SR1.54 billion ($411 million). During 2011, ICD approved a number of new projects totaling SR130 million ($34.9 million) in the Kingdom.In 2011, the real estate sector was the dominant sector, representing 57 percent of ICD’s financing, followed by industrial (29 percent) and finance (14 percent).He said small and medium enterprises (SMEs) play a key role in economic development. Therefore, he said, ICD is in the final stage of establishing SME Development Fund where Saudi Arabia has been selected as the location for the pilot fund.The project aims at assisting SMEs in the Kingdom by providing Shariah-compliant financial investment and targeted size of the fund is SR1 billion.Al-Aboodi described Nitaqat as a great idea. “Probably there will be some challenges before private sector gets acquainted but definitely it will create more job opportunities for Saudis in the future,” he said.