Saudi Arabia

C

Services

About 74 percent of the Saudi labor force works in service industries such as education, health care, transportation, communications, and commercial and financial services. The government employs most of these workers. In addition to providing services for residents, the Saudi service sector is also geared toward dealing with large numbers of travelers from abroad. These include the annual influx of hajj pilgrims from around the world, as well as the guests and dependents of foreign workers. As a result, there is a well-developed hospitality industry in Saudi Arabia, offering accommodations, food, and transportation services. The Mecca-Medina region has accommodated some 2 million pilgrims (including pilgrims from within the country) in recent hajj seasons. In 1996 Saudi Arabia constructed several large coastal resorts and recreation facilities in an effort to promote internal tourism. Services accounted for 32 percent of the country’s gross domestic product (GDP) in 2006.

D

Manufacturing

Saudi Arabia’s initial manufacturing industries involved the refining and processing of crude oil and natural gas. In recent decades, the Saudi government has sought to diversify its industrial sector, recognizing that the country’s economy would be more stable and secure in the long term if its reliance on oil were balanced by other forms of production. Consequently, the nation has developed its nonoil manufacturing sector, producing goods for domestic and export markets. The state-owned Saudi Basic Industries Corporation (Sabic), founded in 1976, has focused on building a petrochemical industry and on steel production. In 1997 Sabic companies marketed 9.2 million tons of petrochemicals, 2.85 million tons of steel, 2.8 million tons of plastics, 1.1 million tons of industrial gases, and 140,000 tons of polyester products.

The government established the Saudi Industrial Development Fund in 1974 to provide loans to private investors. To encourage private sector involvement further, in 1984 the government sold 30 percent of Sabic’s holdings to private investors. As a result, Saudi Arabia now has a flourishing private industrial sector, producing products such as cement, electrical equipment, synthetic rubber, plastics, processed food, and soft drinks.

E

Agriculture

Before the influx of oil money in the mid-20th century, agriculture was carried out in very few locations in Saudi Arabia. The largest cultivated areas were in the eastern oases of Al Hasa and Al Qaţīf, and these farms grew dates (in sufficient quantities for export), other fruits, vegetables, and grains. With increased oil revenues, the Saudi government attempted to make Saudi Arabia more self-sufficient in food production. At great expense, irrigation rapidly increased the amount of farmland available for cultivating a wider variety of crops. While agricultural production temporarily rose, economic realities eventually forced the government to cut back many farm subsidies.

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Livestock products—mainly sheep, goats, and camels—have been important in the local economy for centuries. Large poultry and beef and dairy cattle farm industries were established in the 20th century to supply mainly domestic requirements. Nonetheless, domestic meat production has not kept pace with demand, and the country imports a significant amount of meat.

F

Fishing

Fishing was an important source of food along Saudi Arabia’s coasts before the oil era. However, other food sources have supplanted fish due to the rapid rise of population and the contamination of Persian Gulf fisheries (especially during the 1991 Persian Gulf War). Saudi fishers caught 74,778 metric tons of fish in 2005.

G

Energy

Saudi Arabia’s abundant supplies of oil and natural gas amply meet its energy requirements. In 2003 the country’s oil- or gas-burning power plants produced 145.1 billion kilowatt-hours of electricity. The government heavily subsidized utilities such as electricity until the 1990s, when tighter budgets led to rate increases. In 2000 the country’s ten regional electric companies merged to form the Saudi Electricity Company. The state-owned General Electricity Corporation funds the provision of electricity to remote rural areas.

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