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President & Chief Editor:

Prof. S.B. Hassan Associate Editor:

Mrs. Atia Hassan Assistant Editors:

Syed Farhan & Syed Azfar Hussain Editorial Advisors:

Naila Salman & Dr. S.M. Salman Advisor Planning & Development:

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M. Rizwan Rathore Photographers:


H. Haji Muhammad (Sammy) Abdul Samad Qadri

An International Economic Journal Published from Pakistan 45th year of regular & uninterrupted publication

EDITORIAL & COMMENTS ................................................................................................... 02 SPECIAL REPORT:

History of Saudi Arabia.................................................................................................................. 05 Saudi Arabia: Economy & Infrastructure ....................................................................................... 12 Annual Report of FDI Saudi Arabia 2010 ....................................................................................... 19 Saudi Arabia’s Petroleum Policy and Its Economy......................................................................... 24 Exclusive Interview........................................................................................................................ 34 H.E. Mr. Abdul Aziz Bin Ibrahim Saleh Al-Ghadeer, Ambassador of the Royal Kingdom of Saudi Arabia I&M Acknowledges ....................................................................................................................... 37 Exclusive Interview........................................................................................................................ 38 Mr. Muhammad Yahya Polani, MD, Polani Travels & Chairman TAAP Efforts of Kingdom of Humanity on Pakistani Soil......................................................................... 40 H.E. Mr. Abdul Aziz Bin Ibrahim Al Ghadeer visit to Karachi ......................................................... 47 Hajj 2010: The eye witness account .............................................................................................. 51 Hajj 2010 in Pictures...................................................................................................................... 53 Custodian, King & Carrier of the Future ........................................................................................ 60 Saudi Arabia’s Economic Cities ...................................................................................................... 65 The Kingdom Beyond Oil............................................................................................................... 69 courtesy:

COMPANY NEWS: ................................................................................................................... 84

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Price: .................................. USD $ 15 Issue # 565





Four of the world's largest emerging economies, namely Brazil, Russia, India and China, make up the BRIC bloc represent 40 percent of the world's population, 15 percent of the global GDP and are reckoned to be the next economic powers. BRIC, as an combined is likely to exceed the US by 2018. The Brazilian economy will be larger than Italy's by 2020 and India and Russia will individually be larger than Spain, Canada or Italy. All four will account for a third of the global economy measured in purchasing power parity (PPP) and contribute about 49 percent of global growth. They will account for almost 50 percent of the global equity markets by 2050. A recent study of Goldman Sachs further discloses that BRIC contributed 36.3 percent of the world's GDP growth (in PPP) and made up about a quarter of the global economy during the first decade of the century. In the next 10 years, the incomes of the middle class in BRIC economies are likely to grow further and hence the consumer spending base is going to shift from rich countries towards BRIC with startlingly changing patterns of international trade. They will likely be buying more hi-tech value added goods instead of typical low quality consumer goods. For instance, 70 percent of global car sales growth is likely to come from the BRIC economies, with China accounting for 42 percent of this increase. In the last decade alone, the number of people earning incomes greater than $ 6,000 and less than $ 30,000 has seen exponential growth, which has resulted in increasing standards of living for the citizens of BRIC along with falling poverty rates. Goldman Sachs predicts that China and India will be the dominant global suppliers of manufactured goods and services respectively, and Brazil and Russia will dominate the world's raw materials market. The following are the main factors that contributed to the BRIC success story: macroeconomic stability, institutional capacity, openness and education. Macroeconomic stability reflects effective use of fiscal and monetary policies to ensure economic growth with price stability. Institutional capacity is linked to the input and output ratio. More efficient institutions work with fewer resources but with a high level of output, and low performers do the opposite. Empirical studies suggest that the legal system, functioning markets, health and education systems, financial institutions and the government bureaucracy make up the definition of 'institutions'. Openness to trade and FDI refers to access to imported inputs, new technology, larger markets, policies related

to import substitution and employment creation, export promotion and generally favourable terms of trade liberalisation. To match the BRIC growth rates, what should we be doing if we want to improve the quality of life of our people? Well, first we should revisit our economic governance framework. The most important indicator of economic governance is the way economic decisions are made. Pakistan's economy has been a victim of poor quality decision making most of the time because decisions are made for short term political gains, thus the success stories recorded have been ephemeral in nature. The situation is compounded further when the economy is seeing a steep fall in both local as well as foreign direct investment due to surging terrorism-related incidents, energy shortfalls, political uncertainty and the increasing cost of doing business. Sadly, our spending on education is one of the lowest in the world and socio-economic indicators, instead of improving, are further deteriorating. should be followed now. To achieve macroeconomic stability on the external front, dependency on lending institutions must be reduced steadily. How can we do that? Here is the answer: we should try accelerating exports and home remittances simultaneously and provide a conducive environment for foreign investment (the three main sources to earn foreign currency and build foreign exchange reserves). The higher the foreign exchange reserves in hand, the less the chances are that we will approach foreign lending institutions for help and accept their pressure. Also, at the same time, a deep cut in the imports of luxury items should be considered to ease pressure on the Balance of Payments and on our reserves. On the domestic level, improvement in tax collection and economic governance across the economy, a deep cut in unnecessary government expenditures, merit-based appointments at key posts, effective utilisation of natural resources available such as the Thar coal reserves and privatisation of public sector enterprises or improvement in their efficiency are some tough decisions that the government must take now. The local entrepreneurship model should be encouraged across the country and a better environment ought to be provided for this purpose. To encourage transparency and the rule of law, the discriminatory approach of 'show-me-the-face-and-I-showyou-the-rule' should be strongly discouraged by all the stakeholders. All the above can be achieved if both nation and government have the vision and the will. It is true that the BRIC economies have not used any rocket science to achieve such phenomenal growth and Pakistan can also take advantage from their success stories .The leadership should have a clear vision approach to lay solid foundations for the economy.n

Lessons to be learnt from the growth in emerging economies




machineries, parts, and raw materials on donors' terms and conditions. One such condition has been that the aid, loans, and credit are administered by consultants who take a lion's share as their fees. Actual receipts are much less than the repayments of the so-called aid, loans, and credit from the future earnings in foreign exchange. This has been further punctuated with free imports of whatsoever nature, at the cost of local investment, production, and export. According to Mr Dominique Strauss Kahn, the former Managing Director of the IMF, globalisation has led to a "lethal cocktail of high unemployment, strained social cohesion, and political instability, which, in turn, has affected macroeconomic stability". In Pakistan, thus the 10 percent poorest in the country consume four percent of the national cake while the richest 10 percent gobble up 27 percent of it. According to a recent report of the Federal Board of Revenue and World Bank, 57 percent of the economy is untaxed. The country's total revenue is about Rs1.5 trillion and if this 57 percent untaxed economy is taxed the total revenues will be about Rs 2.5 trillion. This would more than compensate the aids, loans, and credit - Rs0.38 trillion - our country has been plagued with since inception. The total debt of the country has reached a unbelievable figure of Rs11 trillion now as against Rs4.7 trillion four years ago in 2007 due to non-payment of loans. In fact, now even the donor countries have started saying that aid recipients such as Pakistan should rely, first, upon its own resources. Such constructive criticism of our tax machinery is a blessing in disguise for we must get our house in order to win back our sovereignty and become masters of our own destiny. Thus Pakistan has to rethink her strategy from foreign policy to economic and social strategy. If all these resources are put together and prudently employed, Pakistan will be free from reliance on the donor countries and earn socio-politico economic freedom. This will encourage investment, production, and export, creating employment for the masses and make them self-reliant. Access to foreign countries through full utilisation of resources will lead to increased competitiveness and, as such, access to the world markets on its own merit. It is local access to the local economy and not access to US aid and IMF programmes which will lead to selfreliance. Pakistan thus must be guided by her own national interests in following any policy originating from external factors. The former World Bank President, Mr Wolfensohn supports this view; "searing images of desperation, hopelessness and decline of people who once had hope but will have it no more...We need local ownership and local participation. In the present circumstances development cannot be achieved by solely relying on United States and other developed countries. Local access to the local economy is the way forward to macroeconomic stability which will help the Pakistani economy. Local access to our economy will create employment, provide the bread, clothing, and shelter promised to the masses of Pakistan.n





Pakistan's human resource is one of the best in the world Moreover, Pakistani workers and managers are in demand all over the world. Pakistani Entrepreneurs have also made their mark. Pakistan's agriculture is one of the best in the world. Before partition, the part now comprising Pakistan(The Punjab Province) was considered the bread basket of the entire Indian sub-continent. When the country was faced with one of the worst floods in its history, Pakistan was remarkably still exporting surplus wheat and rice. The demand for cotton was such that its prices increased by more than 100 percent, more than most other commodities. All this led to consumer demand. The result is overall improvement in the economy and the retail business, in particular, has prospered with the ever highest corporate results, as reported to stock exchanges. Pakistan is blessed with mines - oil, gas, coal, copper, silver and gold. The mines have not been explored but the reserves are so large that not only can they meet the local requirements but also provide a surplus for export. Presently, the county has one of the highest foreign exchange reserves - US$17.5 billion. The country has the ever highest remittances - on an average US$1 billion per month. The country has surplus current accounts. Exports are expected to be the highest ever, reaching about US$25 billion. Imports will rise to about US$35 billion which is a matter of concern, particularly since so much can and should be produced locally. However, the reality is that Pakistan is somehow obsessed with liberalisation, deregularisation, and privatisation - the mantra of the developed world and US-influenced academics. There are closed markets, such as the European Union and Nafta, to name a few, which restrict free trade. The US itself becomes a closed market whenever there is an excess of imports through implementation of tariff protection, to say the least. The world generally and Pakistan, in particular, is thus denied access to the US and European market, among others. Pakistani textile is made to wait entry to these markets, year after year. On the other hand, there is a free flow of imports from all these markets the world over - USA, European Union, China, etc generally under-invoiced, if not smuggled, thus evading customs duty and sales tax. India, on the other hand, is a classic example for Pakistan to follow. Since the time of Nehru, the policy has been that whatever is produced in India cannot be imported through imposition of tariff or non-tariff barriers. It was only when India's economy became globally competitive and produced export champions that Manmohan Singh, as finance minister, started opening up the economy to the world. Malaysia has also relied on her own resources and thus refused to accept the IFI's support. It is another model country independent of the world powers - for Pakistan to follow. Immediately, after partition Quaid-e-Azam Mohammad Ali Jinnah found that Pakistan had no resource base, so he approached USA for a helping hand. The US agreed but conditioned it with regional cooperation - nay - regional camp follower so Pakistan's subservience shifted from the UK to USA. The aid, loans and credit that follow from IFIs under the influence of America, has been a misnomer. The recipients and more so Pakistan receive such aid, loans, and credit basically for commodities and not for much needed socio-physical infrastructure with the condition that the recipients will import their requirements of

Reliance on local investment to develop economy




is only in the form of an indirect tax. The crop tax has no co-relation to the crop price and the law allows the 'abiana payment' to be adjustable against income from agriculture, unlike Sales Tax on goods and Federal Excise Duty which is not adjustable against income tax on businesses. This just goes to prove that both horizontal and vertical taxation between farm activity and nonagri business is based on an iniquitous or wicked practice. The stated value on which real estate transactions take place is less than 60 to 70 percent of the real sale value. Unless the stamp duty plus other provincial levies are lowered to one percent the property and real estate transactions will continue to remain understated. Provinces must appreciate that their share in the Federal Divisible Pool greatly depends on FBR's success in effectively bridging the tax gap by improving its monitoring system and taking some other required measures that are accompanied by stricter enforcement. But they too need to start making an effort in the same direction. Tax broadening has to be a collective effort - a national effort indeed. Potential taxpayers in Pakistani society can only be identified through collection of transaction data and then crossmatching with the returns filed at all the three tiers of the government. This requires creation of a common data bank backed by laws which make it obligatory for those outside the tax net to supply asset and transaction information with regularity. This requires a handshake between the registrars' office and various other sales points. We have created an Inland Revenue Service in the FBR through integration and harmonization of the income tax and sales tax administration and laws. The present state of confusion or confused mass of information owes its existence to our failure to train the field formation and create a cohesive force. Income tax officers are often found clueless about sales tax laws and vice-versa. Customs service officers who have opted to the Inland Revenue Service stick out like a sore thumb. Without continuous training and an effective audit mechanism, the self-assessment system remains declining. This is specifically the reason that despite emphasis on revenue collection, over the last few years, the tax-to-GDP ratio instead of going up, has been going down. This explains how economic interests of the landed aristocracy have dominance over constitutional rule whereas it should have been the other way around.n





Under the 7th National Finance Commission (NFC) Award, the provinces had agreed to help the Federal Government in increasing tax revenues to the tune of 15 percent of GDP by the end of NFC Award period. To accomplish this target, provinces were required to take necessary legal and administrative measures to effectively tax agriculture and property sectors. Since there is little progress in this regard the transfer to provinces from the divisible pool that was originally predicted at Rs. 1,034 billion in the budget now stand reduced to Rs. 993 billion. Federal Ministry of Finance has, therefore, urged the Prime Minister to hold a meeting of the Council of Common Interests on an urgent basis to start the taxation process from the next financial year budget with a view to achieving a 15 percent tax-to-GDP ratio by 2015-16. On agriculture income there is no law on tax collection. However, rules and procedures are still needed to be framed under the law by the provincial governments. Also, the basic mechanism and appropriate policies to collect this tax are still not in place. In the absence of these fundamental prerequisites, provinces, particularly Balochistan, continue to remain dependent on the Federal Government on account of meager collection. The provincial governments are not levying or collecting tax on agriculture income but charging a fixed rate per-acre - on the basis of area and produce index unit for irrigated and nonirrigated regions. The charge is usually Rs. 150 per-acre from the irrigated areas and Rs. 100 per-acre from non-irrigated lands. Even the penalty for non-filing of tax returns on agri income is nothing, i.e., Rs. 1,000. Defined in article 260(1) acreage-based charge is in gross violation of the Constitution that stipulates tax on agriculture income. The political parties of Pakistan having vote bank in the urban areas are not prepared to accept a value-added Sales Tax (RGST) system; nor are the existing urban taxpayers willing to accept any additional load of taxation unless tax collection from agriculture income and real estate is subjected to same treatment, as in the case of businesses and salaried class. As a consequence, the Federal Government is now caught between a rock and a hard place. Taxes that have buoyancy such as: Capital Value Tax (CVT) on immovable properties and sales tax on services are now with the provinces. Other than Sindh, no province has made attempts, however feeble, towards creating a desired capacity to collect sales tax even from stand alone services. They are asking for help from the centre to collect sales tax on services on their behalf (now firmly with them after the 18th Amendment) against a collection fee. The revenue collection system for the farm sector in place

Barriers to financial and economic growth



History of Saudi Arabia Saudi Arabia traces its roots back to the earliest civilizations of the Arabian Peninsula. Over the centuries, the peninsula has played an important role in history as an ancient trade center and as the birthplace of Islam, one of the world's major monotheistic religions. Since King Abdulaziz Al-Saud established the modern Kingdom of Saudi Arabia in 1932, its transformation has been astonishing. In a few short decades, the Kingdom has turned itself from a desert nation to a modern, sophisticated state and a major player on the international stage.

The Beginning of an Agricultural Society

The first concrete evidence of human presence in the Arabian Peninsula dates back 15,000 to 20,000 years. Bands of huntergatherers roamed the land, living off wild animals and plants. As the European ice cap melted during the last Ice Age, some 15,000 years ago, the climate in the peninsula became dry. Vast plains once covered with lush grasslands gave way to scrubland and deserts, and wild animals vanished. River systems also disappeared, leaving in their wake the dry river beds (wadis) that are found in the peninsula today. This climate change forced humans to move into the lush mountain valleys and oases. No longer able to survive as hunter-gatherers, they had to develop another means of survival. As a result, agriculture developed - first in Mesopotamia some 8,000 years ago, then the Nile River Valley, and eventually spreading across the entire


The magnificent ancient Nabatean tombs at Madain Saleh are a must-see for visitors

Middle East. The development of agriculture brought other advances. Pottery allowed farmers to store food. Animals, including goats, cattle, sheep, horses and camels, were domesticated, and people abandoned hunting. These advances made intensive farming possible. In turn, settlements became more permanent, leading to the foundations of what we call civilization - language, writing, political systems, art and architecture.


at the moment - Babylon, Egypt, Persia, Greece or Rome. In addition, the peninsula's great expanse of desert formed a natural barrier that protected it from invasion by powerful neighbors.

The Birth of Islam

Archeological site in Al-Jouf

An Ancient Trade Center

Located between the two great centers of civilization, the Nile River Valley and Mesopotamia, the Arabian Peninsula was the crossroads of the ancient world. Trade was crucial to the area's development; caravan routes became trade arteries that made life possible in the sparsely populated peninsula. The people of the peninsula developed a complex network of trade routes to transport agricultural goods highly sought after in Mesopotamia, the Nile Valley and the Mediterranean Basin. These items included almonds from Taif, dates from the many oases, and aromatics such as frankincense and myrrh from the Tihama plain. Spices were also important trade items. They were shipped across the Arabian Sea from India and then transported by caravan. The huge caravans traveled from what is now Oman and Yemen, along the great trade routes running through Saudi Arabia's Asir Province and then through Makkah and Madinah, eventually arriving at the urban centers of the north and west. The people of the Arabian Peninsula remained largely untouched by the political turmoil in Mesopotamia, the Nile Valley and the eastern Mediterranean. Their goods and services were in great demand regardless of which power was dominant


Around the year 610 AD, Muhammad, a native of the thriving commercial center of Makkah, received a message from God (in Arabic, Allah) through the Angel Gabriel. As more revelations bid him to proclaim the oneness of God universally, the Prophet Muhammad's following grew. In 622 AD, learning of an assassination plot against him, the Prophet led his followersto the town of Yathrib, which was later named Madinat Al-Nabi (City of the Prophet) and now known simply as Madinah. This was the Hijrah, or migration, which marks the beginning of the Islamic calendar. Within the next few years, several battles took place between the followers of the Prophet Muhammad and the pagans of Makkah. By 628 AD, when Madinah was entirely in the hands of the Muslims, the Prophet had unified the tribes so successfully that he and his followers reentered Makkah without bloodshed.

The Islamic Empire

Less than 100 years after the birth of Islam, the Islamic Empire extended from Spain to parts of India and China. Although the political centers of power had moved out of the Arabian Peninsula, trade flourished in the area.

Modern mosque on the Red Sea in Jeddah

Also, a large number of pilgrims began regularly visiting the peninsula, with some settling in the two holy cities of Makkah and Madinah. These pilgrims facilitated the exchange of ideas and cultures between the people of the peninsula and other civilizations of the Arab and Muslim worlds. The emergence of Arabic as the language of international learning was another major factor in the cultural development of the Arabian Peninsula. The Muslim world became a center for learning and scientific advances during what is known as the ''Golden Age.'' Muslim scholars, such as physician Ibn Sina and historian Ibn Khaldun, made major contributions in many fields, including medicine, biology, philosophy, astronomy, arts and literature. Many of the ideas and methods pioneered by Muslim scholars became the foundation of modern sciences. The Islamic Empire thrived well into the 17th century, when it broke up into smaller Muslim kingdoms. The Arabian Peninsula gradually entered a period of relative isolation, although Makkah and Madinah remained the spiritual heart of the Islamic world and continued to attract pilgrims from many countries.

The First Saudi State

In the early 18th century, a Muslim scholar and reformer named Shaikh Muhammad bin Abdul-Wahhab began advocating a return to the original form of Islam. Abdul- Wahhab was initially persecuted by local religious scholars and leaders who viewed his teachings as a threat to their power bases. He sought protection in the town of Diriyah, which was ruled by Muhammad ibn Saud. Muhammad bin Abdul-Wahhab and Muhammad bin Saud formed an agreement to dedicate themselves to restoring the pure teachings of Islam to the Muslim community. In that spirit, Ibn Saud established the First Saudi State, which prospered under the spiritual guidance of Abdul-Wahhab, known simply as the Shaikh. By 1788, the Saudi State ruled over


SPECIAL REPORT known as the Masmak Fortress. This legendary event marks the beginning of the formation of the modern Saudi state. After establishing Riyadh as his headquarters, Abdulaziz captured all of the Hijaz, including Makkah and Madinah, from 1924 to 1925. In the process, he united warring tribes into one nation. On September 23, 1932, the new country was named the Kingdom of Saudi Arabia, an Islamic state with Arabic as its national language and the Holy Qur'an as its constitution. The historic Masmak Fortress in Riyadh holds a special significance for Saudis

The historic Masmak Fortress in Riyadh holds a special significance for Saudis

the entire central plateau known as the Najd. By the early 19th century, its rule extended to most of the Arabian Peninsula, including Makkah and Madinah. The popularity and success of the AlSaud rulers aroused the suspicion of the Ottoman Empire, the dominant power in the Middle East and North Africa at the time. In 1818, the Ottomans dispatched a large expeditionary force armed with modern artillery to the western region of Arabia. The Ottoman army besieged Diriyah, which by now had grown into one of the largest cities in the peninsula. Ottoman forces leveled the city with field guns and made it permanently uninhabitable by ruining the wells and uprooting date palms.

The Second Saudi State

By 1824, the Al-Saud family had regained political control of central Arabia. The Saudi ruler Turki bin Abdullah AlSaud transferred his capital to Riyadh, some 20 miles south of Diriyah, and established the Second Saudi State. During his 11-year rule, Turki succeeded in retaking most of the lands lost to the Ottomans. As he expanded his rule, he took steps to ensure that his people enjoyed rights, and he saw to their well-being. Under Turki and his son, Faisal, the Second Saudi State enjoyed a period of


peace and prosperity, and trade and agriculture flourished. The calm was shattered in 1865 by a renewed Ottoman campaign to extend its Middle Eastern empire into the Arabian Peninsula. Ottoman armies captured parts of the Saudi State, which was ruled at the time by Faisal's son, Abdulrahman. With the support of the Ottomans, the Al-Rashid family of Hail made a concerted effort to overthrow the Saudi State. Faced with a much larger and better equipped army, Abdulrahman bin Faisal Al-Saud was forced to abandon his struggle in 1891. He sought refuge with the Bedouin tribes in the vast sand desert of eastern Arabia known as the Rub' AlKhali, or 'Empty Quarter.' From there, Abdulrahman and his family traveled to Kuwait, where they stayed until 1902. With him was his young son Abdulaziz, who was already making his mark as a natural leader and a brave warrior.

The Modern Kingdom of Saudi Arabia

The young Abdulaziz was determined to regain his patrimony from the Al-Rashid family, which had taken over Riyadh and established a governor and garrison there. In 1902, Abdulaziz - accompanied by only 40 followers - staged a daring night march into Riyadh to retake the city garrison,

King Abdulaziz (1932-1953)

The legendary King Abdulaziz, also known in the West as ''Ibn Saud,'' was a remarkable leader of imagination and vision who set the new Kingdom of Saudi Arabia on the road to modernization. During his rule, King Abdulaziz started building the country's infrastructure. He established roads and basic communications systems, introduced modern technology, and improved education, health care and agriculture. Although King Abdulaziz never traveled beyond the Arab world, he was a highly sophisticated statesman. Foreign leaders and diplomats who met with him came away impressed by his integrity and


SPECIAL REPORT honesty. He was famous for dispensing with diplomatic niceties in favor of frank discussion. He was just as well known for keeping his promises, whether given to a Bedouin or to a world leader. These qualities enhanced his stature as a reliable and responsible leader dedicated to peace and justice.

(OIC), a group of 56 Islamic countries that promotes Islamic unity and cooperation. Throughout the turbulent period of the 1960s and 1970s, which included two Arab- Israeli wars and the oil crisis of 1973, King Faisal was a voice for moderation, peace and stability. He was assassinated March 25, 1975.

Abdulaziz's eldest son Saud acceded to the throne upon his father's death in 1953. Hecontinued King Abdulaziz's legacy, creating the Council of Ministers and establishing theMinistries of Health, Education andCommerce. One of King Saud's greatest successes was the development of education. Under his rule many schools were established, including the Kingdom's first institute of higher education, King Saud University, in 1957. King Saud also made his mark globally. In 1957, he became the first Saudi monarch to visit the United States. In 1962 he sponsored an international Islamic conference that would become the Muslim World League, headquartered in Makkah.

King Khalid (1975-1982)

King Saud (1953-1964)

King Faisal (1964-1975)

King Faisal bin Abdulaziz was a visionary innovator with a great respect for tradition.He initiated the first of a series of economic and social development plans that would transform Saudi Arabia's infrastructure, especially industry, and set the Kingdom on a path of rapid growth. King Faisal also established the first public schools for girls in the Kingdom. In foreign policy, King Faisal showed a firm commitment to the Islamic world. He was a central force behind the establishment in Jeddah in 1971 of the Organization of the Islamic Conference


Khalid bin Abdulaziz succeeded King Faisal in 1975. King Khalid also e m p h a s i z e d development, and his reign was marked by an almost explosive growth in the country's physical infrastructure. It was a period of enormous wealth and prosperity for Saudi Arabia. On the international stage, King Khalid was a prime mover in forming the Gulf Cooperation Council (GCC) in 1981, which promotes economic and security cooperation among its six member countries: Bahrain, Kuwait, Oman, Qatar, the United Arab Emirates and Saudi Arabia. King Khalid bin Abdulaziz Al-Saud

King Fahd (1982-2005)

Under King Fahd bin Abdulaziz, who adopted the title Custodian of the Two Holy Mosques, Saudi Arabia continued its tremendous socioeconomic development and emerged as a leading political and economic force. King Fahd was central to Saudi Arabia's efforts to diversify its economy and promote private enterprise and investment. He restructured the Saudi government and approved the first nationwide municipal elections, which took place in 2005. One of King Fahd's greatest accomplishments in Saudi Arabia was a

series of projects to expand the Kingdom's facilities to accommodate the millions of pilgrims who come to the country each year. These projects involved major expansions of Islam's two holiest sites, the Holy Mosque in Makkah and the Prophet's Mosque in Madinah, as well as airports and seaports. In the international arena, King Fahd worked actively to resolve regional and global crises. These crises included the Israeli-Palestinian conflict, Iraq's invasion of Kuwait, the Lebanese civil war in addition to conflicts in BosniaHerzegovina, Kosovo, Chechnya, Afghanistan, Somalia and Kashmir. As Crown Prince in 1981, he proposed an eight-point plan to resolve the ArabIsraeli conflict and give the Palestinians an independent state. The plan was considered one of the first attempts to find a just and lasting settlement that took into consideration the needs of both the Arabs and Israel. It was unanimously adopted by the Arab League at a summit in Fez, Morocco in 1982. Perhaps the greatest international crisis of King Fahd's rule occurred when Iraq invaded Kuwait on August 2, 1990. The King played a key role in putting together the international coalition that drove Iraqi forces out of Kuwait. King Fahd was also concerned with humanitarian issues. Under his rule, Saudi Arabia provided humanitarian aid to numerous countries, including Somalia, Bosnia and Afghanistan, as well as countries suffering from natural disasters, such as earthquakes (Turkey in 1999, Iran in 2003) and the Southeast Asian tsunami in 2004.

King Abdullah (2005 - )

Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz acceded to the throne after the death of King Fahd on August 1, 2005. He is also Commander of the National Guard, a position he has held since 1962. King Abdullah was born in Riyadh in 1924, and received his early education at the royal court. Influenced by his father King Abdulaziz, he developed a profound respect for religion, history and Arab


SPECIAL REPORT extremism on numerous occasions over the years. In 1997, he warned of the dangers of militancy in an address to the 11th Organization of the Islamic Conference (OIC) summit in Tehran. At the International Counterterrorism Conference in Riyadh in February 2005, he called for greater international cooperation to fight terrorism.

Crown Prince Sultan bin Abdulaziz

heritage. His years spent living in the desert with Bedouin tribes taught him their values of honor, simplicity, generosity and bravery, and instilled in him the desire to assist in the development of his people. King Abdullah's first official visit to the United States was in 1976 when, as prince, he met with President Gerald Ford. Since then, he has made a number of visits to the United States, including visits to President George W. Bush's ranch in Crawford, Texas in 2002 and 2005. As Crown Prince, he also traveled widely in the Kingdom and inaugurated a number of projects throughout the country. In 2005 he closely monitored the election process for the country's municipal councils. His international diplomacy reflects Saudi Arabia's leadership role in defense of Arab and Islamic issues and for the achievement of world peace, stability and security. Peace in the Middle East and the plight of the Palestinians are of particular concern to King Abdullah. His proposal for a comprehensive Arab-Israeli peace, presented at the Beirut Arab Summit in 2002, has been adopted by the League of Arab States and is known as the Arab Peace Initiative. King Abdullah has been unwavering in his condemnation of terrorism and 46

When he became King in August 2005, Custodian of the Two Holy Mosques King Abdullah appointed his brother Prince Sultan bin Abdulaziz as Crown Prince. Crown Prince Sultan is also Minister of Defense and Aviation and the InspectorGeneral. Prince Sultan was born in Riyadh in 1928, and, like his brothers, received his early education in religion, modern culture and diplomacy at the royal court. After serving as Governor of Riyadh Province from 1947 to 1953, he became the Kingdom's first Minister of Agriculture. In 1955, he became Minister of Communications, and contributed greatly to the development of the Kingdom's road, rail and telecommunications networks. He has been Minister of Defense and Aviation since 1963. Prince Sultan serves as chairman of a number of organizations, including the National Commission for Wildlife

Crown Prince Sultan bin Abdulaziz

Conservation and Development (NCWCD), the Saudi Arabian Railways Organization (SRO) and the Prince Sultan bin Abdulaziz Charity Foundation. He has made a number of official visits overseas, and led the Saudi delegation to the 40th, 50th and 60th sessions of the UN General Assembly in 1985, 1995 and 2005. During official visits to the United States in October 1995, February 1997, and November 1999 Prince Sultan met with President Bill Clinton.


The Kingdom of Saudi Arabia is a monarchy with a political system based

King Abdullah presides over the Council of Ministers, also called the Cabinet


SPECIAL REPORT The King ensures that Islamic law (Shari'ah) is applied. All government officials, agencies and the ministers are responsible to the King. The King appoints the Crown Prince, who assists him in his duties. The Crown Prince is also the country's deputy prime minister. The current head of state is King Abdullah bin Abdulaziz. He is known as the Custodian of the Two Holy Mosques. The current Crown Prince is Sultan bin Abdulaziz, who is also the Kingdom's Minister of Defense and Aviation, and Inspector-General.

Council of Ministers

in Islam. Its rules and regulations are governed by the Holy Qur'an and the teachings and sayings of the Prophet Muhammad, known as the Sunnah, which call for peace, justice, equality, consultation, and respect for individual rights. There are 22 government ministries. The country is divided into 13 provinces, with a governor and deputy governor in each one.


The Saudi head of state and the head of government is the King, who is also the country's prime minister and commander-in-chief of the armed forces.

The Council of Ministers, also called the Cabinet, advises the King and facilitates the country's development. It represents 22 different government ministries and meets every week. The Cabinet is presided over by the King or his deputy. Established in 1953 by King Saud, the Cabinet was restructured by King Fahd in 1993. The Cabinet consists of the Prime Minister (the King), the Deputy Prime Minister (the Crown Prince, who currently is also a Minister with portfolio), 21 other ministers with portfolio and seven ministers of state. It is responsible for drafting and overseeing implementation of the internal, external,, economic, education and defense policies as well as the general affairs of

The seat of the Saudi parliament, the Majlis Al-Shura (Consultative Council)


the State. The Cabinet is the final authority for financial, executive and administrative matters. Its resolutions are non-binding unless agreed upon by a majority vote. In case of a tie, the prime minister casts the tie-breaking vote. It functions in accordance with the Basic System of Governance and is advised by the Majlis

Majlis Al-Shura (Consultative Council)

The Majlis al-Shura, or Consultative Council, is a legislative body that advises the King on issues that are important to Saudi Arabia. It is a modern version of a traditional Islamic concept - an accessible leader consulting with learned and experienced citizens - which has always been practiced by Saudi rulers. The Consultative Council currently consists of 150 members appointed by the King for a four-year renewable term. Based on their experience, members are assigned to committees. There are 12 committees that deal with human rights, education, culture, information, health and social affairs, services and public utilities, foreign affairs, security, administration, Islamic affairs, economy and industry, and finance. Originally restricted to discussion of regulations and issues of national and



Members of the Majlis Al-Shura are appointed by the King for four-year terms

public interest, the mandate of Majlis Al-Shura was broadened in 2004 to include proposing new legislation and amending existing laws without prior submission to the King. It has always been able to request that government officials participate in key meetings and apply for access to government documents. On April 7, 2003 the Majlis Al-Shura became a full member of the Inter-Parliamentary Union (IPU).

Provincial System

Saudi Arabia is divided into 13 provinces. Each province has a governor, a deputy governor, and a provincial council. These councils deliberate on the needs of their province, work on the development budget, consider future development plans, and monitor ongoing projects. The governor and deputy governor of each province serve as chairman and vice-chairman of their respective provincial council. Each council consists of at least ten private citizens. As with the Majlis Al-Shura, members of the council participate in committees that focus on various issues of interest to the province. The councils issue reports that are submitted to the Minister of the Interior, and then passed on to the appropriate government ministries and agencies for consideration. The provincial council system is the result of bylaws established by King Fahd in 1992. These bylaws divided the country into 13 provinces and defined their administrative structure, how they would be administered, and the responsibilities of the governors and other regional officers. In 1993, King Fahd named 210 members to the provincial councils. In 2005, municipal elections were held for half of the members of each of the 178 municipal councils in the Kingdom. The remaining half of the council members and the mayor are appointed.

court of appeal and as a source of pardon. The Saudi court system consists of three main parts. The largest is the Shari'ah Courts, which hear most cases in the Saudi legal system. The Shari'ah courts are organized into several categories: Courts of the First Instance (Summary and General Courts), Courts of Cassation and the Supreme Judicial Council. Supplementing the Shari'ah courts is the Board of Grievances, which hears cases that involve the government. The third part of the Saudi court system consists of various committees within government ministries that address specific disputes, such as labor issues. In April 2005, a royal order approved in principle a plan to reorganize the judicial system. The reorganization includes the establishment of specialized courts as well as a Supreme Court.

Shari'ah (Islamic Law)

Shari'ah refers to the body of Islamic law. It serves as a guideline for all legal matters in Saudi Arabia. In the Shari'ah, and therefore in Saudi Arabia, there is no difference between the sacred and the secular aspects of society. Muslims derive Shari'ah law primarily from the Holy Qur'an and secondarily from the Sunnah, the practices and sayings of the Prophet Muhammad during his lifetime. The third source is Ijma', the consensus of opinion of Muslim scholars on the principles involved in a specific case occurring after the death of the Prophet. Qias, analogy, is the fourth source of law. Shari'ah presumes that a defendant is innocent until proven guilty, and only in serious crimes or in cases of repeat offenders is one likely to witness severe punishments.n source: Clock tower in Riyadh's historic Qasr Al-Hokm district


Since Saudi Arabia is an Islamic state, its judicial system is based on Islamic law (Shari'ah) for both criminal and civil cases. At the top of the legal system is the King, who acts as the final



Saudi Arabia Economy & Infrastructure Saudi Arabia's free market economy has undergone remarkable changes in a relatively short period of time. It has evolved from a basic agricultural society into a regional and global economic power with a modern infrastructure. Petroleum is an integral part of the Saudi economy; Saudi Arabia is the world's largest producer and exporter of oil. In recent decades the Kingdom has increasingly diversified its economy, and today produces and exports a variety of industrial goods all over the globe. The government has an essential role in industrial and economic development. The Ministry of Economy and Planning formulates economic and social development plans that set longterm economic goals. Additional sectors of the economy are overseen by individual ministries, such as agriculture, petroleum, transportation, communications and finance. The private sector is playing an increasingly larger role in the Saudi economy - it now accounts for 48 percent of the gross domestic product (GDP). The sector is expected to continue growing, especially as Saudi Arabia opens its doors further to foreign investment. The Kingdom's oil fields, such as this one at Shaybah, produce high-grade crude In December 2005, Saudi Arabia joined the World Trade Organization (WTO), a significant development that gives Saudi products greater access to global markets, creates jobs and encourages foreign investment.

Saud. The discovery of oil in commercial quantities in 1938 changed that. Soon after World War II, steady oil exports provided the funds to build a basic infrastructure of roads, airports, seaports, schools and hospitals. In 1970, Saudi Arabia introduced the first of a series of ongoing five-year development plans to build a modern economy capable of producing consumer and industrial goods that previously had been imported. The country's infrastructure was expanded, allowing industry and commerce to flourish. At the same time, the national oil company, Saudi Aramco, invested in new production and shipping facilities, pipelines, and plants. Aramco also continued exploring for new deposits to maximize earnings from the oil sector, which were needed to fund further growth. The result has been a steady economic transformation of the country. Today, Saudi Arabia is one of the fastest developing nations in the world. The KingdomÂ’s oil fields, such as this one at Shaybah, produce high-grade crude

BUILDING A MODERN ECONOMY When the modern Kingdom was established in 1932, the Arabian Peninsula was an agricultural society that depended on farming and commerce - especially date exports and trade generated by pilgrims coming to Makkah and Madinah. It lacked the infrastructure needed to support the kind of economic growth envisioned by its founder, King Abdulaziz bin Abdulrahman Al12



The energy sector is the backbone of the Saudi economy. The Kingdom possesses a quarter of the world's proven oil reserves, and is the world's largest producer and exporter of oil. Saudi Arabia is also developing its additional energy resources - natural gas that once flared off oil wells is collected and used, and the Kingdom has become a producer of refined oil products and petrochemicals such as kerosene, diesel oil and gasoline. Saudi Arabia has taken steps to expand the energy sector and encourage greater investment, especially by foreign companies. In May 2000, the Supreme Council for Petroleum and Minerals (SCPM) - which oversees the maximization of natural resources announced a decision to allow foreign investment in the gas sector and downstream industries.


The story of Saudi Arabian oil goes back to 1933 when King Abdulaziz granted Standard Oil of California (Socal), later renamed Chevron, the right to prospect for oil in the new Kingdom. In 1938, Socal discovered large quantities of oil in the Dammam Dome near the Arabian Gulf. Limited exports began in 1939, and picked up significantly with the end of World War II. In the late 1940s, Socal entered into a consortium with other American oil companies and was renamed the Arabian American Oil Company (Aramco). By the 1970s, Saudi Arabia had become the top producer and exporter of oil in the world. The Saudi oil industry entered a new era in 1980 when the government assumed full ownership of Aramco, renaming it Saudi Aramco. The company began exploring in areas that had previously been untouched, and discovered vast deposits of high-grade crude oil. Saudi Arabia continues to find new fields - such as one discovered 175 miles southeast of Riyadh on April 20, 2005.

Ensuring Stability of Global Markets


Saudi Arabia has proven oil reserves of more than 260 billion barrels. Most are located in the Eastern Province, including the largest onshore field in Ghawar and the largest offshore field at Safaniya in the Arabian Gulf. As the world's largest producer and exporter of oil, Saudi Arabia plays a unique role inb the global energy industry. Its policies on the production and export of oil, natural gas and petroleum products have a major impact on the energy market, as well as the globaleconomy as a whole. Mindful of this responsibility, Saudi Arabia is committed to ensuring stability of supplies and prices. The Kingdom has repeatedly acted in times of crisis - such as the Gulf Crisis of 1990-1991, the 2003 Iraq war and market fluctuations of the late 1990s - and covered any drop in oil supplies by increasing its output. In this way, Saudi Arabia has prevented major shocks to the global economy from a loss of supply orsharp price increases. Saudi Arabia's oil production varies according to the state of the market and guidelines set by the Organization of Petroleum Exporting Countries (OPEC). OPEC unifies petroleum policies among its members and ensures stability in international oil markets by eliminating fluctuations in prices. As a founding member of OPEC and its largest producer, Saudi Arabia has a leading role in guiding the organization to promote cooperation in energy issues, often acting as OPEC's principal moderating force.

diesel oil, liquefied petroleum gas, jet fuel, kerosene and other petroleum products for the domestic market and for export. Considered among the most technologically advanced in the world, these refineries have an output of around nine million barrels per day of petroleum products, most for export. The Kingdom continues to invest in its refineries. In May 2005, Saudi Aramco announced plans for new refineries in Jubail and Yanbu with an anticipated capacity of 800,000 barrels per day of petroleum products. Saudi Arabia has entered downstream operations in other countries, including South Korea, the Philippines, Greece, India, and China. Motiva, a joint venture between Shell Oil Company and Saudi Refining Inc., refines, distributes, and markets oil products inthe United States. Motiva is planning to more than double the capacity of its Port Arthur, Texas refinery from 235,000 to 600,000 barrels per day, making it the largest in the United States.

Refining Capacity

Natural Gas

Saudi Arabia has nine refining complexes that produce gasoline, fuel and

Loading crude at Ras Tanura

The Ras Tanura oil refining facility

Saudi Arabia possesses vast reserves of natural gas - dissolved, associated and non associated - which it uses as an environmentally friendly energy source for urban and industrial use. Major industrial facilities use gas as feedstock to produce petrochemicals, fertilizers, steel and other products that in turn feed a thriving industrial sector. Until the 1970s, most of the natural gas produced in the Kingdom was in association with crude oil production and was flared off at the well. An ambitious project known as the Master Gas System


The Haradh-3 natural gas processing plant southwest of Dhahran

equal half of the total output. The Saudi Electric Company (SEC) manages existing power generation, distribution and delivery facilities, as well as investment in new general plants. Wholly owned by shareholders, the SEC also sets the price of electricity sold to consumers and industry under rules set by a governing body based on the cost of production, distribution and services. Saudi Arabia has also begun working with GCC countries to link their national power grids. Ultimately, plans include linking the GCC grid with the rest of the Arab world and Europe through Turkey and Syria.

Alternative Energy Sources

allowed Saudi Aramco to collect the gas and pipe it around the country. Exploration of the Kingdom's natural gas resources remains ongoing. Major deposits have been discovered in the Eastern Province near Abqaiq in 2003 and southwest of the Ghawar oil field. Saudi Arabia also actively promotes foreign investment in natural gas. In July 2003 an agreement was signed with Royal Dutch/Shell and France's Total and China's Sinopec to develop upstream gas operations in the Empty Quarter (Rub' alKhali). In March 2005, additional contracts were signed for two vast oil and gas projects.

desalination process. The Kingdom generates more than 26,300 MW of electricity, 2,800 MW of which is produced by the desalination plants. Saudi Arabia eventually plans to increase the electricity produced by these desalination plants to

Saudi Arabia is also looking at alternative energy sources, including solar energy. The Kingdom receives some of the most intense sunlight in the world 105 trillion kilowatt hours a day, which is roughly the equivalent of 10 billion barrels of crude oil in energy terms. Scientists at the King Abdulaziz City for Science and Technology (KACST) are working on groundbreaking projects to make solar power generation more economically feasible.


Electricity Network

Saudi Arabia has a massive electricity distribution network that extends to cities, towns and villages across the country. Its network consists of 8,750 miles of transmission lines, 52,000 miles of distribution lines and over 53,000 miles of service connections. The Kingdom also uses desalination plants to generate electricity using the steam that is a byproduct of the


Saudi Arabia exports food items such as fruits, vegetables and dairy products, as well as flowers


Dates have traditionally been a Saudi staple

While Saudi Arabia's economic base continues to be dominated by oil, the Kingdom has taken steps to diversify the economy. Today, industrial products make up more than 90 percent of the Kingdom's non-oil exports. Saudi Arabia exports petrochemicals, plastics, metal goods, construction materials and electrical appliances to some 90 countries. As part of Saudi Arabia's diversification efforts, industrial cities have been built in major urban centers. The Jubail Industrial City on the Arabian Gulf has dozens of factories and industrial facilities, including a desalination plant, a seaport, a vocational training institute and a college. The Yanbu Industrial City on the Red Sea has a modern port, refineries, a petrochemical complex and manufacturing and support enterprises. The government offers incentives for the establishment of private companies at the industrial cities. The Saudi Arabian Basic Industries Corporation (SABIC), created in 1976, set up non-oil industrial facilities that use as feedstock natural gas and natural gas liquids manufactured by the oil industry. One of the most ambitious economic projects to date is the massive King Abdullah Economic City near Jeddah, which broke ground in December 2005. The residential and commercial megaproject will include a dedicated port, an industrial park, a residential and hotel complex, and educational facilities. It is the largest joint venture in the Kingdom. Other similar projects are planned, including the Prince Abdulaziz bin Musaed Economic City in Hail and Al-Madinah Economic City in Madinah. In addition, Saudi Arabia has extensive


deposits of minerals. They include gold, silver, copper, tin, tungsten, nickel, chrome, zinc, lead, phosphates, iron ore, bauxite, potassium ore and even table salt. The Kingdom is encouraging greater private sector involvement in the mining sector, and Saudi Arabia expects to become a major exporter of minerals in the coming decades. Saudi Arabia exports food items such as fruits, vegetables and dairy products, as well as flowers


Saudi Arabia's agricultural development over the last three decades has been astonishing. Large areas of desert have been turned into agricultural fields - a major accomplishment in a country that receives an average of about four inches of rain a year, one of the lowest rates in the world. Historically, agriculture in the Arabian Peninsula was limited mostly to date farming and small-scale vegetable production in widely scattered oases, except in a small coastal strip in the southwest. Small plots produced enough food for the local communities, and any extra was sold to passing caravans. Serious agricultural development began in the 1970s. The government launched an extensive program to promote modern farming technology; to establish rural roads, irrigation networks and storage

and export facilities; and to encourage agricultural research and training institutions. As a result, there has been a phenomenal growth in the production of all basic foods. Saudi Arabia is now completely selfsufficient in a number of foodstuffs, including meat, milk and eggs. In fact, Saudi Arabia now exports wheat, dates, dairy products, eggs, fish, poultry, fruits, vegetables and flowers to markets around the world. Dates, once a staple of the Saudi diet, are now mainly grown for global humanitarian aid. The Ministry of Agriculture is primarily responsible for agricultural policy. Other government agencies include the Saudi Arabian Agricultural Bank (SAAB), which disburses subsidies and grants interest-free loans; and the Grain Silos and Flourmills Organization, which purchases and stores wheat, constructs flourmills, and produces animal feed. The government also offers land distribution and reclamation programs and funds research projects. The private sector has played a major role in the Kingdom's agricultural development. This is mostly due to government programs that offers longterm, interest-free loans, technical and support services, and incentives such as free seeds and fertilizers, low cost water, fuel and electricity, and duty-free imports of raw materials and machinery. A network of dams captures runoff from rain for use in agriculture



Saudi Arabia is a desert country with no permanent rivers or lakes and very little rainfall. Water is scarce and extremely valuable, and with the country's rapid growth, the demand for water is increasing. The Kingdom, therefore, has turned to innovative ways to provide enough water to support its development Aquifers, vast underground reservoirs of water, are a major source of water in Saudi Arabia. In the 1970s, the government undertook a major effort to locate and map aquifers and estimate their capacity. As a result, it was able to drill tens of thousands of deep tube wells in the most promising areas for both urban and agricultural use. Another major source of water is the sea. This conversion is done through desalination, a process that produces potable water from brackish seawater. Saudi Arabia is the world's largest producer of desalinated water. The Saline Water Conversion Corporation (SWCC) operates 27 desalination stations that produce more than three million cubic meters a day of potable water. These plants provide more than 70 percent of the water used in cities, as well as a sizeable portion of the needs of industry. They are also a major source of electric power generation. Dams are used to capture surface water after frequent flash floods. More than 200 dams collect an estimated 16 billion cubic

King Khalid International Airport in Riyadh

feet of runoff annually in their reservoirs. Some of the largest of these dams are located in the Wadi Jizan, Wadi Fatima, Wadi Bisha and Najran. This water is used primarily for agriculture and is distributed through thousands of miles of irrigation canals and ditches to vast tracts of fertile land that were previously fallow. An expanding source of water is the use of recycled water. The Kingdom aims to recycle as much as 40 percent of the water used for domestic purposes in urban areas. To this end, recycling plants have been built in Riyadh, Jeddah and other major urban industrial centers. Recycled

Desalination plants such as this one in Yanbu are an important source of water


water is used for irrigation of farm fields and urban parks. Desalination plants such as this one in Yanbu are an important source of water


At the time of the establishment of the modern Kingdom of Saudi Arabia in 1932, the country lacked modern transportation facilities and ports, and had less than 30miles of paved roads. Today, the Kingdom is served by a modern transportation network of roads, railroads, air, marine and public transport. Saudi Arabia has a comprehensive road network that comprises some 100,000 miles of roads. Perhaps the most spectacular is the King Fahd Causeway, which links Saudi Arabia to Bahrain. At 15.5 miles, it is the second longest causeway in the world, an engineering masterpiece that spans both water and reclaimed land. Under consideration is a second causeway linking Saudi Arabia and Egypt. The Kingdom currently has three international airports: King Khalid International in Riyadh, King Fahd International in Dammam and the King Abdulaziz International Airport in Jeddah. There are also 24 regional and local airports. Plans are underway to convert the Prince Muhammad bin Abdulaziz Airport in Madinah into an international


airport. The national airline, Saudi Arabian Airlines (SAA), started out in 1945 with the gift of a single twin-engine DC-3 Dakota from President Franklin D. Roosevelt. It now has a fleet of some 140 aircraft, and carries around 15 million passengers each year. Saudi Arabia has 21 large, modern ports that facilitate industrial development, and a new deep-water port is under construction at the King Abdulaziz Economic City near Jeddah. Saudi ports move some two million twenty-foot equivalent units (TEUs) annually. Around 12,000 ships visit Saudi ports each year, totaling one ship every 30 minutes. There are over 220 berths at Saudi ports. They are operated by the Saudi Ports Authority, which supplies equipment and building piers. Maintenance is provided mostly by private companies. More than half of the Kingdom's sea traffic passes through the Islamic Port of Jeddah, one of the main ports in the Middle East and an entry point for pilgrims. New port facilities at Yanbu Industrial City on the Red Sea have eased Jeddah's load and improved the efficiency of petrochemical exports. Other major ports are located in Dammam, Jizan and Jubail. Saudi Arabia's rail network is managed by the Saudi Railway Organization (SRO). The network consists of the 449-mile

Dammam-Riyadh line that includes stops in Hofuf and Abqaiq. A second, 556-mile Dammam-Riyadh line travels via Haradh, on the edge of the Empty Quarter. There are plans to extend the railway to the Jubail Industrial City on its eastern end and, eventually, to Makkah, Jeddah and Madinah on its western side. Yet another extension would link Riyadh to the mining areas in the north. This expansion is being carried out by the private sector. The Saudi bus network provides affordable public transport both within and between the Kingdom's cities. Operated by the Saudi Public Transport Company (SAPTCO), the fleet of over 2,000 buses carries more than 3 million passengers each year. There are also 10 international routes that are used by nearly half million travelers each year. SAPTCO operates special bus service during the hajj, the annual pilgrimage to Saudi Arabia's holy sites.


Saudi Arabia's telecommunications sector is growing at a rapid rate. Facilities and services are constantly expanded to accommodate the growing market. The Ministry of Telecommunications and Information Technology oversees all modern communications technologies in the Kingdom. The major provider in Saudi Arabia is the partially privatized Saudi

The King Fahd Causeway links Saudi Arabia with the island of Bahrain


Telecommunications Company (STC), one of the largest telecom services operators in the world. A second company, Mobily, also provides mobile phone service. The Kingdom's landline telephone system is modern and efficient, using extensive microwave radio relay, coaxial cable, and fiber-optic cable systems. In 2000, 2.9 million lines were available, and Saudi Telecom is expanding its network to 4 million lines. Seven standard earth stations link up with the Intelsat Satellite System. Mobile phones are extremely popular in Saudi Arabia. In 2002, there were more than 5 million mobile phones in use in the Kingdom. Saudi Arabia's mobile telephones operate on the Global System for Mobile Communications (GSM), one of the leading digital cellular systems used all over the world. Internet usage is growing rapidly in Saudi Arabia. More and more lines are being provisioned for Internet access to accommodate increasing demand, including high-speed service such as DSL. According to a 2003 Zogby poll, nearly two-thirds of Saudis have Internet access. The Communications and Information Technology Commission (CITC) supervises all operations of the Kingdom's Internet sector. CITC also helps Saudi families own personal computers and access the Internet through the Saudi Home Computing Initiative. Saudi Arabia also sends satellites into space. In 2006 alone, the Kingdom plans to launch six Saudi-built satellites for communication and observation. The King Fahd Satellite Communications City in Jeddah is the largest complex of its kind in the Middle East. The King Fahd City is also the ground station for Arabsat, the leading communication satellite in the Arab world. The second Arabsat satellite was launched on June 17, 1985 with the help of Saudi Payload Specialist Prince Sultan bin Salman - the first Arab and Muslim to travel to space - during his mission on the US space shuttle Discovery.


trade zones that Saudi Arabia has undertaken with several neighboring countries.

The Globe Restaurant at the Faisaliyah Commercial Center with panoramic views of Riyadh



The Globe Restaurant at the Faisaliyah Commercial Center with panoramic views of Riyadh Saudi Arabia's commercial sector is growing rapidly. This is mainly due to generous government incentives such as the provision of long-term interest-free loans and support services and facilities. In addition, chambers of commerce and industry in the major cities and regions promote commercial ventures. There are currently some 10,000 firms, mostly joint stock companies, involved in commercial activities in the Kingdom. Their total invested capital is estimated to be more than $45 billion. The sector is overseen by the Saudi Arabian General Investment Authority (SAGIA),which offers private entrepreneurs free consulting and support services and publishes lists of investment opportunities. In November 2005, SAGIA announced plans to open offices abroad, including in China, the United States, the United Kingdom and Germany to attract investment in infrastructure projects. The role of the private sector in commerce is substantial private companies account for some 48 percent of the nation's GDP of $248.82 billion. They manufacture, distribute and sell domestic products. Private companies also handle most imports of consumer and industrial goods and the bulk of the exports of non-oil products. Saudi Arabia is among the top 20 export and import markets in the world, and exports of non-oil products to some 90 countries average around $6 billion per year. Foreign investment is also growing in the Kingdom. Investors from all over the world are joining Saudi partners to set up ventures, attracted by the Kingdom's political, economic and social stability, modern infrastructure, inexpensive energy supplies and strategic geographic location. The Kingdom's foreign investment rules make it attractive for foreign investors to invest in the Kingdom by introducing a new law giving them the right to the same benefits, incentives and guarantees offered to Saudi individuals and companies. It also allows foreign investors to own property and real estate. The future of the commercial sector is promising. Saudi Arabia's membership in the WTO will boost commercial activity and provide Saudi products with more opportunities in global markets. Another positive development is the formation of free-


Saudi Arabia has a modern banking industry with 13 commercial banks. Saudi banks provide retail and corporate banking, investment services, brokerage facilities, and derivative transactions in addition to credit cards, ATMs and point-of-sale transactions. There are also banks in the Kingdom that provide Islamic banking services. Islamic banking is a system of banking that is consistent with the principles of Islamic law (Shari'ah). It prohibits usury, the collection and payment of interest, trading in financial risk and investing in companies considered un Islami Saudi Arabia also has a thriving stock market. The total value of shares traded annually is some SR 60 billion [US $16 billion]. The Tadawul All-Share Index (TASI) of the Saudi stock market is one of the most highly capitalized stock exchanges in the Arab world. TASI was also one of the first exchanges globally to set up a full electronic clearing and settlement system with immediate transfer of ownership. The banking and finance sector is overseen by several government agencies. The Ministry of Finance supervises economic policies. The Saudi Arabian Monetary Agency (SAMA) manages fiscal policy, issues the country's currency, the Saudi Riyal ,and oversees the nation's commercial banks. The government has also established five specialized credit institutions to provide loans to citizens for development projects in agriculture, industry and construction - the Saudi Industrial Development Fund (SIDF), the Saudi Arabian Agricultural Bank (SAAB), the Real Estate Development Fund, the Public Investment Fund and the Saudi Credit Bank.n source:

SAMBA (the former Saudi-American Bank) in Jeddah


Gas flares fire the night at Saudi Aramco's Ras Tanurah refinery, north of Dhahran, Saudi Arabia. Each day sparkling towers here produce more than half a million barrels of refined petroleum, the largest output of any refinery in the Middle East.

Saudi Arabia's Petroleum Policy and Its Economy Background about Saudi Oil

The first three decades of the past twentieth century witnessed a number of attempts to explore the petroleum and mineral resources of what is known today as the Kingdom of Saudi Arabia. These efforts, which took place in today's Jaizan Region and the Eastern Province, did not produce any results. Ion May 29, 1933, however, the government of Saudi Arabia granted a concession to Standard Oil of California (then SOCAL, and today's Chevron), to explore for and produce oil in an area of 495,900 square miles in the eastern parts of the Kingdom. This concession evolved through the past 75 years to become the company we know today as the Saudi Arabian Oil Company , or Saudi Aramco; the world's number one petroleum company. After five years of meticulous and somewhat disappointing exploration work which took place near Jabal Dhahran over a geological structure named the Dammam Dome, oil was discovered in commercial quantities for the first time in 1938 in Dammam Well No. 7 in an a geological substrata known as the Arab Formation. Many years later, the Custodian of the Two Holy Mosques; King 'Abd Allah ibn 'Abd al-'Aziz befittingly re-named the well No. 7 'Prosperity Well'


In May 1939, the first Saudi oil shipment to the international market was exported from the newly constructed Ras Tanura Port on the Arabian Gulf, in a Royal ceremony attended by HM the late King 'Abd al-'Aziz.. Today, the number of discoveries reached 110 fields; the majority of which are oil fields while some are oil and gas, gas only or condensates fields. Many of Saudi Arabia's hydrocarbon resources fields are located in the Eastern Province, on-shore and off-shore. The rest are located south of the capital city Riyadh in the central parts of the Kingdom, and in the coastal plains and under the waters of the Red Sea in the western parts of the Kingdom. The Kingdom ranks the world's first in oil reserves, production and exports. Its proven oil reserves by the end of 2006 amounted to approximately259.9 billion barrels, constituting about 25% of the world's total oil reserves. The Kingdom's oil production averaged 8,9 million barrels per day (bpd) in 2006, or about 11% of world production, and the volume of its oil exports in the same year reached about 7 million barrels per day, or about 11% of world oil exports. In addition to its proven reliability to meet any customer's


SPECIAL REPORT needs which is supported by its reserves and production and export capacity, Saudi Arabia's oil comes in ifive different grades: Arabian heavy, Arabian Medium, Arabian light, Arabian Extra light and Arabian Super light. The crude oil and its products are exported via the ports of Ras Tanura and Ju'aymah on the Arabian Gulf and Yanbu' on the Red Sea.

Background about Saudi Gas

Until the late 1970's, most of the associated gas produced with oil was flared. During that decade, however, the Saudi Government developed a plan to utilize this gas to provide fuel and feedstock to the Kingdom's growing industries. Accordingly, Aramco was instructed to design, build and operate what we now know as the Master Gas System. At the time of its construction, the Master Gas System was the world's largest project ever carried out by a single company. This vast network of gas collecting facilities and processing and fractionation plants became the backbone of the industrial development in Saudi Arabia and made Saudi Aramco the world's largest exporter of Liquefied Petroleum Gas. However, the past two decades witnessed significant growth in Saudi Arabia and as a result demand on gas grew in rates that are considered among the highest in the world. The Saudi Petroleum industry, represented by Saudi Aramco, responded to this national need by launching a comprehensive and aggressive gas program that is based on increasing the capacity of the Master Gas System's current facilities, expanding Saudi Aramco's gas exploration program to find more non-associated gas, building new gas facilities mainly to handle the newly discovered non-associated gas and expanding the gas pipeline network and supplies to reach Riyadh and Yanbu'. As a result of these efforts, the Kingdom's reserves of non-associated gas increased during the past decade from about 45 trillion cubic feet in 1993 to about 95 trillion cubic feet in 2003, and bringing the total gas reserves of the


Kingdom, in 2006, to about 248.5 trillion cubic feet, the fourth largest of the world. Moreover the natural gas production capacity of the Master Gas System increased from approximately 3 billion cubic feet per day to about 7.5 billion cubic feet per day, in the same period. Mega gas projects that Saudi Aramco completed recently such as Hawiyyah and Haradh Gas Plants, made natural gas available across the Kingdom to meet growing demand in the industry and public utilities such as power generation and waterdesalination. Saudi Aramco also contributed to the development of the Saudi gas through its involvement in the Government-launched National Gas Initiative which was culminated by signing four joint-venture agreements that included Shell, Total, Luke oil, SINOPEC, Repsol, Eni and of course Saudi Aramco. Moreover, PetroRabigh; Saudi Aramco is joint venture with Somitumu Chemical in Rabigh is considered a quality move in the Saudi petroleum industry because it makes use of Saudi Aramco's distinguished capabilities and expertise and those of its partner; Somitumu Chemical, to expand the economic base of the Kingdom and offer a promising investment opportunities for the national economy and the private sector. Saudi gas operations also produce natural gas liquids (NGL), part of which is used domestically for household consumption and as a petrochemical feed stock while the rest is exported to world markets. In 2006 the total volume of NGL Production is over 399 million barrels, of which more than 285 million barrels were exported to the international markets.

Petroleum Policy and Economy

Saudi Arabia is considered to be the world's leading petroleum country in terms of reserves, production, exports and refining capacity. The Kingdom owns one quarter of the world reserves, 13 percent of world production, more than 20 percent of petroleum sales in international markets and a refining capacity of more than 3.5 million barrels per day (MMBD). Saudi Arabia 's proven and recoverable

reserves are estimated at about 260 billion barrels. This does not include possible reserves or reserves that currently are not recoverable with available technologies. These are conservatively estimated at approximately 100 billion barrels. The method the Kingdom uses to estimate reserves is consistent with the definitions and methods adopted by reputable professional agencies such as the Society of Petroleum Engineers, the International Petroleum Congress and the American Society of Petroleum Geologists. Additionally, the Kingdom is believed to have undiscovered petroleum resources that are conservatively estimated at 200 billion barrels. Underscoring the immensity of the Kingdom's reserves is the fact that with a production rate of 9.5 MMBD the reserves could last for approximately 80 years, based on proven reserves alone. Production could continue for more than 100 years if probable and possible reserves are taken into consideration. The undiscovered resources also could add many additional decades of use. For examble, during 2004 and up-to mid 2005, six new oil and gas fields were discovered in the Kingdom's Central and Eastern regions, including ash-ShuÂ’aybah, Abu Sidr, Medrikah, DuÂ’ayban, Halfa and Fazran fields. The Kingdom's production estimated at about 12% percent of world production, is not in proportion with the its reserves that constitute 25 percent of world reserves. In other words, the reserve volume to annual production ratio is 87 folds, while the same ratio is approximately 10 folds in some other major producing nations, such as the United States , Canada , the United Kingdom and Norway . In the coming years, it is expected that the Kingdom's production will increase due to rapidly rising world oil demand. Research centers and international organizations forecasts indicate an annual growth of 1.6 percent in oil demand which translates to 1.5 MMBD. Additionally, two other factors will cause an increase in the Kingdom's share in international oil markets. First is the dwindling production output from major countries



and production zones such as the U.S. and the North Sea . Second is that the diminishing chances to discover an alternative to oil during at the coming two decades due to the high economic cost and the inefficiency of current alternative fuels. To counter the expected increase due to these factors, the Kingdom completed the development project for Qatif and Abu Sa?fah fields that produce a total of 800 MBD. This mega project, completed ahead of schedule, will boost the Kingdom's total production capacity from 10.5 MMBD to 11 MMBD. The Kingdom recently started planning to gradually increase its production capacity to 12.5 MMBD by 2010. Work already started on numerous upgrades to both old and new fields. Reservoirs and fields have already been identified for capacity increases. The investment in raising production capacity reflects Saudi Arabia 's expectation that the demand for Saudi oil will continue for many years. It also reflects the Kingdom's desire to maintain a reasonable spare capacity of at least 1.5 MMBD. As happened many times in the past, such spare capacity helped to stabilize the oil market by pumping more oil during supply shortages or unexpected high demand. Over the long term, the possibility of raising production capacity to 15 MMBD has been considered, and may be implemented if world consumption requires it.

It also seeks to stabilize the market and avoid severe demand and prices fluctuations. The Kingdom also wants to maintain prices at reasonable levels that serve the interests of both producing and consuming nations alike. This balance will contribute to the growth of the international economy, especially within developing countries, and generate adequate returns for the international oil industry so it can invest in the exploration and production of oil in order to meet the world growing demand. The inescapable fact is that OPEC countries cannot control prices. OPEC's role is limited to cooperating towards achieving balance between demand and supply in the crude oil market. Indeed, prices are affected by several factors, such as conditions in the petroleum products markets (gasoline and heating oil, for example) as in the U.S., Japan and the EU; political situations in some producing countries; the tendency of speculators and investment funds to either invest or not to invest in crude oil; winter temperatures, etc. One of the main roles of the Kingdom and other OPEC producing nations to stabilize the oil market is maintaining a cushion of spare production capacity. Such very expensive unused production capacity is considered essential in avoiding major crises resulting from supply shortages. A key aspect of Saudi petroleum policy is establishing a close cooperation with oil-producing and consuming countries. The Kingdom pursues close ties with most of the world's countries through official visits, trade, investments, exchange of information and views, and coordination of policies. The Kingdom is also an active member of several international oil and energy organizations and forums, including, most importantly OPEC of which the Kingdom is a founding member. In the Arab world, the Kingdom is also a founding member of the Organization of Arab Petroleum Exporting Countries (OAPEC), which seeks to establish coordination and cooperation among its member countries in regard to petroleum issues, including joint Arab petroleum projects. The Kingdom also coordinates its petroleum policies with the Gulf Cooperation Council (GCC) countries, and has close and regular petroleum cooperation with Russia , Norway , Mexico , and other oil producing countries.

The Kingdom's petroleum policy is in line with the government moderate and balanced approach that considers the interests of all involved parties and balances the present with the future. The Kingdom's moderate approach emphasizes cooperation, peace, economic development and prosperity for all the world. The Kingdom's petroleum policy seeks to stabilize the international oil market by balancing supply and demand depending on its huge reserves, high production capacity, and spare production capacity that enable the Kingdom to meet the world demand during the different seasons. In cooperation with OPEC (the Organization of Petroleum Exporting Countries ) and non-OPEC producers, the Kingdom seeks to provide the market with adequate quantities of crude oil, while avoiding oversupply that could cause prices to plummet. 46


SPECIAL REPORT The Kingdom also keeps close ties with consuming nations. In addition to mutual cooperation at all levels with most of the major oil consuming nations such as the US, Japan, EU, Korea, China and India, the Kingdom plays an active role within the International Energy Forum (IEF). IEF comprises more than 50 major oil-producing and consuming nations and various petroleum organizations, whose ministers and representatives meet once every two years.. IEF activities began in 1991 and has continued to grow every year. In 2000, IEF's Seventh Ministerial Conference, held in Riyadh , was inaugurated by the Custodian of the Two Holy Mosques; King Abdallah Ibn Abd al-Aziz of Saudi Arabia (then Crown Prince), In his opening speech, He proposed that a secretariat general be established to maintain effective cooperation between oil-producing and consuming nations. He added that the Kingdom was ready and willing to host the Secretariat in Riyadh and provide all the necessary facilities for it to achieve its objectives. \ Within three years of the proposal, the Kingdom, with the help of several producing and consuming nations, was able to turn the idea into reality, and the Secretariat started its activities in Riyadh in 2003. Since then, the Secretariat has made several important achievements. The most significant being shouldering the responsibility for the Joint Oil Data Initiative (JODI), which is considered one of the most important steps ever taken to contribute to the stability, transparency and cooperation among the world's producing and consuming nations. The IEF and its Secretariat are expected to have a vital constructive role in the international petroleum arena in the coming years. This will serve the interests of all parties and contribute to the growth of the global economy. In addition to the above, the Kingdom has close ties with international energy organizations such as the International Energy Agency (IEA), which includes in its membership the world's major industrial energy-consuming nations. Saudi Arabia believes in and seeks to achieve continuous international 46

production cooperation that helps foster a constructive environment for dialogue with the objective to stabilize the international oil markets, highlight the importance of oil and enable the Kingdom to play its role as a reliable source of energy the world can depend on for its prosperity and economic growth.

Saudi Arabia's Oil Industry

The Kingdom of Saudi Arabia, being the world's largest oil producer and exporter and having the world's largest oil reserves was able to build an efficient and effective petroleum industry that operates on solid commercial and technical principles vital to continuing success. The Kingdom succeeded in achieving this by taking four specific steps: First: Developing and Qualifying Saudi Citizens. Saudi Arabia 's petroleum industry closely focuses on its personnel. This starts with enrolling distinguished Saudi high school graduates in technical training programs unmatched in the world. The most promising recruits are sent on scholarship for academic study in a specializations that will benefit the industry. After graduation, they are assigned to appropriate positions and given financial and morale incentives with continuation of their on-job training. Through this program, the Kingdom was able to build superior technical workforces comparable in quality to counterparts in the developed countries and the international oil companies. An excellent example is the efficiency demonstrated by personnel in the Saudi oil industry after the Iraqi invasion of Kuwait in 1990. In the span of four months, the Kingdom managed to boost its production, without any external assistance, by 3.0 MMBD. In early 1991, the Kingdom also managed to control the largest oil spill in history in the Arabian Gulf 's waters. Today, approximately 87 percent of Saudi Aramco's personnel are Saudis. The remaining 13 percent are employees from more than 65 countries. Second: Focusing on Petroleumrelated, and Generally Energy-related, Technologies. Saudi universities, research centers such as the King ?Abd al-?Aziz

City for Science and Technology (KACST), and petroleum and petrochemical companies play an important role in this field. Focusing on science and technology includes both theoretical and applied aspects. For example, Saudi Aramco is the world's largest oil company in the use of communications and information technology to track production and transportation of about 9 MMBD of crude oil and over 7 billion standard cubic feet per day (BSCFD) of natural gas. This includes monitoring oil fields and wells, oil gathering centers, gas oil separation plants (GOSP's), refineries, pipelines, shipping and distribution facilities, electricity generation facilities, and sales offices worldwide. Saudi Aramco employs the best and most advanced technologies in the areas of exploration, drilling, oil production and field monitoring. The company's Research and Development Center (R&DC) employs more than 400 employees including about 300 researchers working on different projects. The R&DC was established with the purpose of developing technologies, increasing productivity and finding unique solutions to support the petroleum industry operations. As a result, the center has won 25 internationallyregistered patents, as well as 150 other potential patents that are in various stages of research and registration. Third: Effective Management. Successful petroleum industry can not be achieved without creative, qualified and flexible management. This issue is given utmost importance through continuous training and development and specialized managerial programs. In addition, managerial personnel have the opportunity to gain more scientific and professional experience by moving and working in various departments within the Kingdom and abroad; participating in international events by attending and delivering speeches in conferences and forums; and through professional exchanges with similar agencies and companies. Fourth: Establishing a Productive and Effective Working Relationship among the Government and the Petroleum Companies Working in the Kingdom. The


SPECIAL REPORT Government fully trusts such companies and abstains from interfering with their daily operations, such as exploration, operation, maintenance, sales, purchases, appointments or commercial or technical negotiations with either local or external agencies. This non-interference policy extends to the companies' internal systems and financial activities. They are given the full freedom and flexibility needed to achieve the highest possible productivity levels. Saudi Aramco's Board of Directors serves as the primary channel between the Government and the fully governmentowned Saudi Aramco. The board oversees the Company's operations, like any successful international company board does. Saudi Aramco pays taxes, returns and profits to the Government, and is financially audited based on clear and fully transparent rules and regulations as practiced in the developed countries. The link between the Government and the Saudi petroleum industry, on the Government side, is the Supreme Council for Petroleum and Minerals Affairs (SCPMA), chaired by the Custodian of the Two Holy Mosques. SCPMA is in charge of the Kingdom's petroleum policy and strategy, as well as the Saudi petroleum industry's general plans.

The Role of Oil and Gas in the National Economy

Oil provides a sizable contribution to the gross domestic product (GDP), Government revenues, balance of payments and exports. Oil and gas also play a major role in establishing other industries and services related to them, mainly petrochemicals, electricity, water desalination, and energy-intensive heavy industries. Over the past three decades, the Kingdom has been able to establish a unique petrochemical industry, pushing the Kingdom to the forefront of petrochemical producing and exporting nations worldwide, with a share of approximately seven percent of global petrochemical production. This percentage is expected to double through the coming years. The petrochemical industry is fueled by gas and oil for power and feedstock.


To explain the role of gas in supporting local and foreign investments project in the Kingdom, natural gas feedstock was allocated a few years ago to 19 petrochemical projects with total investments of approximately $7 billion. These projects are planned to come onstream over the next few years. Also, in 2003, feedstock was allocated to 10 other larger petrochemical projects with total investments amounting to $20 billion. These projects will produce approximately 18 million metric tons of petrochemicals annually. Total petrochemical production is expected to reach 70 million metric tons in 2010. The Kingdom also opened the upstream gas-development sector to international investment. As a result of this initiative, concessions for four exploration areas were awarded to international companies which actually started their exploration activities there. This initiative was conducted with a high degree of transparency. Opening of the upstream gas sector will lead to further expansion of Saudi Arabia 's petrochemical industry. In fact, the Kingdom's natural gas processing capacity doubled over the past few years, reaching approximately 7.5 BSCFD today. Demand for natural gas is expected to rise about 4 percent per year for all uses, including electricity generation, as fuel and industrial feedstock, and in water desalination projects. By 2025, the Kingdom will need an estimated 12-14 BSCFD of gas to meet demand. In addition to the petrochemical industries, the Kingdom will establish and develop petroleum and energy-related industries and services. The Ministry of Petroleum and Mineral Resources, for example, has participated in the efforts to establish the privately owned and managed Manufacturing and Energy Services Company. Efforts are now underway to establish energy-intensive industries and utilize the many mineral ores found in the Kingdom and building value-added industries that contribute to the development of the Saudi economy. Next year, for example, the construction of a railway to transport bauxite and phosphate ores from the

Kingdom's northern parts to the eastern region will be offered in an open international competitive bidding process. A new industrial city will be constructed on the coast of the Arabian Gulf as a center to manufacture aluminum and fertilizers, making the Kingdom one of Asia 's major producers of those two products. These projects are expected to be completed before the end of this decade. The Kingdom used its competitive edge in oil and gas to sign an agreement with Sumitomo Chemical of Japan . Saudi Aramco and Sumitomo Chemical created a joint venture to develop the Rabigh Refinery on the Red Sea coast and transform it into an international complex for oil refining and producing and exporting petrochemicals worldwide. A similar project is being developed in partnership with Dow Chemical to similarly develop Ras Tanura Refinery. One of the strategic objectives of the Saudi Government is to decrease the national economy's dependence on oil. Oil's share of GDP was lowered from 60 percent 30 years ago to about 45 percent now, and it is hoped that this percentage will continue to decrease. The Saudi oil industry was aware of the importance of the local private sector and took the initiative to develop the sector, enhance its competitiveness and, thus, strengthen the national economy. It is infeasible for any economy to rely on only one commodity, especially when the income from that commodity is subject to major fluctuations. An observer of the international oil market may notice that the Kingdom's production has ranged from 7.5 to 9.5 MMBD during the past few years. The same applies to prices, which fluctuate considerably from time to time. The price of a barrel of oil has reached a record high today of over $100 per barrel, but only less than a decade ago the price was around $10. The Kingdom, therefore, is encouraging and supporting the growth and development of other economic sectors. Several administrative steps have been made to achieve this goal. In addition to restructuring some sectors such as water, electricity, labor, commerce and industry, other reforms are being actively advanced,


SPECIAL REPORT including, establishment of the Supreme Economic Council in August 1999, the General Investment Authority in April 2000 to facilitate foreign direct investments, the Saudi Communication and Information Technology Commission in 2000, the Saudi Geological Survey Commission in 2000, and the Capital Market Authority in June 2003. Reform initiatives also included the issuance of a set of regulations and simplified strategies for investors, such as the Foreign Investment Regulation in April 2000, the Communications Regulation in May 2000 (which opened the door for privatizing and investment), the Capital Market Regulation in 2003 (which established the legal, constitutional and regulatory framework for capital markets), the Insurance Regulation in July 2003, the Mining Regulation and its Rules for Implementation in 2004, the Corporate Tax Regulation in January 2004, and the Privatization Strategy in June 2002. These reforms were made in an environment of competency and increasing transparency, with diminishing government limitations and rising opportunities for foreign investors. The reforms stress the adoption of the highest ethical and commercial standards, and represent a huge step towards the establishment of a solid economy. The Kingdom's economic growth and prosperity has a positive impact on other countries in the region and their citizens through trade exchange, movements of capital, investment and recruitment of citizens and others. The Kingdom has a total expatriate workforce of approximately 6 million, who are transferring a significant amount of money annually estimated at $18 billion. This transferred amount of money has a positive impact not only on financial and economical levels, but also at the social side. The Kingdom is also a major foreign investor in many countries. The trade between the kingdom and most of the region's countries is the highest.n Source: Ministry of Petroleum and Mineral Resources, KSA

Saudi Aramco by the Numbers







Total Refining Capacity Domestic: 993,000 bpd Domestic Joint and Equity Ventures: 1.105 million bpd International Joint and Equity Ventures: 2.060 million bpd Worldwide: 4.158 million bpd Showa Shell Sekiyu K.K. FRPC (Fujian Refining and Petrochemical Company Ltd.) Motiva Enterprises LLC SAMREF (Saudi Aramco Mobile Refinery Co. Ltd.) SASREF (Saudi Aramco Shell Refinery Co.) Ship calls at Saudi Aramco terminals (exports from Ras Tanura, Ju'aymah and Yanbu' and transfers at Jiddah, Rabigh, Yanbu' and coastal bulk plants)




*includes sales on behalf of SAMREF & SASREF Estimated Worldwide Crude Oil and Gas Reserves as of Jan. 1, 2010




Source: Oil & Gas Journal 46


Exclusive Interview

H.E. Mr. Abdul Aziz Bin Ibrahim Saleh Al Ghadeer

Ambassador of the Royal Kingdom of Saudi Arabia to Islamic Republic of Pakistan

The Kingdom always stands by the side of the people of Pakistan in all circumstances There are joint projects between Saudi and Pakistani businessmen in the fields of banking services, construction and agriculture Editorial Team of

I&M I&M: Your Excellency you are Prof. S.B. Hassan serving as ambassador of the Royal Salman Hassan Kingdom of Saudi Arabia In Syed Azfar Hussain Islamabad since 26th of July 2009. May we have a brief account of your diplomatic services to date? H.E. Al Ghadeer: Our activities since holding the responsibility of the diplomatic mission were focused on the promotion of bilateral relations between the two brotherly countries and to expand the extent of cooperation in all fields and sectors. During the flood crises 2010, which swept away many areas of brotherly Pakistan. I have visited all the flood affected regions and personally supervised the distribution of Saudi relief assistance among the flood affected people. We worked closely with the Embassy and consulate staff during the last year to facilitate the arrangements during the previous Hajj season. And it is worth mentioning that The Kingdom always stands by the side of the people of Pakistan in all circumstances because of the brotherly and friendly ties between the people of the two countries.

I&M: It is very heartening to learn that you have been author of several books. Do you plan to write some books on different subjects inclusive of important historic events?

H.E. Al Ghadeer:With the help of Allah Almighty I wrote


a book on the subject "Dialogue and communication" which is in Arabic language and through it I have highlighted the method of communications with other people. I have also discussed some political issues, and dealt with social phenomenon in other books. I am about to complete some other books as well, which will be published soon.

I&M: How do you feel about the services rendered by the Embassy of Saudi Arabia for the promotion of relations between the brotherly countries of Saudi Arabia and Pakistan?


The Kingdom of Saudi Arabia was the first country to extend the help to the brotherly people of Pakistan and to stand by the side of the flood affected people in all the regions and provinces of Pakistan

H.E. Al Ghadeer: The Royal Embassy of Saudi Arabia had proudly worked a lot in order to enhance the brotherly relations between the people of the two countries and also strengthen the bilateral cooperation in various fields, in all aspects, as Pakistan holds a great significance for the Kingdom of Saudi Arabia. The Royal Embassy of Saudi Arabia would continue to extend with the help of Allah Almighty its support to the brotherly people of Pakistan.

I&M: What is your degree of satisfaction with the growth and expansion of bilateral trade between Pakistan and Saudi Arabia?

H.E. Al Ghadeer: The previous period has witnessed numerous visits for Pakistani businessmen to the Kingdom as the kingdom of Saudi Arabia is seeking to deepen the economic relations and commercial exchange between the two countries and also looking for the investment opportunities in various fields and sectors in Pakistan. We hope that Pakistan would come out of its current


economic crisis soon.

I&M: Which sectors have seen growth in exports from Pakistan? In what sectors have Saudi Arabia imports increased?

H.E. Al Ghadeer: PakistanÂ’s export of meat, fish, and rice to the Kingdom of Saudi Arabia is growing constantly, other exports from Pakistan include fresh fruits, spices, honey, raw textile and tents. Main exports from Saudi Arabia to Pakistan include fertilizers, petrochemical materials, beauty cosmetics and paper.

I&M: What is current status of Saudi Arabia Foreign Direct Investment (FDI) into Pakistan? Should we expect an increase of Saudi Arabia investment in Pakistan, both government and private?

H.E. Al Ghadeer: There are joint projects between Saudi and Pakistani businessmen in the fields of banking services, construction and agriculture.

I&M: Recently announced annual budget of Saudi Arabia is said to be higher than all previous budgets. Would you like to mention the salient features of the present budget?

H.E. Al Ghadeer: General budget for the state recorded about S.R 108,5 billion as surplus in the budget for the year 2010 as compared to the assessments which were expecting to record deficit of S.R 70 billion , where revenues reached S.R 735 billion and expenditures S.R 626,5 with increase in the revenues of S.R 265 billion over the original plan , where as the actual expenditures increased by S.R 86.5 billion , which was attributed by the ministry of finance to the expenditure of the month thirteenth ( Muharram ) and to new payments to execute the projects of the holy Mosques and other holy places and other military and security expenditures. As regard to the budget of the year 2011, the ministry of finance made the assessment for the revenue as S.R 540 billion and the general expenditure as S.R 580 with deficit expected to be around S.R 40 billion, where as the assessment of expenditure for the year 2011 is less than that of the actual expenditure for the year 2010 by S.R 46.5 billion. Usually the actual annual expenditures exceeds the declared assessment of 35

expenditures by more than S.R 60 billion, and during the past three years it increased to S.R 75 - 100 billion, and in case it continues to exceeds the plane for the expenditure with the same rate that prevailed during the last five years, then it is expected for the actual expenditure for the year 2011 to be more than S.R 650 billion, that is at rate more than that of the year 2010.

I&M: Questions Regarding Rescue Relief Activities of Saudi Arabia in the Flood Disaster: Humanitarian and Relief Aid?

The Kingdom of Saudi Arabia responded immediately to the call of the Custodian of the Two Holy Mosques by establishing an Air bridge between the Kingdom of Saudi Arabia and Pakistan since the beginning of the flood crises in Pakistan , where the number of the Saudi aircrafts arrived in Pakistan was about Thirty aircrafts within one and half months . The Kingdom of humanity was the first country to extend help to the brotherly people of Pakistan in all the regions and provinces. Saudi Arabia dispatched a number of caravans and trucks loaded with material aid and food items for the affected people. It included drinking waters and items needed in winter season such as clothes and tents to provide shelter for thousands of the affected families.This is beside the Saudi people campaign in the Kingdom in response to the initiative launched by the Custodian of the Two Holy Mosques to support the flood affected people of Pakistan . The relief campaign of the Custodian of the two Holy Mosques for still provides the relief items and aid to the brotherly people of Pakistan. A team from Saudi Civil Defense also participated in rescue operations to rescue the people besieged by flood waters.

On the Medical and Health level?

coordinating the Saudi efforts for reconstruction in the flood affected regions .

Would you like to comment on your association with the civil society in Pakistan ? NGOs and social welfare organizations in Pakistan?

H.E. Al Ghadeer: All those people who are working with non-government organizations and social welfare organizations are providing their services to the people of Pakistan, we are ready to cooperate with them.

I&M: What is the role of Royal Embassy of Saudi Arabia in the promotion of arts and culture in Pakistan?

As part of humanitarian efforts a field hospital was built in Thatta Town in the Province of Sind which consists of two hundred beds and equipped with the latest medical techniques and equipments and related medical instruments, medicines and all medical supplies. This is beside the participation of about 450 highly qualified surgeons and physicians and 60 male and female doctors as volunteers to provide medical care and supervise the medical services and surgical operations where about 40 surgical operations conducted to affected people. All this has come as per the teaching of our religion of Islam and the moral and human obligation to stand side by side with the brotherly people of Pakistan in good times and bad times.

H.E. Al Ghadeer: There is a similarity in the culture and heritage between the two countries. To introduce the culture, arts, tradition and heritage of Saudi Arabia across Pakistan, there is a popular heritage corner which particpates cultural festivals in Islamabad.

I&M: Future plans of Saudi Arabia during rehabilitation and reconstruction stage ?

H.E. Al Ghadeer: The people of Pakistan and Saudi Arabia share many customs and traditions. The bond between the two brotherly countries is ever lasting. I would like to thank you for giving me the opportunity to meet with the readers.n

H.E. Al Ghadeer: Kingdom of Saudi Arabia will continue, with the help of Allah Almighty, to extend whatever aid possible to the brotherly people of Pakistan. At this stage we are 36

I&M: Would you like to mention some details of your hobbies? H.E. Al Ghadeer: Reading and Travelling.

I&M: Any other issue you like to give your comments on?


Exclusive Interview

Mr. Muhammad Yahya Polani

Managing Director, Polani Tavels Chairman Travel Agents Association of Pakistan (TAAP)

There is an excellent cooperation and coordination between TAAP and the Royal Consulate of Saudi Arabia in Karachi The Kingdom of Saudi Arabia is home to almost a million Pakistanis. These expatriates have gained respect and honor in the Kingdom of Saudi Arabia

Mr. Muhammad Yahya Polani, Managing Director , Polani Tavels and Chairman Travel Agents Association of Pakistan(TAAP) started his career in the travel and tour sector in the year 1973.He is an expert in the category of Hajj & Umrah. He has held various posts in several associations and trade bodies . Mr. Yahya Polani has been nominated as Chairman of the Federation of Pakistan Chambers of Commerce and Industry(FPCCI) committee on Aviation by FPCCI President Senator Haji Ghulam Ali. Polani Travels has around 100 employees. The Polani Group now has 10 companies under its umbrella and has a staff of 800. 38

Experience of working in multiple and diversified sectors

Working in multiple sectors is always useful. It has been very profitable as funds continue to flow and resources are employed optimally in diverse fields. Therefore, one sector strengthens another and offsets any loss. I have incurred losses in few sectors, but recovered soon with the support of my other established businesses. This is the best formula for successful business as you can never be bankrupt with diversified investment.

TAAP Establishment: major functions, duties and responsibilities

TAAP was established in the year 1967 and has its own set of official rules and regulations. It is registered with the Government of Pakistan. TAAP has registration with the Asian Travel Union for Travel Agents with Head Office in Singapore and also with the International Air Traffic Association with Head Office in Switzerland. TAAP assists and facilitates in the processing of visas with various embassies and consulates and acts as the sole

Editorial Team of I&M responsible institution for liaison Prof. S.B. Hassan Syed Azfar between the clients Hussain and the consulates/ embassies or vice versa .It also assists in providing bank guarantees to cover the expenses for the tickets issued by various airlines. The organization also assists in providing visas and addressing the various consulates/embassies in providing them guarantees for its smooth functioning. In return, TAAP receives nominal fees from its members to carry out its operations.

The procedure of Umrah

The preparation of Umrah commences with the preparation of the following documents: 1. Valid passport of person , age being above 40 years 2. Four passport size photographs 3. National Identity Card 4. Medical Certificate 5. Return Air Ticket When the person completes these formalities for travel. He/she presents the same to the nearest Travel Agent recognized by TAAP along with the


passport and requisite charges. The agent forwards this information to the Saudi counterpart(Agent), who in turn arranges through internet their stay, boarding and lodging in Saudi Arabia through three authorized agencies recognized by Saudi Ministry of Haj and Auqaf . These agencies are: 1. Bab Al-Umra 2. One way Umra 3. Al -Tawwaf The above agencies transmit all the information to the ministry of Auqaf which in turn refers it to the Ministry of Foreign Affairs and then transmitted by them to the Consul general in Karachi and after that visa is granted by the consulate as soon as possible.

Difference between Hajj and Umrah operations:

There is a vast difference between Haj and Umrah procedures. Haj is directly dealt by the Pakistani Ministry of Haj & Religious Affairs and in that TAAP has no role whereas umrah procedures are dealt by TAAP

the Saudi Consulate in Karachi

Overseas Employment:

I handled the Hajj groups when they used to go by ship. Although there were many difficulties at that time, the situation was much better than it is now with modern aircraft. The ministry has a lot of corruption on the one hand and the national airline has a lot of problems on the other. The ministry makes money through Hajj operations although it is a Muslim country. On the other hand, the staff members of the national flag carrier also create troubles for us.

The Kingdom of Saudi Arabia is home to almost a million Pakistanis. These expatriates have gained respect and honor in the Kingdom of Saudi Arabia. As a manpower exporter, I think the best quality work is produced by Pakistani nationals in foreign countries. That is why remittances in the country have continued to flow. I believe the expatriate Pakistanis are playing a pivotal role in strengthening our economy. Skilled employees should be encouraged and facilitated if they desire to work abroad. In contrast, they get little help from the government. Government should provide more facilities to companies exporting manpower.

Relationship between Pakistan and Saudi Arbia

Government's Emphasis on Tourism in Pakistan:

Suggestions of Improving Hajj Operations

I pray to Almighty Allah from the bottom of my heart for the long life and health of HRH Khadim al Harmain Sharfain King Abdullah Bin Abdul Aziz. I extend my deep appreciation and thanks to all the diplomatic staff working here in Karachi consulate and also the embassy staff in Islamabad. I would like to H.E Mr. Faleh Mohammed Al ruhaily, the consulate general in Karachi. Mr. Anwar Abdul Rahim Mirza, Incharge for Umrah & Hajj Visa, Mr. Abdullah Sajaf in Employment Section, Mr. Obaidullah Al- Harbi in Visit and Attestation Department and all the staff for their assistance and cooperation.

Cooperation with the Royal Consulate of Saudi Arabia

There is an excellent cooperation and coordination between TAAP and the Royal Consulate of Saudi Arabia in Karachi. The Consul General H.E. Mr. Faleh Mohamed Al Ruhaily extends full cooperation. His deputy, Mr. Anwar Abdul Rahim Mirza, incharge for Haj and Umra Visas has always been helpful to us, because of this excellent cooperation the procedure is smooth and speedy. The Saudi Embassy granted about 130,00 Umra Visas to the intending umra pilgrims this season(figures upto 20-4-2011) whereas last year. during the same period 100,000 visas were issued. TAAP delivers daily about 4 to 5 thousand passports to


The government of Pakistan should attract tourists by offering them incentives in terms of facilities and proper infrastructure. For Example; they can do that by providing tourists with clean beaches and construct hotels and other form of accommodation. The law and order situation is a major reason why we see a decline in tourists visiting Pakistan. The travel advice given by countries to their citizens to avoid visiting Pakistan because of the deteriorating law and order also has its impact.

Effects of floods on tourism and aviation industries

Aviation and tourism industries will definitely get hurt indirectly because of the dilapidated infrastructure of the floodhit provinces. Tourist spots have also been destroyed in KhyberPakhtunkhawa. Government apathy will delay the reconstruction of these spots, so the population whose livelihood is depending on tourism will suffer.

Present Priority:-

In my views, education and training play a pivotal role in human development. So, I constituted an NGO, couple of years ago to train government schools' teachers with English language skills. I know it is very important for our nation because teachers groom the new generation and if they are educated, our new workforce will be better educated.n


Saudi Arabia donates more than $170 million for Pakistan flood relief At the initiative of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz, Saudi Arabia will provide $80 million in humanitarian aid to Pakistan to alleviate the suffering caused by massive flooding in multiple parts of Pakistan. The donation is part of a larger Saudi effort to assist Pakistan. A relief airlift consisting of 22 planes has already delivered about 200 tones of supplies to flood victims; including food, blankets, electrical generators, tents, water and medical supplies, worth $70 million. Furthermore, a fund set up by King Abdullah 40

has already collected more than $100 million in donations from Saudi citizens and businesses. On August 22, King Abdullah issued an urgent directive for the dispatch of two field hospitals to Pakistan, to provide medical services. The capacity of each hospital is 200 beds and includes an operating room, laboratory, pharmacy, intensive care unit room, X-ray room and integrated medical supplies. King Abdullah issued an additional directive sending a rescue team from the Saudi Civil Defense and Border Guards to Pakistan, to participate in the rescue of people trapped by flooding. The first team members arrived in Karachi on August 23, aboard three planes, and traveled to Hyderabad to undertake relief work alongside the Pakistani Armed Forces in the Sindh region. Another batch of Saudi rescue workers arrived in Pakistan on August 24. The teams specialize in water rescue operations and are equipped with vehicles, heavy equipment, electricity generators, water purification stations, boats and other tools. Major-General Najmuddin Khan, the head of the Pakistan Army's relief operations in the southern Sindh region, praised the support extended by the Kingdom, noting that it is the first country to send such a rescue team.n


relief efforts in flood-ravaged Pakistan at a meeting held August 11 under the chairmanship of IDB President Dr. Ahmed Mohammed Ali. The Directors also approved allocations worth $620.4 million for financing new development projects in Morocco, Sudan, Egypt, Burkina Faso, Djibouti, Gambia, Mauritania, Uzbekistan, Iran, Guinea and Cameroon. Additional assistance was allocated to Muslim communities in Argentina, Brazil, Ethiopia, Georgia, Paraguay and the Ukraine.n

Saudi Arabia gifts dates to Palestine, the Philippines and Pakistan In advance of Ramadan, Saudi Arabia has gifted countries around the world with shipments of dates. Fifteen tons of dates for Palestinian refugees were handed over by Saudi Ambassador to Lebanon Ali Asiri at the Saudi Embassy in Beirut on August 3 to Palestinian Ambassador to Lebanon Abdullah Abdullah. On August 5, Saudi Arabia handed more than 100 tons of dates to the Filipino government. On the same day, the Saudi Embassy in Islamabad gave more than 150 tons of dates to the Pakistani government to distribute to those affected by massive flooding.n

IDB extends $11 million in relief aid for flood victims in Pakistan The Executive Directors of the Jeddah-based Islamic Development Bank (IDB) approved a grant of $11 million for

1,000 trucks to provide humanitarian aid to flood victims in Pakistan The Custodian of the Two Holy Mosques Campaign for the Relief of the Pakistani People, which was launched August 16, announced on August 28 that it will establish a land bridge to Pakistan. The first convoy of 80 trucks, carrying 400 tons of flour, 100 tons of rice, 64 tons of lentils, 24 tons of beans, 41 tons of powdered milk and 100,000 liters of cooking oil, was dispatched on August 30. Upon arrival, the supplies will be distributed to 20,000 people in the provinces of Punjab and Kashmir. During the next three months, a total of 1,000 trucks will provide humanitarian assistance to 2 million flood victims in Pakistan. n

Medical team arrives in Pakistan Eight Saudi cargo planes carrying members of a Saudi medical team and equipment for one of two Saudi field hospitals arrived in Islamabad on August 28. The Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz issued an urgent directive on August 22 for the dispatch of two field hospitals to Pakistan to provide medical services to people affected by torrential rains



and flooding. Saudi medical teams began arriving in Pakistan August 26. The first of eight aircraft carrying members of the second field hospital departed King Faisal Air Base in Tabuk for Islamabad on August 30. The hospital is staffed by 115 medical personnel. In a statement, Saudi Ambassador to Pakistan Abdulaziz Al-Ghadeer said that, following the installation of the medical facilities, more than 250 doctors and technicians are expected to come from Saudi Arabia to provide diversified medical services around the clock.n

AGFUND donates $100,000 for victims of Pakistan floods The Riyadh-based Arab Gulf Program for United Nations Developmental Organizations (AGFUND) announced on August 29 that it will donate $100,000 to relief efforts for flood victims in Pakistan. In announcing the donation, AGFUND President Prince Talal bin Abdulaziz said the funds will be channeled through UNICEF and the U.N. High Commission for Refugee Affairs. n


Crown Prince gifts 250 tons of dates to Pakistanis Three cargo aircrafts carrying a gift of 250 tons of dates from Crown Prince Sultan bin Abdulaziz to the victims of flooding in Pakistan started arriving in Islamabad on August 27. The Saudi Embassy in Pakistan will supervise the distribution of the dates to those in need. Meanwhile, the Saudi Consulate in Istanbul has distributed two tons of dates as a gift from Crown Prince Sultan to Turkey on the occasion of the holy month of Ramadan.n

Saudi assistance for Pakistani flood relief exceeds $240 million Saudi Arabia's assistance to the people affected by flooding in Pakistan stands at $242,198,993, the Ministry of Finance reported last week. Saudi relief efforts have included the delivery of large quantities of food and supplies by airlift and truck convoy. Furthermore, millions of dollars have been raised through contributions from Saudi citizens, officials and businesses to the Custodian of the Two Holy Mosques Campaign for the Relief of the Pakistani people. The $242 million figure does not include the cost of the rescue team from the Saudi Civil Defense and Border Guards currently in Pakistan participating in rescue operations of people trapped by flooding. Last month a Saudi team rescued 463 people trapped in school buildings encircled by flood waters in the Pakistani city of Sajawal. On September 11, Saudi Ambassador to Pakistan Abdulaziz Al-Ghadeer inaugurated the Camp of the Custodian of the Two Holy Mosques for the Sheltering of People Affected by Floods in Pakistan in the southern Sindh province. The facility, located next to a Saudi field hospital, is sheltering 500 families and providing relief materials. Ambassador Al-Ghadeer noted that


the camp is an extension of Saudi land-route convoys, which began delivering aid last week under the banner "1,000 trucks for two million affected people in Pakistan."n

Camp in the city of Tata in southern Pakistan on September 22. The installation is the largest relief camp in the region, providing humanitarian services to Pakistanis affected by flooding. In a single day, the medical center treated more than 900 patients, and more than 80 wheelchairs have been provided to disabled flood victims. The Campaign of the Custodian of the Two Holy Mosques to Provide Relief for the Pakistani People distributed 7,000 food baskets on September 23 to families affected by flooding in Charsadda in northwest Pakistan. Meanwhile, a Saudi Arabian Airlines cargo airplane arrived at Karachi International Airport on September 24 carrying the fourth batch of humanitarian relief gifted by Crown Prince Sultan bin Abdulaziz Al-Saud. The plane was carrying 85 tons of supplies, including 55 tons of dates and 30 tons of flour.n

Multi-pronged Saudi relief effort continues in Pakistan The International Organization for Intercontinental Doctors, an affiliate of the Muslim World League, sent a team of 30 doctors from the King Faisal Specialist Hospital to help flood victims in Pakistan. The team is working in Multan, the largest city in the northern Punjab. The doctors brought along large quantities of medicine and insecticide, water filters, which will provide clean water to 15,000 people a day, and pumps to remove stagnant water. Saudi Ambassador to Pakistan Abdulaziz Al-Ghadeer and several senior Pakistani officials attended the opening of expanded facilities at the Custodian of the Two Holy Mosques Relief

Saudi Arabia continues to provide food, tents in Pakistan The Campaign of the Custodian of the Two Holy Mosques for the Relief of the Pakistani People continued distributing aid to flood victims on October 9 in southern Punjab. Approximately 2,000 baskets of food were given out to families at the Islamic University of Bahawalpur. Meanwhile, Saudi Ambassador to Pakistan Abdulaziz Al-Ghadeer participated in the distribution of 4,000 food baskets to flood-affected people living in the city of Rahim Yar Khan. In addition, Second Deputy Prime Minister Prince Nayef bin Abdulaziz has ordered the provision of 5,000 tents to the victims of flooding in Pakistan at a cost of $589,979.n

IDB approves more than $772 million to finance new projects The Jeddah-based Islamic Development Bank (IDB) has approved the financing of several new development projects



worth $772.3 million. The decisions were made during the 271st session of the bank's board of executive directors, held on October 5. Nine IDB member countries have been approved to receive financing, including Indonesia, Uzbekistan, Bangladesh, Pakistan, Sudan, Turkmenistan, Gambia, Mauritania and Albania. Technical assistance in the form of grants for developmental projects was approved for Benin, Chad, Togo, Sudan and Gulf Cooperation Council (GCC) countries. The funding will also go toward health and educational projects for communities in nonmember countries, including Congo, Fiji, India and South Africa.n

gathering, Dr. Madani noted that the Kingdom has come to the aid of the Pakistani people during every major disaster, including the 2005 earthquake, the 2009 refugee crisis and the 2010 flooding. He described the unprecedented single-country campaign to aid Pakistan launched by Saudi Arabia in the wake of the current disaster. The effort has included: a 30-cargo-plane airlift laden with humanitarian supplies; the Custodian of the Two Holy Mosques Campaign for the Relief of the Pakistani people, which raised more than $107 million; a land convoy of one thousand trucks that carried thousands of tons of wheat, 350 tons of dates and 30,000 tents to Pakistan; two field hospitals, along with medical staff and equipment; and a Saudi search and rescue team. In addition, Dr. Madani cited the appropriation of $120 million for Pakistan's energy sector; $200 million in credit extended by the Saudi Development Fund (SDF); the transfer of $200 million as a deposit at Pakistan's Central Bank; a grant worth $100 million to assist people displaced by flooding; and a number of memoranda of understanding signed between the SDF and U.N. relief organizations worth $68 million. According to Dr. Madani, the total amount offered by the SDF for Pakistani development projects is estimated to be $700 million, while the total relief assistance already provided to Pakistan amounts to more than $350 million.n

Saudi relief efforts for Pakistan "unprecedented" Minister of State for Foreign Affairs Dr. Nizar Madani led the Saudi delegation to the 3rd Friends of Pakistan Conference, which was held on October 15 in Brussels. Addressing the

Fifth Saudi relief convoy heads to Pakistan On October 22, Saudi Ambassador to Pakistan Abdulaziz Al-Ghadeer launched the fifth convoy of Saudi relief supplies to flood-affected areas of Pakistan. According to Dr. Khalid AlOthomani, Regional Director of the Custodian of the Two Holy Mosques Campaign for the Relief of the Pakistani People, the convoy includes 2,500 tons of humanitarian aid that will be distributed to 53,000 families in 19 flooded regions. In a statement, Dr. Farooq Sattar, Federal Minister for Pakistani Expatriates



Affairs, thanked the Kingdom for its generosity. "We find our Saudi brothers always stand side by side with us whenever the Pakistani people suffer any distress or difficult circumstances."n

Sixth Saudi aid convoy launched in Pakistan On Jan. 18, Saudi Ambassador to Pakistan Abdulaziz AlGhadeer launched the sixth convoy in the land relief bridge run by the Custodian of the Two Holy Mosques' Campaign to Relieve the Pakistani People. The convoy consists of more than 550 trucks carrying various relief materials to be distributed in more than 36 districts across Pakistan to people affected by recent flooding.n

Pakistan receives 350 tons of dates from Saudi King The Saudi Embassy in Islamabad donated 350 tons of dates on November 23 to the Pakistani government to assist the country's flood victims. The food aid was gifted by the Embassy's Acting Charge d'Affaires, Mohammed bin Nafie Al-Madani, on behalf of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz.n

Saudi medical team arrives in Rawalpindi The third group of medical professionals tasked with operating a Saudi field hospital arrived in Rawalpindi on December 1 to provide medical and therapeutic services for Pakistanis affected by disastrous flooding. Upon arrival, the team, which included 60 doctors, practitioners, specialists, technicians and administrators, was received by a number of senior Saudi and Pakistani officials.n





Khadim-AL-Harmain Al-Sharfain King Abdullah Bin Abdulaziz

HRH Crown Prince Sultan Bin Abdulaziz

Ambassador of the Royal kingdom of Saudi Arabia

H.E. Mr. Abdul Aziz Bin Ibrahim Al Ghadeer visit to Karachi

Ceremony held to honour the workers and volunteers who participated in the rescue and relief operations in the flood affected areas of Pakistan

Ambassador of the Royal kingdom of Saudi Arabia H.E. Mr. Abdul Aziz Bin Ibrahim Al Ghadeer visited Karachi to express appreciation and give rewards to workers and volunteers who participated in the rescue and relief operations to alleviate the sufferings of the flood affectees. The Award giving ceremony was held at the Consulate General of Saudi Arabia in Karachi. H.E. Mr. Abdul Aziz Bin Ibrahim Saleh Alghadeer the Ambassador of the Kingdom of Saudi Arabia speaking on the occasion of ceremony held recently at the Consulate General of Saudi Arabia, Karachi, Pakistan


His Excellency the ambassador, in his speech, thanked all those who selflessly participated in the noble and


H.E. Mr. Abdul Aziz Bin Ibrahim Saleh Alghadeer the Ambassador of the Kingdom of Saudi Arabia keenly looks at the copies of Investment & Marketing (I&M) International Magazine in which comprehensive coverage about Saudi Arabia has been published, Prof. S.B. Hassan, President & Chief Editor, I&M presenting the copies to His Excellency, the Ambassador.

His Excellency, the Ambassador of Saudi Arabia meeting Prof. S.B. Hassan of I&M.

The group shows (from r to l) the Consul General of UAE, the Consul General of Saudi Arabia, H.E. the Ambassador of Saudi Arabia, the Consul General of Kuwait and Prof. S.B. Hassan of I&M



H.E. Mr. Abdul Aziz Bin Ibrahim Saleh Alghadeer the Ambassador of the Kingdom of Saudi Arabia presenting souvenior to H.E. Mr. Faleh Mohammed Al-Ruhaily the Consul General of Saudi Arabia on the occasion of the award ceremony

(From r to l) Consul General UAE, H.E. Mr. Suhail Bin Matar Al-Ketbi, Consul General State of Kuwait, H.E. Mr. Nasser Reden Al-Motairi and Prof. S.B. Hassan

Prof. S.B. Hassan talking to Mr. Saleh Hmuod Almughiri, Director Information Section, Royal Embassy of Saudi Arabia, Islamabad, while Mr. Obaidullah Alharbi (c) of the Saudi Consulate General office in Karachi is also present.

General view of the audience on the occasion of ceremony recently held at the Consulate General of Saudi Arabia, Karachi, Pakistan.

humanitarian task and helped Pakistanis who suffered during the disastrous flood never confronted before.

Allah protect him) for providing rescue and relief to the sufferers of the devastating floods in Pakistan.

The ambassador commended the contribution and active role played by the officers and executives of the Consulate General of Saudi Arabia stationed in Karachi.

The ambassador also expressed thanks to the Pakistani officials who acknowledged with gratitude the assistance provided by different agencies of the Kingdom of Saudi Arabia.

The ambassador mentioned with great appreciation the execution of directives which came from the custodian of the Two Holy Mosques King Abdullah Bin Abdul Aziz(May

As significant parts of this ceremony were distribution of books specially prepared as records of the contribution of Saudi Arabia during the crisis and an exhibition of documentary film which

described the intensity of the disastrous floods and the documented scenes of relief and rescue operations conducted by various Saudi Agencies. The ceremony was attended by Consul Generals of GCC stationed in Karachi, distinguished citizens of this metropolis and the media which included major newspapers and television channels. The ceremony concluded with a sumptuous lunch offered to guests by the Consul General of Saudi Arabia in Karachi, H.E. Mr. Faleh Mohammed Al Ruhaily.n

Saudi Consul GeneralÂ’s wife visits welfare centres 4. Ida Rieu Welfare Association (for blind children) 5. House of Cancer patients During the visit she gave donation in cash and presented lots of food stuff.

Wife of H.E. Faleh Mohammed Al Ruhaily, Consul General of the Royal Kingdom of Saudi Arabia visited many welfare centres of children in Karachi. The following centers were visited: 1. Dar us Sakoon(for Mentally & physically disabled children.) 2. Anjuman Kashan-e-Itfaal(for Orphan Children) 3. Al Huda International Welfare Foundation.

The Custodian of Two Holy Mosques King Abdullah Bin Abdul Aziz had ordered to cancel the celebrations of Saudi National Day to express unanimity and harmony with the flood affected people of Pakistan. celebration of the National Day of Saudi Arabia was distributed among the organizations working for the physically and mentally handicapped and disabled children of Pakistan. It may be recalled that Saudi Arabia is the first country of the world that helped the people in flood affected areas of Pakistan by establishing the biggest Air Bridge for Relief Aid. In addition to this, the workers of Saudi Civil Defense participated in the rescue activities for flood affected people of Pakistan. The Kingdom of Saudi Arabia is continuing its efforts in helping these people to date in the supervision of H.E. Mr. Abdul Aziz Ibrahim Al Ghadeer, Ambassador of Royal Kingdom of Saudi Arabia. Moreover, the Consul General of Saudi Arabia in Karachi H.E. Mr. Faleh Mohammed al Ruhaily also gave donation in cash to the Society for Promotion of Arabic Language. This donation was offered to help orphan students studying in this institute.n

A general view shows the Saudi holy city of Mecca, as seen from the top of Noor mountain, late on November 13, 2010.

Hajj 2010 in pictures

A Saudi worker stitches Islamic calligraphy in gold thread on a silk drape to cover the Kaaba at the Kiswa factory in Mecca Saudi Arabia on November 8, 2010. The Kaaba cover is called Kiswa and is changed every year at the culmination of the annual Hajj or pilgrimage.


Saudi special forces show their skills during a military parade in preparation for the Hajj in the Saudi city of Mecca on November 10, 2010.



Saudi special forces take part in a military parade, preparing for the Hajj in Mecca on November 10, 2010.

Saudi Arabian men ride on the newly-opened Holy Sites metro light rail in Mecca on November 2, 2010. The Chinese-built monorail project, links Mecca with the holy sites of Mina, Arafat and Muzdalifah

Saudi workers load carboys of "zamzam" water containers at the Zamazemah United Office in Mecca, on November 7, 2010. According to Islamic belief, zamzam is a miraculously-generated source of water from God, which began thousands of years ago when Abraham's infant son Ishmael was thirsty and crying for water and discovered a well by kicking the ground. Millions of pilgrims visit the well each year while performing the Hajj or Umrah pilgrimages, in order to drink its water.

Thousands of tents housing Muslim pilgrims are crowded together in Mina near Mecca, Saudi Arabia, Sunday, Nov. 14, 2010.




Muslim pilgrims walk past construction outside the Grand Mosque during the annual Hajj in Mecca, Saudi Arabia on Friday, Nov. 12, 2010.

Muslim pilgrims are seen on their way towards a rocky hill called Mount Arafat, on the Plain of Arafat near Mecca, Saudi Arabia on Monday, Nov. 15, 2010.

Muslim pilgrims pray outside Namira mosque in Arafat near Mecca, Saudi Arabia, Monday, Nov. 15, 2010.




Pilgrims pray on the side of Mount Arafat, near Mecca, Saudi Arabia on Monday, Nov. 15, 2010.

A pilgrim visits the Hiraa cave on Noor mountain late on November 13, 2010 during the annual Hajj. According to tradition, Islam's Prophet Mohammed received his first message to preach Islam while praying in the cave.

Pilgrims climb up Mount Arafat on the Plain of Arafat in Saudi Arabia on Monday, Nov. 15, 2010.



SPECIAL REPORT The Grand Mosque and the four-faced clock, atop the Abraj Al-Bait Towers are seen from the top of al-Noor mountain in Mecca, Saudi Arabia on Nov. 11, 2010.

Pilgrims pray atop Mount Arafat, southeast of Mecca, on November 15, 2010. Pilgrims flooded into the Arafat plain from Mecca and Mina before dawn for a key ritual around the site where prophet Mohammed gave his farewell sermon on this day in the Islamic calendar 1,378 years ago.



SPECIAL REPORT Muslim pilgrims circle the Kaaba at the center of the Grand mosque in Mecca during the annual Hajj pilgrimage November 11, 2010.

Tens of thousands of Muslim pilgrims pray inside the Grand Mosque, during the annual Hajj in Mecca, Saudi Arabia on Friday, Nov. 12, 2010.


Muslim pilgrims reach to touch the golden doors of the Kaaba as they perform their walk around the Kaaba at the Grand Mosque in Mecca early on the morning of November 9, 2010



Muslim pilgrims move around the Kaaba, inside the Grand Mosque in Mecca, Saudi Arabia on Saturday, Nov. 13, 2010.

Muslim pilgrims perform Friday prayers in front of the Grand Mosque in Mecca, on November 12, 2010.


A Muslim pilgrim prays at the top of Noor Mountain, on the outskirts of Mecca, Saudi Arabia on Thursday, Nov. 11, 2010. source: The Boston Globe


Heading Strongly Into the Future The Saudi economy is becoming more energetic as investment in massive new infrastructure projects, economic cities, oil and gas, petrochemicals, and other industries, become reality. Even though high oil prices have been the initial stimulant, the baton of growth is shifting to the private sector, driven by reinvigorated confidence, growing domestic demand and rationalization, institutionalization and deregulation of its economic structure. "We are keen on making our economy a prosperous and diversified one," King Abdullah has said, "as well as an economy which is capable of playing a pioneering role in regional and international arenas and meeting the aspirations of its citizens." But what is to happen with Saudi Arabia when its oil era finally ends? The House of Saud has contemplated this inevitable reality and created the abovementioned projects as a motor for diversification, part of a National Industrial Strategy known as "Vision 2020". Already over the past three decades the nonoil sector has grown from 35 percent to more than 60 percent of the total GDP. Saudi financial institutions forecast that by year's end the non-oil private sector will grow 8.9 percent in real terms, the highest growth in 25 years. Any economic success still hinges on the creation of stability in the Middle East. A major objective of Saudi Arabia's foreign policy is settlement of the Arab- Israeli conflict. Among the Saudi efforts to bring peace to the conflict, there were two peace initiatives in 1982 and 2002 offering solutions based on the United Nations resolutions 242 and 338. The consensus is that should the Palestinian-Israeli conflict be settled, by implementation of either the Abdullah Peace Plan or President


Bush's Road Map, it will positively affect the outcome of other regional issues. "We are keen on making our economy capable of playing a pioneering role in regional and international arenas and meeting the aspirations of its citizens." King Abdullah bin Abdulaziz Al-Saud Former Saudi Ambassador to the US Prince Turki Al Faisal says that working together on these issues is the key to creating stability in the Middle East, as well as dealing with violent insurgents and terrorist cells. "Only Muslims can counter the terrorists who would use Islam to promote their actions," Prince Turki elucidates. "They intentionally misinterpret the teachings of Islam, and we Muslims expose their falseness and hypocrisy." King Abdullah has been a tireless proponent of dialogue for the cause of

calm across the region, and has indicated that Saudi Arabia, with its decades of experience in fostering stability, is best suited to conduct whatever measures are necessary to secure peaceful solutions. "Peace and security are the most important pillars of a stable society and prerequisites for development," the King said. In the King's 2007 policy address to Saudi Arabia's Shura (consultative) council, he explained that "The Kingdom's eighth Five-Year Plan (20052009) aims to build on the achievements of the previous plans, designed according to a strategic perspective with the aim of achieving sustainable development. The plan has focused on a package of priorities, led by preserving Islamic values; enhancing national unity, social stability and national security; upgrading standards of living; providing job opportunities for Saudi jobseekers; developing the workforce and enhancing its skills; diversifying the economic base; increasing private sector contribution to development; achieving balanced development in all parts of the Kingdom; developing sciences, technology and informatics; supporting and encouraging scientific research and technological development, preserving and developing water resources; and protecting the environment." Saudi Arabia is in a strong position to fulfill its plans as it has the resources to finance them. If it can clear the misconceptions held by western nations about the country, its people, and its culture, that would be a major step in itself. But that's exactly where the challenge lies, as the country resolves to break free from close-knit secrecy and transform itself into a transparent, open society, economy and government.n 61

Foreign Investors Courted by $700 Billion Bonanza Below the desert's surface Saudi Arabia's natural resources may account for 25 percent of the world's total oil reserves, but above ground the Kingdom has a wealth of assets waiting to be developed. "We have over $700-billion worth of investment opportunities in Saudi Arabia over the next 15 years," says HRH Prince Turki Al Faisal, Former Saudi Ambassador to the US. "American businesses should take advantage of that." In December 2005 the Kingdom officially joined the World Trade Organization, providing it with greater opportunity to enhance its business and investment climate and drive competition. Four centerpieces of business activity in the years to come will be the mega economic cities, tax free centers of finance, healthcare, and technological development. "The Kingdom has been liberalizing its trade policies, enacting new regulatory laws, increasing transparency, and opening up our economy to investment. We have also enacted a new law allowing foreign businessmen and women to obtain visas without an invitation." Saudi Arabia is not only actively reducing its dependency on oil, but is also trying to decrease its reliance on foreign workers. Human Resources of Saudi origin are being trained to take on the new job opportunities offered by the economic and industrial cities, and education reforms target a curriculum that prepares students for globalization. "We have undertaken a multi-year modernization program of our education system" explains Prince Turki. "More than 300 technical and vocational colleges are being built in the next five years. The Saudization process on the other hand limits the number of foreign employees in order to slowly decrease dependency on them." The process is not only significant to alleviating unemployment but also instills a greater sense of responsibility in the Kingdom's youth, according to Prince Turki. Investors


have the good fortune of being able to access the Saudi market in its era of "economic openness". Up until recently certain sectors were still closed to foreign involvement, but a new law lift ed many of the barriers, as Mr Hamad Al-Sayari, Governor of the Saudi Arabian Monetary Agency, explains. "The Foreign Investment Law was enacted in 2000 to allow the international community to make direct investment in most of the county's economic sectors without having to act through a Saudi partner. The sectors that are restricted to foreign investment are minimal and comprise only those which are of strategic importance." The Saudi Arabian Monetary Agency functions as the Kingdom's Central Bank, issuing the national currency (the Saudi Riyal), pursuing an appropriate monetary policy, promoting price and exchange rate stability, and supervising the banking and insurance sectors. Under its supervision the country counts as one of the most financially stable in the region. The banking sector in particular has enjoyed unparalleled growth, particularly in the Islamic Banking division, a service offering financial management compliant to Islamic Sharia laws. "By December 2006," says Mr Al-Sayari, "on a year to year basis, the banking sector's total assets increased by 13.3 percent, loans and advances by 10.3 percent, and total deposits by 20.8 percent. In addition, Saudi banks are adequately liquid at 34.8 percent, and most showed record profits, with the sector's net profits registering a 41-percent increase over 2005." The Kingdom's fiscal achievements are pivotal within an initiative to implement a Greater Arab Free Trade Zone towards the establishment of a Common Arab Market (CAM). "The establishment of a GCC Monetary Union and the introduction of a common currency by 2010 will be an important development for the region,"

confi rms Mr. Al-Sayari. One sector in particular is showing some of the most promising developments modern Saudi Arabia has witnessed. "I believe that we are on the threshold of an ICT revolution," remarks Dr Mohammed Al Suwaiyel, Governor of the Communications and Information Technology Commission (CITC). "The high growth rates achieved in mobile services, PC literacy and internet usage combined with the establishment of the necessary frameworks to encourage foreign investment and joint participation in telecommunications projects suggests that, while there is still much work to be done, we are catching up with global leaders in the ICT sector at a fast pace. Since being set up in 2002, the CITC has granted three mobile provider licenses, two for 3G services, two for data services as well as four VSAT provider licenses." Despite the expected challenges faced by having undertaken an ambitious liberalization program in a very short time, including initial inertia, maintaining order in introducing competitiveness to a previously monopolistic sector, attracting and training qualified human resources, CITC is committed to continue granting new licenses to further the Kingdom's development. "Computer sales in the country increased from $881 million in 2005 to $1.5 billion in 2006," says Mr Al Suwaiyel of the CITC's Home Computing Initiative which spurred PC manufacturers to establish plants in the Kingdom. As a result, Internet usage has nearly doubled in the last two years to 20 percent of the population. It has all become part of a grander scheme to turn Saudi Arabia into a "smart" nation, with technological convergence covering everything, from e-government to Wi-Max cities, and it has been witnessed in other countries that once the ICT ballgets rolling, the opportunities are endless.n


Cultivating Sustainable Agriculture Among one of the great misconceptions about Saudi Arabia is that its desert land image renders it hostile to agriculture. Not only is this far from the truth, but the Kingdom's combined fertile regions make agriculture and agribusiness the third largest sector in GDP revenues. In fact Saudi Arabia produces, and to a great extent exports, a huge variety of quality products. Fresh cut flowers find their way to the Netherlands and olive oil is sold to Spain. The nation has also embarked on aquaculture and other break-through activities, fully exploiting its mainland and aqua assets. The Kingdom's agricultural growth was not merely achieved by cultivating arable land, but the result of a highly focused program on solving some tricky challenges. Understandably, water is not readily available throughout Saudi Arabia, calling for closely monitored irrigation management, as well as crops that are not water intensive. Nevertheless, an ambitious agricultural plan embarked upon three decades by the country's leadership to enlarge the Kingdom's cultivated area, with the cooperation of local and international investors, bore a high yield of fruits, vegetables, livestock and dairy products. "We have managed to produce a high self sufficiency in products such as wheat, fresh milk, eggs and potatoes," says Dr Fahad bin Abdulrahman bin Suleiman Balghunaim, Saudi Arabia's Minister of Agriculture. The aforementioned products now cover 100 percent of the Kingdom's needs. Minister Balghunaim says poultry production satisfies 50 percent of national needs, and general vegetable and fruits cover 85 and 65 percent respectively. In fact, the country's wheat program was so successful in attaining set targets that reforms were needed to quell production. "We have reached very high levels of wheat production, so now we produce wheat for local consumption only, which is roughly 2.5-2.6 million tons per


year. Export of wheat has been disallowed and the government no longer buys barley from the farmers." The reason for this, says Minister Balghunaim, is the fact that wheat needs a lot of water, so anything above the basic needs is not necessary. "We would like to produce more crops with less drops of water. We encourage farmers to go to greenhouses; we are

developing means for farmers to switch to drip irrigation instead of ground irrigation. Large agricultural companies and big farmers realize this very easily, because they are using deep wells and the more they use the water the higher their electricity bills." But also smaller farmers are being guided by the Agriculture Ministry's support. Take dates, of which Saudi Arabia now produces some 900 million tons annually. "The government buys dates from small farmers and distributes them among underprivileged people here and around the world, especially in world food programs and countries affected by disasters." The Saudi government used to buy dates at three riyals (0.80 cents) per kilo, but after careful consideration it agreed to buy them at five riyals ($1.33) per kilo as an incentive for small farmers to switch to drip irrigation. "In two years' time they can pay back the cost of drip irrigation," says Minister Balghunaim, adding that the Saudi Arabian

Agricultural Bank (SAAB) provides loans for the equipment and subsidizes 25 percent of mechanisms that help reduce water consumption. Since joining the World Trade Organization, Saudi Arabia has opened up its agricultural market, importing products without tariff s, save for some key crops. "In our negotiation with the WTO," explains the Agriculture Minister, "we have requested and obtained some tariff s to protect some of our major agricultural products because they affect a lot of people, specifically wheat, dates, chickens, and fresh milk. But everything else is open." Shrimp farming in particular has become a focal point of aquaculture, as the Kingdom is able to utilize its 1,500mile long Red Sea coast and its advantageous location between both European and Asian markets. Currently exporting to 18 countries worldwide, the country is engaging in an ambitious plan with the private sector to become the biggest exporter of shrimp. Foreign investment is highly welcomed in the agriculture sector, and major companies from Europe and New Zealand such as Danone and Arla have already moved in to the promising dairy industry. Despite the success and progress made in the sector, Minister Balghunaim confers that Saudi Arabia still has to actively deal with adverse conditions. Scarce rain, meager subterranean water, limited local manpower and widely dispersed cultivatable lands are among the Kingdom's difficulties. "We are conscious about our limitations, and we do not want to push the limits of sustainable agriculture." Initiatives have been implemented to control the spread of desertification, including the establishment of 27 forest nurseries in addition to coastal mangrove nurseries, as well as five national parks. All in all, the Kingdom's agricultural developments have enabled it to achieve important objectives while at the same time conserving its resources.n 83

Saudi Arabia's Economic Cities

A New Era of Economic Wealth and Prosperity Economic Cities: Pockets of Competitiveness

Provide a comprehensive package to investors

Objective of the economic cities To grow the national economy and raise the standard of living for Saudis through: •Enhancing the competitiveness of the Saudi economy •Creating new jobs •Improving Saudis’ skill levels •Developing the regions •Diversifying the Economy

Creating Partnerships

Global innovation in public private partnerships (PPP)

The Kingdom of Saudi Arabia has announced the launch of six economic cities



To ensure success, the economic cities will be developed according to six key design principles

The ECs will be important for the economic growth of the Kingdom and the prosperity of the Saudi individual

Direct GDP contribution only. Indirect spillover effect is estimated to contribute an additional USD ~100 bn Source:Team analysis



Prince Abdulaziz Bin Mousaed Economic City

King Abdullah Economic City in Rabigh "The Dawn of the World's Next Great Economic City"

" Location:Built at a pristine location off the Red Sea north of Jeddah " Focus: port and logistics, light industry, and services " Size:168 million square meters " Investment size: US $ 27billion " Employment:1 million jobs " Population:2 million people " Components: Modern world -class Seaport-Industrial District Financial Island-Education Zone Resorts-Residential Area " Master Developer: Emaar, TheEconomic City

Prince Abdulaziz bin Musaid Economic City in Hael "The World has a New Beat" A new hub for logistics in the region Location:on the cross roads of trade and transportation routes for the Middle East " Focus: Logistics, agribusiness, minerals, and construction material " Size:156 million square meters " Investmentsize: US $ 8 billion " Employment:55,000 new jobs " Population:80,000 people " Components: Logistics & transportation Center-Dry PortInternational Airport Petrochemical Industries Center-Business Center Knowledge Center Agriculture industries-Mining CenterEntertainment Area " Master Developer: Rakisa Holding Company


With Saudi Arabia's coastal areas well served with industrial clusters, the government focused its infrastructure efforts on bridging the country between the Red Sea and the Arabian Gulf. It also opened an opportunity to create an economic cluster at the very heart of the Kingdom's most prosperous provinces. At the crossroads of all the navigational, trade and transportation routes in Saudi Arabia lies Ha'il, where the $8-billion Prince Abdulaziz Bin Mousaed Economic City (PABMEC) will rise to prominence. "The project aims to utilize the Kingdom's second competitive advantage after energy - its strategic location as a link between East and West- and leverage it through the establishment of a fully integrated economic city providing transportation and logistics services. Produce and minerals arriving from the north of Saudi Arabia and surrounding areas within Ha'il region will be traded, marketed and processed to add value to the raw materials," says SAGIA's Governor Mr Al-Dabbagh. Built on 156 million square meters, PABMEC'S core Master Development Plan will include as a main pillar a Supply, Transportation and Logistical Services Center. At the same time, the dry port, airport, land freight sector, in addition to the agroindustrial zone, as well as the mining and processing industries sectors will constitute the energetic nerve of the economic city. Moreover it will be supported by a robust and solid infrastructure in addition to the business, residential, and recreational sectors. As the economic cities are intended to be self funded by the private sector, it is the developer's task to secure the investment. Hot off the heels from an 18- city global road show promoting PABMEC, Mr. Abdullah Taibah, CEO of the city's developer RA KISA Holding, said the company had in fact succeeded in soliciting more than 8 billion Saudi riyals. The consortium includes key investors from Saudi Arabia, UAE, Bahrain and


Jazan Economic City: Generating Strategic Advantages

Kuwait. "Phase one will be completed by 2016, and will hopefully generate more than 30,000 jobs," says Mr. Taibah. "Agrobusiness, mining, and the building materials industry are at the heart of its sustainable business model. The addition of the dry port will give the city a backbone of logistics infrastructure that will support these clusters." An IPO has also been planned by RA KISA for the city. PABMEC will not only bridge the gap between the country's major cities, but also between technology and education. As RA KISA's CEO puts it, "We are putting our fingerprint on the future."

Knowledge Economic City in Madinah "Enlightened by the Spirit of Al Madinah" Attracting Muslims from around the world

" Location: Near the Holy Mosque of the Prophet in Madinah " Focus: Knowledge based industries with an Islamic focus and services " Size:4.8 million square meters " Investment Size: US $ 7 billion " Employment: 20,000 new jobs " Population: 200,000 people " Project Components: Educational/entertainment park themed around the prophetic heritage Medical sciences and Bio-Technology center High-tech park-Islamic civilization studies and research center Multi-modal transportation center-business district Major retail hub(souks)-Hotel complex " Master Developer: Quad International

Jazan Economic City Focusing on Heavy Industry and Agribusiness

" Location: On the Red Sea in the South Western region of the Kingdom " Focus: Energy and labor intensive industries " Size:100 million square meters " Investment Size: US $ 27 billion " Employment: 500,000 new jobs " Population: 250,000 people " Project Components: Industrial Park (will occupy 2/3 of the City) - Sea Port Agriculture repackaging and distribution -Fisheries Business and Cultural Center -Health& Education Areas " Master Developer: MMC International


The main aim of Saudi Arabia's mega projects is to give a profound energy boost to the Kingdom's economy. The first phase in developing these pioneering economic cities is providing them with the power to rise, especially since most will be located on virgin grounds. The $30-billion Jazan Economic City (JEC) is the fourth mega project to be established in the Kingdom. Its grand ambitions will be ignited by a new 3,000 MW power plant. From day one of the project's launch by King Abdullah in November last year, JEC has brought in three anchor tenants who will drive the industrial development of the city. "We have signed memorandums of agreement for an aluminum smelter, a dry dock at the seaport, and a steel processing plant. In addition, a refinery is being planned by ARAMCO. In that aspect this project is unique compared to all the other economic cities," said Mr. Feizal Ali, Group Chief Executive of MMC Corporation Berhad. MMC is the premier Malaysian utilities and infrastructure group that together with the equally influential Saudi BinLadin Group (SBG) has been awarded the contract for JEC's construction. Located 37 Miles northwest of the provincial capital Jizan, the brand new Jazan Economic City will occupy an area of 40 square miles with a coastline of 7.1 miles. Two thirds of the city will be covered by primary and secondary industries and one third will be commercial and residential. The future city will not only be located at the confluence of available raw materials and abundant labor source, but also tap into the main Red Sea shipping route between Europe, Africa, and Asia. JEC's connectivity will be enhanced by the new International Airport at Jizan, a proposed artery road running east, and a future railway link with Jeddah, 375 miles northwest. Besides its strategic location, Mr Feizal points out that JEC will aim to offer enterprises the competitive advantage of cheap energy, a must for most industries. On many fronts it is in active discussion with the Saudi Arabian General Investment Authority (SAGIA) to get full cooperation from all parties involved. "This can sometimes be understandably difficult because it is a new project, but SAGIA has been able to iron out all issues fairly rapidly," attests Feizal. The power plant ,which has an integrated desalination facility for the city's vital water supply, will run on Saudi crude oil. "We are leveraging on the energy advantage of Saudi Arabia so that it will be extremely competitive for enterprises to establish themselves here." The JEC project seeks to extract the provinces' full potential. Jizan's hinterland is rich with mineral deposits.n


Custodian, King, & Carrier of the Future

To his citizens he is known as the Custodian of the Two Holy Mosques, a reference to Mecca and Medina, the most important sites in Islam. The honorable designation comes even before his royal title, which makes King Abdullah bin Abdulaziz Al-Saud not only the current ruler of the Arabian Peninsula’s largest and most powerful nation, but also a revered figurehead to Muslims worldwide. Since succeeding the throne on August 1, 2005, following the passing of his half brother King Fahd, King Abdullah has reached across Saudi Arabia’s borders to enhance diplomatic and trade ties. A major step in building a future beyond oil has been the Kingdom’s entry into the World Trade Organization (WTO). It hailed in a new era for Saudi Arabia, which is now training its human resources to compete on a much broader level. In order to take full advantage of its capabilities, Saudi Arabia also needs to increase female participation across all sectors, as women make up 50 percent of the workforce. King Abdullah’s progressive agenda has already opened new paths for women’s involvement in economic and socio-political processes. Key professional and public sector positions are increasingly being taken up by and assigned to women, especially in the more cosmopolitan city of Jeddah, but much still needs to be done to harness their full potential.

Growth feeds growth

Since December 2005, the King has also inaugurated some of Saudi Arabia’s most ambitious real estate projects to date. Four Economic Cities have been announced that will lead the Kingdom’s 60

diversification strategy into the next few decades. These mega projects have been accompanied by an equally impressive wave of new universities, colleges, and training institutes. They form the foundation of King Abdullah’s vision to feed greater industrialization by creating a knowledge-based economy. The buzz around the projects has already created an ever-expanding momentum. Business is up 17 percent, expansion plans have resulted in more orders and contracts for Saudi industries and services, and non-oil exports rose to $2.16 billion in April this year. In his State of the Kingdom address given in April this year, King Abdullah said that “due to the importance of investment in the national development, we are planning to continue our support for the private sector to become a strategic partner in the economic development. We are also removing all obstacles facing Saudi and foreign investors so that they can benefit, whenever possible, from the proportional privileges in the Saudi economy.” This opens new doors for the United States which, together with Japan, is the Kingdom’s top trade partner. SaudiUS trade grew 16 per cent to a record $39.49 billion last year, compared to $34

billion in 2005. King Abdullah has maintained good ties with the United States, frequently meeting with the US President and highranking officials to discuss the Arab peace process and counter-terrorism efforts. He has not wavered in his condemnation of the taking of innocent lives and in his denunciation of deviant groups that falsely claim to be Islamic. At the CounterTerrorism International Conference in Riyadh in February 2005, he urged international cooperation to fight this global scourge. “I hope that a new world will emerge, a world that is blessed by virtues of freedom, peace, prosperity, and harmony.” As Saudi Arabia looks ahead, King Abdullah’s pursuit of modernity and democracy indicates that this strategic powerhouse is a concerned, active global citizen, ready to tackle difficult issues through constructive and peaceful means. The King is adamant that unity and balance within the Middle East is the only solution to maintaining not only political but also energy security. After all, oil continues to be the Kingdom’s main source of income. King Abdullah explains, “Saudi Arabia is aware of its international responsibilities and is working to create fair prices to this resource by taking into consideration the interests of the producer and the consumer.” Most importantly, the economic restructuring, entrepreneurial and largescale projects being overseen by the Saudi Arabian General Investment Authority (SAGIA) aim to elevate the Kingdom among the 10 most competitive economies of the world. Known as the 10 x 10 plan, the strategy might just be Saudi Arabia’s ticket to a dazzling future.n


Mastering the Challenges of Globalization Advances in liberalization and diversification lead the way A mighty nation created by strong leadership and the calculated management of its natural resources, Saudi Arabia now has to deal with its future. Its evolution into a modern economy is necessary in an increasingly competitive and globalized world. The Kingdom’s December 2005 accession to the WTO goes a long way in converging the country’s successful, yet protective, past and its more open, accepting present. “We have three challenges in Saudi Arabia,” analyzes Dr Fawaz Al Alamy, Deputy Minister of Commerce and Industry. “Number one is our young generation. Sustainable development needs to concentrate on the brainpower of both boys and girls. We grade people who can add value to the country, so we need to revamp the education system and create jobs. We need to direct them toward their future aspirations.” The second issue, likely the most crucial for the Kingdom, is the need to drastically reduce dependence on oil as a main source of income. “80 percent of our revenue is from oil and that is not good,” admits Dr Al Alamy, “so we have to diversify and raise investor confidence, the confidence that Saudi Arabia is creating a level playing field and applying its rule of law. To do that we need to be within an international system that will cater for us, and that is the WTO. That is why a swift accession was important, so that we could sit down and debate with our friendly countries and open up to international investment.” “Third is our GDP growth which must be much higher, twice as much as our population growth, so that we can sustain this development.” Over the last two decades Saudi Arabia’s population growth has been 3.2 percent, while GDP growth is less than 3.2 percent. “To increase that we have to increase our professionalism, inter-trade efficiency, commercialize, and then privatize these trade enterprises.” In all three challenges Saudi Arabia

“A swift accession to the WTO was important so that we could sit down and debate with our friendly countries and open up to international investment.” Dr Fawaz Al Alamy Deputy Minister of Commerce and Industry faces the issue of human resources, as it currently needs to bring in foreign work force to fill most sub-management positions. Saudi Arabia’s Minister of Finance Ibrahim Al Assaf says that the government has expanded the higher education infrastructure in the last three years to increase the number of colleges in medicine, nursing, science, information and communication technology, and engineering. “We faced fiscal challenges in the past which prevented us from building up the education system. We realize more has to be done to improve the quality of Saudi human resources and bring new skills to the Saudi market.” The most valuable and largely untapped pool of labor in Saudi Arabia is women, which could make up 50 percent of the work force. Many moves have been made in recent years by the Saudi government to bring more women into decision-making positions. Reforms have also led to wide-scale privatizations and liberalization, creating a more open economy. Closer ties with the surrounding Gulf Cooperation Council (GCC) countries is a logical step as the trade, skills, and experiences of countries like the United Arab Emirates (UAE), Qatar, and Oman are similar to that of Saudi Arabia. The UAE’s advanced economy has guaranteed a high Human

Development Index, Qatar’s social infrastructure has been facilitated by the country’s natural resources windfall, with guaranteed free education for all nationals, andOmanization has been a successful example of integrating national citizens in the economy. The last example has also been adopted in the Kingdom as Saudization, but Mr Omar Bahlaiwa, Secretary General of the Committee for International Trade, says foreign investors should not misconstrue it. “Saudization does not mean to impose Saudis on the job, it means qualifying Saudis to do the job,” explains Mr Bahlaiwa. “At the same time we should input part of our investment to bring the know-how and human resources development in finance, training, skills, preparing the environment, and preparing the youth for the market place. All this should be the trend of Saudization in the next decade or so.” Where Saudi Arabia intends to excel, besides remaining a global leader in oil and gas, is in fostering a powerful private sector, which already contributes 44 percent to its GDP, and is growing by 6 percent annually. WTO membership greatly supports economic expansion and allows the Kingdom greater access to more markets. As a result, Saudi Arabia is attaining the best of global business standards, international regulations and protection. “Saudi Arabia is a partner, not an isolated entity,” assures the Secretary General of the Committee for International Trade. The economic cities currently under construction are the most poignant example that Saudi Arabia is building a rapport with partners all over the world, as the cities rely on large-scale foreign direct investment. “We have a lot of projects from now until 2020 that are worth over $623 billion in opportunities and will encourage Saudi Arabia to be a strong contributor to the WTO. We need the world to come and share the future with us.n

The Kingdom Beyond Oil The Kingdom Beyond Oil Saudi Arabia’s great boom of the seventies, when revenues from oil exports really started to flow, laid the groundwork for one of the most economically dynamic regions of modern times. Consistently high oil prices of recent years have sparked a second renaissance for Saudi Arabia. This time, the Kingdom is covering all its competitive bases by creating projects of such an immense magnitude, that they have officially been branded as Economic Cities, rising from the Kingdom’s ample desert and coastal lands. With four Cities officially initiated by King Abdullah and two more on the horizon, the mega projects facilitated by the Saudi Arabian General Investment Authority (SAGIA) are aimed at increasing foreign capital involvement in the Saudi economy as well as creating jobs for Saudi nationals. The Cities are primarily intended to provide financial security for the country’s next generation. Building on its strengths, Saudi Arabia is diversifying and re-inventing itself with innovative plans to grow the economy beyond oil and gas. That Saudi Arabia is serious about its future is exemplified by the impressive large-scale developments taking place. Under the auspices of SAGIA, successful joint ventures have been awarded to construct the King Abdullah Economic City (KAEC) on the Red Sea coast 90 miles north of Jeddah, the Knowledge Economic City (KEC) in Medina, the Jazan Economic City (JEC) on the southern Red Sea coast, and the Prince Abdulaziz Bin Mousaed Economic City (PABMEC) at the central city of Ha’il. Combined the Cities form the vision of a new Saudi Arabia, in which SAGIA is the central component around which these new developments take shape. “Establishing an integrated system of Economic Cities,” explains SAGIA’s Governor Mr Amr Al-Dabbagh, “creates a competitive environment that is able to provide everything from A to Z, including commercial and residential land, visas,


“This project is something we do for our children’s future.” Mr Nidal Jamjoom, CEO of Emaar

labor force, entertainment, everything to provide the best quality of life for the inhabitants and investors.” One of SAGIA’s roles in this ambitious vision is to serve as a ‘One Step Shop’, a comprehensive services center where everything needed to license and register a company can be handled in one place, with one representative. Having a complete overview of all the opportunities on offer at the cities now rising on the Kingdom’s horizons, SAGIA is able to direct interested parties to the destination that best fits their needs. The grandeur of King

Abdullah Economic City

The first and most magnanimous of the current projects is the King Abdullah Economic City near Rabigh. Construction started in 2005, on the very day (December 20) that King Abdullah announced the cityto- be. The master plan has already been up-scaled to five times the original design. Covering a total development area of 64 square miles, roughly three times the size of Manhattan, the city will comprise the region’s largest sea port on the vital Red Sea route with capacity of

over 10 million containers per year, a light industrial district of 24 square miles, an educational zone complete with university, a financial island at the heart of a central business district, seaside resorts and residential areas. Due to the city’s proximity to Medina and Mecca, the port will even have a terminal dedicated to pilgrimage travelers. The total development cost is estimated at approximately $27 billion, and when KAEC is completed it will provide jobs for nearly 1 million people. “Our goal is to have the first phase completed by the end of 2008,” says Mr Al-Dabbagh. “As for how it will catalyze and expand the Saudi economy, we expect a combined effect of the six Economic Cities to contribute $150 billion to the country’s economy, become home to over 4.5 million people, and increase the per capita GDP from $13,000 to $33,500.” SAGIA’s Governor points out that even though the function of these cities is to diversify the economy, the diversification will happen within the boundaries of the country’s core competitive advantages of energy and location. Adding value to the petrochemicals thereby takes front stage. 69

Mr Al-Dabbagh adds that “Saudi Arabia is the most cost effective location in the world for hosting these industries,” a fact that could make the Kingdom a true energy capital of the world. Interestingly, Deputy Governor of SAGIA Mr Fahd Al-Rasheed, in charge of the Economic Cities Agency, says that the development costs are to be covered by the private sector, starting with the developers. “We selected from the top offers that provide the financing capabilities and the experience in developing such large projects.” The KAEC project was awarded to Dubai-based Emaar Properties, the world’s largest real estate company with over $40 billion worth of business. EMAAR’s CEO, Mr Nidal Jamjoom, stresses that one of the key objectives of the city is to create jobs for young Saudis. “This project is something we do for our children’s future, and that is what keeps me going every day. There are not many smart cities in the world today, and the whole idea of creating Economic Cities is in fact an innovation for Saudi Arabia,” states Mr Jamjoom.

A new landmark for Medina

An innovation of equal importance to the Islamic world is Knowledge Economic City (KEC) at Medina, the second most holy city of Islam. The $7-billion hightech project is designed to turn the Medina region into a centre for knowledge-based industry where young Saudi entrepreneurs will be trained and nurtured. It will also attract the best Muslim Information Communications Technology (ICT) talent from around the world. About half of the country’s 20 million local population is under the age of 20, and by building the Economic Cities in regional areas, the government is taking a positive step towards creating employment for its young people. The Al Madinah Al Munawwarah region in the northwest of Saudi Arabia has particular significance for the country


and the Muslim world in general. Twice a year during the Hajj and Umrah pilgrimage 10 million people pass through the area en route to Mecca. Medina was the home of the Prophet Mohammed, the place where he is buried and where the Quran was compiled. The modern Medina is also home to some of the Kingdom’s leading educational institutions, has a growing ICT industry, and piloted the country’s new e-Government program. The positioning of the KEC on the outskirts of Medina, just 7 kilometres from the airport, fits well with existing infrastructure. KEC is expected to create 20,000 new jobs and provide a solid return for investors who participate as partners, sub-developers, venture capitalists, or direct investors. KEC has already attracted a powerful consortium of Saudi companies, including the Savola Group, Taiba Investments and Real Estate Company, Project Management Development Company (PMDC) and Quad Intl’ Real Estate Development Co. In addition, since November has signed deals with several interested parties from the US, Canada, and Malaysia. This includes MoUs signed with some of the biggest names in the IT world, such as Intel Corporation, Cisco and CompTIA with further announcements expected in August. The Malaysians in particular see the potential for high-tech industry in the region, having gained plenty of experience from the development of their own Multimedia Super Corridor (MSC). In February this year, a trade delegation led by Malaysia’s Deputy Prime Minister Najeeb Tun Razaq visited Medina and signed several deals that will give KEC the benefit of MSC’s expertise. The project is the only one of the six Economic Cities that has the direct involvement of the King Abdullah Foundation, which is providing the land for the development.n

Knowledge Economic City’s High Aspirations It is expected to attract a population of 150,000, host up to 10,000 visitors in world class accommodations, and develop 30,000 residential units on a total build area of 2,421 acres. The KEC rising in Medina, under the management of the Seera City Real Estate Development Company, is already attracting investor interest for its unique amenities. Seera City Chairman Sheikh Ibrahim Al Eissa says KEC will combine the concepts of Intel Corporation’s ‘digital city’ and Cisco Systems’ ‘smart city’. The project will include a hightech park for knowledgebased industries, a centre for medical sciences and biotechnolog y, research centers and scientific development, an educational/entertainment (eduta inment) pa r k themed around the Prophet’s heritage, a centre for Islamic civilization studies and research, a multi-modal transport center, a world-class business district and a major retail hub inspired by the old Souks of Medina. “We want to establish strategic partnerships to develop and operate key components in the project,” says Chairman Sheikh Ibrahim. “We want to get together with leading international technology f i rms , ICT- f o c u s e d venture capital funds and Infrastructure funds.” Seera City Marketing Manager Mohammad Khoja is understandably enthusiastic about KEC. “It’s attracting some of the world’s leading experts in smart cities of knowledgebased industry, because not only do they recognize the value of the project in terms of education, training and the development of ICT skills and industries, but they also understand the significance of Medina as a heartland of Islam,” says Mr Khoja. “This is an ambitious, challenging, creative, exciting and essential project that reaches out to people of all cultures and backgrounds around the world. It will act as a cultural landmark serving residents and visitors to Al Madinah and become a national icon for knowledge-based industrial development. We have made a good start and still have a long way to go, but our location at Medina is a blessing that I am confident will assure us of success,” he says.n


Constructing the New Saudi Arabia The real boom in real estate What is the Arabian Peninsula’s fascination with real estate? Almost every single country within the GCC has at least one, but more often, several mega projects underway in groundbreaking, skyscraping and awe-inspiring construction work. It could be a byproduct of the abundant unused desert land, but that does little to explain the island clusters magically rising from the sea. The simple answer would be that after decades of filling up national coffers with oil revenues, the Gulf nations have the resources to bring almost any real estate desire into reality — from residential units to retail resorts and hyperluxury hotels to Economic Cities. But there’s more to the construction boom than meets the gazing eye. Real estate development in Saudi Arabia is undergoing a veritable quantum leap. With over 420 major projects in progress, including four Economic Cities and two more on the list, one in the northwestern Tabuk region and another expected near the new Ras Al Zour minerals port in the Eastern province, one may wonder if this boom is sustainable. There are clearly risks attached to this grand vision, but the potential benefits for the Saudi economy in terms of modernization, diversification, employment, education and general advancement of the Kingdom far outweigh any calls for caution. Persistently high oil prices have created such a solid economic environment in the region that the main challenge now is how to manage the success. Construction needs energy, and Saudi Arabia together with similar Gulf States is at a 30 percent cost advantage in power generation with the availability of cheap oil and gas. Infrastructure expansion is therefore the first step in creating a stable base for continued economic stability. Real estate is a long-term investment with potentially high and lasting returns. The International Monetary Fund assesses that there are $700 billion worth of projects currently ongoing or


pending in the Gulf, and estimates are that the regional power sector needs $61 billion in new investments by 2011 in order to support this construction surge. By involving contractors who build and fund the projects rather than the Government footing all the costs, development projects are more profitable, timely, and conscientious of environmental issues and design aesthetics. Incorporating the financial input of the developers entails the revamping of the banking sector to accommodate the requirements of long-term financing. Unfortunately, the rise in demand for contractors also means a rise in construction costs, as well as lapses in the supply of raw materials, such as the shortages already registered for cement and steel. It is Saudi Arabia’s challenge to keep a cap on the already astronomical figures attached to the current projects. In a column of the Arab Times Top-

100 Saudi Companies supplement (November 27, 2006), Editor in Chief Khaled Almaeena comments that “Saudi Arabia has such a massive spending power worldwide that an order made or canceled here could make or break an industry on the other side of the world. That demands responsibility.” Local economists have also suggested that the development of the mega cities should be scheduled properly in consultation between the government and the contractors in order to avoid bottlenecks in the economy. A labor force of 1.3 million will be needed when the projects are scheduled for completion, so the pace of development should match the skilled manpower supply. Currently many Southeast Asians are taking up the tasks offered by the projects, but the cost of living has already increased by 2.9 percent in April 2007, according to a report by the General Statistical Information Department of the Ministry of Economy and Planning. Even though this figure is still well below the inflationary spiral registered in certain neighboring countries, the existing salary structure may need to be reviewed, much as it has in India and the Philippines. Over 50 companies are licensed to sell and develop real estate in Saudi Arabia, and they are eager to feed the housingdemand of the Kingdom’s over 20 million inhabitants, 70 percent of which are under 30 years of age. Kingdom Holding Company, the country’s top earning group headed by billionaire businessman Prince Alwaleed bin Talal, has also planned two mega projects in Riyadh and Jeddah. With total consolidated assets up to $25 billion in 2006, the company is well placed to add such prestigious real estate projects to its already diversified portfolio. Traditional and emerging players such as the Alshoula Group and Inmaia also headline the construction and real estate sector, and despite aforementioned concerns they prove that it’s the right time and place for thinking and building big.n 79

Connecting All The Dots

Infrastructure revamp spurs greater growth With infrastructure spending over the next five years forecast at $5-7 billion, Saudi Arabia is truly a transportation developer’s paradise. The Kingdom’s transport network is undergoing a major overhaul in order to bridge all the vital passenger and cargo clusters. If Saudi Arabia is to become the next global trade hub, connecting the lines between the Red Sea ports and Gulf-side industries via central logistics and business centers is of the utmost importance. “We are working on all fronts of the transport sector as it is a key element to our economic development plan,” says Saudi Arabia’s Minister of Transport Mr Jobarah Al Suraisry. “With regards to highways, we are not only connecting every city but also connecting Saudi Arabia with the neighboring countries. There is heavy traffic coming from the north, from Lebanon, Turkey, and Syria, with a lot of imports for the Kingdom and other Gulf countries.” Less than 40 years ago the total length of roads was limited to a few thousand miles. But the significance of interconnectivity in the oil age rapidly raised the infrastructure profile and by 2006 Saudi Arabia had constructed close to 95,000 miles of roads. One of the most important current road projects is the 480- mile expressway that serves as a land bridge between Jubail Industrial City on the Arabian Gulf and Yanbu Port on the Red Sea. This coast-to-coast connection is also the basis of a new tender by the Saudi Railway Organization to connect Dammam to Jeddah via Riyadh. It will double the existing railroad network between Riyadh and Jubail, transforming it into a world-class freight and passenger rail link across the country. In addition, a high-speed train link between Mecca, Medina, and Jeddah will provide comfortable and fast transportation for pilgrims visiting the holy cities each year. The rail link will have a station at the King


Abdullah Economic City and a spur will be constructed to Yanbu port. “The third project is a north-south railway for our large mineral deposits in the Kingdom’s northern part,” says Minister Al Suraisry. “The train will take all these raw materials to the Eastern Province.” Roads, railways, and the country’s 204 airports form a lifeline for Saudi Arabia’s ports, the largest of which is Jeddah Islamic Port which receives over 65 percent of the country’s imports. A new terminal will be constructed at Jeddah that will increase the port’s capacity by 45 percent. The Transport Minister indicates that the terminal in Jeddah will have a capital investment of around $370 million, while

an expansion at Dammam Port is estimated at $106 million. A brand new port at Ras al Zour to process and transport raw minerals will also be a heavy investment according to the Minister, but will add a great deal of value to the country’s profile. Saudi Arabia’s ports are healthy, dynamic entities since the Saudi Ports Authority undertook the pioneering step of privatizing all port operations in the Kingdom. The privatization program was the first of its kind in any part of the Saudi public sector when it was implemented in 1997 and completed in 2000. The program contains a commitment to modernize and increase all equipment levels with the

private sector being fully responsible for operational costs. The Saudi Ports Authority ensures crediting a certain percentage of the operational income to the national exchequer through a contract period of between 10-15 years.

Yielding profits from Yanbu port The ports of Saudi Arabia are divided according to specialization into two subdivisions. Firstly there are the six commercial ports in Jeddah, Dammam, Jubail, Yanbu, Jizan, and Dhiba, and secondly the industrial ports located at Yanbu and Jubail. Known as King Fahad Industrial Port, Yanbu is considered to be the biggest port for loading crude oil and its refined products on the Red Sea Coast, as well as being the longest (linear) port in the Middle East. Its advantageous location close to the Suez Canal gives Yanbu access to world markets. In 2006, Yanbu Industrial Port handled nearly 84 million tons of cargo and received 1,766 ships at its 25 berths. Yanbu Industrial Port’s Director General, Mr Hamoud Bin Abdu Al Saadi, says that the success in efficiency and productivity increased substantially since privatization of services started 9 years ago. “New projects in port facilities renovations reached $29 million,” says the Director General. “The access channel was dredged which increased water depth to 32 meters, allowing the berthing of bigger and Very Large Crude Carrier (VLCC) ships. The port also has a plan to build new berths and terminals to handle the added production of factory extensions in Yanbu.” Through these developments along with extended training of its employees, the port yielded a total income of $31 million in 2006 and continued to apply its policy of reducing administration and operational expenses.n


Taking a Closer Look at Saudi’s Charms

Maximizing the National Tourism Development Strategy Every year, over 2.5 million people, different in language, race, color, gender, culture — but united in faith and purpose, form the largest gathering of humanity in any one time or place. Every able-bodied Muslim, who can afford to do so, is required to make a pilgrimage to Mecca at least once in his or her lifetime. For the past 14 centuries, the ritual known as the Hajj has been performed as a spiritual experience of goodwill, discipline,generosity, and brotherhood. With up to 1.4 billion followers of Islam in the world today, the 2nd largest religion after Christianity, and travel becoming ever more accessible, the number of pilgrims to both Mecca and Medina has grown substantially. In 1983 the number of pilgrims coming from abroad exceeded one million for the first time. The Saudi Government has spent nearly $25 billion in renovating and expanding facilities and infrastructures for pilgrims. It can be considered an investment in religious tourism. Besides this yearround source of income, Saudi Arabia is now also putting on a charm offensive to attract visitors to many of its other wonders. The Supreme Commission for Tourism (SCT) has set up a National Tourism Development Strategy to increase exposure in family and cultural tourism, national and regional tourism, environmental tourism, and business tourism. “Re-organizing the tourism industry as a productive economic sector is extremely important because it is a service which has to be organized from


the ground up,” comments the SCT’s Secretary General, HRH Prince Sultan bin Salman bin Abdulaziz Al-Saud. The reorganization, which started mid 2005, is focused on the Kingdom’s regions with the creation of local commissions and boards. The internal market has enormous growth potential, according to Prince Sultan. “There are also programs running in schools, with the help of the education ministry, training children to become better tourists and enjoy their country.”

“Our focus is on keeping the Saudis at home,” admits SCT’s Secretary General. “The challenge is to keep these very well spending tourists, 4.5 million a year, from traveling abroad, to give them new products, competitive prices, and family programs.” Ideas for attracting youth include car races, rallies, boat shows and diving, “a sector experiencing a tremendous surge,” says Prince Sultan. Saudi Arabia also has a rich historic and archaeological heritage, largely unknown

outside its borders, and cultural tourism programs can seamlessly be combined with trips from Red Sea resorts. The Supreme Tourism Commission was given control of the government’s heritage sector, including museums and archaeological antiquities, in order to curb bureaucracy. “We are doing a lot to bring the culture, crafts, colors, and foods of the country into the spotlight,” Prince Sultan comments. SCT’s masterplan involves creating a synergy between tourism and society, where regions can develop economically and create employment opportunities within their communities. The aim is to realign the national vacation structure, starting with the introduction of a weekend culture for short trips to various regions. Later, in about 5 years when major infrastructure and transportprojects are complete, Prince Sultan believes the Kingdom will be ready to move into mass tourism models. Quizzed on why the development of tourism in Saudi Arabia has taken such a long time to take shape, he answers, “it is a big sector. It takes a lot of work and a lot of people. Furthermore, we got caught in a period where everything was happening at the same time so passing laws and regulations took a long time.” But even though the sector is in its infancy, the energy and interest raised in its potential has got people rearing to go places, and taking a closer look at the sacred secrets of the Saudi Kingdom.n


Saudi Industrial Development Fund: Fulfilling Industrial Objectives

Following Saudi Arabia’s WTO accession, the government has geared its efforts towards welcoming and aiding new arrivals to its industrial sector. Its support for private sector projects is not a recent trend. Since 1974, the Saudi Industrial Development Fund (SIDF) has provided loans as well as technical and consultative assistance to promising start-ups. Administratively part of the Ministry of Finance, SIDF is a corporate entity that uses a sound economic feasibility policy to determine the projected success and necessity of applicants. The substantial growth in demand for SIDF loans over the years resulted in several government approved increases of SIDF capital, which now amounts to $5.33 billion. SIDF is funded primarily through medium to longterm loans extended to national and foreign interests in the private industrial sector. Although its activities remain identical to when it first started, SIDF’s focus has evolved over the years, as the Fund’s Acting Director General Mr Mohammed Dobaib explains. “Between 1960 and 2000, investors were most interested in the energy industry, but it was noticed that during the period 2001-2005 they have been attracted by new areas, such as transportation, insurance and financial services, and construction. In light of the Kingdom’s strategy to diversify its industrial base, more emphasis should be given to investments that serve that goal.” Mr Dobaib adds that foreign direct investment will play a key role in promoting non-oil exports, accompanied by the introduction of modern management techniques, technology transfer, and maximizing added value. “In the early 1960’s, the Kingdom was fully importing its needs from abroad,” recalls Mr Dobaib, “hence SIDF facilitated credit to industrial activities following the import-substitution strategy. Currently most companies that benefited from the Fund’s credits are mainly producing for the local market.” However, the Fund now encourages companies to give more consideration for exports to WTO members utilizing locally available raw materials. This includes cement and petrochemicals, and SIDF is involved in three $4 billion mega projects that will produce 3.5 million tons of ethylene and one million tons of propylene. Through these projects and a high rate of fully repaid loans, SIDF reflects the continued success of industrial development in Saudi Arabia.n 76

Saudi Ports 12,000 ships visit Saudi Arabia’s 8 ports every year. That is one ship every 30 minutes. With 95 percent of Saudi imports and exports passing through the Kingdom’s seaports, they are major contributors to the national economy and the main link to the global economy. Since 1997 the management system had matured enough to be handed over to the private sector. During the last few years, the privatization resulted in a sharp 85 percent increase of the total cargo throughput, while TEU (twenty-foot equivalent units) throughput rose 700 percent and transshipment 1000 percent. The Ports Authority nevertheless maintains a supervisory function. Today the two main ports of Saudi Arabia, Jeddah Islamic Port on the Red Sea and King Abdulaziz Dammam Port in the Gulf, have become high-tech goliaths of cargo handling and maintain a distinguished edge over other ports in the region. Both now operate with the electronic cargo logging system Saudi EDI, and are undergoing major upgrades to substantially expand capacity. The operator of the container terminal in King Abdulaziz Port in Dammam, International Ports Services (IPS), has started a huge development project to improve and expand the terminals operations. The project is expected to increase the terminal’s capacity from 800,000 TEU to 2 Million. It includes the dredging of the basin and approach channel, the provision of new gantry cranes, rubber-tyred gantries (RTG), ground equipment, and the reallocation of key activities. The privatization of Jeddah’s port had already brought a massive investment of more than $535 million during the past 6 years, and in 2006 an agreement was signed with the Saudi Commercial and Export Development Company (Tusdeer), to develop and operate the port’s third container terminal with a capacity of 1.5 million TEU. Director General Mr Sahir Tahlawi explains that the conversion of 5 of Jeddah’s 58 berths will increase capacity for the existing two terminals by 2 million TEU to 7 million by 2010, allowing Jeddah to retain its leading position in the region. “The port, apart from its obligation of providing a safe haven for the embarkation, disembarkation, and associated services of the Haj and Umrah pilgrims, had to provide dedicated services for cargo handling with specialized terminals. Jeddah’s advantage is also attributed to its ship repair yard and floating dry docks. With 49 berths equipped with modern facilities, the two industrial ports in Jubail & Yanbu provide a safe handling system for Saudi Arabia’s industrial exports. A significant expansion program at these ports will add 8 more berths within 2 years. The driving force behind the success of Saudi Arabia’s ports has been the global increase in cross-global trade and transshipment and their ability to react to new demands of the next generation container freighters. Combined with the new rail links between the Jeddah and Dammam ports, Riyadh, Mecca, and Medina, the Kingdom is truly becoming a significant multimodal transport hub.n


The Making of a Competitive Kingdom Every year, over 2.5 million people, different in language, race, color, gender, culture — but united in faith and purpose, form the largest gathering of humanity in any one time or place. Every able-bodied Muslim, who can afford to do so, is required to make a pilgrimage to Mecca at least once in his or her lifetime. For the past 14 centuries, the ritual known as the Hajj has been performed as a spiritual experience of goodwill, discipline,generosity, and brotherhood. With up to 1.4 billion followers of Islam in the world today, the 2nd largest religion after Christianity, and travel becoming ever more accessible, the number of pilgrims to both Mecca and Medina has grown substantially. In 1983 the number of pilgrims coming from abroad exceeded one million for the first time. The Saudi Government has spent nearly $25 billion in renovating and expanding facilities and infrastructures for pilgrims. It can be considered an investment in religious tourism. Besides this year-round source of income, Saudi Arabia is now also putting on a charm offensive to attract visitors to many of its other wonders. The Supreme Commission for Tourism (SCT) has set up a National Tourism Development Strategy to increase exposure in family and cultural tourism, national and regional tourism, environmental tourism, and business tourism. “Re-organizing the tourism industry as a productive economic sector is extremely important because it is a service which has to be organized from the ground up,” comments the SCT’s


Secretary General, HRH Prince Sultan bin Salman bin Abdulaziz Al-Saud. The reorganization, which started mid 2005, is focused on the Kingdom’s regions with the creation of local commissions and boards. The internal market has enormous growth potential, according to Prince Sultan. “There are also programs running in schools, with the help of the education ministry, training children to become better tourists and enjoy their country.” “Our focus is on keeping the Saudis at home,” admits SCT’s Secretary General. “The challenge is to keep these very well spending tourists, 4.5 million a year, from traveling abroad, to give them new products, competitive prices, and family programs.” Ideas for attracting youth include car races, rallies, boat shows and diving, “a sector experiencing a tremendous surge,” says Prince Sultan.

Saudi Arabia also has a rich historic and archaeological heritage, largely unknown outside its borders, and cultural tourism programs can seamlessly be combined with trips from Red Sea resorts. Tourism Commission was given control of the government’s heritage sector, including museums and archaeological antiquities, in order to curb bureaucracy. “We are doing a lot to bring the culture, crafts, colors, and foods of the country into the spotlight,” Prince Sultan comments. SCT’s masterplan involves creating a synergy between tourism and society, where regions can develop economically and create employment opportunities within their communities. The aim is to realign the national vacation structure, starting with the introduction of a weekend culture for short trips to various regions. Later, in about 5 years when major infrastructure and transportprojects are complete, Prince Sultan believes the Kingdom will be ready to move into mass tourism models. Quizzed on why the development of tourism in Saudi Arabia has taken such a long time to take shape, he answers, “it is a big sector. It takes a lot of work and a lot of people. Furthermore, we got caught in a period where everything was happening at the same time so passing laws and regulations took a long time.” But even though the sector is in its infancy, the energy and interest raised in its potential has got people rearing to go places, and taking a closer look at the sacred secrets of the Saudi Kingdom.n


Gaining on Competitiveness Becoming competitive is a big concept in theory, but even more so in practice. How does a nation “produce goods and services which meet the test of international markets, while simultaneously maintaining and expanding the real incomes of its people over the long term?” to borrow from the OECD definition of Competitiveness. This is the fundamental question facing Saudi Arabia today, and the cornerstone towards building its modern day economy. “There are three important competitiveness reports,” explains Amr Al-Dabbagh, governor of the Saudi Arabian General Investment Authority (SAGIA). “The World Bank’s Ease of Doing Business Index, the Institute for Management Development’s rankings, and the World Economic Forum Global Competitiveness Index. All in all, these three reports benchmark against 300 different indicators. We have a master plan for improving polices and procedures that correspond to each and every one of these indicators.” Governor Dabbagh’s brainchild, made possible by the King’s vision, is known as the 10x10 program. As SAGIA’s most ambitious goal to date, this program aims to achieve a Top 10 ranking for Saudi Arabia on one of the three indexes by 2010. Accomplishing such a feat will require the complete collaboration of both Saudi Arabia’s public and private sectors, who have been asked to join the 10x10 mission and embrace competitiveness as a practice and philosophy. To this end, King Abdullah has said that ongoing reforms, in addition to opening several sectors for FDI, would improve business infrastructure in the Kingdom and increase Saudi competitiveness. “We intend to enhance, gradually and continually, the investment environment with the purpose of supporting the private sector.” Already, Saudi Arabia’s progress toward this milestone is impressive. The Kingdom’s National Competitiveness Center (NCC)


has been charting the country’s progress, which has risen in the World Bank’s Ease of Doing Business Index from 76th to 23rd place in just three years, and is currently the number one in the entire Middle East. This is a considerable vote of confidence for the Kingdom’s progress thus far. The culmination of each year’s efforts has become the Global Competitiveness Forum (GCF), which concluded its second successful iteration in Riyadh last January. Intense debates on how to keep an economy at the forefront of development were fueled by leading experts on competitiveness, including Lee Kuan Yew, Singapore’s mentor minister, and Professor Michael E. Porter of Harvard Business School. Many of Porter’s principles, in fact, have served as blueprints for Saudi Arabia’s strategic development, including clustering and economic cities. In his keynote speech, the worldrenowned competition strategist addressed the important opportunity Saudi Arabia has in fulfilling its goal by fundamentally

increasing access to vocational and training programs for Saudi citizens. “There is no possibility of achieving competitiveness without raising the culture of productivity,” said Professor Porter. He lauded Saudi Arabia’s positive results over the years, adding that support for the establishment of small and medium enterprises as well as becoming more active in attracting foreign investment into non-energy sectors was crucial for the Kingdom’s continued success. Purposely scheduled immediately preceding the World Economic Forum in Davos, the GCF creates a window to the world for the Middle East’s development as a whole. There is no doubt that the entire region is brimming with potential, and if conflicts can be resolved, the longterm economic benefits stand to reach unparalleled heights. This is where Saudi Arabia vies to become a role model, with the GCF as one of the premier platforms for communication. All eyes will be on GCF 2009 to see whether Saudi Arabia is closing in on this goal.n


Mind Wealth, The New Oil Of all the magnanimous projects, reforms, and improvements currently taking place in Saudi Arabia, at the end of his reign and beyond King Abdullah will most likely be remembered for the imprint he will have left on the country’s education. Saudi Arabia is one of the world’s youngest countries, with 75 percent of its population being under the age of thirty. The king wants to ensure that the millions of young Saudis safely propel the Kingdom into the future, by making education one of the country’s strongest assets. In order to achieve this goal of imparting mind wealth upon his people, the king has invested an unprecedented amount of funds into the sector. No less than 25 percent of the 2008 Saudi budget, totaling a grand 105 billion Saudi riyals ($28 billion), the largest in its history, is being invested into education and manpower development. Large sums will be channeled toward technical and vocational training as well as public and higher education. On top of all of this, King Abdullah has instated a massive public education overhaul, known as the King Abdullah Project for the Development of Public Education. This project will consist of multiple phases of targeted spending, initially totaling $3.1 billion. This is clearly revolutionary, as no king before has devoted so much of the country’s resources to developing its human capital. With his commitment to raise education’s allocation each year from now on, Saudi citizens have now truly become the Kingdom’s largest untapped asset. Minister of Education Dr. Abdullah bin Salih Al- Obaid sees this period in Saudi Arabia’s history as a time of great transition. “We believe that during the time of the custodian of the two holy mosques, King Abdullah bin Abdulaziz, Saudi Arabia has entered a new stage of knowledge, and knowledge was his concern even before he became a crown prince.” The ministry is in charge of implementing the Education Development


“We are facing development demands to transfer the Kingdom from the current traditional lifestyle to the world that is based on knowledge.” Dr. Abdullah bin Salih Al-Obaid, Minister of Education

Plan that seeks to turn the country into a knowledge-based information society. The eighth phase of the plan was recently rounded off with considerable rates of success. “Most of the plan goals were achieved. Some were better than expected, because the plan was based on certain financial considerations. Due to the rise of petroleum prices, the country obtained a budget surplus, which the government invested strongly in education and health—therefore it is going to achieve more than what was stipulated in the development plan.” According to Minister Al-Obaid, the number of schools established during the three years of King Abdullah’s reign is the same as in the seventy years prior to his coronation. “Hence, we are facing a responding stage for the development demands to transfer the Kingdom from the current traditional lifestyle to the world that is based on knowledge.” This challenge is considerable, taking into account the Kingdom’s rapidly rising population. The complete provision of primary and secondary education has been the first step in this direction, with education being compulsory from ages six to fifteen. Beyond that, however, the Ministry of Education is calling upon international investors to play a significant role in the Kingdom’s ambitions. Companies and institutions with backgrounds in teacher training, curriculum development, and extracurricular expertise are being approached and encouraged to become involved in Saudi Arabia’s transformation.

Leveraging Knowledge

There is a goal to make Saudi education—and thus, its society—more globally oriented. The Ministry of Education conducted a long and thorough survey of many countries around the world exhibiting successful education systems. “We are trying to adopt the strengths of each nation’s educational system and apply them to improve our own,” reveals Vice-


“The establishment of (KAUST) has been a living idea in my mind for more than 25 years.” King Abdullah bin Abdulaziz Minister of Education Dr. Saeed M AlMullais. These include Canada, France, Austria, Finland, and China. In addition, the number of Saudis studying abroad has reached record highs, largely thanks to the decision to increase government spending to subsidize their trips. “We are sending 10,000 students to obtain their bachelor’s, master’s, and PhD degrees from abroad,” says Al-Mullais. The Kingdom has a long history of successful cultural and educational exchange, particularly with the United States. A full generation of Saudis educated in America is now in control of the economy, and the two nations have in many aspects been brought together by such exchanges. However, since 9/11 it has become more difficult for Middle Eastern students to obtain U.S. visas, and they are therefore attending top schools in countries such as Canada, the United Kingdom, Switzerland, and the Netherlands. “We believe that we should have a global education, both inside our country and abroad,” elucidates ViceMinister Al-Mullais. “We also invite people to do their scholarship here, not only in higher education but even in general education. 15 percent of our students are from other


countries.” Saudi Arabia intends to leverage its international standing through the creation of specialized new universities. One such shining example is the King Abdullah University of Science and Technology (KAUST) next to the Economic City in Jeddah, the first of its kind in both the Arab and Islamic worlds. KAUST will facilitate Saudi Arabia’s position as a global hub for business and technology by forming management and IT skills that can be injected directly into the Saudi economy. Through the University’s Global Research Partnership, students will gain the expertise taught in universities and enterprises of the United States and around the world, and combine them with Saudi-specific skills needed throughout the market. KAUST has so far established partnerships with Woods Hole Oceanographic Institution (WHOI) in the United States, Institut Francais du Petrole in France, the National University of Singapore, the Indian Institute of Technology, Bombay (IITB), and, most recently, the American University in Cairo. Through these linkups, KAUST hopes to compete with the world’s top faculties, including the Massachusetts Institute of Technology. Speaking at the groundbreaking

ceremony on October 22, 2007, King Abdullah commented on the university’s capacity to bridge cultures through the pursuit of knowledge. “Inspired by the eternal teachings of Islam that call for seeking knowledge, engaging in development works, and promoting better understanding between peoples, the establishment of this university has been a living idea in my mind for more than 25 years. We hope that the university carries out its noble humanitarian message in a pure and clean atmosphere, taking the help of God and then that of enlightened intellectuals all over the world, without any bias or discrimination,” he said. The most important milestone of Saudi Arabia’s education drive is the impetus behind gender equality. Female participation in Saudi’s economy is most likely to become its greatest asset. The World Bank may have placed education in the Middle East below average, stressing the need for drastic improvement, but in its recent report on Arab education, Saudi Arabia ranks near the top in terms of gender parity. “Women in Saudi Arabia are getting the same access to education as men,” says Prince Dr. Khalid Abdullah M. Al Saud, vice minister for girls’ education. “In terms of degrees, there are many Saudi women who hold PhD degrees in different fields. In terms of empowerment, women are getting more chances in banks, universities, hospitals, and so forth. We would like women to be empowered, but in the meantime, respected. Through King Abdullah, Saudi Arabia has become a model, because it is utilizing modernity while protecting the social values.”n


The Thriving Pulse of Saudi’s Health Sector The health sector in Saudi Arabia is considered by SAGIA to be one of the six pillars of the economy, and many even believe it is the most important in terms o f s p u r r i n g t h e e c o n o m y ’s competitiveness. Regionally, it is one of the largest in terms of size, activity, and potential. Average annual health spending in Saudi Arabia is $8 billion—75 percent by the government and only 25 percent by the private sector. According to a 2007 report by Booz Allen Hamilton, an aging but increasingly wealthy population is seeking specialty health care treatment from the private sector. Combined with the sharply growing population, expected to rise from 23 million today to 30 million by 2016, and demand for hospital beds increasing from 51,000 to 70,000 in the same period, the opportunities facing the private health sector are immense. “For international healthcare providers and investors,” the report observes, “the coming liberalization of the sector will mean increased access to the largest healthcare market in the Middle East, and an exciting opportunity to help millions of Saudis live longer, healthier lives.” Deputy Minister of Health Dr. Obaid Al Obaid says that in order to meet this rising demand, the ministry has engaged a plan for building new hospitals across the Kingdom to complement 230 already operating under its aegis. Currently in progress are two major hospitals in Riyadh, one specialized hospital in Jeddah, and one in Dammam, but Al Obaid acknowledges that the sheer scale of these projects calls for an active participation from non governmental sources. “We are actually in need of the private sector to be involved in building hospitals, especially in the large cities. The Ministry of Health facilitates everything for investors who are willing to buy into the 80

hospitals and the sector overall.”

Kingdom Come

Existing healthcare companies in the Kingdom have been keen to partner with international pharmaceutical and healthcare providers that can impart knowhow to the local Saudi market. One such company is Tamer Group, which evolved from a single pharmacy founded in 1922 by Dr. Mohammed Said Tamer into a modern Saudi enterprise. Through its deep understanding of the industry, the regulations, demands, and suppliers, Tamer has attracted the likes of Sanofi-Aventis, Bristol- Myers Squibb, and Viagra manufacturer Pfizer to give their Saudi business interests a big boost. “Being competitive today in health care is a combination of things,” says Ayman Tamer, the group’s president. “We work in a highly regulated industry, which will only increase in the future, as authorities want to ensure the quality of health care provision. Then you have a lot

of good experience, and with experience comes continuity. Today there are many international pharmaceutical companies that wish to put their flag in the Kingdom. They feel there are big business opportunities and growth potential and want to have a permanent presence here in Saudi Arabia.” Tamer therefore sees itself as an international partner’s “source for competitive advantage in the Kingdom.” The group also entered into a unique relationship with two of the top pharmaceutical companies in Japan, Astellas and Sankyo, to create the Saudi Arabian Japanese Pharmaceutical Company, known today as SAJA. But Tamer feels that competitiveness comes from not only adding value to the Kingdom, but from maximizing its export potency and further penetrating global markets. “If you really wish to succeed, then more is needed than just local manufacturing and the local market,” attests Tamer. “The key is in the export of goods produced here in Saudi Arabia.”n



The Saudi Finance Sector

Confident, Competitive, and Compliant The Saudi financial market as we know it today can still be considered as being in its infancy. Until the 1980s, capital markets did not exist in Saudi Arabia. It was really the creation of the Capital Market Authority (CMA) that got the ball rolling and paved the way for the TADAWUL stock market, bond markets, and even the insurance sector. Yet in just a very short time, the Saudi Arabian financial sector has gained sophistication and prosperity and stands ready to capitalize on the unprecedented liquidity flowing through the Kingdom. In this market of extremely high potential, many finance methods are rapidly gaining ground. One particularly prosperous activity has proven to be private equity, and no one is showing more thrift in this field than the Bahamdan Group (BG), a professionally governed investment house. The Bahamdan family name has for a long time been synonymous with accomplishment in Saudi Arabia. One of the family’s major companies, Sara Holding, has been a household name with a regional focus, while two other major holdings focus on Europe and the United States. However, the group is now set on consolidating their various interests under the name Bahamdan, thereby demonstrating that a family firm, the


historic model of success in Saudi, can be every bit as competitive as a public entity. “When I think of competitiveness, I think of all the young entrepreneurs with their great ideas, says Kamal Bahamdan, the group’s CEO. “It is not about the beauty of money but the beauty of the mind. We are seeing so many creative people taking their ideas and starting their own companies. Competitive companies based on human capital are the future.

Today with all the liquidity they will find the money to see through their initiatives.” He of all people should know. The son of Sheikh Abdullah Bahamdan, revered in the Gulf ’s business community and who as chairman of the National Commercial Bank of Saudi Arabia, the largest Arab bank, was a major driving force in the Kingdom’s historic transformation, Kamal graduated from

Boston University in 1994 and launched an investment platform the following year. Against all predictions, the venture proved extremely successful, giving Kamal a lot of momentum. He nurtured this venture for years, spinning off a variety of other platforms in various sectors along the way, each one successful in its own right. The truly remarkable facet lies in the fact that these investment platforms were incubated and developed in the world’s most competitive market, the United States. By 2003, when the business climate was opening up, Bahamdan brought the expertise and knowledge of the venture back to Saudi Arabia. In essence, the group operates in unique platforms by clustering investments and industries together to provide the best possible know-how transfer and value-added services. Bahamdan believes that formula can be beneficially applied to national development, through strategic investments in the health and educational sectors, which it feels will become some of the most lucrative investments for the group. One of the cornerstones of its platforms strategy, in addition to transfer of knowhow and identifying market trends before anyone else, is capturing and fostering top-notch human capital. Kamal Bahamdan, an avid equestrian showjumping competitor with Olympic


credentials, explains that the group has already embarked upon a series of ventures tailored to societal development, all the while continuing to be a major player in the international financial world. “Within the next five years, I would like to see our group acting as bridge out of the region abroad. To b r i n g k n o w - h o w a n d technologies from the West and Far East to Saudi Arabia is our goal. We are continuing to bring people, products, and departments from all over the world to the region and our company.” Successes in Saudi finances have not been limited to private equity alone. The changing landscape of the national market has also paved the way for new innovative products in consumer banking. Credit cards, for example, previously unseen in the Kingdom, are expected to thrive as the Saudi mentality embraces the concept of debt. Razi Shafeek Fakih, acting CEO of Bank Albilad, highlights this change in the financial paradigm, making this an opportune moment to bring about a whole new philosophy of consumer banking to the Kingdom. In addition, despite an international credit crunch, the Saudi mortgage market is about to blossom, as a generation of Saudi homeowners settle down. But most see the greatest window of opportunity in Islamic finance. Banks like Albilad have begun to carve out a niche market for themselves in the provision of shariacompliant banking. “What I see here in Saudi today excites me,” says Fakih. “There is simply no other market which has the potential that Saudi offers, especially in Islamic banking.”

Bold Moves

One of the fastest movers to capitalize in this field has been Jadwa Investment. From day one, Jadwa has had one goal: to be one of the Kingdom’s, and the region’s, premier sharia-compliant investment houses. And since their inception in August 2006, they’ve been highly successful at doing so. A great deal of planning and strategy went into


preparing their business model. Obviously there is plenty of money in circulation in Saudi Arabia, but Jadwa wanted to find the factor that could make them stand out from the pack, as CEO Ahmed Al-Khateeb points out. “Everybody is running after this market: Goldman Sachs, Morgan Stanley, UBS, HSBC, Citigroup, and so on. How can we differentiate ourselves? By being a world-class domestic institution.” By that, Al-Khateeb is referring to the talent around which his business revolves. Jadwa has conscientiously built its organization from the ground up around the region’s leading investment minds, which include renowned Chief Economist Brad Bourland and Al-Khateeb himself. In addition to Islamic financial-compliance regulations, an indepth knowledge of both international and local markets is required in order to offer the most allaround services. Along these lines, Jadwa Investment teamed up with the Frank Russell Company in 2007 to aid it in reaching a larger market and boost its shariacompliant offerings. “We look at Jadwa as a window to the international investors when it comes to the local financial market,” comments Al-Khateeb. “If international investors would like to invest in the equity market and in any of the real estate projects, we will definitely welcome this and facilitate it.” Among Jadwa’s boldest moves to date was launching the first regional Sukuk fund, or Islamic bond, one of the Gulf ’s most promising markets. This gave Jadwa unprecedented access to the fixedincome, sharia-compliant

investment market, which has spawned $80 billion in Sukuk funds in the past five years, with $50 billion in additional funds expected to launch this year alone. Jadwa has also proven itself an ideal partner of choice through a recent purchase of ExxonMobil’s 30 percent stake in the Saudi Aramco Lubricating Oil Refinery Company (LUBEREF). Acquiring the U.S. oil giant’s stake and the resulting partnership with Saudi Aramco thrusts Jadwa into the forefront of Saudi business and has given the small investment bank credibility as a major player in the surging Saudi economy. Brad Bourland, considered one of Jadwa’s strongest assets and the foremost authority on the Saudi economy, believes the infectious liberalization being witnessed in the region today may have created a rush on opportunities of sorts, but there is nevertheless a well-formed investment efficiency being maintained by the Saudi authorities. With almost 30 years of experience in the Kingdom, his insight into the diplomatic and financial worlds paints a clear picture of where the Kingdom was, where it’s at, and where it will most likely be heading. “When I was first exposed to the Kingdom in the 1970s,” recalls Bourland, “the planning minster at that time, Mr. Hisham Nazer, who later became oil minister, came to the U.S. to give a speech. He said, ‘We Saudis are not a wealthy people; all we have is money. We have no roads, no hospitals, no schools, no telecommunication, no infrastructure— but we have a lot of money from oil revenues.’ The challenge was to turn out that money into real economic activity and development. I think now, 30 years later, there is a realization that oil revenues do not serve as an economic model. I think the combination of globalization, market liberalization, and participation of foreign investors will really maximize the potential of this country.”n


The Saudi Finance Sector

Confident, Competitive, and Compliant The Saudi financial market as we know it today can still be considered as being in its infancy. Until the 1980s, capital markets did not exist in Saudi Arabia. It was really the creation of the Capital Market Authority (CMA) that got the ball rolling and paved the way for the TADAWUL stock market, bond markets, and even the insurance sector. Yet in just a very short time, the Saudi Arabian financial sector has gained sophistication and prosperity and stands ready to capitalize on the unprecedented liquidity flowing through the Kingdom. In this market of extremely high potential, many finance methods are rapidly gaining ground. One particularly prosperous activity has proven to be private equity, and no one is showing more thrift in this field than the Bahamdan Group (BG), a professionally governed investment house. The Bahamdan family name has for a long time been synonymous with accomplishment in Saudi Arabia. One of the family’s major companies, Sara Holding, has been a household name with a regional focus, while two other major holdings focus on Europe and the United States. However, the group is now set on consolidating their various interests under the name Bahamdan, thereby demonstrating that a family firm, the


historic model of success in Saudi, can be every bit as competitive as a public entity. “When I think of competitiveness, I think of all the young entrepreneurs with their great ideas, says Kamal Bahamdan, the group’s CEO. “It is not about the beauty of money but the beauty of the mind. We are seeing so many creative people taking their ideas and starting their own companies. Competitive companies based on human capital are the future.

Today with all the liquidity they will find the money to see through their initiatives.” He of all people should know. The son of Sheikh Abdullah Bahamdan, revered in the Gulf ’s business community and who as chairman of the National Commercial Bank of Saudi Arabia, the largest Arab bank, was a major driving force in the Kingdom’s historic transformation, Kamal graduated from

Boston University in 1994 and launched an investment platform the following year. Against all predictions, the venture proved extremely successful, giving Kamal a lot of momentum. He nurtured this venture for years, spinning off a variety of other platforms in various sectors along the way, each one successful in its own right. The truly remarkable facet lies in the fact that these investment platforms were incubated and developed in the world’s most competitive market, the United States. By 2003, when the business climate was opening up, Bahamdan brought the expertise and knowledge of the venture back to Saudi Arabia. In essence, the group operates in unique platforms by clustering investments and industries together to provide the best possible know-how transfer and value-added services. Bahamdan believes that formula can be beneficially applied to national development, through strategic investments in the health and educational sectors, which it feels will become some of the most lucrative investments for the group. One of the cornerstones of its platforms strategy, in addition to transfer of knowhow and identifying market trends before anyone else, is capturing and fostering top-notch human capital. Kamal Bahamdan, an avid equestrian showjumping competitor with Olympic


Saudi Post From the postal command center in the heart of the Saudi Post’s headquarters in downtown Riyadh, all eyes are focused on the massive projection screen and illuminated trajectories showing each Saudi Post truck as it goes about its day-to-day deliveries. And while each blinking icon may not individually seem like a driver for economic growth, together they represent the nuts and bolts of one of the most sophisticated postal systems in the world. From his upstairs office, Dr. Muhammed Benten, CEO of the Saudi Post, smiles in recognition of just how much he and his team have accomplished in the past few years, and what this will bring to the nation in general. “You cannot imagine having a prosperous country with investment and big corporations without a successful and efficient postal infrastructure,” says Benten. Yet, as Benten can attest, the creation of an efficient, modernday postal system is easier said then done, especially considering the fact that, until recently, the Kingdom was largely unaddressed. Jokes Benten, “When you wrote your address, you really described to someone how to get to your home!” Add to this the dilemma of a multilingual demographic and inconsistent spellings of Arabic names in Latin letters, and the task of modernizing Saudi Arabia’s postal service becomes that much more difficult. Yet, undeterred from his objective, Benten assembled a team of global technological leaders with which to partner, including Cisco Systems and Saudi Arabia’s own National Technology Group (NTG). Through such collaborations, Saudi Post has been able to forge one of the most elaborate technological backbones for postal delivery anywhere in the world. “We were inspired by a number of factors, including a standard and numbered address, which we think are very essential for competitiveness of the country and security of the country. We need a high-


tech system whereby all documents or parcels are accounted for at all times,” notes Benten. The solution to this demand proved to be a comprehensive GPS grid system, pioneered in Saudi Arabia, whereby each address in the Kingdom corresponds to a unique coordinate. “It is a regular grid with natural boundaries,” explains Benten. “A lot of mapping and cartography have obviously gone into this. However, you will never be mistaken if you follow the rules. We are the only Arab country that has an active navigator that can pinpoint a house.” To maximize this system’s efficacy, each Cartesian address is likewise paired with a GPSenabled smart mailbox, which syncs with each postman as he makes a delivery and offers instantaneous delivery notification. With this cuttingedge technology in place, Saudi postmen are able to receive each day’s deliveries on their equipment with a preprogrammed delivery itinerary that notifies them as the truck approaches the parcel destination. Beyond routine parcel delivery, however, the Saudi GPS mapping system has strong commercial implications. With such comprehensive coordinate data already compiled, the Post now sits atop a wealth of information that can translate into higher efficiency in the deliveries and services sector. Benten is quick to note

the Post’s collaboration with Pizza Hut, where pizzas are delivered to digital housing numbers, as an example of this project’s commercial viability. Yet the Post’s overhaul of Saudi logistics goes far beyond smart mailboxes and GPS grids. As Benten describes, the role of tomorrow’s postal service provider is not simply delivering parcels but “integrating with the electronics age.” It is here that Benten’s collaborations with Bill Gates and Microsoft have borne fruit, providing every citizen in the Kingdom of Saudi Arabia with a unique, postal-specific email address. Benten and Gates are betting on the inbox becoming the new mailbox and are already exploring ways to take advantage of this unprecedented technological leap forward. One such venture Benten has launched in collaboration with the Saudi Research and Marketing Group (SRMG) has been Shaher, an innovative directmail company that has its sights set on leveraging this delivery mechanism to maximize promotional exposure to opt-in recipients. In this delivery model, relevant JPEG-formatted promotional materials can be sent to the inboxes of willing clients, who can then agree or disagree to receive further materials and samples via post. The result is a highly targeted and cost-effective marketing platform, with significant environmental implications. Such advances in conventional postal services have not, of course, gone unnoticed, and Saudi Post has received the top accolades of the world’s postal community, placing first in postal social responsibility and second in outstanding postal services in 2007. “We have been very fortunate,” says Benten, while adding that the real competitiveness of the Post is in its partnerships. “We have future projects and we work with winners,” exclaims Benten. “The sky is the limit!”n


Powering the Kingdom of Energy That Saudi Arabia produces much of the world’s energy will surprise no one. That Saudi Arabia is actively seeking the world’s energy expertise is quite another story. Having pegged the energy sector as one of “three priority sectors of strategic importance to the future of the Kingdom,” the Saudi Arabian General Investment Authority (SAGIA) has enlisted the help of the global private sector, once discouraged from participating, to aid the Kingdom’s energy development and drive economic growth in the “Kingdom of Energy.” The response to this call has been an energy-sector capital projects bonanza throughout the Kingdom, in everything from petrochemicals to fertilizers, to the tune of $80 billion—music, surely, to the ears of SAGIA’s governor, Amr AlDabbagh. Yet apart from investments flowing downstream toward petrochemicals, ARAMCO refining capacity upgrades, and a massive new aluminum development in Ras Az Zawr by Ma’aden, the nation’s supercharged mining company, perhaps the most dynamic subsectors at play in Saudi are the power and water supplies. After decades of underinvestment, the Kingdom of Saudi Arabia is now facing an unprecedented spike in both water and power demand due to both a rapidly expanding population and sharp industrial expansion (ARAMCO alone predicts a 50 percent rise in power usage in just a fiveyear span). Nationwide estimates published in the 2007 Saudi Arabia Energy Review Report (SAERR) predict demand for both water and power to increase at 6 percent per annum, highlighting the need for large-scale investments, but also forecasting high returns for investors noting “those companies with access to reliable technology and excellent project management and operational skills will tend to have an edge in the development of the sector.” And it is here, at the junction of technology, management, and operational prowess that the country’s most successful water and power company


has found its niche. Forged in joint venture by Saudi giants Abdullah Abunayyan Group, A.K. Al Muhaidib & Sons, and Al-Rajhi Group’s investment vehicle, MADA, ACWA Power Projects has been the most successful developer of the nation’s Independent Water and Power Project (IWPP) program in capitalizing upon the rapidly liberalizing regulatory environment in the sector. But Mohammad Abunayyan, chairman of the ACWA Power Projects and representative of Abunayyan Group’s water industry expertise, insists that despite its unprecedented recent success in winning four consecutive major project bids and meeting demanding project deadlines, the company has a long-term approach to its business model. “If we were interested in high returns we would look into other areas like real estate,” quips Abunayyan. “This is high risk and requires a longterm commitment.” But risk or not, Mr. Abunayyan and President and CEO Paddy Padmanathan have set an enviable example of competitiveness in developing privately financed power and water projects, for both the Kingdom and the power markets beyond. “The real mission is to localize the knowledge and the know-how and to be able to absorb the knowledge from the international arena,” explains Abunayyan. “This translates into the competence and capability of the company and its ability

to match any other professional international company.” Both men further point to the company’s innovative approach to project development as critical to their success. “You have to have something out of the box, whether it is a financial structure or a technical solution … to be credible and challenging. It is exactly how we have been able to be competitive and be able to provide winning bids four times in a row.” Now managing the development of all four projects valued at more than $9.1 billion and adding upwards of 4,855 megawatts into the Kingdom’s power capacity and 220,000 cubic meters per day of desalinated water, the extent of the company’s competitiveness is beginning to show. Yet Abunayyan feels that the true value of being the nation’s most competitive IWPP is not in winning bids but in enhancing Saudi energy competitiveness, with knock-on effects of bolstering employment, innovation, and international partnerships in the Kingdom’s energy sector. Abunayyan draws upon each of these points in his call for attracting the world’s top talent as future partners in the company’s long-term vision, which encompasses both global expansion and alternative energy sources. “This is our country—we know what to do,” says Abunayyan confidently. “Saudi Arabia exudes energy competitiveness of anything energy related.”n


Hajj 2010:

The eye witness account By Prof. S.B. Hassan " If Allah has ordered you, then Allah will not let us down" Hajj revolves around this Abrahamic commitment to divine orders. As Hajra frantically was looking for water, she ran between two massive rocks 7 times, by the time she finished the 7th run, her little baby was screaming Ibrahim(A.S) and his son Ismail(A.S) built the Kabba, and was ordered to call for prayer in the middle on nowhere. Allah said in the Quran 22:27 "proclaim to mankind the Hajj (pilgrimage). They will come to you on foot and on every lean camel, they will come from every deep and distant (wide) mountain highway (to perform Hajj)." Today, from every far corner of the globe, humans enter in the state of Ihram as they enter the city of Mecca, all men wear the two white sheets, status is gone, wealth is not noticed, race is diminished,

As long as a Muslim is breathing he/she has to pray 5 times a day. It does not matter what condition we are in, we have to humble our self and face Our Creator. We also have to fast Ramadan once a year, but when it comes to Hajj, its only once a lifetime, fardh (obligatory) for everyone who possesses means prescribed by Islam. Hajj is the fifth pillar of Islam. It is an order to travel a long way to reach a city in the middle of mountains surrounded by desert. Where thousands of years ago, Prophet Ibrahim(A.S) was asked by Allah to take his wife Hajra(A.S) along with his only son Ismail(A.S) and leave them right there in the middle of nowhere. Hajra(A.S) with astonishment asked Ibrahim(A.S) as he turned his back to her in the middle of the deserted mountains if this was a divine order, he shook his head as a yes and moved on. Hagar said her famous saying,


what prevails is this intrinsic humanity value in the millions around. In Ihram state, a muslim cannot hurt anything, not an ant, not a fly, cannot pull a leaf out of its tree, he/she cannot push a human, or talk in vain. Muslims cannot hurt anything that lives. This is the true state of a Muslim. Hajj is to see this solidarity from China to America to Russia down to South Africa. all over the world, people humble themselves and come answering the call of Allah through Ibrahim(A.S). To see this commitment this solidarity of the followers of La Ilaha Illa Allah (no God but one), it makes ones heart glitter, it makes one's eyes run like raining sky, it makes your thoughts deep and beautiful. It makes one a true human with feelings, with emotions, with remembrance of Allah at all times. It's a feeling that words fall short to describe, Nationality is forgotten; it is only a simple man marching with one identity,

For my international travel during the calendar year, I had never planned to go for Hajj in the year 2010.It was like a miracle that I received the invitation from the ministry of interior of the Royal Kingdom of Saudi Arabia in Islamabad through the diplomatic channels of the Royal Kingdom of Saudi Arabia in Islamabad and they connected me H.E. Mr. Abdul Aziz Bin to the Consulate General of Saudi Arabia in Karachi. H.E Mr. Faleh Ibrahim Al Ghadeer The Invitation was during the last week of Hajj Mohammed Al- Ruhaily flights leaving from Karachi for Jeddah. All the travel papers were processed so swiftly that I could not believe. I was invited to collect the necessary documents only three days before the flight of Saudi Arabian Airlines from Karachi. I acknowledge grateful cooperation and guidance given by the office of the Ambassador of Saudi Arabia: in particular the assistance given by Mr. Saleh Hmuod Almughiri, Director Information Section, Royal Embassy of Saudi Arabia. Brother Mughiri gave his telephone contact to be used at all times required during the journey Mr. Saleh Hmuod Mr. Obaidullah to perform Hajj. I owe grateful thanks to the Consul Almughiri Alharbi General of Saudi Arabia, H.E Mr. Faleh Mohammed Al- Ruhaily stationed in Karachi and his Vice Consul Mr. Obaidullah Alharbi, who looked after the minute details to make Hajj travel smooth and comfortable.



Landing at Jeddah:-

When the Saudi Arabian Airlines Flight number 0715 on 10th November 2010 landed in Jeddah at 11:15 there was a car with a chauffeur and another escort waiting at the doorsteps of the aircraft to receive me and transport me to the Hotel after fulfilling all the immigration formalities. I was in the state of Ihram right from the time I left my house with the Niyat(Intention) of Hajj therefore I was taken to Mecca to perform the First Umrah after which I got out of Ihram. The stay at Mina was organized by the volunteers of the ministry of Interior who remained all the time with me and other such guests from other countries, providing the facilities.

Arrangement During Hajj:

Under the policy, directives and guidance of HRH Prince Naif Bin Abdulaziz, the arrangement of movement of the ocean like heads of pilgrims were made so smooth and efficient that no where on the globe one would find a similar flawless event taken place with peace and spiritual satisfaction. One can never find anywhere in the world supply of food and water, arrangement of sanitation and hygienic conditions, transportation and security made so efficiently for more than 4 million human beings(pilgrims).

The Metro Light Rail Experience:

Special mention has to be made of the Metro Light Rail which has been made operational for the first time during the Hajj 2010.I was among the fortunate pilgrims to have used the Metro Light rail going from Mina, Arafat and Muzdalifah. The travel through the rail was really enjoyable and very significantly resulted in saving travel time between Mina, Arafat and Muzdalifah. One may recall that the travel time from Mina to Arafat and Muzdalifah used to take many hours which has been reduced to nearly 45 minutes and it's the oneness of the Creator. The highlight of Hajj, is when all the people gather in the plain of Arafat, millions and millions, start moving by sunrise to Arafat, and leave it by sunset. This is the most emotional day of Hajj, where the Prophet(P.B.U.H) stood up, raised his hands and prayed all day. That's what you see people do, everyone takes a corner, by a tree, under a tent, by an umbrella and prays. You cannot help but to hear the cries, Muslims from everywhere: from Pakistan, from China, from Nigeria, from the Arab countries, from Russia and Europe, the humans... you cannot help but to notice humanity crying. All the pilgrims raising their hands, asking for mercy, for love, asking for forgiveness, for guidance. 46

It's said that Allah, will descend close to Arafat to hear the pleas of his human creatures. Approximately more than four million pilgrims performed Hajj. I joined the standing millions raising their hands to the sky and prayed. Hundreds of languages were spoken, hundreds of races, of nationalities are all equal now and all crying. The pilgrims then move and camp in Mina for three days, with every day the pilgrims gather around the symbol of Satan and stone it. It's a reminder to all the people that we are all brothers and sisters, and that the enemy is Satan. It said that as Ibra-

him(A.S)was ordered to slaughter his son Ismail(A.S), Satan came to him in the shape of an old man telling him how horrible it is to do so Ibrahim(A.S) took some stones from the ground and threw it at Satan. The pilgrims mimic that in the last three days. After the stoning of the Satan, the pilgrims perform animal sacrifices, to symbolize God having mercy on Ibrahim(A.S) and replacing his son with a ram, which Ibrahim(A.S) then sacrificed.On this or the following day the pilgrims re-visit the Masjid al-Haram mosque in Makkah for another tawaf, to walk around the Kaaba. This is called the Tawaf az-Ziyarah or Tawaf al-Ifadah, an obligatory part of the Hajj.The night of the 10th is spent back at Mina. On the afternoon of the 11th and again the following day the pilgrims must again throw seven pebbles at each of the three jamarat in Mina. Pilgrims must leave Mina for Mecca before sunset on the 12th. If they are unable to leave Mina before sunset, they must perform the stoning ritual again on the 13th before returning to Mecca. Finally, before leaving Mecca, pilgrims perform a farewell tawaf called the Tawaf al-Wida. 'Wida' means 'to bid farewell'. Isn't it beautiful when you see humanity at its basic. Away from the material, stripped out of identity, stripped out of status, away from the so called "valuable material world" At the end of Hajj, something always happens, no matter what time of the year it is, no matter what season it is, at the end of Hajj, the sky pours down, and it's such a beautiful rain.n


I&M Acknowledges The Friendship and Support of H.E. Mr. Faleh Mohammed Al-Ruhaily, Consul General, Royal Consulate General of Saudi Arabia in Karachi

Prof. S.B. Hassan, President & Chief Editor, I&M visited the Royal Consulate of Saudi Arabia in Karachi to meet H.E. Mr. Faleh Mohammed Al-Ruhaily, Consul General, Royal Consulate General of Saudi Arabia in Karachi

I&M Editorial Team led by Prof. S.B. Hassan, President & Chief Editor, I&M visited the Royal Embassy of Saudi Arabia in Islamabad. Seen in the picture (From l to r) Mr. Nafa Al Madani, Mr. Salman Hassan, Prof S.B. Hassan, Mr. Jassim Al Khaldi, Mr. Saleh Hmuod Almughiri and Mr. Asif A. Siddique




SWISS named Best Airline in Western Europe Swiss International Air Lines has been voted "Best Airline - Western Europe" in this year's Skytrax World Airline Awards. The distinction is based on the latest annual survey of several million air travellers conducted by the UK-based Skytrax consultancy. The 2011 Skytrax poll to determine the world's best air carriers extended to travellers from over a hundred countries. Once again, SWISS scored top marks for the quality of its services in the air and on the ground. "We are delighted to receive this award, because it demonstrates to us that our product and service strategy is well appreciated by our customers," said Frank Maier, Head of Product & Services at SWISS, accepting the distinction during today's awards ceremony at Le Bourget, where the Paris Air Show is currently being held. "We aim to provide our customers with a travel experience that is as pleasant, smooth and seamless as possible, with consistently high-quality service on the ground and in the air. And we will carry on doing everything we can to offer our travellers continually high quality standards." SWISS previously earned the title of "Best Airline: Europe" for both short- and long-haul services in the 2009 Skytrax awards. The carrier was also named number one in Europe for "Staff Service Excellence" in the 2010 Skytrax poll.n

JS Bank launches Visa Debit Card JS Bank Limited, one of the fastest growing banks in Pakistan, announced the launch of its JS Bank Visa Debit Card in a ceremony held at JS Bank head office, Karachi, says a press release. Kalim ur Rahman, President & CEO, and Kamran Jafar, Group Head Retail Banking, were present on the occasion along with the senior management of the Bank. While speaking, Kalim ur Rahman said, "We chose Visa as our strategic partner because they have an unmatched suite of payment products that would allow our customers to pay securely and conveniently for every type of purchase. Visa Debit makes an important contribution to enhancing our relationship with our valued partner." With the launch of JS Bank VISA Debit Card, the Bank brings its clients yet another benefit of alternate payment mode to cash when making purchase at thousands of Point of Sale (PoS) terminals across the country, millions of merchant outlets and over 1.6 million ATM's across the globe. The facility will simultaneously allow JS Bank customers to access their accounts through its diversified network of ATMs and pay conveniently at thousands of merchant outlets with no need for cash or cheque. Group Head Retail Banking Kamran Jafar said "JS Bank's progressive approach to banking is reflected in our wide array of banking products and services and we are providing premier services at an affordable cost to our customers, along with the security of banking with a truly committed organisation. Under our new vision plan, JS Bank is in the process of building an extensive branch network and a broadened product suite to provide the very best of banking experience."n 84

Emirates summer surprise for children Emirates Airline, the Dubai based international airline, has launched its summer bonanza offer "Summer Smiles in Dubai" offering families with children under 12 years an incredible offer while they visit Dubai this summer. Passengers who book a three-night package with select hotels in Dubai between 14th May and 30th September 2011 can have up to two children under the age of 12 years to fly at 50 percent off the adult fare while their stay, meals and play in Dubai is absolutely free when travelling with two paying adults. The Summer Smiles in Dubai package comprises a three-night stay for two adults and two children including the visa cost for the children. The visa costs for the two adults are not part of the package. Moreover, the two children will have free entry to a wide range of Dubai's most exciting attractions and free rides on the Dubai Metro, ensuring an action packed family vacation. This offer also comprises Meet & Assist at Dubai International Airport, return airport transfers (seat in coach), as well as hotel taxes and service charges. Summer Smiles in Dubai is valid for all passengers flying on Emirates to Dubai or beyond. Speaking at the occasion, the Emirates Vice President for Pakistan and Afghanistan, Badr Abbas said: "Emirates prides itself in designing innovative travel solutions for its customers to help them keep discovering. Our summer vacation offers for Dubai have been met with resounding success year on year within Pakistan, and we are excited at being able to bring the offer again to Pakistan this time around. We look forward to helping families enjoy their summer break, starting from their journey onboard Emirates." He further added: "UAE, especially Dubai, remains a key travel destination for Pakistan".n Vol: XXXXIV


Nasair announces launch of new flights to Karachi, Pakistan Nasair, the low fare airline based in Saudi Arabia, recently announced the launch of new flights to Karachi, Pakistan. The airline will operate daily scheduled flights from both Riyadh and Jeddah airports. These flights will go on sale for an introductory price of SAR 499 inclusive of taxes. The addition of Karachi to the nasair route network will bring the number of nasair's international destinations to 19 cities. The flights will accommodate the growth in demand from Pakistani expats living and working in Saudi Arabia. Moreover, with the Hajj season rapidly approaching for the year 2011 this critical route expansion will help serve the nearly 200,000 pilgrims who fly to Saudi Arabia from Pakistan every year. The routes will be flown by nasair's modern, comfortable Airbus A320 aircraft. Simon Stewart, CEO says, "We are proud of our commitment to being the smart choice for passengers throughout the MENA region and beyond. By adding this new destination, we intend to efficiently serve the Pakistani businessmen, executives, families and workers living in Saudi Arabia. We also hope to offer Saudi business people more travel options for reaching expanding markets in Pakistan." To better service travelers between the two countries, nasair has introduced seven direct flights between Jeddah and Karachi each week and seven direct flights between Riyadh and Karachi per week. Turki Abdullah Al Jawini, Director of Sales comments, "The nasair team is proud to represent the 'Smart Airline', catering to the needs of the domestic, international, business and religious tourist alike. We recognize that our passengers want to plan their trips in advance to take advantage of our 'book early and pay less' model." Mr. Al Jawini also underscores that alongside its advancing route map, nasair will be offering its customers a redesigned website with more advanced features and capabilities and remains committed to its strong promotions and revamped social media.n

Chevron Issues 2010 Corporate Responsibility Report Chevron Corporation (NYSE: CVX) achieved its safest year in company history, reduced its total energy consumption by 33 percent compared with 1992 levels, invested $197 million in communities around the world, and spent more than $2 billion with small U.S. businesses, according to the company's 2010 Corporate Responsibility Report.n


Hilton Pharma's donation Abdul Kader Jaffer, Chairman/CEO Pakistan Japan Business Forum, led a three-member delegation comprising of Sardar Yasin Malik, Chairman Hilton Pharma, and Shahbaz Malik, President & CEO, and called upon the Consul General of Japan, says a Press release. Sardar Yasin Malik presented a cheque of Rs10,64,000 on behalf of Hilton Pharma. Chairman Hilton Pharma prayed that Japan would soon recover from damage done due to tsunami and earthquake. Malik assured the Consul General that Pakistan and its people would always support Japan and its friendly people in time of their need. Moreover, he appreciated the support Japan and its people have always given to Pakistan and its people. Japanese Consul General Masaharu Sato thanked the Chairman PJBF and Sardar Yaseen Malik for donation.n



Make A Wish Foundation Pakistan joined hands with PIA for granting the wish of the ailing child to be a Pilot Make A Wish Foundation Pakistan in collaboration with PIA granted the wish of Muhammad Usama, 10 years old suffering from kidney disease (Renal Failure) who wished to be an Aeroplane Pilot. The Managing Director of PIA Capt. Nadeem Khan Yousufzai decorated the wings of Pilot to the ailing Usama who was looking very excited wearing a PIA Captain's uniform at a ceremony at PIA Head Office Karachi on Tuesday, 31st May 2011. The young Pilot was given practical Pilot's training in Flight Simulator.. PIA M.D. Capt. Nadeem Khan Yousufzai lauded the works of Make A Wish and in his speech he said that PIA will extend its cooperation to Make A Wish Pakistan to fulfill the wishes of ailing children who wishes to travel by aeroplane. President Make A Wish Pakistan, Mr Ishtiaq Baig thanked PIA for granting the wish of USAMA and became the youngest Pilot of the country. The ceremony was also attended by other senior PIA officials, Make A Wish children and Volunteers. Muhammad Usama will join PIA flight crew to Islamabad on Wednesday along with other three Make A Wish children whose cherished wishes are to travel by aeroplane.n

Workshop on "Ensuring Personal Success and Realizing Corporate Dreams" held The Centre for Change held a very well attended workshop on the topic of " Ensuring Personal Success and Realizing Corporate Dreams" at a local hotel recently in Karachi. The participants represented various renowned corporate sector organizations. The workshop included a number of activities for participant's active involvement in the entire process of building self esteem and learning about creation of "Hope and Happiness in a challenging environment". Mr. Najam Ali, C.E.O, Next Capital, spoke about his experience of establishing Next Capital and C.D.C. He explained to the audience how he overcame several difficult situations and defeated various odds and achieved success in the face of stiff resistance. He mentioned to the participants that his success in his various ventures could be attributed to disciplined hard work, adherence to strict merit and tenacity. Mr. Shahid Ghaffar, CEO of Habib Asset Management Company also shared his experiences. His advice to the participants was that work with honesty of purpose and full commitment which would lead to success and dream realization. He narrated different inspiring episodes which required meticulous planning, execution and intense follow-up. He said that any dream could be turned into reality provided one was prepared to invest in it personally. Mr. Firasat Ali, Chief Executive, Centre for Change in his talk and presentation to the participants outlined the road map to success and in this context discussed the importance of "Passion", "Energy", "Commitment", "Imagination", "Bonding Power" etc. He also explained how to take the maximum output from the mental faculties and harness them successfully with the external environment. He mentioned to the participants that to enhance the courage muscle the pain threshold had to be further developed. He also said that role modeling was critical to achieve higher objectives. The participants applauded and appreciated the efforts of The Centre for Change for holding such a useful and successful workshop. The company plans to hold workshops in Lahore and Islamabad as well as in Karachi on a regular basis. n




Etihad, Bank Alfalah hold competition Etihad Airways and Bank Alfalah have conducted an competition where big rewards were given to customers in Pakistan. The top prize comprised of a Free Air-Tickets along with Free Stay at the Crystal Hotel in Abu Dhabi. Sohail Qureshi was declared the winner of this contests top prize. Other prizes included 10,000 Etihad Guest Miles to each of the 5 lucky winners. Etihad Airways' Country Manager in Pakistan, Amer Khan said response from the customers was really tremendous and it has inspired us to continue creating such rewarding offers in collaboration with the prestigious Bank Alfalah of high repute.n

PQFT declares surplus for BancaTakaful participants The Pak-Qatar Family Takaful (PQFTL) has declared a surplus of 48 percent of Takaful Donation for its BancaTakaful customers for the financial year ending 2010. This was announced by the Chief Executive Officer of PQFTL, P Ahmed here on Monday. He said that the surplus, an inherent benefit of Takaful, is calculated on the amount available in the Waqf Fund after paying off all claims and meeting all expenses for the year. The company will share the surplus amount with Individual Takaful participants on the basis of their contributions to the Waqf Fund. `The provision of surplus makes Takaful equitable and financially more viable as compared to the conventional insurance system. We are the first Takaful company in Pakistan to declare a surplus on their BancaTakaful product', Ahmed said. PQFTL has distribution agreements in place for its BancaTakaful products through premier banks such as Standard Chartered Bank, Dubai Islamic Bank, Albaraka Bank, Dawood Islamic Bank, MCB Bank, Faysal Bank and Bank Alfalah. PQFTL is the largest provider of BancaTakaful in Pakistan. FWU Global Takaful Solutions based in the Dubai International Financial Centre (DIFC), is the technical partner in PQFTL's BancaTakaful product and is also one of the strategic shareholders in PQFTL. FWU is the premier facilitator of BancaTakaful products in Saudi Arabia, the UAE, Kuwait, Malaysia and Pakistan.n

Gulf Air's Silkbank announces Rs 157 million Services Division profit before tax Marks One Year

The Board of Directors of Silkbank announced a profit before tax of Rs 157 million in the first quarter of 2011. President and CEO Silkbank, Azmat Tarin presented the accounts in the meeting. This was a complete turnaround for the Bank as a loss of Rs 407 million was registered in the same period last year. Silkbank also made substantial gains in the Gross Revenue numbers for Q1 2011 registering a total of Rs 719 million vs Rs 290 million for Q1 2010, reflecting a growth of 148 percent for the period.n

Bahrain's National carrier Gulf Air's key functional area, the Services Division, recorded significant progress following its formation one year ago. The division, the first of its kind in any airline in the Middle East/Asia, was established to focus on improving all aspects of a customer's experience and to deliver consistent services - both on the ground and in the air. n


The 6th NJI Annual Sales Conference held in Karachi



Increase in Pakistan's Export to Germany Pakistan`s exports to Germany increased by 23 per cent during 2009-10 and overall trade volume between two countries rose by over 11 per cent with the trade balance shifted in favour of Pakistan. This was stated by Pakistan German Business Forum (PGBF) President Saifuddin N Zoomkawala, while presenting the annual report of the forum at its second annual general meeting held recently in Karachi, He said that Germany is Pakistan`s fourth largest and the biggest European trading partner.n

KESC introduces bill payment convenience for customers The Karachi Electric Supply Company has made alternative arrangements for payment of monthly electricity bills for those customers who have not received physical bills around their usual due date, given interruptions caused in the regular process by the union miscreants. The KESC has developed this system as a supplementary support to facilitate the customers who might not receive their monthly printed bills before due date because of the union miscreants blocking distribution of bills and attacking the utility's bill distributors. At several places the union miscreants snatched and tore up the customers' bills that the distributing personnel had taken to deliver in different localities. At the same time, the newly devised methods of bill payment would also remain as permanent support feature of the KESC to receive bills through these channels in normal circumstances in future as well if the customers may find it convenient. The KESC has drawn five easy methods for the convenience of customers which will be available henceforth besides the normal way of using printed bills.n 88

Mr. M. Yahya Polani, giving the token of appreciation to Mr. Raheel Ahmed, General Manager Airblue at the time of his courtesy meeting with TAAP members recently. The other prominent TAAP members in the picture are Haji Yusuf, Anwar Rasheed, Hanif Dossani & many others

Mr.M. Yahya Polani, giving the token of appreciation to Mr. Tareq Alkhalil, Commercial Manager Flydubai at the time of his courtesy visit meeting with TAAP members recently. The other prominent TAAP members in the picture are Haji Yusuf, Amin Wali Mohammad, Raees Ahmed Siddiqui, Naeem Sharif & many other



PTCL to invest Rs16 b in next five years - Walid Pakistan Telecommunications Company (PTCL), would invest about Rs16 billion in telecommunications sector in next five years in Pakistan , this was stated by the Managing Director, PTCL Walid Irshad. Addressing a luncheon meeting at Korangi Association of Trade and Industry (KATI), Irshad said that PTCL is going to introduce super-speed internet very soon in Pakistan and it would be started from Korangi Industrial Area He said that the era of conventional telephone exchanges is now over and most modern exchanges would now be installed in Pakistan. He said that first ever new generation telephone exchange would be introduced in Karachi He said that PTCL has already minimized the subscribers' complaints and with the introduction of new services and new generation telephone exchanges, the complaints would become nil. He said that PTCL is not being run just as Phone Company but as an investment-oriented company which is striving hard to introduce most modern telecommunications services. The Chairman, KATI, Syed Johar Ali Qandhari said in his welcome address that telecommunications plays vital role in trade and industry and PTCL has improved its performance over the years. He however said that sometimes industrialists face hardships in broadband and internet which needs to be improved.

He said that PTCL should set up a full-fledged cell at KATI so that subscribers' woes should be addressed. Former Chairman, KATI, Mian Zahid Husaun said on this occasion that there was revolution in telecommunications' sector in Pakistan over the last one decade and PTCL has played a vital role in the spread of telecommunication technology. He said that though complaints of the PTCL's subscribers have become insignificant however, the mindset of lower level employees needs to be changed so that PTCL would be able to address the subscribers' complaints in a real manner. The Vice Chairman, KATI, Shahid Javed Qureshi pointed out that PTCL's latest product EVO 9.3 is having signal problems in some areas of Karachi while charges are so high as compared to other companies' services.n

Flanked by Mian Zahid Hussain, Former Chairman KATI, Shahid Javed Qureshi - Vice Chairman KATI, Arif Suleman - Advisor to Thai Consulate, Karachi, Abdul Rauf Tabani - Founder President, Pakistan - Sri Lanka Business Forum, Mohammad Qamaruddin Khan & Muhammad Ghazanfar Ali Khan - Chairman & Executive Director of Mehran Commercial Enterprises respectively (The Hosts), Saleem Ahmed - Secretary General Travel Agents Association of Paksitan & various other prominent. The picture was taken on the occasion of a dinner reception recently held by Ghazanfar Ali Khan in honour of Mian Zahid Hussain & others at his residence.




Marriott Hotels refers all employees as associates as a symbol of respect

Marriott Hotels has established so many best practices in its properties across the world that Rajeev Menon is hard-pressed to replicate them all in the regions he heads. The area vice president for India, Malaysia, Maldives & Pakistan, Menon has had to pick and choose and says, "I wish I could have picked up on all the best practices. For the time being, we've concentrated on those we thought might be most relevant," he says. One of Marriott's best known practices is to refer to all employees as 'associates', which is a symbol of the respect with which the hospitality chain treats its staff. It also has a practice called 'Fresh Eyes', a forum where the HR head of properties invites all new associates to share their experience of their first 30 days at the hotel. Their feedback is then shared with department heads and it serves as a tremendous boost for the young trainees. Or as one young associate says, "All my thoughts are valued, which really makes me proud."n

Serena Hotel responds to local heritage and crafts through contemporary design language The Serena Hotel represents the ideology of the client, The Agha Khan, who has been an exponent of local heritage and enrichment of the local crafts through new design challenges and opportunities. The Serena hotel buildings in Asia and Africa have been able to reflect the sensibilities of their respective locations and have been sympathetic to historical and cultural aspects through their unique expressions. The hotel in Islamabad posed a tall challenge since the capital city is a fairly young development. In order to extract a connection to historical and cultural content, the circle had to be enlarged to absorb the culture and expression of surrounding areas instead of the capital itself.n

Top executives from the hotel Mother's day Celebrated at and hospitability Industry Pearl Continental Lahore join Avari Hotel The Pearl Continental (PC) hotel, in connection with the Mother's Day, organised a ceremony at Marcopolo Restaurant. A large number of families were present at the occasion. A cake was also cut during the event, and later, a lucky draw was also held especially for mothers. Shabina Riaz was the chief guest of the event. She expressed her joy of being a mother and shared her experiences. PC General Manager Irshad B Anjum also spoke about the sanctity of motherhood and how a good mother is the major force behind the success of a family.n 90

Madiha Mustafa Malik and Kazim Rizvi have joined the Avari Hotel Lahore as new PR and Brand Coordinator, and Director Sales and Marketing respectively. Madiha brings with her varied experience of event coordination as she has worked for different organisations and assisted them in arranging fashion shows and other media events. Rizvi, on the other hand, started his career in the hotel industry with Hilton in 1977. In 1989, he undertook extensive training with Ramada Hotels in Washington DC.n



Mr. Roeland Vos and Sheraton Technology And The Travel Agent Karachi Team visit Jati Angario - Asia Powers Ahead. Abacus

Mr. Roeland Vos President of Starwood Hotels and Resorts, Europe, Africa & Middle East (Eame), Mr. Guido De Wilde Senior Vice President & Regional Director Starwood Hotels & Resorts Middle East, Mr. Antoine Joignant Area Manager Pakistan & General Manager Sheraton Karachi Hotel, accompanied the Sheraton Karachi team for a visit to the village of Jati Angario. This village was adopted by Sheraton Karachi under their flood relief program; 'Give a Brick, Give a Break' for rehabilitation and reconstruction after the devastation of 2010 floods. Mr Roeland Vos stressed his support for the Pakistan Flood victims. Starwood intends to adopt more villages for the same purpose of rehabilitation in the coming months.n

Today the Asia travel industry leads worldwide growth and travel agents are faced with travelers who want the best deal, and the latest information at their fingertips; throughout this ever-evolving industry one core element has remained constant and critical - Technology. “Since air travel began, technology has provided the solid foundation on which travel agents build and develop their businesses.Ê It is central to how they operate and communicate; and with today’s increasingly tech savvy travelers, it is the number one priority that helps them gain a competitive advantage.” stated Mr Robert Bailey, President and CEO of Abacus International. “Globally, the travel industry is spending billions of dollars on technology, and Asia accounts for about a third of this.” Technology’s brisk pace has propelled travel agents to constantly reinvent and redefine their role and that of their business. According to a new Abacus poll, 96.4 per cent of agents polled were unanimous in their agreement that technology has completely revolutionised the way they conduct their business. As Abacus International celebrates its 23rd year as the leading provider of travel solutions and services in Asia, it looks at the some of the travel technologies that it has helped pioneer in assisting agents throughout the region gain a competitive foothold in the travel space.n

DHL expands fleet in Pakistan DHL, the world's leading Logistics Company, further expanded its domestic fleet in Pakistan by inducting more new trucks in its existing fleet of vehicles. The strengthening of the fleet will help DHL Global Forwarding to provide efficient and timely service to its customers in Pakistan. A senior level delegation of DHL Global Forwarding lead by Ms. Anne Schaefer, Director Strategic Planning - South Asia and Imran Shaikh, Managing Director, DHL Pakistan, recently visited Hinopak Motors Limited, Karachi. Speaking on the occasion Ms. Anne Schaefer, Director Strategic Planning - South Asia said "We see a great and growing demand from our customers for reliable and secure domestic transport solutions across the country. DHL differentiates itself through best-in class quality standards in a developing market segment. We see ourselves in the driver-seat in collaboration with local partners to expand and enhance the transportation infrastructure for companies operating in Pakistan. The expansion of our fleet is one important aspect but our activities also include work on related issues like road safety." Commenting on the expansion of DHL vehicle fleet, Imran Shaikh, Managing Director DHL Global Forwarding Pakistan said "This induction marks the expansion of our domestic operations in Pakistan and we hope that the extended fleet will help us to serve our customers well by providing timely and efficient services across Pakistan." DHL Global Forwarding has a significant infrastructure and operational presence in every global market and provides specific logistics solutions to meet the demanding needs of every industry. DHL is the logistics partners of the biggest FMCG manufacturers and retailers in the country, pharmaceutical manufacturers and wholesalers, technology industry and also the fashion industry. DHL is equipped to handle highly sensitive needs of oil refinery, like managing a drilling operation on or offshore, or mining, generating or distributing power.n




Byco Celebrates the Establishment Dnata reveals new brand identity following global success of 200 Retail Stations & Launch of Branded Tank Lorries

Dnata today unveiled a new company philosophy and fresh visual branding after having undergone a global brand realignment following a period of unprecedented growth worldwide. Hundreds of employees from across the Group celebrated dnata's revitalised look and feel, which include a striking new logo, at a launch event held in Dubai . A new company vision, mission and set of values have been created to encompass dnata's diverse portfolio of businesses and unify over 20,000 employees around the world. These will also act as a spring board for future expansion including the launch of a corporate travel service in India next month, capturing the essence of the company as a global player. The brand refresh comes during one of dnata's most successful periods in its 52 year history, as the company has transitioned from regional to global status. Over the past six years, the organisation, which incorporates a range of services including ground handling, cargo, travel, IT solutions and flight catering, has quadrupled in size. It now has a global footprint across 73 airports, in 38 countries across five continents. Despite the recent global economic downturn, dnata continues to expand. The recent acquisition of Alpha Flight Limited, which provides flight catering and retail services for over 100 airlines worldwide, catapulted the company's international flight catering business to its current position, now present at 62 airports in 12 countries. This significant milestone was complemented by the 2008 acquisitions of a 23% share in worldwide corporate travel company, Hogg Robinson Group (HRG) and 49% of the global outsource provider, Mind Pearl. "Today is the beginning of a new era for dnata, our customers and our staff," said Gary Chapman, President, dnata. "The brand refresh represents the start of our journey as a global, unified company. It has been an insightful and creative process which will further enhance our customer offering through our values of 'service excellence' and 'delighting customers'," he added. Staff events celebrating the new brand integration will also take place over the next few months in dnata offices across the globe including Switzerland, the United Kingdom, Australia, Singapore, the Philippines and Iraq.n


Byco, the fastest growing OMC in Pakistan, now has a strong network of over 200 retail stations across the nation. The celebratory event was held at Carlton Hotel, Karachi. Mr. Amir Abbassciy, CEO Byco Petroleum and Mr. Kalim Siddiqui, President Byco Petroleum, congratulated all the employees on this remarkable achievement and encouraged the team to continue working with the same zeal and dedication. Byco has achieved this milestone in a short span of time The event also marked the launch of Byco's newly-branded tank lorries. These state-of-the-art vehicles, with enhanced safety and security measures now ply on the roads across the nation.n

Air Marshal (Retd) Khalid Choudhry new CAA DG Air Marshal (Retd) Khalid Choudhry assumed charge of Civil Aviation Authority Director General. Choudhry earned his Wings from PAF Academy, Risalpur in April 1974. His aviation career includes more than 3,500 flying hours, primarily on fighter assignments. For his meritorious services, the Government of Pakistan conferred on him the Hilal in Order of Imtiaz (Military) and Tamgha-e-Basalatn



Oman Air Wins Best Extra Flights offered Business Class Seat by Thai Air At World Airline Awards

Oman Air was named winner of the World's Best Business Class Airline Seat award at the 2011 World Airline Awards, in a ceremony held in the French Air and Space Museum at the Paris Air Show.

Turkish Airlines named winner of "Best Premium Economy Seats" and "Best Airline Southern Europe" Turkish Airlines has been named as the winner of the categories, "Best Premium Economy Seats" and "Best Airline Southern Europe" by Skytrax, says a press release. Turkish Airlines has been chosen as the winner of the three categories by Skytrax which is a world recognised brand associated with air travel excellence in the 21st century, providing unique expertise to the world airline and airport industry. Vol: XXXXIV

For the convenience of their valued clients, Thai Airways has added extra flights to its schedule from Karachi, Lahore & Islamabad. The new flight program is effective from 11th June till 6th August.

SriLankan Airlines bags four awards State-run Sri Lankan Airlines has bagged four awards at Sri Lanka Tourism Authority awards, the airline said. It was named 'airline of the year 2010' for its contribution to inbound tourism traffic, the award for promoting inbound tourism and best print media presentation inflight magazine. It was also named to the 'hall of fame' for its continued contribution to the travel industry, especially after winning the 'airline of the year' for three years running.

The TCS Case Study appears prominently in 'Principles of Marketing - South Asian Perspective' The 13th edition of the Principles of Marketing, the seminal work of Professor Dr. Philip Kotler, is dedicated to the South Asian Perspective. Through the decades Kotler's work has held the fort as the primary text on marketing for business schools all over the world. In the 13th edition Kotler has shared the credits in equal measure with co-authors Professor Dr. Gary Armstrong (University of North Carolina), Professor Dr. Prafulla Y. Agnihotri (Indian Institute of Management, Calcutta), and Professor Dr. Ehsan ul Haque (Lahore University of Management Sciences, Lahore). The TCS Case Study appears prominently as the curtain-raiser of Chapter 12 titled 'Marketing Channels - Delivering Customer Value' on page 288. A special reference is also made to the TCS website <> in Chapter 17 that deals with Direct and Online Marketing on page 431. The TCS Story is narrated in great detail, and in crisp and clear terms, and presents TCS as an agile and innovative company "Â&#x2026; that has dramatically changed the distribution choices and expectations of both business and home consumers forever." This is high order validation for TCS from Kotler & Co, if any validation was needed after the conduct and publication in 2005 of the Harvard Business School's Case Study on TCS. n



Byco Celebrates the Establishment Dnata reveals new brand identity following global success of 200 Retail Stations & Launch of Branded Tank Lorries

Dnata today unveiled a new company philosophy and fresh visual branding after having undergone a global brand realignment following a period of unprecedented growth worldwide. Hundreds of employees from across the Group celebrated dnata's revitalised look and feel, which include a striking new logo, at a launch event held in Dubai . A new company vision, mission and set of values have been created to encompass dnata's diverse portfolio of businesses and unify over 20,000 employees around the world. These will also act as a spring board for future expansion including the launch of a corporate travel service in India next month, capturing the essence of the company as a global player. The brand refresh comes during one of dnata's most successful periods in its 52 year history, as the company has transitioned from regional to global status. Over the past six years, the organisation, which incorporates a range of services including ground handling, cargo, travel, IT solutions and flight catering, has quadrupled in size. It now has a global footprint across 73 airports, in 38 countries across five continents. Despite the recent global economic downturn, dnata continues to expand. The recent acquisition of Alpha Flight Limited, which provides flight catering and retail services for over 100 airlines worldwide, catapulted the company's international flight catering business to its current position, now present at 62 airports in 12 countries. This significant milestone was complemented by the 2008 acquisitions of a 23% share in worldwide corporate travel company, Hogg Robinson Group (HRG) and 49% of the global outsource provider, Mind Pearl. "Today is the beginning of a new era for dnata, our customers and our staff," said Gary Chapman, President, dnata. "The brand refresh represents the start of our journey as a global, unified company. It has been an insightful and creative process which will further enhance our customer offering through our values of 'service excellence' and 'delighting customers'," he added. Staff events celebrating the new brand integration will also take place over the next few months in dnata offices across the globe including Switzerland, the United Kingdom, Australia, Singapore, the Philippines and Iraq.n


Byco, the fastest growing OMC in Pakistan, now has a strong network of over 200 retail stations across the nation. The celebratory event was held at Carlton Hotel, Karachi. Mr. Amir Abbassciy, CEO Byco Petroleum and Mr. Kalim Siddiqui, President Byco Petroleum, congratulated all the employees on this remarkable achievement and encouraged the team to continue working with the same zeal and dedication. Byco has achieved this milestone in a short span of time The event also marked the launch of Byco's newly-branded tank lorries. These state-of-the-art vehicles, with enhanced safety and security measures now ply on the roads across the nation.n

Air Marshal (Retd) Khalid Choudhry new CAA DG Air Marshal (Retd) Khalid Choudhry assumed charge of Civil Aviation Authority Director General. Choudhry earned his Wings from PAF Academy, Risalpur in April 1974. His aviation career includes more than 3,500 flying hours, primarily on fighter assignments. For his meritorious services, the Government of Pakistan conferred on him the Hilal in Order of Imtiaz (Military) and Tamgha-e-Basalatn



Ramada introduces Amadeus Offers New Insights for CruiseGold Card Selling Agents

Ramada Gold Card Offers one night complimentary stay with Buffet Breakfast at Ramada Plaza Karachi Airport Hotel.n

Air Arabia Earns Top Airbus Excellence Award

Air Arabia , the first and largest lowcost carrier (LCC) in the Middle East and North Africa , has confirmed that it has won the A320 Family Operational Excellence Award by Airbus for the year 2009-2010. The Sharjah-based LCC received the award for achieving the highest level of A320 family aircraft utilization in the world for a fleet of less than 30 aircraft, with 99.8 per cent operational reliability. Air Arabia received the prestigious award in Toronto , Canada , during Airbus's biannual symposium of all operators of the A320 Family worldwide. Held earlier from May 23 through 26, this year's symposium marks the fifth consecutive occasion Air Arabia has won the award. This symposium reaffirmed the company's lead among all global airlines operating the Airbus A320 family aircraft.n 94

The adoption of new technologies is boosting the cruise industry's bottom line, according to a new study from Amadeus and the Cruise Lines International Association (CLIA). The new study examines the impact of social media on the cruise industry and suggests that social media is making waves for agents and cruise lines. From 'Likes' to 'Leads': Cruise Agents, Social Media & the Impact of Emerging Technologies surveyed representatives at cruise lines as well as more than 1,000 cruise specialists, inquiring about their current engagement with social technologies. The study, which was prepared by the independent research firm Schwartz Consulting Partners, also asked respondents to make predictions about their future engagement with social media.n

Etihad and Gerry's International team up to launch new coach service Etihad Airways, has teamed up with Gerry's International, one of Pakistan's leading aviation groups, will launch a dedicated coach service in Pakistan from May 02, 2011 for Etihad guests travelling between Allama Iqbal International Airport in Lahore and the cities of Sialkot and Faisalabad. The new daily service will be provided by two 16-seat luxury coaches and the coach operating schedule will be coordinated with the arrival and departure timings of the Etihad Airways flights at Lahore's Allama Iqbal International Airport. Guests wishing to inquire or book with 'Etihad Coach Services' to and from Sialkot can contact Gerry's International on the following number +92-52-427-3402. Guests travelling to and from Faisalabad can call +92-41-263-5457 or alternatively get in touch via e-mail at

Flydubai, GE unit sign $300m engine repair deal Flydubai, Dubai's first low-cost carrier, on recently announced a $300 million contract with GE Aviation for the maintenance, repair and overhaul of 109 engines over the next 10 years. The contract with GE Aviation, which was signed at the Paris Air Show, represents an investment of $2 million per CFM56-7B engine that powers flydubai's fleet of Boeing 737-800 NG aircraft, the airline said. "Flydubai is constantly looking for the best services and partners to ensure our fleet remains in the best condition to safeguard our operational obligations and safety of our passengers and crew. We have one of the newest fleets in the industry and signing this agreement will ensure our engines continue to perform at peak levels," Ghaith Al Ghaith, chief executive of flydubai, saidn


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