3 Economic development is a vital element which the state must focus on and take care of. A strong and growing economy provides the solid foundation for cultural renaissance and is a mainstay of our citizens present and future prosperity and wellbeing. The Kingdom s interest endorsed by God - and efforts to develop the economy take into account the many requirements for stable economic growth and constitute an important part of development plans. The Kingdom has always had as a priority the needs of citizens in all regions and the provision of services and public utility projects which are requirements of modern development. Furthermore, it has sought to develop financial, industrial and service sectors by providing organizational facilities, financial support and marketing protection. It has also initiated the establishment of strategic economic entities and large economic projects as a way of investing in the blessings and privileges that God has bestowed on Arriyadh. Under the leadership of the Custodian of the Two Holy Mosques may God support him, the Crown Prince has initiated major service and public utility projects, so that all regions can benefit from a sustainable economic renaissance. God has bestowed Arriyadh with plenty of economic blessings. These have contributed to the progress of the City s economy, and have made it a favourable place for investment by Saudi citizens, GCC nationals and foreigners. Arriyadh is the administrative and political capital of the Kingdom and, as the center of finance and business, is the interface of political decision making and economic leverage. Arriyadh enjoys advantages being strategically located among the various regions of the Kingdom, in addition to its natural blessings which have made the City a center for various industries, and multilateral trade activities. The Kingdom s continued focus on infrastructural projects have helped develop the service sector, create economic value and prosperity in the private sector and attract domestic and foreign investment. By God s help and grace, Arriyadh will achieve further integrated economic growth which will continue to rely on the various strategic plans and monitoring needs while ambitiously looking towards the future wellbeing and development of the City. H.R.H Prince Salman Bin Abdulaziz Chairman, High Commission for the Development of Arriyadh
5 Economic development is closely related to urban development and both exercise a mutual influence upon each other. Urban development has opened the door to modern economic domains such as environmental protection issues and tourism. The requirements of urban planning are equally important for economic development as an integral part of the process of urban development. Balanced urban development and the realization of the future needs of Arriyadh s public utilities, services and housing can only be fulfilled within the framework of successful economic formulas that provide abundant and required resources. The concern of the High Commission for the Development of Arriyadh with the City s economy is based on strategic studies formulating long-term plans and close coordination between sector performance for the most effective development of urban components. The comprehensive strategic plan of Arriyadh focuses on economic development as a vital sector of urban development. The strategic plan sets general axes for economic development and these include the diversification of the city s resources, creation of new sectors and investment in human, natural and strategic resources. The plan also works on the activation of a complementary role with the private sector, and expands its participation to include development of the basic requirements of the City, its public utilities and future services. Meeting these requirements will be achieved according to viable economic principles while improving and developing the environment, resources and urban capacities to keep Arriyadh City an attractive destination for sustainable investment. The most prominent urban development programs represent the best and most economically feasible investment opportunities. Examples for Arriyadh are the planned urban sub-centers, development of communications and public transportation, open areas, building systems, multi-use areas and the city center. All of these, as they roll out represent cost effective urban development programs. Careful and regular monitoring of Arriyadh s economic indicators as well as studies on the reciprocal impact between economy and various urban activities and urban development plans reflect the responsibilities of the High Commission for the Development of Arriyadh. This ongoing monitoring of the City s economic status is a key part of the Commission s concern and responsibility. H.E Abdullatif Bin Abdulmalik Al Sheikh Member of the High Commission for the Development of Arriyadh Chairman of Projects and Planning Department in the Commission
6 Contents This Report 12 Part One: Kingdom of Saudi Arabia: General Information 15 Part Two: Arriyadh City 19 Theme One: Arriyadh City: General Features 20 Theme Two: Arriyadh City Importance 24 Theme Three: Infrastructure in Arriyadh City 25 Roads and Transportation 25 King Khaled Airport in Arriyadh 25 Ports and Railroads 27 Telecommunications 27 Post 29 Electricity 29 Water and Sanitary Waste 31 Theme Four: Economic and Service Sectors in Arriyadh City 32 Industrial Sector 32 Agricultural Sector 33 Trade Sector 35 Construction and Building Sector (Contracting) 35 Real Estate Sector 36 Insurance Services Sector 37 Education Sector 37 Tourism Sector 40 Health Sector 41 Finance and Banking Services Sector 43 Telecommunications and Information Technology Sector 43 Theme Five: The High Commission for the Development of Arriyadh and its Role in the Development of the City Sub-Centers 46 A Plan to Develop the Environmental and Urban Situation for South of Arriyadh City 47 Theme Six: Arriyadh Competitiveness Center 48 Theme Seven: Arriyadh Chamber of Commerce and Industry 50 Part Three: Kingdom of Saudi Arabia and the Enhancement of Investment Climate 53 Theme One: Macro-Economic Indicators in the Kingdom 54 State Budget 54 Pages 44 8
7 Pages Gross Domestic Product (GDP) 55 Balance of Payments 56 Foreign Trade Relations 56 Cost of Living Index 59 Wholesale Index 59 Per Capita Income 60 Labor Market Structure 61 Transport and Telecommunications Infrastructure 62 Major Producing Sectors 64 Performance of the Saudi Economy and Future Outlook 66 National Strategies 67 Theme Two: Policies and Measures Supporting Investment in the Kingdom 71 The Economic Strategy & Privatization 71 Projects Supporting the Kingdom s Transfer to a Knowledge-Based Economy 73 Economic Freedom and the Enhancement of Investment Climate 77 The Kingdom & the WTO 77 Saudi Arabia s Capital Market 79 Real Estate Investment and Companies 80 Banking System Development 83 Theme Three: Rules of Investment in the Kingdom and Related Procedures 85 Labor Law 85 The Foreign Investment Act 85 Capital Market Law 86 Corporate Law 87 Commercial Register Law 87 Trade Agencies Law 88 Trademarks Law 88 Commercial Papers Regulations 89 Customs Law 89 Income Tax Law 89 Measures and Weights Law 90 Cooperative Insurance Law 90 Social Insurance Law 91 9
8 Contents Pages General Environment Law 91 Intellectual Property Rights 92 Commercial Mortgage Law 92 Competition Law 92 Mining Investment Law 92 Theme Four: Higher and Major Investment Authorities In the Kingdom 94 The Supreme Economic Council 94 The Supreme Council for Petroleum and Mineral Affairs 94 Saudi Arabian General Investment Authority (SAGIA) 94 The Saudi Commission for Tourism and Antiquities (SCTA) 95 The Capital Market Authority (CMA) 96 Communications and Information Technology Commission (CITC) 97 Royal Commission for Jubail and Yanbu 98 Saudi Organization for Industrial Estates and Technology Zones 98 Saudi Aramco 101 Saudi Basic Industries Corporation (SABIC) 101 Saudi Arabian Mining Company (Ma aden) 102 Saudi Ports Authority 103 Theme Five: Financial Services and Credit Funds in the Kingdom 104 Saudi Industrial Development Fund (SIDF) 104 Agricultural Development Fund (formerly Saudi Arabian Agricultural Bank) 105 Saudi Fund for Development (SFD) 106 The Public Investment Fund (PIF) 107 Real Estate Development Fund (REDF) 107 Human Resources Development Fund (HRDF) 107 The Centennial Fund 108 Saudi Credit Bank (SCB) 109 Commercial Banks 110 Theme Six: Ninth Development Plan and Investment Outlook in the Kingdom 112 Part Four: Investment Opportunities in the City of Arriyadh 117 Theme One: Investment Opportunities Offered by the Government and Other Agencies 118 The High Commission for the Development of Arriyadh 118 Saudi Commission for Tourism and Antiquities (SCTA)
9 Pages Saudi Arabian General Investment Authority (SAGIA) 120 The Saudi Organization for Industrial Estates and Technology Zones (SOIETZ) 120 Arriyadh Region Municipality 121 Public Pension Agency 121 General Organization for Social Insurance 121 King Saud University in Arriyadh 121 Saudi Electricity Company 122 Budget Surplus Projects 122 Theme Two: Investment Opportunities Offered by Other Parties 124 Saudi Aramco 124 Riyadh Chamber of Commerce and Industry 124 Theme Three: Investment Opportunities Resulting from Sectoral Studies 126 The Industrial Sector 126 The Water Sector 126 Sanitation Sector 126 The Electricity Sector 127 Education Sector 127 Health Sector 127 Roads and Transport Sector 128 The Telecommunications Sector 128 Housing Sector 128 The Social Welfare Sector 128 The Tourism Sector 128 Personal Services Sector 128 Statistical Tables and Addresses of Agencies Related to Investment 132 Web Addresses of Selected Organizations
10 The High Commission for the Development of Arriyadh This Report The Investment Climate in Arriyadh City report represents one of the objectives of the High Commission for the Development of Arriyadh City to provide local and foreign businessmen and investors with guidelines and information on policies and procedures related to relevant agencies and the range of investment opportunities available in Arriyadh City. The 2011 edition comprises four parts: Part One provides background and general information on the Kingdom of Saudi Arabia. Part Two under the title Arriyadh City presents background information on Arriyadh City; its importance, infrastructure, economic and service sectors and the role of the High Commission for the Development of Arriyadh City in the development of the City. Part Three shows the role of the Kingdom in enhancing the investment climate, including the macroeconomic indicators in Saudi Arabia, and policies and procedures adopted by the government to support the investment in the Kingdom and Arriyadh City. It provides key regulations and procedures, including the recent labour law related to investment, foreign investment and capital markets. It also covers main government agencies related to investment in the Kingdom and Arriyadh City, such as the Supreme Economic Council, Supreme Council for Petroleum and Minerals, General Investment Authority, Saudi Commission for Tourism and Antiquities, Telecommunication and Information Technology Commission, etc. It also includes the agencies which provide funding and investment support, such as Saudi Industrial Development Fund, Real Estate Development Fund, Saudi Fund for Development, Public Investment Fund as well as commercial banks. This part ends with a brief on the indicators and goals of the Ninth Development Plan, in particular the investment strategy in the Kingdom. Part Four handles investment opportunities in Arriyadh City which are provided by various public agencies such as the High Commission for the Development of Arriyadh, Saudi Commission for Tourism and Antiquities and other agencies. It also includes information on investment opportunities in various private economic and service sectors and the opportunities resulting from studies of sectors. The Investment Climate Report concludes with various statistical tables that review the essential economic, service and social indicators in the Kingdom in general and Arriyadh City in particular. This is accompanied by a list of websites and other useful information on the most important public and private organizations involved in investment, administrative and legal procedures. 12
11 Investment Climate in Arriyadh
12 The High Commission for the Development of Arriyadh 14
13 KINGDOM OF SAUDI ARABIA GENERAL INFORMATION
14 The High Commission for the Development of Arriyadh Kingdom of Saudi Arabia: General Information Basic Law The Kingdom of Saudi Arabia is an Arab Islamic country, applying Islamic Sharia law in its judicial system. The constitution of the Kingdom is based on the Holy Qur an and the Sunna of the Prophet (peace be upon him). The political system is based on absolute monarchy. The executive and legislative powers are exercised by the King and the Council of Ministers in accordance with the teachings of Islam. The Consultative Council was established to provide advice to the King and the Council of Ministers in matters of relevance to the Government and its policies. Regional Municipal Councils (of whom half are elected) were also established to participate in the decision making process. The King of the Kingdom and Prime Minister: The Custodian of the Two Holy Mosques, King Abdullah bin Abdulaziz Al-Saud. Crown Prince and the First Deputy Prime Minister: His Royal Highness Prince Sultan bin Abdulaziz Al-Saud. Second Deputy Prime Minister: His Royal Highness Prince Nayef bin Abdulaziz Al-Saud. The Saudi Emblem The emblem of the Kingdom of Saudi Arabia is made up of two crossed Arabian swords; the space above is topped with a palm tree. The two swords symbolize strength and justice, whereas the palm tree symbolizes growth and prosperity. Membership in International Economic and Trade Organizations The Kingdom of Saudi Arabia is a member of trade, economic and international organizations including: 1. Organization of Islamic Conference 2. Arab League 3. Gulf Cooperation Council 4. Islamic Development Bank 5. United Nations 6. World Trade Organization 7. Arab Monetary Fund 8. Arab Investment Guarantee Corporation 9. Greater Arab Free Trade Organization 10. World Bank 11. International Monetary Fund 12. Group of Twenty (G-20) 13. Organization of Petroleum Exporting Countries (OPEC) 14. Organization of Arab Petroleum Exporting Countries (OAPEC) The Kingdom s Regions The Kingdom consists of 13 administrative regions. Each one consists of a number of governorates. The total number of governorates in the Kingdom amounts to 43 class A and 61 class B governorates. Capital: Arriyadh City Main Cities: Makkah: Islam s holiest place. Madinah: Islam s second holiest place. Jeddah: the commercial capital, an important port and the main gateway for pilgrims. Dammam: the capital of the Eastern Province, rich in oil and an important port. Dhahran: the headquarters of Saudi Aramco, the world s largest oil company. Religion: Islam Official Language: Arabic Geographic Features Location: The Kingdom of Saudi Arabia lies in the southernmost part of western Asia. It is bordered by the Red Sea on the west; the Arabian Gulf, the United Arab Emirates and Qatar on the east; Kuwait, Iraq and Jordan on the north and Yemen and Sultanate of Oman on the south. Area: The Kingdom occupies about four-fifths of the Arabian Peninsula, with a total land area of around 2,149,690 km 2. Terrain: There are various types of terrain in the Kingdom resulting from its vast geographical area. In the west is a narrow coastal plain paralleled by a mountainous chain sloping eastwards to the Arabian Gulf. The Empty Quarter and An Nafud Deserts occupy the south-eastern and northern parts of the Kingdom respectively. 16
15 Climate: The climate of the Kingdom varies from region to region, depending on the type of terrain. In general, it is continental, i.e. hot during summer and cold during winter, with a low level of rainfall. However, the climate is moderate in the western and south-western highlands. In the central region, the climate is dry and hot in summer and dry and cold in winter. The coastal areas are generally characterized by high degrees of humidity. Working Hours Government Sector: 7.30 a.m. to 2.30 p.m.(saturday-wednesday) Banking Sector: 9.30 a.m. to 4.30 p.m. (Saturday to Wednesday) Private Sector: Varies, depending on company and location Shops: 10 a.m to 12 p.m and 4 p.m to 10 p.m The Calendar: the Kingdom follows the Islamic Hijri calendar. This is based as a starting date of the day when Prophet Mohammed (peace be upon him) emigrated from Makkah to Madinah, corresponding to the Gregorian year 623. The Hijri year consists of 12 months and is 10 or 11 days shorter than the Gregorian Year. The days of the Hijri month range between 29 and 30 days. - National Day: 23 rd of September Official Time The Kingdom s official local time is three hours ahead of Greenwich Mean Time. Currency The currency unit of the Kingdom is the Saudi Riyal, which is divided into 100 Halalas. Parts of the Riyal are: Paper Currency: 1 Riyal, 5 Riyals, 10 Riyals, 20 Riyals, 50 Riyals, 100 Riyals, 200 Riyals and 500 Riyals. Coin Currency: 1 Riyal, 50 Halalas, 25 Halalas, 10 and 5 Halalas. Custom duty on most imported items is 5%. Foreign Exchange Control There is no restriction on currency transfer in or out the Kingdom. The exchange rate of the Saudi Riyal is SR 3.75 = 1 US Dollar. Measures and Weights The Kingdom adopts the metric system (kilometer, meter, and centimeter) in measures and kilograms and ton in weights. Investment Climate in Arriyadh 2011 Official Holidays Besides the weekends (Thursday and Friday), the following official holidays are customary: - Eid Al-Fitr: from the 25 th of Ramadan to 5 th of Shawal* - Eid Al-Adha: from the 5 th to 15 th of Dhil Hijja* Power Voltage Both 110 and 220 Volts are used. International Telephone Code Area Code (Arriyadh 1, Jeddah 2, and Dammam, Dhahran and Al Khobar 3). Population According to 2010 Population and Housing Survey (1) Total Population (Saudi and Non-Saudi) 27,136,977 Males 15,460,147 Females 11,676,830 Saudi 18,707,576 69% Males 9,527, % Females 9,180, % Non-Saudi 8,429,401 31% Males 5,932, % Females 2,496, % Number of Residences in the Kingdom 4,643,151 residences )*( Holidays in the private sector vary from one firm to another. )1( Central Dept of Statistics and Information: preliminary results of General Census of Population and Housing,
17 ARRIYADH CITY: CONTINUOUS DEVELOPMENT AND PROMISING INVESTMENT OPPORTUNITIES
18 The High Commission for the Development of Arriyadh Theme One: Arriyadh City: General Features History of Arriyadh (1) Arriyadh is the plural of the Arabic word rawdah, which means garden or meadow. The city might have taken this name since it was one of the few green areas amid the desert. The City is an expansion of the historic city (Hajr Al Yamamah). It goes back to both tribes Tasm and Judais. They built palaces and forts whose ruins were seen at the beginning of the fourth century. Then, Arabic tribes settled in the area and spread in the valley. The city flourished in the pre-islamic era and turned into a market and center for trading, poetry and literature. With the advent of Islam in the Hijaz and all over the Arabian Peninsula, Al Hajr city in the time of Succession (Khelapha) became a leader for the territory of Al Yamamah. But with the shift of the Islamic Caliphate outside the Arabian Peninsula and the emergence of rich Muslim provinces, less attention and care were given to Al Yamamah s cities and villages which affected its stability, growth and development. With the modern era in the eighteenth century, Arriyadh City emerged upon the stone ruins of Al Hajr City and the surrounding villages and orchards. Arriyadh grew near Addiriyah City, the Saudi state s first capital and the starting point of the Salafi call of Imam Mohamed Bin Abdul Wahhab. Hostilities broke out between the two cities lasting for 28 years during which Arriyadh came under the control of Addiriyah City The influence and power of Addiriyah City extended to most parts of the Arabian Peninsula as far as the frontiers of Iraq and Al Sham. In 1818 Addiriyah was destroyed by forces sent by Ibrahim Pasha, the son of Mohamed Ali Pasha of Egypt. At this time, the Ottoman Empire was afraid of an Arab call to a revolution in Najd. As a result a military conflict occurred between the Ottoman Empire and the Saudi State. The result was Ottoman control over Hijaz. However, the Ottoman Empire s control over Hijaz could not last for long because of the continuing attacks against its troops, and thus it withdrew. Al Saud regained their power in 1825 at the hands of Imam Turki bin Abdullah who made Arriyadh the capital of his state after the destruction of Addiriyah. Imam Turki built the city s mosque, established the Prince s palace and a strong fort. Since that time, Arriyadh remained the capital of the second Saudi State. After a battle led by King Abdulaziz bin Abdurrahman bin Faisal to open Arriyadh it became the capital of the modern Saudi State; with the king initiating the process of unifying and establishing of the Kingdom of Saudi Arabia. The High Commission for the Development of Arriyadh is the party responsible for drawing up the development and strategic long-term plans of the capital. These reflect the future outlook of the city, determine its path and set the mechanisms for execution and follow up by studying all factors related to implementing development plans. Location Arriyadh is strategically located at a major crossroads of the continents of the world in the heart of the Kingdom and the eastern part of the Arabian Peninsula. It lies on Latitude N and Longitude E and is about 600 meters above sea level. Area Until 2011, the developed area in Arriyadh City is 1219 km 2. This area is expected to reach 2500 km 2 in The area allocated for urban development is expected to reach 2395 km 2 in 2014, and 3115 km 2 in 2029, while development protection area, the administrative boundaries, amounts to 5961 km 2. The area allotted for housing represented about 17.8% of the total area of the city, the area allotted for industrial purposes 1.88%, transport services 3.12%, commercial purposes 1.97%, health, government and educational purposes 10.66% and cultural and entertainment purposes 6.48% (2). This expansion beyond its original walls has resulted in Arriyadh City becoming one of the three largest metropolitan areas in the Kingdom, together with Makkah and Jeddah and the conurbation of Dhahran, Dammam and Al Khobar in the Eastern Province (1).The City includes 13 municipalities in addition to Addiriyah governorate that accommodates 209 quarters (2). 20 (1) (2( The High Commission for the Development of Arriyadh: data on land uses for Arriyadh City, 2009.
19 Climate The climate of Arriyadh is marked by extremes of temperature: it is very hot in summer and cold in winter with low humidity throughout the year, particularly in the summer season. The temperature varies greatly between night and day. In summer, the lowest average temperature ranges between o C and the highest o C. Humidity ranges from 10% to 13%. It is cold in winter; the lowest temperature ranges between 8-14 o C while the highest ranges between o C, the humidity ranges between 40% and 49%. Rainfall ranges from 10 cm to 13.1 cm (approximately four inches (3) ). Composition of Population Arriyadh City is one of the world s fastest growing cities, and its population has risen steadily at a rate of 4% during the period (4). In the early 1970s, the population of the City was no more than 100,000, mostly of common heritage and following a pattern of life characterized by unified activities. Today the city accommodates more than 50 different cultures, languages and activities (5). The increase in population is the most prominent feature of the City and is responsible for the growth of other sectors. The most important advantage of this growth is the increase rate has never been less than 8% which is a high rate compared to similar cities. In the 1980s and 1990s that rate doubled to 16%. The other advantage of Arriyadh population growth is characterized by qualitative features in the standard of living of residents (6). According the preliminary results of the general census of population and housing, 2010 (7), the overall population of Arriyadh City reached more than 5.2 million (8) ; 59% males and 41% females. The Saudi population reached more than 3.1 million or 60% of the total, while the non-saudi population reached 2.1 million or 40% (9). Investment Climate in Arriyadh 2011 Population Distribution in Arriyadh City 2010 (10) Saudis Males Females Grand Total Males % Females % 1,645,060 1,506,149 3,151, % 47.8% Non-Saudis 1,460, ,773 2,103, % 30.6% Total 3,105,638 2,148,922 5,254,560 59% 41% Occupied Residences 857,764 (1( The High Commission for the Development of Arriyadh website: (2( Ibid. (3) Ibid. (4( The High Commission for the Development of Arriyadh, population estimates study of Arriyadh city, (5( CDSI, 44 th Statistical Yearbook, SAMA # 45, (6( Ibid. (7( Ministry of Economy and Planning CDSI, preliminary results of the General Census of Population and Housing, (8( The real number is 5,254,560. (9( Arriyadh City Website (10( Ibid. 21
20 The High Commission for the Development of Arriyadh Population Pyramid (1) Young people make up the majority of the population of Arriyadh City. Those under 15 years of age constitute about 34% of the total, as shown below, thus the base of the pyramid is wide due to the growing number of youth. This will lead to an increased labour force in the future and necessitate economic programs and projects in order to increase job opportunities. The Saudi population as a whole is typically younger compared to other countries. The under-15s make up 40% of Saudis and 23% of non-saudis (as shown below) and that is due to recruiting young people for employment. Figure (5): Saudi Population Pyramid Male Female Age Gender There is a significant difference in gender ratios between the Saudi and non-saudi population. According to preliminary results of the general census of population and housing, 2010 Saudi males represent 52% compared to 48% females, whereas non-saudi males represent 69.4% compared to 30.6% females (2). Saudi and non-saudi males represent 59% of the population compared to 41% females. Households Arriyadh Region witnessed a noticeable increase in the number of households. There are two types of households: the nuclear family, consisting of one couple and their children, and the extended family, consisting of married couples and their relatives. The changing pattern of Saudi households shows an increase in numbers of nuclear families 75% in 2004, compared to 67% in The percentage of extended family reached 21% in 2004 (3). The number of households in Arriyadh City reached 774,000 with an average size of 6.2 individuals per family. This average is expected to fall to about 5.7 individuals per family in 2024 (4) and according to statistical expectations the number of households in 2024 will reach 1.1 million (5) Figure (6): Non- Saudi Population Pyramid Age Male Female (1( Arriyadh City Website (2) Ministry of Economy and Planning, CDSI, preliminary results of the General Census of Population and Housing (3) Ibid. (4) The High Commission for the Development of Arriyadh housing reality and future in Arriyadh City, (5) Ibid.
21 Labour Force According to 2009 indicators, the total labour force in Arriyadh City reached 1,722,833. For Saudis the number of labour force aged 15 and above reached about 996,300 made up of 832,000 males and 164,000 females. The number of Saudis in the age range of 15 and above who are unemployed reached 1.5 million made up of one million males and 451,000 females. The number of unemployed in Arriyadh City is distributed between households and partly comprises of those who are in education and others who are retired and financially independent. About 668,000 of the unemployed aged 15 and above are students. Cost of Living The period from 2004 to 2009 witnessed a noticeable increase in the cost of living index in the Kingdom. The annual average increased from in 2006 to 106 in 2007 then in 2008 to reach in Most of the cost of living increases in 2009 were in the following categories: housing and related costs 14.2%, food and beverages 2%, household furniture 8.4%, medical care 7%, education and luxury items 1.3%, clothing and footwear 0.5% and transportation and telecommunications 0.1%. These increases are due to several reasons: the continuous raising of governmental expenditures for the purpose of enhancing economic and social development, increase in oil price, decrease of skilled labour force, price increases of food categories and other commodities in the world markets in addition to the increase of dollar exchange compared to other currencies (1). Investment Climate in Arriyadh 2011 (1) Saudi Arabian Monetary Agency (SAMA), 46 th Annual Report,
22 The High Commission for the Development of Arriyadh Theme Two: Arriyadh City Importance The importance of Arriyadh City is represented in many factors: Arriyadh is the Capital of the Kingdom of Saudi Arabia Arriyadh is the political and administrative capital of the Kingdom. In 1824 it was the second Saudi capital, and then it regained its glory after being restored by King Abdulaziz in Arriyadh is the Headquarter of Central Governmental Agencies Arriyadh is the location of the Royal Court, the Prime Ministry, ministries, most Central Governmental agencies, military headquarters as well as civil agency and telecommunications headquarters. It is also the location of the Saudi News Agency, Saudi Arabian Monetary Agency, King Abdulaziz City for Science and Technology, Capital Market Authority, General Investment Authority, Saudi Commission for Tourism and Antiquities, Customs Department and other major organisations. Arriyadh is the Location of General Managements of Banks and the Major Economic Companies Arriyadh accommodates the headquarters of Saudi Commercial Banks. These include Arriyadh Bank, Al Bilad Bank, Al Inma Bank, Al Rajhi Bank, Saudi Hollandi Bank, Banque Saudi Fransi, SABB, SAMBA Financial Group, Saudi Investment Bank and Arab National Bank. It is also the Saudi Arabian headquarters of Arab and foreign branch banks such as Emirates Bank, Kuwaiti Bank, Muscat Bank, Bahrain National Bank, Deutsche Bank Group and others. Also the administrative headquarters of large companies are located in Arriyadh. These include SABIC telecommunications companies, Tasnee, National Gas and Industrial Co (GASCO), Saudi Advanced Industries Company, the National Co. for Glass Industries, Saudi Chemical Co., Saudi Arabian Mining Company, Saudi Cable Company, Al Marai, Yamamah Cement Company, Arriyadh Development Co and Saudi Real Estate Co. Arriyadh gains economic importance as well as a competitive advantage from being the headquarters of banks and large corporations. Arriyadh is the Largest Population Center in the Arabian Peninsula Arriyadh is the largest population center in the Arabian Peninsula. The population of Arriyadh city has doubled more than ten times during the past three decades (1). It is expected to reach 8.2 million in Arriyadh is the Location of Central Gulf Bank Arriyadh has been selected to be the headquarters of the Joint Central Gulf Bank which will supervise the execution of the monetary policy of the Gulf Union as a kind of Arabian economic assembly. It will also supervise the foreign monetary reserves and methods of their management and set the mechanisms that maintain the financial and monetary stability in Gulf countries. Economically speaking, the existence of such a bank in Arriyadh City gives it a financial importance and shows its competitive merit. Other Matters Related to the Importance of Arriyadh The importance of Arriyadh City is not only limited to the previously mentioned aspects. It is also the location of King Abdullah Financial Center planned as one of the biggest world financial cities. It is also a center for exchanging electronic technology and knowledge, the Kingdom s gate to an intellectual economy with projects such as Riyadh Techno Valley, Riyadh Assembly for Communications and IT, Saudi Organization for Industrial Estates and Technology Zones. 24 (1( The High Commission for the Development of Arriaydh: estimates of population, 2029.