How have lower oil prices affected the Eastern Province's economy, and how do you see the region responding over the remainder of the year and into 2016?
Saudi Arabia's economy, as a whole, is less likely to be affected by falling oil prices. The Eastern Province is the heart of Kingdom's industrial activities and home to many ongoing megaprojects. It is able to withstand the effects of fluctuations in oil prices. The first and foremost assurances for keeping the country's economy afloat came from the Custodian of the Two Holy Mosques, King Salman Bin Abdulaziz Al Saud, when he said, “Though oil prices are in the downward trend and affecting the economy, we are working to limit the effects on the country's overall development march." There are reasons why the Saudi economy will not feel the crunch of lower oil prices. It is because the government is committed to maintaining spending to prevent the negative implications of the crisis. Moreover, the Saudi economy has the ability to weather the current storm of declining oil prices by tapping into its huge reserves of $683 billion. The Saudi government has previous experiences in dealing with such situations of falling oil prices in the past and it had overcome those crises successfully. Generally, the Saudi economy has strong fundamentals supported by years of strong economic growth, which averaged 5.5% annually. Most importantly, the key contribution to economic growth comes from the non-oil sector, which on average grows by 6.8% per year, compared to oil sector growth of 1.6%. In addition, the national budget for 2015 has already envisaged a record projected expenditure of $229.3 billion, which will support government spending.
Within the Eastern Province, what are the major opportunities for private sector and foreign investments over the coming years?
The Eastern Province is called the economic engine of Saudi Arabia, offering enormous trade and business opportunities for local and foreign investors. It is the most important industrial region of Saudi Arabia, contributing 60% of GDP to the national economy. This province represents nearly half of the Kingdom's industrial investments and around 90% of the country's both oil and non-oil exports contributing significantly to the Kingdom's drive to diversify its income away from oil. Although the Eastern Province is the center of Saudi Arabia's oil and gas industries, many manufacturing industries, such as petrochemicals, chemicals, steel, aluminum, plastics, and foodstuffs, have developed in the region. It has an internationally recognized petrochemical industry located in the Jubail Industrial Cities (I and II) and currently represent more than 7% of the total global supplies of petrochemical products. The Saudi Basic Industries Corporation (SABIC) is behind the growth and development of the Kingdom's petrochemical industries. Most of its 17 manufacturing facilities including 14 joint ventures established in cooperation with the world's major giants are located in Jubail.
How is the Asharqia Chamber working to promote and develop employment opportunities for young Saudis in the Eastern Province?
The development of the SME sector is key to creating more jobs for Saudis. Since its inception in 1952, Asharqia Chamber has been supporting the growth of SMEs, which represent nearly 90% of the total business establishments in the country. The Chamber has set up a SME Development Center through which scores of studies have been carried out to help local people start their own small and medium size enterprises. The SME Development Center has organized many seminars, symposia, conferences, and workshops to educate and keep the owners of SMEs abreast of the latest in technology and sources of financing. The Chamber has launched the best SME Award to encourage private companies to play a larger role in the economy. With the Nitaqat labor law in place that, until the middle of 2014 had created over 600,000 jobs for Saudis, there have been some impacts of the system on the SME and Asharqia Chamber has been working with the Labor Ministry to reduce the Saudiization pressure on small enterprises.