Sa'udi Arabia - Economic development
Sa'udi Arabia's first two development plans (1971–75 and 1976–80) stressed improvement of the country's economic infrastructure by expanding the highway system, port capacity, electric power output, water supply, and irrigated land. The third plan (1981–85), continuing the Sa'udi program of modernization without Westernization, aimed at diversifying and expanding the productive economic sectors of industry, mining, and agriculture. The government's long-term goal was to reduce the nation's dependence on oil exports and foreign labor. Expenditures for the 1981– 85 plan were initially estimated (at current prices) at $235.8 billion, compared with $140 billion for the 1975–80 plan. At the end of the third development plan, most of the infrastructure had been put in place. The fourth development plan (1985–90) emphasized consolidation of the gains of the previous 15 years and rational planning of economic activity. From the plan's emphasis on cost reduction and improvement of economic performance, it was clear that it had been drawn up under the assumption that the days of huge surpluses in the oil sector were over. Planned expenditures for the fourth plan were reduced several times. The fifth plan (1990–95) followed the goals of the fourth plan closely. Stressing economic diversification, this plan supported industry, agriculture, finance, and business services. An important goal of the sixth plan (1995–2000) was to reduce water consumption by 2% annually over the plan's period.
By the late 1990s, low oil prices had substantially reduced the GDP. Low revenues from oil and a rapidly expanding population put pressure on the government to put more emphasis on private sector expansion. Accordingly, the government began the process of privatizing government-owned entities in the telecommunications, transportation, and power generation sectors. However, there is concern that the growth in private sector jobs will not keep pace with the more quickly expanding population.
In April 2000, the government approved a new Foreign Direct Investment (FDI) Law, which allows 100% foreign ownership of investments, and established the General Investment Authority (SAGIA) to provide information and assistance for foreign investors.