Saudi Arabia-NON-OIL INDUSTRIAL SECTOR

Water tower, Buraydah, Al Qasim

Courtesy Saudi Arabian Information Office

Water from desalination plants, such as that above, helps supplement limited groundwater.

Courtesy Aramco World

Laboratory technician at work

Courtesy Aramco World

During the 1980s, the government established, virtually from scratch, a modern industrial sector. The industrialization process had two goals: first, the use of the kingdom's enormous gas production as industrial inputs to produce chemicals and petrochemicals for export and, second, the construction of energy-intensive industries, some for import-substitution purposes and others to meet infrastructural needs. The government also established state-of-the-art industrial cities and facilities to support its industrial program, including those at Al Jubayl and Yanbu.

By the early 1990s, the vast majority of these plants had been completed, and few major expansions were planned. Infrastructure requirements had largely stabilized and were adequate to meet the needs of the population and industry for much of the 1990s. Therefore, the government concentrated on maintenance and on improving productivity and efficiency. Moreover, with the onset of serious budgetary constraints, the government's role in advancing the domestic industrialization process grew more indirect. The government was forcing a number of state-owned industrial institutions to seek financing for their new capacity-expansion programs from nontraditional sources such as domestic and foreign commercial banks, stock markets, and private investors. In an ongoing attempt to encourage more private sector investment in manufacturing, particularly in light industries, local business received incentives in the form of production and consumption subsidies.

Data as of December 1992