With the global economic recovery pushing oil prices again above the $100 mark, Saudi Arabia, which holds some 20% of the world’s proven petroleum reserves and ranks as the largest oil exporter, may feel cheerful about its future.
Perhaps. But rather than just relying on oil revenues, which currently contribute some 85 percent of the state budget, the desert Kingdom is moving to consolidate its oil boon and focus on economic diversification and sustainable growth.
That is a smart way to go. The International Monetary Fund reported that over the past decade, the number of Saudis has grown four times the average rate for advanced economies. Half of the Saudi population is now below the age of 23, adding stress to the labor market and to the country’s welfare system.
The Saudi government recently published its Vision 2020 that maps the road ahead. The document views the country emerging as “a diversified and prosperous economy.” The report stressed that manufacturing, innovation, training and education, and the private sector entrepreneurship were key to sustainable growth.
GE has been active in Saudi Arabia for over 80 years, and the company plays a key role in supporting the Kingdom to make that transition. GE supplied the country with equipment for its first oil refinery in 1942.
Today, more than 500 GE turbines produce over half of Saudi electricity. The company just announced a $300 million contract to supply 13 new gas turbines that will add 800 megawatts to the grid and help deal with summer blackouts. GE’s water treatment technology delivers some 180 million of liters of clean water every day to the parched country.
From left to right: Eng. Ali AlBarrak, CEO of Saudi Electricity Co., Dr. Abdulaziz AlJazzar, CEO of AlMalaz Group, and Dr. Ihsan AbuHulaiqa, CEO Joatha for Business Development And Executive Member Shura Council.
Elsewhere, GE is training some Saudi professionals in the energy, healthcare and aviation sectors. The company is also expanding the country’s R&D base. In June 2011, GE opened a $250 million technology and training center in Dammam. The center focuses on innovation and technology transfer and helps the Kingdom expand its manufacturing and export sectors.
GE has also partnered with the Saudi Ministry of Health to modernize the country’s healthcare. Last year, GE’s Chief Marketing Officer Beth Comstock traveled to the Kingdom and signed an agreement with the ministry to build a sustainable healthcare model that can provide more access to care, and deliver better quality at lower costs, which are the three tenets of GE’s healthymagination strategy.
Comstock returned Riyadh in October this year to raise awareness of breast cancer screenings and the growing incidence of breast cancer in the Kingdom – currently, the most common form of cancer. In a joint stakeholder event with the health ministry, Comstock and senior officials from the ministry and other key institutions addressed over 200 healthcare practitioners and key opinion leaders about the importance of early diagnosis and screening programs. GE and the ministry also launched a dedicated website for promoting breast cancer awareness