Editing Economy of Saudi Arabia (section)

===Diversification and the development plans===
All the Saudi government's five-year plan since 1970 have called for diversifying the economy beyond oil, but with marginal success.<ref name="house-162">{{cite book |last1=House |first1=Karen Elliot |url=https://books.google.com/books?id=dIu0LSe8aVwC&q=every+five-year+plan+since+the+first+one+in+1970+has+called+for+diversifying+the+economy+beyond+oil&pg=PA163 |title=On Saudi Arabia: Its People, Past, Religion, Fault Lines and Future |date=2012 |publisher=Alfred A. Knopf |isbn=978-0307473288 |page=163 |quote=every five-year plan since the first one in 1970 has called for diversifying the economy beyond oil, but oil is still supreme |access-date=13 February 2015 |archive-url=https://web.archive.org/web/20210613081751/https://books.google.com/books?id=dIu0LSe8aVwC&q=every+five-year+plan+since+the+first+one+in+1970+has+called+for+diversifying+the+economy+beyond+oil&pg=PA163 |archive-date=13 June 2021 |url-status=live}}</ref>

The government has sought to allocate its petroleum income to transform its relatively undeveloped, oil-based economy into a modern industrial state, while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed rapidly. Oil wealth has increased the standard of living of most Saudis. However, significant [[population growth]] has strained the government's ability to finance further improvements in the country's standard of living. Heavy dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. The mismatch between the job skills of Saudi graduates and the needs of the private job market at all levels remains the principal obstacle to economic diversification and development; about 4.6&nbsp;million non-Saudis are employed in the economy.<ref name="usgov" />

Saudi Arabia first began to diversify its economy to reduce dependency on oil in the 1970s as part of its first five-year development plan. Basic petrochemical industries using petroleum byproducts as feedstock were developed.<ref name=PCPSKSA>{{cite web|title=The Petrochemicals and Plastics Sector in the Kingdom of Saudi Arabia|url=http://www.us-sabc.org/files/public/Petrochemicals_Brochure.pdf|publisher=U.S.–Saudi Arabian Business Council|access-date=12 February 2015|url-status=dead|archive-url=https://web.archive.org/web/20141212225752/http://www.us-sabc.org/files/public/Petrochemicals_Brochure.pdf|archive-date=12 December 2014}}</ref> The fishing villages of al-[[Jubail]] on the [[Persian Gulf]] and [[Yanbu]] on the [[Red Sea]] were developed. However, their effect on Saudi Arabia's economic fortunes has been small.<ref name="HT2009: 44">[[#HT2009|Tripp, ''Culture Shock'', 2009]]: p. 44</ref>

Saudi Arabia's first two development plans, covering the 1970s, emphasized infrastructure. The results were impressive—the total length of paved highways tripled, power generation increased by a factor of 28, and the capacity of the seaports grew by a factor of 10. For the third plan (1980–85), the emphasis changed. Spending on infrastructure declined, shifting instead to education, health, and social services. The share for diversifying and expanding productive sectors of the economy (primary industry) did not rise as planned, but the two industrial cities of [[Jubail]] and [[Yanbu]]—which were built around the use of the country's oil and gas to produce steel, [[petrochemicals]], fertilizer, and refined oil products—were largely completed.<ref name=usgov/>

In the fourth plan (1985–90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. The private sector became more important, rising to 70% of non-oil GDP by 1987. While still concentrated in trade and commerce, private investment increased in industry, agriculture, banking, and construction companies. These private investments were supported by generous government financing and incentive programs. The objective was for the private sector to have 70% to 90% ownership in most joint venture enterprises.<ref name=usgov/>

The fifth plan (1990–95) emphasized consolidation of the country's defences; improved and more efficient government social services; regional development; and, most importantly, creating greater private-sector employment opportunities for Saudis by reducing the number of foreign workers.<ref name=usgov/>

The sixth plan (1996–2000) focused on lowering the cost of government services without cutting them and sought to expand educational training programs. The plan called for reducing the kingdom's dependence on the petroleum sector by diversifying economic activity, particularly in the private sector, with special emphasis on industry and agriculture. It also continued the effort to "[[Saudization|Saudize]]" the labour force.<ref name=usgov/>

The seventh plan (2000–2004) focused more on economic diversification and a greater role of the private sector in the Saudi economy. For 2000–04, the government aimed at an average GDP growth rate of 3.16% each year, with projected growths of 5.04% for the private sector and 4.01% for the non-oil sector. The government also set a target of creating 817,300 new jobs for Saudi nationals.<ref name=usgov>{{cite web|title=Saudi Arabia. Profile|url=https://2009-2017.state.gov/outofdate/bgn/saudiarabia/26136.htm|work=11/2001|publisher=US government|access-date=12 May 2014|archive-date=25 January 2020|archive-url=https://web.archive.org/web/20200125122536/https://2009-2017.state.gov/outofdate/bgn/saudiarabia/26136.htm|url-status=live}}</ref> By 2007, advertising expenditures had reached new peaks due to emphasis on value-added manufacturing.<ref>{{cite web |url=http://www.warc.com/LandingPages/Data/NewspaperTrends/PDF/SaudiArabia.pdf |title=Archived copy |access-date=20 December 2007 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20090326211755/http://www.warc.com/LandingPages/Data/NewspaperTrends/PDF/SaudiArabia.pdf |archive-date=26 March 2009}}</ref>{{Failed verification|date=March 2023|reason=Source includes information on advertising, but not value-added manufacturing.}}

In 2016, the main investing countries in Saudi Arabia were the US, UAE, France, Singapore, Kuwait, and Malaysia. They mainly invested in chemical industry, real estate, tourism, fossil fuels, automobiles, and machinery.<ref name=":4">{{Cite web|url=https://en.portal.santandertrade.com/establish-overseas/saudi-arabia/foreign-investment|title=SAUDI ARABIA: FOREIGN INVESTMENT|date=2019|website=Santander, TradePortal|access-date=4 February 2019|archive-date=7 February 2019|archive-url=https://web.archive.org/web/20190207015550/https://en.portal.santandertrade.com/establish-overseas/saudi-arabia/foreign-investment|url-status=live}}</ref> As part of its diversification, Saudi Arabia arranged major refinery contracts with Chinese and other companies.<ref name="Bloomberg 17 January 2012">{{cite news |url=https://www.bloomberg.com/news/2012-01-16/saudi-aramco-to-invest-200-billion-in-refining-exploration.html |title=Saudi Aramco to Invest $200 Billion in Refining, Exploration |first=Wael |last=Mahdi |date=17 January 2012 |newspaper=Bloomberg |access-date=19 January 2012 |archive-date=21 October 2012 |archive-url=https://web.archive.org/web/20121021230714/http://www.bloomberg.com/news/2012-01-16/saudi-aramco-to-invest-200-billion-in-refining-exploration.html |url-status=live }}</ref>

After Saudi Arabia became a member of the World Trade Organization (WTO) in 2005, the overall foreign investment environment in Saudi Arabia improved thanks to the kingdom's stable economy, massive oil reserves, high power of expenditure, developed infrastructure, reinforced finance, and banking system. Since then, and pursuant to its commitment to the WTO, Saudi Arabia has been developing trade-related policies and legislations. Moreover, foreign investment has been highly encouraged by [[Saudi Vision 2030]] and its economic diversification.<ref name=":4" />

Since 2017, to boost the economy and decrease the country's dependency on oil, Crown Prince [[Mohammed bin Salman]] has introduced multiple changes, such as raising the prices of gasoline and electricity, levying new taxes, and prioritizing Saudi workers over foreign workers. However, some government officials claimed the policies were causing serious ill effects on the economy. Saudi businessmen reported a decline in sales for 2018, and a few blamed the government.<ref>{{cite news|url=https://www.wsj.com/articles/saudi-arabias-economic-overhaul-is-backfiring-11553338819|title=Saudi Arabia's Economic Overhaul Is Backfiring|newspaper=The Wall Street Journal|access-date=5 April 2019|archive-date=5 April 2019|archive-url=https://web.archive.org/web/20190405025846/https://www.wsj.com/articles/saudi-arabias-economic-overhaul-is-backfiring-11553338819|url-status=live}}</ref>

In 2019, the ''[[Financial Times]]'' reported that the plans to float state-owned oil beneficiary Saudi Aramco were stranded between the company's attachment to the oil ministry and the desire to meet international standards. However, Energy Minister [[Khalid A. Al-Falih|Khalid Al Falih]] has long maintained that Aramco's association with the state is a "win-win policy" for both parties.<ref>{{cite news|url=https://www.ft.com/content/96a6fc26-8b92-11e9-a24d-b42f641eca37|title=Saudi Aramco battles oil ministry overuse of company funds|newspaper=Financial Times|access-date=20 June 2019|archive-date=21 July 2019|archive-url=https://web.archive.org/web/20190721071536/https://www.ft.com/content/96a6fc26-8b92-11e9-a24d-b42f641eca37|url-status=live}}</ref>

Saudi Arabia made plans to launch six "economic cities" (e.g., [[King Abdullah Economic City]]) in an effort to diversify the economy and provide jobs.<ref>{{cite web |url=http://professional.tdctrade.com/content.aspx?data=Professional_content_en&contentid=917452&w_sid=194&w_pid=836&w_nid=10993&w_cid=917452&w_idt=1900-01-01&w_oid=181&w_jid= |title=Construction boom of Saudi Arabia and the UAE |access-date=7 December 2016 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20071011212725/http://professional.tdctrade.com/content.aspx?data=Professional_content_en&contentid=917452&w_sid=194&w_pid=836&w_nid=10993&w_cid=917452&w_idt=1900-01-01&w_oid=181&w_jid= |archive-date=11 October 2007}}. tdctrade.com. 2 August 2007</ref> At a total construction cost of $60&nbsp;billion (2013), they were "expected to contribute $150bn to the economy".<ref name=MEED>{{cite web|title=Saudi Arabia economic zones|url=http://www.meed.com/supplements/2013/meed-guide-to-economic-zones/saudi-arabia-economic-zones/3183419.article|website=MEED|access-date=16 March 2015|date=21 August 2013|url-status=dead|archive-url=https://web.archive.org/web/20150402105004/http://www.meed.com/supplements/2013/meed-guide-to-economic-zones/saudi-arabia-economic-zones/3183419.article|archive-date=2 April 2015}}</ref>
<ref name=MCC>{{cite web|title=Saudi Arabia's Four New Economic Cities|url=http://www.metrocorpcounsel.com/articles/22205/saudi-arabia%E2%80%99s-four-new-economic-cities|website=The Metropolitan Corporate Counsel|access-date=16 March 2015|date=6 February 2013|archive-date=10 October 2017|archive-url=https://web.archive.org/web/20171010082817/http://www.metrocorpcounsel.com/articles/22205/saudi-arabia%E2%80%99s-four-new-economic-cities|url-status=live}}</ref> However, these cities have failed to attract either the population or the financial investment that the government claimed they would.<ref>{{Cite web |date=2023-01-12 |title=Saudi Arabia is giving itself an extreme makeover with 'giga-projects.' Will it work? |url=https://www.latimes.com/world-nation/story/2023-01-12/saudi-arabia-development-megaprojects-jeddah-tower |access-date=2023-01-13 |website=Los Angeles Times |language=en-US |archive-date=18 January 2023 |archive-url=https://web.archive.org/web/20230118135541/https://www.latimes.com/world-nation/story/2023-01-12/saudi-arabia-development-megaprojects-jeddah-tower |url-status=live }}</ref>

The privatization program [[Saudi Vision 2030]] is running behind schedule. Oil prices have doubled since the government began to consider the program in 2015. Delay in Aramco's initial public offering further demonstrated a lack of urgency to privatize, even though in July 2018, the [[International Monetary Fund]] urged accelerating the process.<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2018-09-20/aramco-is-not-alone-as-saudi-arabia-s-privatization-push-slows|title=It's Not Just Aramco, Saudi's Privatization Push Is Slowing Down|newspaper=Bloomberg.com|date=20 September 2018|publisher=Bloomberg News|access-date=20 September 2018|archive-date=21 September 2018|archive-url=https://web.archive.org/web/20180921190935/https://www.bloomberg.com/news/articles/2018-09-20/aramco-is-not-alone-as-saudi-arabia-s-privatization-push-slows|url-status=live}}</ref>

According to many reports, the Saudi government is interested in granting more liberties to the foreign investment system and giving a 100% allowance to foreign investors to work in the wholesale and retail sector in certain cases.<ref name=":4" /> The Saudi [[Ministry of Commerce and Investment (Saudi Arabia)|Ministry of Commerce and Investment]] expected that the kingdom would see an increase in the GDP per capita from US$20,700 to $33,500 by 2020.<ref>{{Cite web|url=https://mci.gov.sa/en/AboutKingdom/Pages/InvestmentInKingdom.aspx|title=Kingdom of Saudi Arabia|website=mci.gov.sa|language=en-us|access-date=4 February 2019|archive-url=https://web.archive.org/web/20171106080038/http://mci.gov.sa/en/AboutKingdom/Pages/InvestmentInKingdom.aspx|archive-date=6 November 2017|url-status=dead}}</ref> However, the GDP per capita by 2020 had stagnated at $US20,000.<ref>{{Cite web |title=GDP per capita (current US$) - Saudi Arabia {{!}} Data |url=https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SA |access-date=2023-01-13 |website=data.worldbank.org |archive-date=18 January 2023 |archive-url=https://web.archive.org/web/20230118135541/https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SA |url-status=live }}</ref>