Infrastructure development in Saudi Arabia, post Arab Spring

The Arab Spring has had a deep effect on the Middle East, and the unrest has caused non-afflicted areas to seriously consider its citizens’ needs.

Saudi Arabia’s monarch, King Abdullah, has recognised the necessity of keeping citizens content as has pledged $130 billion towards housing and benefits, as well as a significant overhaul of the infrastructure.

36 billion riyals ($9,599,220,000) has been put into transport construction contracts, focusing on the Riyadh metro project and the augmentation of the Mecca and Jeddah bus and metro systems to be completed this year.

The government has also dedicated 100 billion riyals ($26,664,500,000) to healthcare, and has planned to build 19 hospitals and five “medical cities” as part of its infrastructural changes.

Educational expansion will also be on the cards, with the government allocating 204 billion riyals $(54,395,580,000) towards the creation of 539 new schools to cater to the 28 million people living in the region.

The idea is to put money into the people of Saudi Arabia, the end consumer, whilst creating work for local businesses. It will also create employment for the high number of jobless young people in Saudi Arabia – nearly a quarter of 20 to 30 year olds are currently without work.

Another added benefit is adding support to sectors outside of the oil and petroleum industries. Although Saudi Arabia commands a strong position in the global energy market, it can draw revenue from other sectors to supplement its oil revenue stream.

The financing of these structural redevelopments comes from the windfall of Saudi Arabia’s position as the largest exporter of oil for the petroleum industry in the world. With barrels of crude oil at approximately $75 per barrel, the government can finance all of its planned projects for the near future. Barrels are currently priced at $110.62 per unit.

The government expects to collect revenue worth 829 billion riyals ($221,048,705,000) in 2013 alone, and plans to spend 820 billion riyals ($218,648,900,000) on expansion, according to the Finance Ministry of Saudi Arabia.





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