| 25 Apr 2010 |
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Saudi Arabia spends SR20.9bn, mostly on infrastructure
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JEDDAH: Saudi Arabia awarded development contracts worth SR20.9 billion ($5.6 billion) in the first quarter of this year as the Middle East's largest economy pursues a five-year infrastructure program.
The world's top oil exporter has like other nations boosted spending on infrastructure, health care and education to underpin economic growth, and has warned against early withdrawal of stimulus packages.
Saudi Arabia, a member of the G20, plans to spend more than $400 billion until 2013 for projects such as roads, hospitals and other infrastructure to serve its mainly young population of 18 million people.
The Saudi Press Agency gave no comparison but in May last year Finance Minister Ibrahim Al-Assaf put the value of contracts in the first quarter of 2009 at SR40.6 billion.
"The government is seeing clear signs of a recovery so it could be that spending is less spread over the full year more evenly," said John Sfakianakis, chief economist at Banque Saudi Fransi in Riyadh.
"It is hard to sustain high spending from one quarter to the next but the government's announced spending program is on course," he said. In the fourth quarter the value of contracts had risen to SR32 billion versus SR20 billion in the same period a year ago, he added.
The largest chunk, 479 contracts worth SR15.7 billion, went into construction projects such as building roads, schools or hospitals, the Finance Ministry said.
The government spent SR4.7 billion on building schools, SR3.6 billion on health or water projects, SR2.4 billion on city and town development, and SR1.7 billion on road works and transport, the SPA said quoting the ministry.
Saudi Arabia said in December it plans to raise investments by 16 percent to SR260 billion this year. Muhammad Al-Jasser, governor of the Saudi Arabian Monetary Agency, told Reuters in March that local lending growth is set to recover this year.
The IMF expects the Saudi economy to grow by 3.7 percent this year after 0.15 percent in 2009.
This year's general budget has allocated SR137.6 billion for education and training. The amount will be used to fund the King Abdullah Project for Development of Public Education, the creation of 1,200 new schools and the completion of more than 3,000 school buildings that are already under construction.
The Ministry of Higher Education's budget includes funding for the construction of four new universities and the expansion of existing ones, increasing student enrollments at institutes of higher learning and scholarship programs abroad.
© Arab News 2010
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Community Comments (1)
Saudi Arabia continues to provide the new and indigenous model for sustainable development for the region. Away from the biggest, tallest, highest star rating speculative activities the rest of the GCC indulged in for the last decade. Infrastructure starts with building human capacities and nothing builds capacities better than 12,000 public schools. Far beyond capital from oil revenue, human capital remains the greatest resource a proud nation can ever produce.
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