The Saudi capital, one of the most important economic and industrial centres of the Kingdom, will be the first to be impacted by the restructuring of the economy, say industry analysts.
Riyadh, with more than 800 industrial units, accommodates about 31 per cent of the total factories operating in the Kingdom. With the improvement of the investment climate, the share of the industrial capital in Riyadh area will considerably exceed the current rate of 11.4 per cent of the total industrial capital invested in the Kingdom, according to Riyadh Chamber of Commerce and Industry sources.
Extensive capital and technology is required for the development of industries. The new investment law has increased the possibility of investments, particularly in the field of chemical industry and the plastic products that have a relative advantage because of the availability of the raw materials produced by the petrochemical factories in Jubail and Yanbu.
In the agricultural field, the Kingdom expects to accomplish a reasonable level of growth. [QQ]This will lead to the increase of investments in the agricultural sector in Riyadh area that produces 712,000 tonnes of cereals which is equivalent to 37 per cent of the Kingdom's cereal total production. Riyadh area also produces 956,000 tonnes of livestock fodder, that is equivalent to 30 per cent of the total livestock fodder products of the Kingdom, say RCCI sources.
Riyadh area also produces 939,000 tonnes of vegetables or 36 per cent of the Kingdom's total vegetables product. The Kingdom's self-sufficiency level in this commodity is 85 per cent.
Riyadh continues to be an ideal location for investments, being the city of ministries and governmental departments, diplomatic missions, and banks' head offices and major companies looking for advanced infrastructure. This will eventually require a wide consumption market to meet the demand of the population of the capital. The population growth rate is estimated at 8 per cent per year compared to the national rate which is 3.5 per cent. It is expected that [QQ]Riyadh's population will exceed five million by the year 2005.
The construction sector in Riyadh is also robust. About 49 per cent of the Kingdom's contractors are located in Riyadh so as to meet the rapidly increasing demand for housing, shopping centres, health care facilities and educational institutions, the RCCI sources say.
The rapidly and progressively increasing population and economic growth calls for upgrading of the infrastructure. The number of people subscribing to the power consumption is also increasing by 4 per cent. To meet the rapidly increasing demand for telephone services, Riyadh is currently carrying out a huge expansion project.
Riyadh's remarkable growth over the last few decades, the diversity of its producing sectors and the ambitious plans under way is sure to herald a new era of investments, say analysts.
