Education Focus of Largest-Ever Budget for 2006 in Saudi Arabia On Monday, December 12, 2005, the Saudi Ministry of Finance announced the largest budget in its history, projecting revenues at record US$104 billion and expenditures at over US$89.3 billion, for a projected surplus of $14.7 billion. Special emphasis of the budget was allotted for capital expenditures, which totaled $33.6 billion, signaling a revival of government spending on the country infrastructure. Saudi Arabia’s Finance Minister stated that the Kingdom’s actual revenues in 2005 reached US$148 billion and expenditures at US$91 billion, resulting in a $57 billion surplus, which was the highest ever.. An estimated $37.1 billion of the surplus was used to reduce the public debt, which is expected to reach $126.67 billion, dropping by more than 22 percent in 2005. The Kingdom’s gross domestic product (GDP) was projected to grow in 2005 by 22.7 percent in current prices and by 6.54 percent in constant prices, reaching US$307.4 billion and US$204.7 billion in current and constant prices respectively. Addressing the Cabinet, King Abdullah said the new budget was designed to accelerate the development process and improve living conditions of citizens. “We have set aside 26 percent of the budget for education and training,” the king said, emphasizing the significance of an educated, skilled work force. Education and manpower training received the highest allocation of US$23.28 billion against last year’s US$18.67 billion. Health and social affairs sectors got US8.27 billion while water, agriculture and infrastructure US$6 billion. Special allocations have also been made to increase the capacity of educational institutions and expand employment opportunities for young Saudi men and women in the job market. The 2006 national budget includes allocations for the construction of three new universities in Jizan, Hail and Al-Jouf, 2,700 new schools, three new technical colleges and 15 vocational training centers. “The existing universities will be supported by establishing 85 new colleges,” the Saudi Press Agency quoted the king as saying. Three new university hospitals will be established while the existing university hospitals will be upgraded. The budget includes establishing and furnishing of 440 primary health care centers in all the 13 regions of the Kingdom. Allocations have been made for 24 new hospitals, and for the furnishing, expansion and development of existing health facilities. 2006 Saudi Arabia’s Budget Highlights & % change from 2005 Revenues projected at US$104 billion Expenditures projected at US$89.3 billion New Projects - US$33.6billion Education and Manpower - US$23.28 billion, up 24.5 percent Health and Social Affairs - US$8.27 billion, up 27.5 percent Municipalities - US$3.57 billion, up 25.2 percent Transport & Communications - US$3.07, up 29.2 percent Water, Agriculture, and Infrastructure - US$6 billion, up 17.2 percent
The above is extracted from the English language daily newspaper, “Arab News” on December 13, 2005. Most Saudis in contact with the Commercial Section of the U.S. Embassy in Riyadh are delighted with this budget increase. An official at the powerful Council of Saudi Chamber of Commerce and Industry told FCS, “We are used to growth. During the past 5 years, things went slowly. Now we are back to normal. This budget proves that Saudi Arabia has a long term, sustainable economic growth, reflected in the near and medium term spending. These expenditures for training should bring technology training to help qualify Saudis for the job market. The official pointed out that the 6-10,000 students who will receive scholarships to study in the U.S. during the coming year. This development is even more important for the long term than the spending, since the
U.S. graduates will bring the skills necessary to prepare the Saudi work force to face the economic challenges of the next 2-4 decades. Commercial Counselor comment: Prior to September 11, 2001 as many as 30,000 Saudis a year studied in the U.S. In 2001-2002 this number dropped precipitously. In 2004 the U.S. Mission granted about 600 student visas to Saudi nationals for U.S. colleges and university study. Thanks to renewed government scholarships to study in America, in late 2005 the Embassy received over 7000 student visa applications – an increase of 11 fold over the previous year. These scholarships and a return of Saudi students to the U.S. for bachelors and masters degrees and doctorates are necessary to further healthy bilateral relations between the U.S. and Saudi Arabia. In addition, educational reform within Saudi Arabia is a key stepping stone to job creation and the ability of Saudis to shape their own work force. For more information on the Saudi budget and exporting your educational, medical, health, or security equipment to Saudi Arabia, please contact: Commercial Service Riyadh: - Contact: H. Edward Burton, Email: eburton@mail.doc.gov - Contact: Maher Siblini,Email: msiblini@mail.doc.gov Commercial Service Dhahran: - Contact: Ishtiaq Hussain, Email: ihussain@mail.doc.gov Commercial Service Jeddah: - Contact: Marilyn Taylor, Email: mtaylor@mail.doc.gov - Contact: Mona Hassoun, Email: mhassoun@mail.doc.gov Website: http://www.BuyUSA.gov/saudiarabia http://riyadh.usembassy.gov