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The utilities sector is enjoying huge investments into expansions and capacity upgrades, with around SR500bn ($133.25bn) to flow into the electricity and water segments in the coming decade. Saudi Arabia has ambitious plans to build up renewable electricity generation capacity, in particular solar power, to address rapidly rising energy consumption. The Kingdom is investing in water desalination plants and looking at new technologies, like solar desalination, to improve efficiency. Another marked feature of the sector, looking ahead, is likely to be more private investment. The government is implementing new policies to encourage businesses to undertake energy efficiency reforms, such as by limiting supply if firms do not meet stipulated targets. Meanwhile, construction and engineering contracts will make for plenty of opportunity for such firms for years to come.

Accounting for just under 30% of real GDP and providing roughly 80-90% of state revenue in any given year, the oil and gas sector has been the dominant force behind Saudi Arabia’s economy for decades. Seeking to cement its position as a front-runner in the global market, the government has continued to invest heavily in the sector over the last decade to boost capacity and develop new resources. These new discoveries, along with new, more efficient lifting technologies, have seen the Kingdom’s proven reserves increase over the past two decades in spite of rising extraction rates. Indeed, oil consumption in the Kingdom peaked at 2.86m bpd in 2011 and this growth shows no signs of stopping; it is predicted that the rate of consumption will double by 2030. Moreover, since achieving its target production capacity of 12m barrels per day, the nation is looking to continue its success by developing downstream refining and petrochemicals operations. This chapter includes an interview with RPN Singh, Indian Minister of State for Petroleum and Natural Gas. It also features viewpoints with Maria van der Hoeven, Executive Director, International Energy Agency; and Peter Voser, Global CEO, Shell.

The A’sharqia, or Eastern Province of Saudi Arabia, continues to be at the forefront of economic and industrial advancement. The province is a microcosm of the government’s diversification efforts and is home to a number of rapidly growing industries. The construction of new industrial sites is being accompanied by support infrastructure, including mixed-use projects that combine residential, commercial, business and leisure activities in one location. Capitalising on the region’s competitive advantages, energy-intensive industries including mining, smelting and petrochemicals are also a natural fit for the Eastern Province and should help it continue to thrive.

While Jeddah bears evidence of several decades of rapid, poorly-managed expansion, the city is now gearing itself to attract further private investment in a range of economic activities, with tourism and retail in particular well positioned for growth. The first phase of upgrades to Jeddah’s cornice, for example, was completed in December 2012 and includes new parks and outdoor leisure facilities for the city’s residents. Furthermore, rejuvenation plans are in the pipeline for the city centre, including the Heart of Jeddah project, which will incorporate elements such as a metro system, a traditional market, a convention centre and related hospitality venues. These developments could transform the city into a regional coastal resort hotspot. As for the city’s industrial sector, the government hopes that major transportation upgrades will help the region to better compete internationally. This chapter includes an interview with Mazen Batterjee, Vice-Chairman, Jeddah Chamber of Commerce and Industry; and Hani Mohammed Aburas, Jeddah Municipality Mayor.

As Islam’s holiest city, Makkah has an economy that enjoys extraordinarily high demand from the many millions of Muslim pilgrims who visit it each year. With pilgrim numbers expected to nearly double between 2008 and 2019, the real estate, infrastructure, hospitality and retail sectors are among those most likely to benefit. Hotel capacity is set to rise from 50,000 rooms to around 75,000 as several massive developments are completed. Most of these properties will be geared towards the higher end of the market, although there are opportunities in other segments as well. All in all, ongoing developments in Makkah were valued at around $200bn in early 2012, with much of this devoted to redeveloping the centre of the city near the Grand Mosque. This chapter includes an interview with Osama Al Bar, Mayor of Makkah.

Over the past decade Saudi Arabia’s insurance industry has become an important contributor to the economy. In 2011 the sector brought in gross written premiums of $4.93bn, up nearly 13% from $4.37bn the previous year. The majority of this expansion took place in the health and general insurance segments, which together account for more than 95% of the total market. Going forward, with the Kingdom’s rapidly growing population becoming increasingly aware of the benefits of coverage, the industry is expected to continue to expand. While insurance penetration remains low compared to more developed markets around the world, most projections show it rising through 2020 as a result of the Kingdom’s strong economic fundamentals. The reinsurance industry has also grown substantially in recent years. This chapter includes an interview with Abdullah Al Sharif, Secretary-General, Council of Cooperative Health Insurance. It also includes a viewpoint with Dr Metaib Al Rawqi, CEO, Weqaya Insurance.