Privatized in 2002, the Saudi telecom sector demonstrates the country’s modernization potential.

With a very young and and rapidly growing population, which climbed from 12 million in 1980 to 22.7 million in the 2004 census, Saudi Arabia has a continued need for more infrastructure and services. The national government, having enjoyed great wealth through its oil revenues, much of which has been applied to infrastructure improvement, is also eager to encourage economic diversification. To date, structural reforms have been implemented to make it easier for foreigners to invest in the country, while at the same time a head start has been made in privatization. The telecom sector was privatized in 2002, and other areas such as hospitals, mining, insurance and transport have been opened up. On the home front, a fund set up to encourage young Saudi entrepreneurs to start up new businesses began extending grants in January this year.

Young Saudis need look no further than their own fellow nationals when it comes to running a successful company in any sector of the economy.

Several major holding companies of diversified business interests have developed and flourished, moving with the times and the steady opening up of the economy. Family-run enterprises such as the Saad, Al-Osais or Aswad groups have been quick to exploit opportunities and are now in the process of adapting to the increased activity and competition ensuing from the privatization process. Infrastructure and construction, the original domain of Al-Osais group, is booming, and growth is expected to continue at least until 2010, when maintenance services will still be required. Aswad Group, providing engineering and industrial services as well as running a leading chain of supermarkets, is planning to go public by the end of 2006. Kingdom Holding Company, another diversified conglomerate, has been ranked eleventh among the top 100 firms in the Muslim world (taken to mean the 57 countries that make up the Organization of the Islamic Conference).

Other changes ahead are Saudi Arabia’s proposed entry into the World Trade Organization (WTO). While it awaits the outcome of negotiations, the kingdom has already signed bilateral agreements with existing WTO members, including the European Union in 2003. In all, Saudi Arabia’s strong demographic growth, vast area size and substantial oil revenues, coupled with its increasingly large role on the world stage, provide a `powerful launch pad for private businesses.