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Saudi Arabias Economic Cities

Saudi Arabia

The place to be

The IFCs Doing Business 2008 report ranks Saudi Arabia


23 out of 178 countries overall ranking. ahead of all Arab countries as well as many countries in Europe such as Spain, Portugal, Italy and Greece. 7th for ease of paying taxes (includes the number of taxes to be paid and the tax rate on profit). 3rd for ease of registering property, a top performer in this category. Largest recipient of FDI in the Arab world in 2006 $ 18 billion, an increase of 51 % over 2005 (UNCTAD).

Over US$ 624 billion in investment opportunities through 2020.

Saudi Arabia

A different kind of boom


Largest economy in the MENA region holding 25% of total Arab GDP Highest purchasing power in MENA Strong oil sector (25% of proven oil reserves)
Large investments in oil sector to continue in support of the global oil market (US$ 70 bn next 5 yrs.)

Drive for economic diversification and liberalization Largest privatization program in the world
Now the focus is on developing soft infrastructure During 70s, government spent mainly on hard infrastructure

Implementation of an unprecedented number of Mega projects Enhancement of womens role in the Saudi economy and removal of obstacles
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Saudi Arabia

Engaging the private sector

Saudi Arabia

Serious about competitiveness

The 10 X 10 Program
One of the worlds top 10 competitive investment destinations by 2010

The National Competitiveness Center (NCC)


Benchmarking competitiveness against 300 global indicators WEF, IMD, WB

Saudi Arabia
Oil Producing Capacity

Untapped Potential
Energy Advantage

Geographic Location

Strategic Market Access

Untapped Potential

Economic Boom

Opportune Time

SAGIA & Investment Climate

Accessible & Friendly

The Economic Cities

Exhaustive research

Studies at least 1000 Free Zones around the world, thoroughly analyzed the 60 most successful zones and determined the factors leading towards their success.

Europe: 3

China/East Asia: 25 North America: 4 South America: 2 Africa: 4 MENA South Asia: 20
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The Economic Cities

An innovation

A global innovation in Public Private Partnership (PPP)


New Concept
Integrated city Clusters Comprehensive solution

Economic City SAGIA


Regulator Facilitator Promoter

Private Sector
Capital provider Land owner Developer

The Economic Cities

Thinking BIG!

Objectives of the Economic Cities:


Balanced regional development.
Tabouk Hail Eastern Province

Economic diversification. Job creation. Upgrade competitiveness.

Medinah Rabigh

Jazan

The Economic Cities

Thinking BIG!

Tabouk Hail

Eastern Province

King Abdullah Economic City (KAEC) Rabigh www.kingabdullahcity.com

Medinah Rabigh
Area: 168 million sq m Investment Size: US$ 27 billion Jobs: 1 million

Jazan

Population: 2 million Zones: Sea Port, Industrial Zone, Central Business District, Water front Resort Area, Education Zone, and Residential Zones

Focus: Ports, Logistics, Light Industry and Services

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The Economic Cities

Thinking BIG!

Tabouk Hail

Eastern Province

Jazan Economic City (JEC) Jazan www.jazanecity.com

Medinah
Area: 100 million sq m

Rabigh

Investment Size: US$ 27 billion Jobs: 100,000

Jazan

Population: 300,000 Zones: Industrial Park (will occupy 2/3 of the City), Sea Port, Agriculture repackaging and distribution, Fisheries, Business and Cultural Center, Health & Education Areas Focus: Heavy Industries, Lifestyle, Agro Industries, and People Development

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The Economic Cities

Thinking BIG!

Tabouk Hail

Eastern Province

Knowledge Economic City (KEC) Madinah www.madinahkec.com


Area: 4.8 million sq m Investment Size: US$ 7 billion Jobs: 20,000 Population: 150,000

Medinah Rabigh

Jazan

Zones: Taiba Complex for Technology and Knowledge based Economy, Technological and Administrative Colleges, Theme Parks, Islamic Civilization Studies Centre, Complex for Medical Studies, Biological Sciences and Health Services, Complete Business Centre, Residential Areas, Passengers station, Commercial Area, King Abdul Aziz Mosque Focus: Knowledge Based industries, Tourism and Services

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The Economic Cities

Thinking BIG!

Tabouk Hail

Eastern Province

Prince AbdulAziz bin Mousaed Economic City (PABMEC) Hail www.pabmec.com

Medinah Rabigh

Area: 156 million sq m Investment Size: US$ 8 billion Jobs: 55,000

Jazan

Population: 80,000 Zones: Logistics & transportation Center, Dry Port, International Airport, Petrochemical Industries Center, Business Center, Knowledge Center, Agriculture industries, Mining Center, Entertainment Area Focus: Logistics, agribusiness, minerals, and construction material

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The Economic Cities

The impact
In 2020, the Economic Cities will grow to create an economy equivalent to 2 X Pariss Population

Economic Aspiration

Saudi Economy Today GDP Jobs Population GDP/capita USD 310 bn 7.5 million 23.8 million USD 13,000

Economic Cities in 2020 USD 150 bn* 1.3 million 4.5 million USD 33,500

Singapore, Barcelonas GDP 4 X Hong Kongs Size

* Direct GDP contribution only. Indirect spillover effect is estimated to contribute an additional USD ~ 100 billion

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The Economic Cities

The Pillars of Global Competitiveness


Energy Advantage Clustering

Regulations & Incentives

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

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Pillar 1: The Energy Advantage The Oil Giant

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

25% of proven oil reserves. Avg. 2006 production 11 MB/D Worlds lowest production cost/barrel

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Pillar 1: The Energy Advantage


The core of each EC will be based on one of four sectors, in which Saudi Arabia enjoys a global cost advantage
Production Cost (USD / ton)
Aluminium Petrochemical

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

2,068

2,050 1,425
-30%

670 248
EU US SAUDI ARABIA US

-63%

SAUDI ARABIA

Fertilizer

Steel 365

292
247 143
-42%

345
-15%

Germany

SAUDI ARABIA

DRI/FAF

BF/BOE

FAF

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Pillar 1: The Energy Advantage


By leveraging its competitive advantage, Saudi Arabia can hold a significant world market share of energy intensive industries.

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

KSA global competitive advantage up to 26% of industry revenues 15% location advantage 11% EC and cluster benefit
*Of upstream production **Of MENA market

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Pillar 2: Clustering
UPSTREAM MIDSTREAM DOWNSTREAM

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

Aluminum

Refineries

Smelters

Factories: Casting, Packaging, Extrusion, Auto Steel Fabrication, Rebar, Rod, Forged, etc. Fertilizer Manufacturing: Packaging, Plastics, Auto Parts, Tires ~ 70,000

Steel

Steel Mills & Plants

Steel Processors

Fertilizer

Urea and DAP Plants Refinery, Splitter, Plant Crackers Reformers

Petrochemical

Employment

~ 10,000

~ 30,000

VALUE CHAIN
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Pillar 3: Global Logistics HUB

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

Europe Asia Africa

All major trade routes between East & West pass through the Red Sea along Saudi Arabias west coast. Launch pad and access to over 250 million consumers.
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The Economic Cities

Connecting East and West

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

TEC PABMEC

KAEC JEC

Multi modal logistics network enabling efficient East West connection Growing addressable market, +52 million TEUs by 2020

Intl Airport Railway Dry Port Port

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Pillar 4: World Class Infrastructure


Transportation & Logistics

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

Technology & Communication

Education & Health Power & Utilities Technology

Power

Airports

Roads
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Pillar 4: World Class Infrastructure


Capital expenditures USD millions

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

Developed by the private sector


Types of investment 24,000 Electricity, sewage, logistics, ports, airports etc.

Infrastructure

Health network

3,200

Hospitals, clinics, pharmacies etc.

Education*

1,500

Universities, vocational institutes etc.

Total basic infrastructure costs for a city of 500,000 could exceed USD28 billion

Entertainment

237

Stadium, green spaces

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Pillar 5: Smart Cities


Smart cities rely on a combination of connectivity, connected real estate and value added services that together create significant value for the Economic Cities businesses and residents.

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

Industrial Services
Energy Logistics Agriculture Tourism Real Estate Knowledge

Public Services
Health Care Government Services Education Safety & Security Traffic & Transportation

Personal Services
Communication Housing Financial Entertainment

Converged broadband network


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Pillar 6: Lifestyle Work, Live & Play

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

The aim for the Economic Cities is to rapidly grow into vibrant and prosperous cities that offer an attractive lifestyle for professionals and families.
Tourism Entertainment Health & Education Family Business

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Pillar 7: Environment In Mind!


SAGIA is working with global leaders to ensure that the Economic Cities are Developed with the Environment In Mind!

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

LEED
Leadership in Energy and Environmental Design Green Building Rating System The accepted benchmark for the design, construction, and operation of high performance green buildings. Sustainable site development Water savings Energy efficiency Materials selection Indoor environmental quality

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Pillar 8: SMART Services


Municipalities Ministry of Water & Electricity Ministry of Commerce & Industry Ministry of Finance

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

SAGIA
128 SERVICES License Work Permit Visa Renewals

SAGIA, through its One Step Shop, will be the only channel point between the investors and residents and the Government.

Investor & Resident

Ministry of Interior Ministry of Telecommunications Ministry of Justice

Fast-track services with guaranteed satisfaction

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Pillar 9: Human Resource Allocation


Focusing on high level skill jobs for Saudis Providing as many jobs in the shortest period 1,300 High skill 170

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

Total jobs created


(In thousands)

845,000 new high skill level jobs opportunities


Medium Skill 675

1,300

900

SAGIA will secure all Human Resource requirements for investors


Low Skill

360

455 2020 2015 2010

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Pillar 10: Regulations & Incentives Regulations 100% Foreign Ownership No local sponsor is required 100% Property ownership to Foreign Investors 3rd rank for ease of registering property in the IFCs Doing Business 2008 No Minimum Capital Requirement No restrictions on repatriation of capital Sector Specific Regulations Investor Engagement

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

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Pillar 10: Regulations & Incentives Fiscal Incentives One of the worlds most efficient and competitive tax systems

Regulations & Incentives

Competitive Energy Advantage Clustering

HR Allocation INVESTOR SMART Services

Global Logistical HUB

World Class Infrastructure

Environmentally Green Lifestyle

SMART City

No personal income taxes and only a 20% corporate tax rate for foreign companies Under the Paying Taxes indicator, Saudi Arabia ranks 7th among the 178 countries ranked in the IFC Doing Business 2008 report. Able to carry forward losses on balance sheets indefinitely Jazan and Hail Economic City are eligible for tax credits Up to 50% on payroll and training costs
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The Economic Cities

Its Happening

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THANK YOU

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