Doing Business in Saudi Arabia - International Franchise Association

Saudi Arabia’s education system is currently experiencing an astonishing transformation. Not
only has the Saudi Government been increasing budgetary allocations in support of education
and manpower development projects since 2000, but it has been increasingly opening its doors
to U.S. universities, institutions, and major corporations. The Saudi Government has earmarked
an estimated $11 billion worth of investment opportunities in education alone through 2020.he
significant public and private effort, both local and international, will further transform Saudi
Arabia’s education system, and will enable an unprecedented concentration of local talent to
form and be injected directly into the Saudi economy.
According to the most recent statistics published by the Saudi Arabian Monetary Agency, Saudi
Arabia’s public education system includes 25 public and private universities in various stages of
operation, some 25,000 schools, as well as a large number of colleges and other educationrelated
institutions. The student body in Saudi universities includes local and international
students from over 100 countries. The total number of students enrolled in the Kingdom’s
higher education institutions for the 2004/2005 academic year stood at 603,800, while the
number of newly-enrolled students exceeded 200,500 for the same period.
With an average population growth rate of 2.3 percent, Saudi Arabia is one of the fastest
growing societies in the world. Moreover, a sizeable portion of its population is below the
working age or close to entering the job market. To keep the unemployment rate of Saudi
nationals, currently estimated at 12.02 percent, under control, the Saudi Government must not
only ensure the availability of jobs but must also develop the appropriate framework to support
highly qualified Saudi workers and equip them with the relevant skill set to meet the demands of
a modern and booming economy. As a result, the Saudi Government is accelerating the
overhaul of the Saudi education system to ensure it can provide the necessary human capital to
keep up with the economic demands.
One of the most important steps the Saudi Government has been taking in this regard is to
gradually increase its annual budget. This upward trend emphasizes the Saudi Government’s
vision that education is the cornerstone to sustained economic development as it brings human
capital and knowledge, both essential ingredients for economic growth and social cohesion. In
its 2008 budget, the largest in the economic history of the Kingdom of Saudi Arabia, the Saudi
Government allocated $28 billion of the $120 billion budget for human resource development
alone, up from $12.53 in 2002. This includes spending for higher education, technical and
vocational training, teacher training, development of academic curricula, as well as allocations
to boost scientific research and technological development at new research centers at
universities.
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The Kingdom has identified technical and administrative training as an essential sector of
education to support the country’s economic and social development. Graduates of training
programs in health care, agriculture, teaching and other areas are steadily filling positions at
industrial, agricultural and social institutions throughout the country. The General Organization
for Technical Education and Vocational Training, along with the Ministry of Labor and Social
Affairs, operates most of the Kingdom’s vocational training centers and higher institutes of
technical education. The Ministry of Education operates vocational and secondary schools and
several other government agencies run institutes or training centers in their particular
specialties.
These institutes teach, for example, machine tooling, metalworking, electro-mechanics, and