Public Sector Transformation: Privatization in Saudi Arabia

Public Sector Transformation: Privatization in Saudi Arabia

Fareed Alyagout (National Power Company, Saudi Arabia) and A. K. Siti-Nabiha (Universiti Sains Malaysia, Malaysia)
DOI: 10.4018/978-1-4666-2665-2.ch002
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Abstract

The Kingdom of Saudi Arabia has embarked on the privatization of its public enterprises with the main objectives of improving the efficiency of the national economy, enlarging Saudi citizens’ ownership of productive assets, and encouraging local and foreign capital investment in the Kingdom. Subsequently, in 2003, the Saudi Council of Ministries approved a list of twenty-two targeted economic activities and government services to be privatized and the private sector is being invited to participate in many economic activities and services. As such, the aim of this chapter is to present the historical context and rationale for privatization in Saudi Arabia. The objectives and implementation process taken by the Saudi government to create a suitable environment for private sector investment and the issues and problems associated with privatization initiatives are also discussed in this chapter.
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Background Of The Saudi Arabian Governmental System

Modern Saudi Arabia was founded in 1932 by the late King Abdulaziz bin Abdulrahman Al-Saud. Saudi Arabia is a monarchy in which the power rests in the hands of the King and the Crown Prince. From the Kingdom’s foundation in 1932 until 1992, Saudi Arabia was ruled without a formal, written Constitution. It was only in March 1992 that King Fahad promulgated several Royal Decrees, which constituted a package of constitutional and administrative reforms.

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