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The Saudi Arabian population has grown rapidly in the last 20 years. Sixty per cent of the population is under 21, and this will rise as the Kingdom experiences one of the highest birth rates in the world. By 2010, 42% of the population will be under 15 years of age. By 2015 population will reach over 30 million.
Government education and training policies are therefore governed by the effects of the rapidly expanding younger population, particularly the need to expand higher education and vocational training.
The outcome of the Kingdom’s aspiration to be among the world’s most competitive nations will ultimately be determined by the quality of human capital it produces. Enhancing Saudi Arabia’s competitiveness in the education sector is a crucial step toward developing individuals, innovation, and employment opportunities. The output of education will be measured against its ability to match labour market demand.
But the challenge in Saudi Arabia goes beyond that. Education is seen as the main driver of economic diversification away from oil, providing the human capital to attract foreign direct investment, build an innovation-based economy, and redefine Saudi Arabia’s position in the world.
Saudi Arabia needs to create a work force from among its own nationals which has the skills necessary to meet the requirements of the modern global economy. Approximately 100,000 Saudi Arabians enter the job market every year and this number will grow, particularly as more young women take up their position in the labour force. Fifty five per cent of graduates are female, though women make up only 5% of the work force. Cultural attitudes may be starting to change slowly, in part due to the skills shortage.
This is an oil-based economy with strong government controls over major economic activities. Saudi Arabia possesses 25% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 75% of budget revenues, 45% of GDP, and 90% of export earnings. About 40% of GDP comes from the private sector. Roughly 5.5 million foreign workers play an important role in the Saudi Arabian economy, particularly in the oil and service sectors.
The government has begun to permit private sector and foreign investor participation in the power generation and telecom sectors. As part of its effort to attract foreign investment and diversify the economy, Saudi Arabia acceded to the WTO in 2005. High oil revenues have enabled the government to post large budget surpluses.
Today the Kingdom is highly committed to building a strong education system. It spends more per pupil than many developed countries, and of the countries surveyed by the World Economic Forum, Saudi Arabia ranks eighth in relative education spending as a percentage of GDP.
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