The 2004 budget, announced on Monday, makes education one of its top priorities. Out of the total SR230 billion expenditure, almost SR64 billion has been allocated to it. Among new projects, three new universities are to be built.
Education is a vital focus. If the Saudi economy is to grow and diversify, the country has to have a skilled, well-educated, up-to-date labor force. In today’s economic global village, where countries constantly compete with each other for investment, Saudi Arabia has little chance of attracting the serious investors and creating jobs for the burgeoning population if its citizens do not have the skills that industry needs. And the plain fact is that it does not.
The Kingdom’s output of doctors, engineers, scientist, IT specialists and the like is lamentable. Look at Taiwan. It is a country with much the same population. Yet it has 154 universities and institutes of higher education — and as far as the Taiwanese authorities are concerned, even that is not enough if new IT industries are to have the quality of employees they need.
Saudi Arabia hopes to become a regional IT center. If it is to ever compete with places like Taiwan or India, it needs not three new universities, but three a year for the next 30 years. There needs to be a university or further education institute in every town in the country, not just in the major cities, but in places like Hafr Al-Baten, Khamis Mushayt or Qunfudha. If this were Taiwan, Abha would have two or three universities, Jeddah and Riyadh five or six apiece.
As to the rest of the budget, there will be those who are puzzled that a SR30 billion deficit is projected and expenditure set at just SR200 billion when income in 2003 turned out to be $295 billion.
It has to be. It is better to be cautious than sorry. Saudi Arabia’s income depends on oil. In the past year, the price of oil was way over what was expected when the planners devised the 2003 budget. They had worked on an oil price of $17.50 a barrel. In the event it has been about $8-$10 higher all year. That is why, instead of a deficit of SR39 billion there was a pleasing surplus of SR45 billion. But the price of oil is almost certain to drop back this year as more Iraqi oil comes on stream and the market gains confidence that Iraq is on the road to normality and the region will remain stable. The planners have understandably based their projections on an average oil price in 2004 of about $19 a barrel. If it is higher, good: there will be another serendipitous surplus. But it would be unwise, indeed irresponsible, to base expenditure and income on oil remaining at its present price. The planners have been wisely cautious.
