The Euromoney Saudi Arabia Conference will be convened on May 17 and 18. Arecent report by the World Bank has shown that small and medium-sized companies in the Kingdom constitute 90 percent of Saudi companies, but the sector's contribution to employment does not exceed a quarter of the total workforce in the country, and is not more than a third of the country's Gross Domestic Product (GDP). In addition to this, the Ministry of Labor estimates that the Saudi unemployment rate is at 10 percent. Richard Banks, Director of the Euromoney Saudi Arabia Conference, said these numbers calls for radical reforms in the private sector, so that it can create more jobs. He said the conference, which will be convened on May 17 and 18, will discuss this issue. It will be attended by a group of senior government officials and business figures, and will discuss the role of small and medium-sized enterprises as a new driver of economic growth. The conference's theme will be “Diversifying sources of financing”, he said. It will show that only two percent of lending in the Kingdom goes to the small and medium enterprises sector, and that the Saudi government had started an initiative to guarantee loans up to 80 percent, to a maximum of SR1.6 million for a small establishment. Guarantees for medium-sized establishments amounts to SR5 million, and for other companies up to SR10 million, he said. Although Saudi Arabia has the largest number of programs supporting small and medium-sized enterprises in the region, Banks said he thinks “reforms must go further than they are now”. He noted that the Shoura Council has recommended the formation of an authority to remove hurdles to the sector's growth and development. Banks added that most giant, state-financed projects are awarded to major contractors and developers. When small and medium companies do not get such projects and benefit from their revenues, their ability to create jobs is restricted. Therefore, there is a need to create serious policies to stimulate the growth of this sector and help boost the employment rate in the country.
