Business Opportunities – The Kingdom of Saudi Arabia
Wednesday, April 19th, 2017
The Kingdom of Saudi Arabia is one of the main players in the Arab world.
Its strategic importance is built on its geographical size (twice that of France and Germany combined), its prestige as the custodian of Islam’s two holiest shrines in Mecca and Medina, and its status as a major oil producer, with c. 16% of the world’s known oil reserves.
The Head of state is prime minister King Salman bin Abdulaziz al-Saud who acceded to the Saudi throne, at the age of 79, on the death of his half-brother, King Abdullah in January 2015. He was Governor of Riyadh Province for 48 years before becoming Defence Minister in 2011 and Crown Prince a year later.
The Saudi population is very youthful, with almost 60% percent of the country’s citizens under the age of 30.
Saudi Arabia has the highest per-capita YouTube use of any country in the world. It is reportedly home to more than 40% of all active Twitter users in the Arab region.
The economy is struggling right now in KSA across pretty much all sectors.
Saudi consumers are getting squeezed by the Government’s plan to rein in its spending and reduce the country’s dependence on energy exports after a two-year oil price slump. Subsidies for gasoline, electricity and water have been slashed, alongside public sector salaries (a major event in a country where the state sector employs around two-thirds of working nationals).
The low oil revenues of the past two years have also forced the government to take the axe to its spending programme. That has had a big impact on the construction sector in particular, which relies on state-funded projects for much of its work, but other sectors have also been affected.
Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Over 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors; at the same time, however, Riyadh is struggling to reduce unemployment among its own nationals.
Historically, Saudi Arabia has focused diversification efforts on power generation, telecommunications, natural gas exploration, and petrochemical sectors. More recently, however, the government has approached investors about expanding the role of the private sector in the healthcare, education and tourism industries.
GDT has been operating in the Kingdom for over 25 years and whilst there is no doubt that conditions in KSA right now are tough, we remain well placed to help our clients identify new business opportunities.
GDT operates across many commercial sectors from automotive, to construction and beyond and our breadth of knowledge and years of experience means that we can identify opportunities for delivering business growth even in the most challenging conditions.