SAUDI ARABIA

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SAUDI ARABIA

• Xiomara Archibald, Marco Conte, Andrew Gerrard,
  Gillian McVeigh, Joanna Robinson, Martha van
  Zanten

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Location
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Geography

• Location 
• Middle East, bordering the Persian Gulf and the
  Red Sea. (Iraq, Jordan, Kuwait, Oman, Qatar, UAE
  and Yemen).
• Extensive coastlines on Persian Gulf and Red Sea
  provide great leverage on shipping (especially
  crude oil) through Persian Gulf and Suez Canal.
• Area 1, 960, 582 sq. km (slightly more than
  one-fifth the size of the US)

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Geography cont.

• Physical Features mostly uninhabited, sandy
  deserts, plateaux and mountains.
• Natural Resources petroleum, natural gas, iron
  ore gold, copper.
• Land use Arable 2
• Permanent crops 0
• Permanent pastures 56
• Forests and woodlands 1
• Other 41

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Geography cont.

• Irrigated land 4,350 sq km
• Natural hazards frequent sand and dust storms
• Environment current issues Desertification
  depletion of underground water resources the
  lack of perennial rivers or permanent water
  bodies has prompted the development of
  extensive seawater desalination facilities
  coastal pollution from oil spills.

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Demography

• Population 22, 023, 506 (of which 5, 360 526
  are non-nationals)
• Growth rate 3.28
• Currently estimated that over 50 of population
  is under 20yrs old.
• Birth rate 37,47 births/1000 population
• Death rate 6.02 deaths/1000 population

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Demography cont..

• Infant Mortality rate 52.9 deaths/1000 live
  births
• Sex ratio 1.24 males/female
• Life expectancy Male 66.11 years
  Female 69.51 years
• Total fertility rate 6.3 children born/woman

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Demography cont.

• Ethnic groups Arab 90, Afro-Asian 10
• Religions Muslims 100
• Languages Arabic
• Literacy (age 15 and over can read and write)
• Male 71.5
• Female 50.2

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Demography cont.

• Currency Saudi Riyal
• Capital Riyadh (population 3.1m)
• Head of State and Prime Minister King Fahd bin
  Abdul Aziz, Custodian of the Two Holy Mosques.

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History - Cradle of Islamic Religion

• Holy Quran revealed to Prophet Mohammed
• Arabs expanded from Arabia, spreading Islam
  (provided stability for many)

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Modern Saudi Arabia

• Abdul Aziz Al - Saud
• 1902 - history of modern Saudi Arabia
• 1933 - renamed Kingdom of Saudi Arabia
• 1936 - treaty with Yemen
• Goals - consolidation of power
• restoration of law and order
• died 1953

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Modern Saudi Arabia

• Saud bin Abdul Aziz (1953 - 1964)
• relations with neighbours
• education, social services
• abdicated after 11 years in favour of his brother

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Modern Saudi Arabia

• King Faisal (1964 - 1975)
• continued programmes of reorganisation and reform
• policy change--but slowly
• development of Kingdoms resources
• assassinated 1975

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Modern Saudi Arabia

• King Khalid bin Abdul Aziz(1975 - 1982)
• a time of prosperity and enormous wealth
• first serious evidence of public dissension and
  disagreement
• radicals seized control of Grand Mosque
• died 1982

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Modern Saudi Arabia

• King Fahad bin Abdul Aziz(1982 - )
• continuing development
• strengthened its ties of defence with USA,
  Britain and France
• Iraqi invasion of Kuwait

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Culture

• Islamic Country
• birthplace of Islam, Arab people and Arabic
• home to Mecca and Medina
• no consumption of alcohol or pork
• Friday is Sabbath day
• prayer 5 times every day
• ultra-conservative dress
• strict separation of men and women

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Culture

• The role of women
• modesty expected in dress and behaviour
• no unaccompanied travel
• also applies to foreigners
• increasingly well-educated and employed outside
  the home

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Institutions

• The Quran is the Constitution
• Legal system based on Islamic Law
• Monarchical System of Government
• The King is Chief of State, Head of Government,
  and the ultimate source of Judicial and
  Organisational power
• The King appoints the cabinet

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Institutions

• The Ulemma (Religious leaders)
• Responsible for all preaching and guidance
• Handle legal cases in courts
• Public notaries
• supervise girls education and Islamic teaching
  abroad
• supervise all mosques
• oversee all scientific and Islamic research

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Infrastructure

• Transport
• Roads
• Railways
• Air
• Shipping
• Communications
• Telephones
• Internet
• Satellites

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Resources

• Gas
• Oil
• Saudi Arabia has roughly 25 of the worlds
  proven oil reserves
• Minerals
• Water

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Economy - Economic Overview
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Key elements of the Saudi economy are

• The Macroeconomy
• Annual population growth rate - 3.5 per annum
• Minors 50 of the current population

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Government and Budget

• Public sector debt
• exceeded 120 of GDP(end of 1999)
• SAG studying new non-oil tax revenues to dampen
  oil revenue volatility.
• SAs bid to enter the WTO continues to move
  forward.
• The new FDI Code will strengthen the climate for
  foreign investment

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Oil

• SAs economy still too dependent on oil and oil
  derivatives
• 90-95 of SA export earnings, 75 of the budget,
  and about 35-40 of GDP.
• Oil and gas initiatives moving forward.
• Potential huge investment
• Reinvigorated petroleum company investment in SA
  

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Current Account and Finance

• Net FDI slowed in recent years
• SA - non member of WTO
• Overseas Saudi private capital amounts to
  600-700 billion
• Foreign worker remittances, about US 16 billion
  annually, continue as a drag on the current
  account.
• Low inflation and stable currency due to oil

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Private sector and Privatisation

• Large state corporations, generally monopolies,
  dominate the Saudi economy.
• Saudi Basic Industries Corporation (SABIC), the
  Saudi Telephone Company (STC), the Saudi
  Electricity Company (SEC), and the Saline Water
  Conversion Corporation (SWCC).
• Prior to the oil boom in the 1970s, parts or all
  of many of these firms, were in private hands.
  (Private sector - one third of GDP)

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Sectoral Analysis - The Financial Sector

• Central Bank - the Saudi Arabian Monetary Agency
  (SAMA)
• 10 commercial banks
• The Stock Market
• Specialised Funds

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The Industrial Sector

• Enormous growth in the number of industrial
  plants .
• Power and Energy SA world leaders in per capita
  consumption of electricity, water, and gas
• demand growing
• Construction sector - vital to economys health.
• The Saudi cement industry today ranks 3rd after
  petrochemicals and banking in terms of annual
  yield.

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Agriculture

• The Saudi agricultural sector has become one of
  the largest and most successful non-petroleum
  sectors in the Kingdom.
• Sector growth
• Average annual rate - 8.7 percent since 1970 and
  accounts for more than 9.4 percent of Saudi
  Arabias GDP.

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Foreign Trade

• Exports
• Imports
• US - Saudi Trade

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Economic Strategy Policy

• 5-Year Plans Development Strategy
• 1995 - 2000 development plan
• need to reduce state involvement
• increase private sector
• greater diversification away from oil production
• deregulation of FDI
• WTO membership
• economic integration
• other policies e.g.. saudiization

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Internationalisation

• New Foreign Investment Code
• Legal, cultural and economic issues
• US - Saudi Arabia ties

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Risk

• Saudi Customs
• Political Risk
• King Fahd Ailing
• Relationship with USA
• Terrorism
• Human Rights

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Risk

• Economic Risk
• Dependence on Oil
• effect of Gulf war
• Climatic Risk
• High Temperatures
• Water Shortages

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Conclusion

• Stable Economy but High Risk for foreigners

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Sources

• www.arabia.com
• www.lonelyplanet.com
• www.roughguide.com
• www.cia.gov
• www.odci.gov
• www.saudiinf.com