Key Developments of Business in the Kingdom of Saudi Arabia

At the beginning of the millennium, Saudi Arabia’s economy saw a surge in profits and prosperity due to the rising prices of oil and increased demand for the resource across the globe. Drawing on Saudi Arabia’s ample natural supply, the oil boom from 2003 to 2013 launched the Kingdom into the most prosperous state it had seen in years, making it the 19th-largest economy in the world.

During this period, the GDP doubled led to increased job opportunities. With government investment in education, infrastructure and healthcare, the country saw an increase of 1.7 million new jobs and the average household income rose by 75 percent.

Saudi Arabia continues to move toward adherence to a single standard, which is often based on International Organization for Standardization (ISO) or International Electrotechnical Commission (IEC) standards, in technical regulations to the exclusion of other international standards, such as those developed by U.S.-domiciled standards development organizations (SDOs).  Saudi Arabia’s exclusion of these other international standards, which are often used by U.S. manufacturers, can create significant market access restrictions for industrial and consumer products exported from the United States.

Government-controlled enterprises in Saudi Arabia are increasingly introducing local content requirements for foreign firms.  Aramco’s “In-Kingdom Total Value Added” program, for example, strongly encourages the purchase of goods and services from a local supplier base and aims to double Aramco’s percentage of locally manufactured energy-related goods and services to 70 percent by 2021.  Saudi Arabia’s military is reforming its procurement processes and policies to incorporate new Saudi employment and localized production goals.  The SAG’s Vision 2030 program calls for 50 percent of defense materials to be produced and procured locally by 2030, and simultaneously seeks comparable increases in the number of Saudis employed in this sector. 

References 

Saudi Arabia - Market Challenges https://www.export.gov/article?id=Saudi-Arabia-Market-Challenges

Key Development Projects in Saudi Arabia https://quincygroup.com/6-key-development-projects-in-saudi-arabia/