The kingdom of Saudi Arabia is the world’s major oil exporting country. Oil exports reached 79% of total exported products in 2018.
In order to reduce its dependence on oil exports, Saudi Arabia has launched an ambitious blueprint, “Vision 2030”, based on 3 pillars,
“a vibrant society, a thriving economy and an ambitious nation” to achieve 96 strategic objectives with the aim of modernizing the country and its economy.
Some of the economic goals of “Vision 2030” are:
- To leverage its position as a global hub by connecting the 3 continents: Asia, Europe and Africa
- To raise the share of non-oil exports in GDP from 16% to 50%
- To transform Aramco from an oil producing company into a global industrial conglomerate
- To transform the Public Investment Fund into the world’s largest sovereign wealth fund.
This ambitious plan will entail a boost for the economy and will attract big foreign investments by opening up new business opportunities.
In addition, Export Development Authority of Saudi Arabia, an independent national authority, aims to develop non-oil exports and help Saudi exporters to increase their international competitiveness.
Tips for importing / exporting to or from the Saudi Arabia market
If you are thinking of importing / exporting to or from the Saudi Arabia market, it is advisable to consider the key factors that we will see below:
- Saudi Arabia was the 20 largest exporting economy in 2018, with a total of 299 billion USD, according World Bank statistics.
- Followed by Poland (21) with 260 Billion and behind Switzerland (19) with 310 Billion USD. The countries within its geographical area of influence like United Arab Emirates, Iran and Qatar were placed in positions 16, 36 and 40 respectively.
- During the period 2016-2018, exports increased at an average annual rate of 28% from 184 billion in 2016 to 299 billion in 2018.
- In 2018, the top 5 Saudi exports with 93% out of the total, were:
- 79% Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral
- 7% Plastics and articles thereof
- 5% Organic chemicals
- 1% Ships, boats and floating structures
- 1% Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals
- The following 5 product groups represent 40% out of total Saudi imports during 2018.
- 11% Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof
- 10% Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television
- 9% Vehicles other than railway or tramway rolling stock, and parts and accessories thereof
- 6% Commodities not elsewhere specified
- 4% Pharmaceutical products
- In 2017, exports of technological products (medium high tech products), represented 47% out of the total of exported manufactured products.
- GDP per capita in 2018 was 55,336 USD. The population reached 33.1 million inhabitants.
- The urban population is 84%. The biggest cities are: Riyadh (4.2 million), Jeddah (2.8 million) y Mecca (1.3 million).
- 93% out of total population uses internet. The number of mobile phone subscriptions is 1.23 per inhabitant.
- Exports of services rose by an average annual rate of 12.1% in the period 2014-2018, from 12.5 to 19.7 Billion USD.
- During the period 2014-2018, Foreign Direct Investment (FDI) received by Saudi Arabia reached the average annual figure of 5.9 billion.
- Its main trading partners are China, which represents 36% of exchanges, followed by Japan with 19% and United States of America with 18% of exchanges.
- The Kingdom of Saudi Arabia has 9 commercial ports, with a 13 million containers traffic, according to the Saudi port authority.
- Regarding bilateral agreements, Saudi Arabia has 3 existing regional trade treaties. Its presence in international markets will be bolstered by 3 new treaties which will come into force soon (at the date of this publication).
- The Saudi legal system is based on Islamic (sharia) legal system with some elements of Egyptian, French, and customary law. The type of government is absolute monarchy. King and Prime Minister Salman bin Abdulaziz Al-Saud (since 23 January 2015); Crown Prince Mohammad bin Salman bin Abdulaziz Al-Saud.
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Data from 2018, other years are stated.