Download Saudi Arabia Strengths

‫العربية السعودية‬
‫‪Saudi Arabia‬‬
STRENGTHS
Education
• Saudi Arabia Education system under
– Government agencies of Ministry of Education
– The Ministry of Higher Education
– General Organization for Technical Education and
Vocational Training
• Education starts at 6 years old
• Examination at end of the 6th grade
Education (cont.)
• Schools are not co-educational
• Women are prevented from studying
– Engineering
– Journalism
– Architecture
• Saudi Arabia literacy rates
– 85% among males
– 70% among females
Economics
Growth in GDP
• 80% between 20092011
• 5% growth in U.S
Ease of Doing Business
• Named 11 out of 183
in Annual Report
WTO Member
• Trade negotiations
• Implementations and monitoring
• Dispute settlement
• Building trading capacity
• Outreach
Road, Rail, & Port Infrastructure
There is a new
road being
established in
Saudi Arabia
called the Atlantic
Route Corridor.
It will start in
northern Saudi
Arabia stretching
due south, and
then east to
Westford.
Road, Rail, & Port Infrastructure
Currently the
kingdom has
1,200 km of rail
ways. When the
project is finished
in 2015, the
kingdom will
have 7,000 km of
rail roads.
Road, Rail, & Port Infrastructure
15 Ports in Saudi
Arabia. The
Majority of them
are located in
Eastern and
Southern Saudi
Arabia, for a total
of 9 major ports.
WEAKNESSES
Political Forces Outside Saudi Arabia
• Political Unrest in the Middle East
• Revolts
• Terrorism
Geographic Location
Because of the recent
unrest in the Middle
East, problems may
arise from exposing the
company to this
location.
Culture
• Religion
– Schedule of prayers
– Month of Ramadan
• Women’s social standing
• Pork-free diet
• Advertisements aimed at Men
OPPORTUNITIES
Favorable Taxes
• Joint ventures – five year tax holiday
• Agricultural – ten year tax exemption
• Company tax rates between 25 and 45 percent
• Foreign employees not taxed on income
• Zakat religious tax
U.S. – Saudi Arabia Relations
• Ancestral ties and shared values
• 9/11 Attacks
– Both take the stance Saudi Arabia wasn’t involved
Promising Economic Growth
• Privatization
• Laws to Encourage Investment
• Capital Markets Law
• Foreign Investment Law
Limited Competition
• Consumes 45% of all feed barley in global
markets
• Import millions of sheep each year
• Pilgrimage to Mecca
– 2 million people
– Government provides food all month
THREATS
Unemployment
•
Unemployment Rate
• 10.9%
• Production Capacity
• Potential Opportunity
Terrorism in Saudi Arabia
• New wave of youth activism
– Government reinforces strict limits on political
activism
• Related Developments
– Internet – social media tools
– “Reform stimulus” package - $37 billion
– Municipal council elections
Terrorism – 9/11 Attack
Company ABC is thinking about moving into
Country XYZ. Recently, XYZ has been found to
be involved in funding terroristic attacks.
• Would you still buy from them?
• If you were an investor, would you still invest
or sell your stock?
Terrorism
Terrorism
SUMMARY
Strengths
• Education
• Economy
• WTO Member
• Road, Rail, & Port Infrastructure
Weaknesses
• Political Forces outside Saudi Arabia
• Culture
Opportunities
• Favorable Taxes
• U.S. and Saudi Arabia Relations
• Promising Economics Growth
• Limited Competition
Threats
• Unemployment
• Terrorism
Recommendation
Saudi Arabia does have considerable downsides such as
terrorism, extremely high unemployment rates, and
migration. However, Saudi Arabia does have a promising
growth in economic areas and Saudi Arabia continues to
have strong ties with the U.S. as far as trade relations and
investments. The lower corporate taxes, the ability to
move products and services freely throughout the Middle
East, and limited competition in the food and beverage
industries have lead Team Saudi Arabia to recommend in
favor of moving forward and expanding business to Saudi
Arabia.
‫العربية السعودية‬
‫‪Saudi Arabia‬‬