Comparative Analysis of Saudi Arabia and UAE for Middle Eastern Business Opportunities

What is the purpose of conducting country analysis in business?

To understand risks and potential by examining economic stability, political conditions, cultural realities, regulations, and market opportunities.

What are key aspects of country index analysis?

Market opportunities, macroeconomic factors, political and business environment, financial stability, and country risk ratings.

What is the significance of Saudi Arabia in the global business landscape?

It is a top oil exporter, a leading OPEC+ member, and an investment powerhouse with a strategic trade location.

What is Saudi Arabia's Vision 2030?

A strategic framework aimed at reducing oil dependence and increasing the private sector's contribution to GDP to 65% by 2030.

What is the capital city of Saudi Arabia?

Riyadh

What is the official language of Saudi Arabia?

Arabic

What currency is used in Saudi Arabia?

Saudi Riyal (SAR)

What type of governance does Saudi Arabia have?

Absolute Monarchy

What is the current population of Saudi Arabia as of 2023?

33 million

What percentage of Saudi Arabia's population resides in urban areas?

86%

Who is the official head of state in Saudi Arabia?

King Salman bin Abdel-Aziz al-Saud

Who is the de facto ruler and Prime Minister of Saudi Arabia?

Crown Prince Mohammed bin Salman (MBS)

What is the role of the Majlis al-Shura in Saudi Arabia?

It is an appointed body with advisory powers but no legislative authority.

What is the Public Investment Fund (PIF) in Saudi Arabia?

The nation's powerful sovereign wealth fund, driving Vision 2030 and leading major domestic and international investments.

What is the Saudi Central Bank (SAMA) responsible for?

Monetary and financial stability in the country.

What are some major political and economic risks facing Saudi Arabia?

Human rights issues, authoritarianism, regional instability, and economic dependence on China.

What is the economic structure of Saudi Arabia characterized by?

A hybrid economy transitioning from state-dominated to greater private-sector involvement.

What is the expected population of Saudi Arabia by 2028?

37 million

What percentage of the Saudi population are Saudi nationals?

58%

What is a significant factor deterring Western investment in Saudi Arabia?

The country's human rights record.

What is the significance of the Strait of Hormuz for Saudi Arabia?

It is a critical route for oil shipments, making regional stability vital for economic interests.

What are the implications of Saudi Arabia's economic ties with China?

Economic success is increasingly tied to China's growth, creating vulnerability to a slowdown.

What is the anticipated political stability in Saudi Arabia under MBS?

High political stability with firm authoritarian control and a smooth transition of power.

What are the main goals of Saudi Arabia's Vision 2030?

To diversify the economy and reduce dependence on oil.

What is Vision 2030?

A national strategy announced in April 2016 by Crown Prince Mohammed bin Salman to transform Saudi Arabia's economy, society, and global image.

What is the core goal of Vision 2030?

To reduce heavy dependence on oil, which accounts for approximately 70-80% of government revenue.

What are the three core pillars of Vision 2030?

A Vibrant Society, A Thriving Economy, and An Ambitious Nation.

What is the projected GDP of Saudi Arabia in 2028?

$1.32 trillion.

What was the GDP per capita in Saudi Arabia in 2023?

$32,420.

What was the real GDP growth rate for Saudi Arabia in 2023?

-0.8% (contraction).

What is the expected real GDP growth rate for Saudi Arabia in 2024?

+1.3%, driven by non-oil sectors.

What is the unemployment rate for Saudi nationals as of Q1 2024?

7.6%.

What is the gender gap in unemployment in Saudi Arabia?

14.2% for females and 4.2% for males.

What percentage of GDP does the services sector contribute in Saudi Arabia?

Nearly 50%.

What is the dominant sector of the Saudi economy?

Oil & Gas, accounting for approximately 40% of GDP.

What is Saudi Arabia's goal for foreign direct investment (FDI) by 2030?

To attract $100 billion in annual FDI inflows.

What are some barriers to investment in Saudi Arabia?

Concerns over human rights and risks related to the rule of law.

What is the Saudi riyal pegged to?

The US dollar at SR 3.75 : US$1 since 1986.

What is a major challenge faced by the Saudi economy?

High vulnerability to global oil price volatility.

What is the projected average inflation rate in Saudi Arabia for 2025?

2.6%.

What is the strategic goal for renewable energy in Saudi Arabia by 2030?

To generate 50% of electricity from renewables.

What is the significance of the Riyadh Metro project?

It is part of massive state-led investment in transport and telecommunications.

What is the role of Zakat in Saudi Arabia?

An annual Islamic duty of 2.5% of a person's net worth paid by Saudi and GCC citizens.

What is the expected labor force participation rate for women in Saudi Arabia by 2024?

Nearly 36%, up from 20% in 2018.

What is the impact of the peg of the Saudi riyal on monetary policy?

It forces the Saudi Central Bank to follow the US Federal Reserve's interest rate policy.

What is a significant recent development in Saudi Arabia's technology sector?

Rapid development of 5G networks and significant government investment in AI and IoT.

What are Special Economic Zones (SEZs) in Saudi Arabia?

Areas that offer competitive tax rates and customs exemptions to attract investment.

What is the expected contribution of tourism to Saudi Arabia's economy?

A major growth area, with 30 million international visitors projected in 2024.

What is the significance of the Saudi Green Initiative?

It aims to promote renewable energy and environmental sustainability.

What is Zakat in the context of Saudi Arabia?

An annual Islamic duty of 2.5% of a person's net worth paid by Saudi and GCC citizens.

What is the significance of the Kaaba during the hajj?

The Kaaba in Mecca is a central religious site for Muslims during the hajj pilgrimage.

What demographic characteristic defines Saudi Arabia's population?

A young and growing population of approximately 34.5 million, with 50% under the age of 30.

What percentage of the Saudi population consists of expatriates?

Approximately 42% of the population.

What is a major labor market challenge in Saudi Arabia?

A persistent shortage of skilled local labor and heavy reliance on foreign workers.

What are 'Saudisation' policies?

Policies aimed at increasing local employment, which have had modest results.

How has female labor force participation changed since 2018?

It has nearly doubled, indicating a significant social shift.

What is the female unemployment rate in Saudi Arabia compared to men?

Female unemployment is 14.2%, significantly higher than men's rate of 4.2%.

What are the two tiers of the retail environment in Saudi Arabia?

Modern shopping malls and traditional outdoor markets (souks).

What is a notable trend in consumer spending patterns in Saudi Arabia?

High demand for luxury goods, high-end fashion, and Western fast food.

What is Saudi Arabia's commitment regarding carbon emissions?

The Kingdom aims for net-zero carbon emissions by 2060 as part of Vision 2030.

What is the ambitious renewables target for Saudi Arabia by 2030?

To meet 50% of electricity needs from solar and wind power.

What significant environmental challenge does Saudi Arabia face?

Critical water scarcity due to very low rainfall.

What is the Kingdom's approach to integrating ESG into business?

The Capital Market Authority has introduced ESG standards for all listed companies.

What is a key concern regarding labor practices in Saudi Arabia?

Exploitation of expatriate workers, particularly in construction and retail sectors.

What is the primary export of Saudi Arabia?

Crude oil, making it the world's largest net exporter.

What percentage of Saudi Arabia's export earnings come from hydrocarbons?

Approximately 73% of export earnings.

Who are Saudi Arabia's top trading partners?

China is the primary partner, accounting for nearly 16% of exports.

What is the role of Saudi Arabia in OPEC+?

As a key member, it influences global oil production and pricing policies.

What is the significance of the 2025 World ESG Summit for Saudi Arabia?

It highlights the Kingdom's commitment to environmental, social, and governance standards.

What is the impact of the Vision 2030 initiative on Saudi Arabia's business environment?

It is adapting to be more international and tourist-friendly.

What is the expected capacity increase for renewable energy in Saudi Arabia by 2030?

From approximately 6.5 GW in 2024 to 130 GW by 2030.

What is the significance of the Kingdom's nuclear power ambitions?

Saudi Arabia is pursuing civilian nuclear power capabilities to diversify energy sources.

What is the primary level at which Saudi Arabia negotiates its free trade agreements?

At the GCC (Gulf Cooperation Council) level.

Which countries have FTAs with the GCC?

Singapore, New Zealand, and the European Free-Trade Association (EFTA).

What ongoing negotiations are currently taking place for the GCC?

Talks for major trade pacts with the EU and the UK.

What strategy does the UAE employ that contrasts with the GCC's collective approach?

Pursuing numerous individual bilateral trade deals.

What significant trade agreement was announced by New Zealand in 2024?

A trade agreement with the Gulf Cooperation Council.

What is the primary geopolitical risk affecting Saudi Arabia's economy?

Significant regional instability.

How could Iran's nuclear program impact Saudi Arabia?

It could stifle inward investment and increase threats to critical infrastructure.

What balancing act must Saudi Arabia maintain in its foreign relations?

Balancing relationships with the US and Iran.

What characterizes the political economy of Saudi Arabia?

Dominant state control and an oligarchic private sector.

What issue arises from sudden major policy changes in Saudi Arabia?

They give businesses little or no time to prepare and adapt.

What concerns were raised by the 2017 anti-corruption arrests in Saudi Arabia?

Concerns about the authorities' respect for private property rights.

What is a key barrier to market entry in Saudi Arabia related to labor?

The 'Saudisation' policy, which mandates employment quotas for Saudi nationals.

How do 'Saudisation' policies affect operational costs for businesses?

Saudi nationals are, on average, twice as expensive to hire as expatriates.

What ethical challenges do foreign firms face when investing in Saudi Arabia?

The country's human rights record deters some Western investors.

What emerging sectors is Saudi Arabia focusing on for growth?

Tourism, manufacturing, mining, renewable energy, AI, and Electric Vehicles.

What is the purpose of the Vision 2030 plan in Saudi Arabia?

To transform the economy and open up massive investment opportunities.

What does the Public Investment Fund (PIF) aim to achieve by 2030?

To reach $2 trillion in assets.

What is Saudi Arabia's overall ranking in terms of business environment?

#30 globally and #4 in the region.

What are the key drivers of Saudi Arabia's improving business attractiveness?

Vision 2030, regulatory reforms, and strong investor appetite.

What is a major focus for Saudi Arabia to become a regional hub?

AI, EV manufacturing, tourism, and mining.

What is the capital city of the United Arab Emirates?

Abu Dhabi.

What is the official language of the UAE?

Arabic.

What is the currency used in the UAE?

UAE Dirham (AED).

What type of governance does the UAE have?

A federation of monarchies.

What is the current population of the UAE as of 2023?

10.7 million.

What is the forecast population of the UAE by 2028?

11.5 million.

What percentage of the UAE's population is expatriate?

Over 85%.

What is the urbanization rate of the UAE's population?

88% of the population resides in cities.