Saudi Arabia

ةيدوعسلا ةيبرعلا

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 6 th 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 2009 2011 • 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

• Unemployment • Terrorism Threats

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.

Saudi Arabia

ةيدوعسلا ةيبرعلا