I think Saudi Arabia will be a growing impact on the global economy. A country that has a history of nomadic tribes and known for its vast amounts of oil is successfully diversifying its business ventures and becoming less oil reliant. Of course, this is a slow transition, but in 2011 “the non-oil component of the economy expanded by 7.8% (http://bit.ly/zOmdVY).” This is a growing trend in other places in the Middle East such as Qatar, where an official has announced investing money into alternative energy’s and in Dubai where it heavily relies on its financial sector, its real estate sector, and its tourism sector.
Although I have heard much about other countries in this particular region, there is not much being reported about Saudi Arabia’s rise in the global economy. Saudi Arabia has been ranked 16th by the World’s Bank 2009 Ease of Doing Business index. It is ranked 27th in the world for global competitiveness. It is building multiple “Economic Cities” across the country to invite foreign direct investment in different sectors of its economy. Recently, Mars Inc, the candy company, invested $210 million for the next 10 years in building a factory that will supply the Middle East region with its products (http://bit.ly/AvKs7Z). In a statement, the Mars Inc. Representative made it a point to say that this move is to “develop and nurture Saudi talent.” However, the future is not relying on just one company that has invested in this particular economic city. In 2007, the government began to develop two economic cities that gave foreign investors a place to settle down as if it was their home country. It is a “policy at SAGIA (Saudi Arabian General Investment Authority) that hosts the needs of the corporations within an environment that suit the needs of businessmen” of foreign countries (http://bit.ly/yrSU5Y).
Having stated many positives about Saudi Arabian business practices has overshadowed the culturally gap that it has holds with Western countries. The treatment of woman in Saudi Arabia is something that is not exactly approved by the U.S.A. and it has a history of not treating lowing class citizens well. My opinion on its treatment of woman is that it is a theocratic monarchy. The country is supposed to follow the rules of the land and these are rules of Saudi Arabia. Things may change in the future and we have all witnessed the changes across the Middle East so we will have to wait and see. The ill-treatment of its immigrant working class is prevalent throughout the Middle East, and every western country has a demographic that is employed for low skill cheap labor so I believe this is an effect of the capitalistic system.
All in all, Saudi Arabia is a Firm Asset. I will include other aspects about Saudi Arabia in later posts such as its investments in commodities and its stock exchange, Tadawul. If I made any mistake please correct me and if you have any questions feel free to comment me on the firmassets website.