Economy: Saudi Arabia has the world’s largest oil reserves – about 20 per cent of proven deposits – and is also currently the world’s largest producer. Oil and natural gas products now account for 35 per cent of Saudi GDP, 75 per cent of government revenue and 85 per cent of export income. The non-oil economy is devoted to agriculture and newly developed industries (considerable effort has been put into ensuring adequate irrigation and industrial water supplies in a country with extremely low rainfall). Agriculture, which supports a little over 10 per cent of the workforce, produces wheat, fruit, vegetables, barley, eggs and poultry, in most of which the kingdom is now self-sufficient. In addition to oil and gas, there are other confirmed and exploitable mineral deposits including limestone, gypsum and marble plus phosphates, bauxite and gold.

The industrial sector produces petrochemicals, steel, engineering and construction materials and a wide range of consumer goods. The service sector is the fastest growing part of the economy at present, with finance and business services, consultancies and property services prominent.

The rapid expansion of the Saudi economy from the 1960s onwards stalled during the late 1980s as overstretched finances and persistently low world oil prices forced the Saudi exchequer to rein in its spending plans (government debt is now nearly 100 per cent of GDP – much of which, such as US$40 billion of loans to Iraq, may not be recovered). This has had unfortunate consequences for the large body of foreign labour – an estimated 35 per cent of the workforce – upon which the Saudis rely for much of their technical, managerial and menial labour. Foreigners are now barred from a range of occupations as the government seeks to tackle Saudi unemployment, which is estimated at 25 per cent. Meanwhile, the average Saudi income has fallen by around 40 per cent in the last 20 years. At present, the economy is picking up; annual GDP growth is now 5.3 per cent; inflation is effectively zero.
Since the late 1990s, the Saudis have gradually introduced economic reforms. A thriving private sector is viewed as essential to the government’s objective of diversifying the economy and reducing reliance on the oil and gas sector. Some state-owned businesses have been sold and a number of measures taken to deregulate the economy and open up domestic markets to foreign competition. To that end, a trade agreement has been signed with the European Union, and Saudi Arabia is expected to join the World Trade Organization in due course. Saudi Arabia is the most influential member of the Organisation of Petroleum Exporting Countries (OPEC) and of the Islamic Development Bank. Japan and the USA are Saudi Arabia’s most important trading partners, followed by Korea (Rep), the UK, Singapore and Germany.

Business: Appointments are necessary. Visiting cards printed in English with an Arab translation are usually exchanged. Men should wear suits for business meetings and formal social occasions. Thursday and Friday are official holidays. Office hours: Sat-Thurs 0900-1300 and 1630-2000 (Ramadan 2000-0100), with some regional variation. Government office hours: Sat-Wed 0730-1430.