Saudi Arabia – Economic Overview

Diversification Of Economic Base

Trade Liberalization:

Since its establishment, the Kingdom of Saudi Arabia has adopted the free economics system in its broad sense, thus ensuring the freedom of trade, within the framework of fair competition and compliance with the rules and provisions organizing it, meanwhile encouraging the initiatives put forth by the private sector, which stands out as a crucial pivot for the economic activity.

In this spirit, the State has been always encouraging the private sector to have its share in joint ventures with foreign enterprises, and invest in new productive capacities, by way of harnessing the state-of-the-art technologies. Moreover, the State has adopted certain financial and organizational procedures meant to reinforcing the private sector's contributions.

The private sector, as a result, has become less dependent on the government spending, nay; it is now considered a rich stream of the National Economy.

The trade policy which the State has adopted and made every effort to put into effect is evidently manifested in the Kingdom's dealings with the outside world, characterized by the freedom of import from all countries, except for those boycotted, and the freedom of capital movement, as well as the movement of all funds and currencies to and from the Kingdom, at any quantity.

Thanks to this very policy, the import/ export tempo has been on the rise; not to mention the increase of the incoming foreign currency, the improvement of the balance of payment, and moderate prices of most available goods and products.

The Kingdom has issued a set of regulations and instructions that organize trade activity in accordance with Shariah, thereby protecting consumers and preserving their safety as well as the public health. It has also imposed field inspection across the Kingdoms ports, with the aim to verify the compliance of all the incoming goods and products with the quality standards in effect. In doing so, the Saudi society enjoys welfare. And as a result of the economic growth, and flourish of trade, owing to the freedom of Saudi merchants, KSA has become one of the world's leading countries in the field of free economics, boasting its substantial share in the international trade.

Reinforcement of the Private Sector's Role:

The State has been always showing keen interest in reinforcing and encouraging the private sector, emanating from its staunch belief in the necessity of creating a wide economic base for the varied national resources, along with promoting positive competition among commercial entities, and providing proper environment for such competition to flourish, by way of providing the necessary equipment, and offering all the facilities and information related to investment; not to forget the development of human resources, promoting the organizational and operational capacity of such entities, and providing the demanded aid for establishing new units meant to accommodate capital expansion. That's to be added to embracing the principle of citizens' partnership in the state-established projects, and transferring the ownership of the productive projects proven to be successes to them, by way of the sale of shares or privatization programs.

Within the same vein, the Kingdom of Saudi Arabia has issued numerous rules, regulations, principles and procedures of practicing each commercial activity. Among the objectives assigned to such rules and regulations is to promote competition in domestic trade and control monopolistic and restrictive practices on wholesale and retail trade, in addition to maintaining safety while practicing whatever economic activity, and combating commercial fraud, imitation, and forgery of trade marks.