General Information
The Kingdom of Saudi Arabia the "third Saudi state", is located in the Middle East and was established in September of 1932, by Muhammad I ibn Saud ibn Muhammad ibn Muqrin Al-Maridi the emir of Ad-Diriyyah. His family, the House of Saud, had been living in central Arabia, in the area called Najd since 1744. The Kingdom of Saudi Arabia is an absolute Monarchy, although the country has a Consultative Assembly.
The members of the Consultative Assembly are appointed by the King. The Consultative Assembly is a formal advisory body with no executive power, but It has the power to propose laws to the King of Saudi Arabia and his cabinet. The Consultative Assembly cannot pass or enforce laws, which are powers reserved for the King.
Geography
Kingdom of Saudi Arabia is the largest country in the Arabian Peninsula and its total surface area is estimated to be 2,149,790km² which is almost 4/5th of the Peninsula. It is surrounded by the Red Sea in the west, by Yemen and Oman in the South, the Arabian Gulf and the UAE, Bahrain and Qatar in the east and Jordan Iraq and Kuwait in the north. Saudi Arabia’s Red Sea coastline is 1,760 km long, while its Arabian Gulf coastline is 560 km long. The total length of the land border is 4,415 km of which 814 km shared with Iraq, 728 km with Jordan, 222 km with Kuwait, 676 km with Oman, 60 km with Qatar 457 km with UAE and 1,458 km with Yemen.
At the west part of the country is the Tihama narrow plains and to the east the mountain ranges of Hijaz and Asir and their peaks Jabal Sawda (2,998.7 m) and Jabal Ferwa (2,998.8 meters). The country has two large deserts, Al Nufud in the north and Al Rub Al Khali in the south. Almost 90% of the territory of the kingdom is deserts and rocky plateaus. In the east and along the coastline of the Arabian Gulf are wide coastal plains. The territorial waters of the Kingdom are 12 nm, the contiguous zone 18 nm and the exclusive economic zone is 228,633 km².
The capital of the Kingdom of Saudi Arabia is Riyadh, located almost at the center of the country, with a population of 7,676,654 people, the second biggest city is Jeddah, with a population of 3,600,000 people and the third one is Dammam, with a population of 2,054,710 people.
The Population of the Kingdom of Saudi Arabia
The population of the Kingdom of Saudi Arabia is divided to the indigenous population and to the foreign citizens who work and live in the country. The total population of the Kingdom of Saudi Arabia in 2018 was 33,413,660 people of which 20,768,627 are Saudi citizens and 12,645,033 foreign citizens from around the world. The foreign citizens represent 37.8% of the total population of the Kingdom. One of the most important factor about the population of the Kingdom of Saudi Arabia is the percentage of the young people compare to the total population. According to the Statistics Authority of the Kingdom of Saudi Arabia about 80.8% of the total population of the Kingdom belong to the age group of 0-44 years old.
Furthermore, 68.5% of the population of the foreign citizens that live in the Kingdom are males. The two factors could probably have a significant effect to the future social and economic development in the country. According to the “World Bank” the average life expectancy in the Kingdom of Saudi Arabia for 2017 was 75 and more specifically 74 years for males, 76 years for women. The birth rate for 2018 was 2.319 and the death rate per 1,000 people for the same year was 3.446.
Energy dependency and “Vision 2030”
Like many countries in the Middle East, the Kingdom of Saudi Arabia is highly dependent on the oil and gas sector. The Kingdom of Saudi Arabia has the second largest proven petroleum reserves in the world and is the largest exporter of petroleum in the world. Furthermore, Saudi Arabia has the 5th largest proven natural gas reserves in the world. The Saudi economy is the largest in the region and one of the top twenty economies in the world. The economy of the country has a large state sector, although there have been efforts to increase the size and the economic volume of the private sector.
Another characteristic of the Saudi economy is the sizable welfare benefits systems for the citizens of the country, although recently there have been several government initiatives to reduce the economic size of this policy.
Finally it is very important to mention the vulnerability of the Saudi economy to the fluctuation of the oil prices, since as it has been mentioned earlier, the petroleum sector accounts significant part of the GDP of the country (approximately 42% in 2018) and 90% of the export earnings (2018).
The dependency of the Saudi economy on oil has been one of the major issues for the leaders of the country since the 1980’s. Since 1980, the Kingdom of Saudi Arabia has been trying to diversify and expand productive sectors of the economy primarily industry, encourage the establishment and development of private companies, attract foreign investments in the form of joint ventures with Saudi public and private companies focused in trade commerce industry, agriculture, banking, and construction.
This policy was implemented throughout the period 1980-1990 and was intensified during the period 1996 till nowadays. Saudi Government targets are;
- Lowering the cost of government services without cutting them
- Expand educational training programs
- Reduction of the dependence of the Kingdom on the petroleum sector
- Diversification of the economic activity
- Development of the private economic sector with special emphasis on industry and agriculture
- Continued the effort to increase the employment of Saudi citizens in the national economy
In order to enhance the efforts of the country towards the diversification of its economy, the generation of new sources of revenues and the modernization of the society with respect to Islamic culture & faith and Saudi heritage, the Saudi Government started in 2016 a new 15-year long development program called “Saudi Arabia’s Vision 2030”.
The program is going to be implemented in three phases, each one lasting 5-years, with each phase contributing to the achievement of several targets and reforms strategies.
"Saudi Arabia’s Vision 2030” development program seeks to unlock the private sector’s capabilities, which will lead to greater private sector contribution to the national GDP, to increase the efficiency of the government spending, to lead the country to digital transformation, to focus on sectors such as telecom, tourism, manufacturing, healthcare, retail and IT.
The “Saudi Arabia’s Vision 2030” program is built on three pillars:
- A vibrant society, (urbanism, culture and entertainment, sports, Umrah, UNESCO heritage sites, life expectancy)
- A thriving economy (employment, women in the workforce, international competitiveness, Public Investment Fund, Foreign direct investment, private sector, non-oil exports) and
- An ambitious nation (non-oil revenues, government effectiveness, and e-government, household savings and income, non-profits and volunteering)
In order to balance the economic effects of the implementation of the “Saudi Arabia’s Vision 2030” program to the Saudi society, the Government initiated a parallel social policy program called “Citizen’s Account”.
The program started in December 2017 and includes the transfer of cash to the citizens of Saudi Arabia from the state. Though this program, the citizens of the country receive a monthly payment from the state, a form of basic income, designed to balance the consequences of the economic reforms of the “Saudi Arabia’s Vision 2030” program, such as the impose of VAT on many products, services and companies, as well as the increase of the cost of electricity and gasoline.
The implementation of 5% of VAT in the national economy, started in January 2018 and it was imposed to most goods and services such as, food and beverages, domestic transportation, hotels, private education, private healthcare and companies with annual turnover of Saudi Arabian Riyal (SAR) 375,000 and higher.
In addition to that, a combination of higher energy prices and fuel subsidy cuts, marked a great change for the Saudi economy and society. These reforms were implemented together with an expansionary government fiscal policy for the years 2017, 2018 and 2019.
During this period, the Saudi Government estimated that spent SAR 930 Billion in 2017 (approved initially SAR 890 Billion), SAR 1.030 Billion in 2018 (approved initially SAR 978 Billion) and approved the expenditure of SAR 1.106 Billion for 2019, the largest ever planned budgeted spending.
The 2017 budget of the Kingdom of Saudi Arabia dedicated 40.43% of the total SAR 930 Billion State Budget to sectors affecting the lives of the citizens of the Kingdom. More specific 14.4% of the State Budget was spent on social development and healthcare, 22.25% on education and 3.76% on infrastructure and transportation.
The 2018 State Budget of the Kingdom of Saudi Arabia dedicated 40.66% of the total SAR 1,030 Billion State Budget to sectors affecting the lives of the citizens of the Kingdom. More specific 15.43% of the State Budget was spent on social development and healthcare, 19.9% on education and 5.33% on infrastructure and transportation.
The 2019 State Budget of the Kingdom of Saudi Arabia dedicated 39.4% of the total SAR 1,100 Billion State Budget to sectors affecting the lives of the citizens of the Kingdom. More specific 15.6% of the State Budget was spent on social development and healthcare, 17.5% on education and 6.3% on infrastructure and transportation.
The country is a member of several prestigious international organisations such as, the Gulf Cooperation Council (GCC), The World Trade Organisation (WTO), World Customs Organization (WCO), International Organization for Standardization (IOS), International Chamber of Commerce (ICC), International Monetary Fund (IMF), Interpol, UNESCO, International Maritime Organization (IMO), UNIDO, UNRWA, UNWTO, and IAEA.