Saudi Arabia country brief

Overview

The Kingdom of Saudi Arabia is the largest Arab country of the Middle East. It is bordered by Jordan and Iraq on the north and northeast, Kuwait, Qatar, Bahrain and the United Arab Emirates on the east, Oman on the southeast, and Yemen on the south.

The origins of Saudi Arabia go back as far as 1744 with the establishment of the first Saudi State. The formation of the current Kingdom began in 1902, when Abdul-Aziz bin Saud captured the Al-Saud's ancestral home of Riyadh, and culminated in 1932 with the proclamation and recognition of the Kingdom of Saudi Arabia.

Political overview

Saudi Arabia is a monarchy. King Salman bin Abdulaziz Al Saud succeeded to the throne on 23 January 2015, following the death of his brother, the late King Abdullah bin Abdulaziz Al Saud. The King is assisted by a Council of Ministers that he appoints. In recent years the consultative Shura Council, which consists of 150 members (including 30 women) appointed by the King, has developed a modest but increasing role in public debate. Municipal elections were last held in December 2015, with women granted the right to vote and to run as candidates for the first time.

Saudi Arabia is a member of the Gulf Cooperation Council (GCC). It is a member of the Arab League, the Organization of Islamic Cooperation (OIC), the G20, the United Nations, World Trade Organization (WTO) and the Organization of Petroleum Exporting Countries (OPEC).

Bilateral relations

Australia and Saudi Arabia enjoy a friendly relationship. This is underpinned by commercial ties and supported by shared membership in the G20 as well as Australia’s engagement with the GCC and OIC, which are both headquartered in Saudi Arabia (Riyadh and Jeddah respectively).

Australia and Saudi Arabia also have well-established cooperation in countering terrorism and are both members of the anti-ISIL coalition and the International Syria Support Group.

People-to-people contacts are also an important aspect of the relationship, with over 8,100 Saudi enrolments at Australian education institutions in 2016.

Saudi Arabia is Australia’s second largest trading partner in the Middle East region. There is significant potential for economic ties to grow, given areas of complementarity in agriculture, education and construction. The launch in April 2016 by the Saudi government of a plan (Vision 2030) for economic reform and diversification also provides potential opportunities for Australian business. The establishment of the Australia-Saudi Business Council in 2013 also supports the promotion of bilateral business ties.

Economic overview

With a population of around 31.4 million (2015) and nearly 20 per cent of the world's conventional oil reserves, Saudi Arabia is the Middle East's largest economy. Real GDP growth in 2016 was 1.2 per cent, according to the IMF, having declined as a result of continued low oil prices.

The Saudi Government initiated structural reform measures in the 1990s designed to encourage privatisation, liberalise foreign trade and reform investment regimes. Commercial laws were revised and initial steps were taken to free up foreign investment and privatise parts of the state sector. Sustained low oil prices have seen an accelerated agenda for economic reform, focused on diversification, privatisation and job creation. Education and skills development are a major focus for the government, as the policy of ‘Saudisation’ looks to increase the percentage of Saudi citizens working in the private sector. An approximately $5 billion scholarship program was launched in 2005, funding over 185,000 young Saudis to undertake tertiary studies abroad. The program has recently been revamped to ensure closer alignment between scholarships and in demand skills. It is now known as the King Salman Scholarship Program. The Saudi Government is also engaged in a major program for the construction of educational institutions in Saudi Arabia.

Trade and investment

As Australia's second largest market in the Middle East, Saudi Arabia is an important trading partner for Australia. In 2016, the two-way merchandise trade totalled $2.0 billion and trade in services $363 million. Passenger motor vehicles were Australia’s largest commodity export to Saudi Arabia, worth $796.8 million in 2016.

Saudi Arabia is also a substantial market for beef, sheep meat, barley, wheat, dairy products, vehicle parts and accessories and vegetables.

Exports of services, notably education, are also significant. A large number of Saudi tertiary students study in Australia, mostly under the King Salman Scholarship Program (formerly known as either the Custodian of the Two Holy Mosques Scholarship Program or the King Abdullah Scholarship Program). In 2016, there were more than 8,100 Saudi enrolments in Australian educational institutions, with Saudi students representing the largest contingent from the Middle East region.

Australia-Saudi business ties have expanded. The March 2013 Joint Ministerial Commission meeting saw the signing of a MoU between the Australia Saudi Business Council and the Council of Saudi Chambers of Commerce establishing the Australia Saudi Joint Business Council. The establishment of the Saudi-based chapter, the Saudi-Australian Business Council, was formally approved in July 2014.

Saudi Arabia's needs are well suited to Australian capabilities. Saudi Arabia has a sound economy with a fast-growing and young population, a well-managed banking system, good infrastructure, and generally low import duties and barriers. Its business community is sophisticated and familiar with Western practices. Austrade is represented in both Riyadh and Jeddah.

Information on doing business and opportunities in Saudi-Arabia

High level visits

  • April 2017: Minister for Trade, Tourism and Investment visited Saudi Arabia with business delegation.
  • December 2016: Minister for Defence Industry visited Saudi Arabia.
  • January 2016: The then Minister for Tourism and International Education visited Saudi Arabia.
  • December 2015: Parliamentary Delegation (JSCFADT Trade Sub-committee) visited Saudi Arabia.
  • April 2015: the then Minister for Trade and Investment visited Saudi Arabia.
  • January 2015: The Governor General visited Saudi Arabia. He conveyed the condolences of the Government and people of Australia to the Royal Court of the Kingdom of Saudi Arabia following the death of King Abdullah bin Abdulaziz Al Saud.
  • November 2014: King Salman, in his former role as Crown Prince, attended the G20 Leaders’ Summit in Brisbane. His delegation included the Minister of Finance, then-Minister of Culture and Information; then-Minister of State; Minister of State for Foreign Affairs and the Central Bank Governor.
  • September 2014: Minister of Labor visited Australia to attend the G20 Labor and Employment Ministerial Meeting.
  • August 2014: Then-Saudi Minister of Higher Education visited Australia.
  • July 2014: Saudi Minister of Commerce and Industry visited Australia to attend the G20 Trade Ministers meeting in Sydney.
  • April 2014: The then Minister for Trade and Investment visited Saudi Arabia.
  • April 2014: Minister for Agriculture visited Saudi Arabia. He was accompanied by a delegation of Australian agriculture and food industry representatives.
  • February 2014: Minister of Finance and Central Bank Governor visited Australia to attend the Meeting of Finance Ministers and Central Bank Governors.

Updated July 2017.

Last Updated: 13 July 2017