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 Adbdulaziz 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 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 and substantive relationship. This is underpinned by commercial ties and supported by shared membership in the G20 as well as Australia’s engagement with the Gulf Cooperation Council and Organization of Islamic Cooperation, which are both headquartered in Saudi Arabia.

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 10,100 Saudi enrolments at Australian education institutions in 2015.

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 30.8 million (2014) 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 2015 was 3.4 per cent, according to the IMF. The recent decline in oil prices is expected to negatively impact Saudi Arabia’s current account balance in 2016.

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 King Abdullah Scholarship Program (KASP) was launched in 2005, funding over 185,000 young Saudis to undertake tertiary studies abroad. After the death of King Abdullah in January 2015, the program was renamed the Custodian of the Two Holy Mosques Scholarship Program and revamped to ensure closer alignment between scholarships and needed skills. Australia is an approved destination for Saudi students under the 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 2015, the two-way merchandise trade totalled $2.6 billion and trade in services $393 million. Passenger motor vehicles were Australia’s largest commodity export to Saudi Arabia, worth $924.3 million in 2015..

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 Custodian of the Two Holy Mosques Scholarship Program. In 2015, there were more than 10,100 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

2016: Minister for Tourism and International Education Senator Colbeck visited Saudi Arabia in January.

2015: Parliamentary Delegation (JSCFADT Trade Sub-committee) visited Saudi Arabia.

April 2015: Minister for Trade and Investment, the Hon Andrew Robb MP, visited Riyadh to promote Australia’s trade and investment links with Saudi Arabia. He also supported 29 Australian education institutions exhibiting at the annual International Exhibition and Conference on Higher Education.

January 2015: Governor General His Excellency General the Honourable Sir Peter Cosgrove AK MC (Retd) 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 Minister of Finance Dr Ibrahim bin Abdulaziz Al-Assaf, then-Minister of Culture and Information Dr Abdulaziz Khojah; then-Minister of State Prince Mohammad bin Salman bin Abdulaziz; Minister of State for Foreign Affairs Dr Nizar Obaid Madani and Central Bank Governor Mubarak.

September 2014: Minister of Labor Adel bin Mohammed Fakieh visited Australia to attend the G20 Labor and Employment Ministerial Meeting.

August 2014: Then-Saudi Minister of Higher Education HE Dr Khalid Al-Ankary visited Australia and met Minister for Trade and Investment the Hon Andrew Robb MP.

July 2014: Saudi Minister of Commerce and Industry Dr Tawfig Al-Rabiah visited Australia to attend the G20 Trade Ministers meeting in Sydney.

April 2014: Minister for Trade and Investment, the Hon Andrew Robb MP, visited Saudi Arabia. Minister Robb promoted Australia’s trade and investment links with Saudi Arabia, and supported 27 Australian education institutions exhibiting at the annual International Exhibition and Conference on Higher Education.

April 2014: Minister for Agriculture, the Hon Barnaby Joyce MP, visited Saudi Arabia on his first overseas ministerial visit. Minister Joyce discussed Australia’s agricultural relationship with Saudi Arabia. He was accompanied by a delegation of Australian agriculture and food industry representatives.

February 2014: Minister of Finance Dr Ibrahim bin Abdulaziz Al-Assaf and Central Bank Governor Mubarak visited Australia to attend the Meeting of Finance Ministers and Central Bank Governors.

March 2013: Then-Saudi Minister of Agriculture, HE Dr Fahd bin Abdul Rahman Balghunaim co-chaired with then Australian Minister for Trade, the Hon Craig Emerson, the 9th Australia-Saudi Joint Ministerial Commission meeting.

June 2012: Then-Minister for Foreign Affairs, the Hon Senator Bob Carr, visited Saudi Arabia.

May 2010: Then-Saudi Minister of Higher Education HE Dr Khalid Al-Ankary visited to sign a MoU on Higher Education Cooperation with Australia.

Updated July 2016

Last Updated: 8 July 2016