Doing Business With Saudi Arabia - The Country

The Saudi state came into being in 1744. This was after Sheikh Muhammad ibn Abd al Wahhabi settled at Diriyah. The Diriyah prince, Muhammad ibn Saud, welcomed Wahhabi and they both cooperated in reforming what they considered distorted Islamic practices. The Prince of Diriyah rose to become very powerful, and extended his authority to other neighbouring states. In fact, the Diriyah forces, known as Wahhabi forces, attacked and took into their control the states of Nejd, Al Hasa and Hejaz.

Prince Saud, having taken control of several regions, proclaimed himself King of United Saudi Arabia in 1932, effectively establishing the Saudi Kingdom. King Saud died in 1953 and was succeeded by his eldest son, Saud, who was deposed by Faisal in 1964.

Oil was discovered in 1936 with commercial production commencing in 1938. King Faisal secured an agreement with foreign oil companies to have 60% ownership by Saudis. However, King Faisal was assassinated in 1975 and Khalid became king. King Khalid later introduced Social Welfare and Industrialization program. King Khalid died in 1982 and was succeeded as king by Fahd.

The Kingdom of Saudi Arabia is the largest state in the Arabian Peninsula and is sandwiched between Iraq to the North East, Jordan to the North, Bahrain, Qatar, UAE (with Dubai and Abu Dhabi) and Kuwait to the East, Oman and Yemen to the south. To the West are the Persian Gulf and the Red Sea. The Kingdom is composed of five main regions: (a) The Rub al-Khali region on the south and southeast. (b) The Nejd region. This is at the center of the kingdom. (c) The Hejaz and Asir regions. These lie along the Red Sea. (d) The Easter Province. This lies along the Persian Gulf and is the kingdom's oil basket. Saudi Arabia has the largest world oil reserves (about a quarter) and the kingdom is very influential in the Organization of Petroleum Exporting Countries (OPEC) where it plays a vital role in stabilizing world oil prices. The Saudi capital is Riyadh with Jiddah as the main port. The kingdom has a population of about 18,730,000 people (1995) and covers an area of 2,149,690 sq. km. Saudi Arabia's climate is generally hot and dry. The population is mainly Arab with Arabic as the official language. The dominant religion is Islam, the Wahhabi sect.

The second largest city, Jeddah, in the Western Province, is the commercial capital of the Kingdom of Saudi Arabia. With a population of over 3 million, Jeddah is the wealthiest city in the whole of the Middle East. Jeddah is also the gateway to the holiest Muslim cites, Mecca and Medina.

Oil is the main economic activity. Oil export generates huge revenues that have been channeled into the development of other sectors. In the agricultural sector, major irrigation projects have led to huge chunks of desert land being reclaimed and grains, citrus fruits, and vegetables are grown. Animal rearing is mainly carried out by the Nomadic Bedouins and camels, goats, sheep and horses are reared. Tourism rakes in good revenue, mainly during Muslim pilgrimage. Other industries that have been established include metal and chemical industries, plastic, cement and fertilizer industries.