- Saudi Arabia In The International Spotlight Workforce Saudi Arabia Is A Large Country In The Middle East Cover 16 Perce 1 (196.46 KiB) Viewed 43 times
Luthans, F. & Doh, J. P. (2021). International Management
Culture, strategy, and behavior (11th ed.). New York: McGraw-Hill
Education
Saudi Arabia In the International Spotlight Workforce Saudi Arabia is a large country in the Middle East cover- 16 percent of proven petroleum reserves. Forcign workers ing 856,000 square miles. The country borders the Persian play a vital role in the economy, with more than 6 million Gulf to the north and the Red Sea to the south. About expatriates employed in a variety of industries, especially one-fifth the size of the United States, its natural resources construction and manufacturing. The government is making include petroleum and natural gas (among the largest in efforts to diversify its economy by growing the private sec- the world), iron ore, gold, and copper. The two major holy tor and by seeking to employ more nationals, balancing the cities of Islam are in Saudi Arabia: Mecca and Medina. With just over 27 million people, Saudi Arabia is As oil prices have plummeted in recent years due to a almost entirely Arab Muslim (approximately 90 percent variety of factors, Saudi Arabia and the other OPEC coun- Sunni and 10 percent Shia). The country's population tries have been keeping output levels relatively high. growth rate is estimated at 1.46 percent. Additionally, the resulting in huge losses. While the country can cover the country's population is overwhelmingly (approximately deficits for the time being, a prolonged period of low oil 90 percent) younger than 55 years of age. According to demand could have devastating effects on the economic U.N. reports, 30 percent of the country's population con- health of the country.!! sists of immigrants.126 The country's GDP in 2014 was US$746 billion. You Be the International Management From 2011 through 2013, annual GDP growth Consultant from 10 percent to 2.7 percent. With low oil prices world- wide, Saudi Arabia's GDP growth remains stunted at As oil prices continue to drop. Saudi Arabia is actively about 3.5 percent. 128 seeking foreign investors to come into the country, espe- Saudi Arabia oper operates its government as a monarchy, cially in sectors such as transportation, health care, tour wherein the king makes all important official decisions. ism, and building materials. The country has also opened The king appoints ministers who act as his advisers. In the retail sector to companies seeking complete ownership 2011, women were granted the right to vote and run for of their business, negating the need for joint venture part- seats in municipal elections, though gender oppression is nerships. The Saudi officials courting foreign investors still commonplace and integrated into the legal system. say that, despite falling oil prices, the country's other sec- The country's laws are based on Islamic law with some tors are still growing and provide excellent investment Western elements incorporated. For many years. Saudi opportunities. Moreover, officials have said they are will- Arabia has enjoyed favorable relationships with many ing to discuss modifying any rule or regulation that might Western nations. As it is a large exporter of fossil fuel, impede investment by a major foreign company. 12 W Western nations are somewhat dependent on maintaining We civility with the Saudis despite alleged human rights vio- Questions lations. In recent years, however, the Saudi monarchy and royal family have been suspected of aiding terrorism 1. Given that the country is actively seeking foreign efforts, leading to somewhat strained relations with investors and appears to be creating a pro-business in Europe and the U.S.129 atmosphere, what non-oil businesses do you think The government maintains strong control over the coun- would be best suited for expanding into Saudi try's economy, which is highly reliant on extraction and production of oil and gas. It is the largest exporter of petro- 2. If you were a foreign investor, what concerns would leum, is the leader of the Organization of Petroleum Export- you have about the country? Would you make an ing Countries (OPEC), and accounts for approximately investment in the country? m. countries in Arabia? 327