The Kingdom of Saudi Arabia is a dynamic nation with eternal values, the sustained preservation of which, together with the provision of national security, have been the basic principles guiding national development. Beyond these two fundamental principles, several other broad goals have headed the economic development plans in the Kingdom. Saudi economic development has been carefully orchestrated in a succession of five-year plans. The government’s long-term objective is the diversification and privatization of the Saudi economy.

 The first five-year development plan 1390-1395 H (1970-1974) was introduced at a comparatively modest cost of (Saudi Riyal) SR 80 billion (over $20 billion). These funds were allocated to the development of human resources, and the building of the basic infrastructure, in particular public utilities, as well as the improvement of government services.

 With the second five-year development plan 1395-1400 H (1975-1979), the Saudi government emphasized the importance of the development of the infrastructure and the associated role of the construction industry. The government established the Ministry of Industry and Electricity, the Royal Commission for Jubail and Yanbu, and the Saudi Basic Industries Corporation (SABIC), a petrochemical interest group of national and international companies. Government expenditures increased nine-fold to reach nearly SR 700 billion ($204 billion), allowing for a greater expansion of the development projects.

 Government expenditure was reduced to SR 659.6 billion ($190.1 billion) in the third five-year development plan 1400-1405 H (1980-1984), ushering in a period of structural change in government expenditure and gross domestic product. The depreciation of oil prices was subsequently reflected in lower levels of investment and a decline in economic growth rates. Despite the decline in revenue, the government pursued the completion of the infrastructure and emphasized the need for output oriented public sector investment. With the infrastructure nearing completion, manufacturing and agriculture became high growth industries.

 The fourth five-year development plan 1405-1410 (1985-1989) focused on the economic diversification carried out in the previous development plans, with the intention of shifting the private sector into a leading role. Therefore, there was an unexpected decline in the growth of government sponsored sectors, primarily in the construction, transportation and communication industries. Emphasis was placed on the production sectors as well as social services and human resource development. Total government expenditure was approved at SR 687.5 billion ($183.33 billion).

 The fifth five-year development plan 1410-1415 H(1990-1994) reflected the long-term vision for restructuring Saudi Arabia's productive resources, expanding its industrial sector, and introducing modern technologies throughout the economy. The objectives of the earlier plans were reinforced, but the fifth plan placed a higher emphasis on the role of the Saudi private sector and on the policy and institutional changes necessary for economic diversification. The total Saudi government expenditure during the fifth development plan, including non-civilian expenditure, amounted to SR1,090 billion (approximately U.S. $290.7 billion).

 The strategic bases of the current sixth five-year development plan 1415-1420H (1995-1999) are as follows:

• Enhancing and consolidating of a protective defense and security system.
• Improving the economic and productive standards of the services, utilities and products which the government provides for its citizens.
• Continuing to adopt a policy that gives the private sector the opportunity to undertake many of the economic tasks of the government.
• Rationalizing the system of direct and indirect subsidies provided by the state for many goods and services.
• Rationalizing the government’s investment and expenditure.
• Continuing the development of the Saudi labor force.
• Continuing the Saudization of labor force.
• Continuing the development of the Saudi society and providing social welfare and health services for all.
• Achieving balanced development in all regions of the Kingdom.
• Continuing to protect the environment.
• Adopting a fiscal policy that balances the budget.

The principal purpose of this guide is to provide American executives with basic information about the Saudi business environment. Chapter One briefly introduces the Kingdom of Saudi Arabia. It presents the Kingdom’s history, location, climate, geography, population, language, and religion. The Saudi judicial system, government, flag, the Kingdom’s official emblem, currency, visa regulations, Islamic calendar, and business hours are also introduced in this chapter. Chapter Two presents a brief survey of the Saudi economy. It describes the major economic sectors in the Kingdom and provides facts and figures about the state of the Saudi economy. Chapter Three explains Saudi Arabia’s commercial policy and briefly discusses the Kingdom’s foreign trade, balance of trade, balance of payments, and direction of trade. It concludes with an emphasis on the importance of the Saudi-U.S. trade relationship. Chapter Four is a step-by-step approach on how to reach the Saudi Arabian market. It explains the process of establishing business contacts, marketing procedures and sales techniques. It introduces certain business opportunities in the Kingdom, the Saudi foreign investment policy and key Saudi government agencies affecting foreign investment. The Saudi financial system is also briefly introduced. Chapter Five includes salient features of regulations and procedures governing business and trade in the Kingdom.

 Finally, the appendixes section presented at the end of this guide, contains listing of the Saudi government ministries and autonomous agencies, Saudi Arabian government offices, commercial banks and companies in the U.S., Saudi diplomatic missions, Saudi chambers of commerce and industry, international Arab-foreign chambers of commerce, Saudi commercial banks operating in the Kingdom, and leading Saudi daily, weekly and advertising agencies. Other useful appendixes supplied at the end of this Guide include listing of the top 100 Saudi companies, U.S.-Saudi industrial and non-industrial joint projects, sample of the export information sheet EIS, sample of the standard commercial agency or distributorship agreement, hotels in the Kingdom and the Islamic calendar.

The Commercial Office of the Royal Embassy of Saudi Arabia in Washington D.C. is pleased to introduce the fifth edition of "A Business Guide to the Kingdom of Saudi Arabia." It aims at fulfilling the long-felt need of the American business community to become familiar with the various rules and regulations that govern business in the Kingdom. Notwithstanding the fact that this edition has been considerably expanded to include additional information, it is not meant to be exhaustive. Further details can be obtained by contacting the appropriate Saudi ministries, departments, and independent agencies (see appendix I for addresses).

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