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Saudi Arabias online business has grown quickly, while the kingdom has been steadily realizing Vision 2030, the comprehensive plan aimed at shifting the kingdom towards a knowledge-based economy. In the past decades, the Saudi Arabian free-market economy has been diversifying more and more, today producing and exporting various manufactured goods around the world. Today, industrial products account for over 90% of non-oil exports from the Saudi free market economy.
Saudi Arabia is one of the worlds 20 largest export-import markets, with exports of non-oil products to about 90 countries, on average, worth about $6 billion per year. The role of the private sector in trade is significant: Private firms make up about 48 percent of the Saudi Free Market Economys $248.82 billion GDP. Government agencies, such as Saudi Arabias House of Consultancy, replaced in April 2000 with a larger entity, Saudi General Investment Authority (SAGIA), offer free consultancy services and support, and publish lists of investment opportunities in producing goods sought by Saudi Arabia.
According to the Commerce Department, US exports of goods and services to Saudi Arabia supported approximately 165 thousand jobs in 2015 (the most recent data available) (101 thousand supported by goods exports, 63 thousand supported by services exports). Exports of services totaled $9.4 billion; imports of services totaled $1.5 billion. Goods exports were $14.5 billion; goods imports were $13.4 billion.
Form of payment
Overall US exports of agricultural products to Saudi Arabia in 2019 were $1.3 billion, the 22nd largest agriculture export market for us. U.S. imports of services from Saudi Arabia were estimated at $1.5 billion in 2019, down 6.2% ($98 million) from 2018, but down 41.9% from 2009 levels. Cash has stopped being the most prevalent form of payment in Saudi Arabia for the first time, according to research on the kingdoms payment methods for the year 2021.
For Saudis used to the unidirectional flow of cash — from state coffers to their wallets — the changes are sure to be jarring. The moves keep the Saudis from making much noise about austerity. Taking advantage of a collapse in oil revenues, the Saudi government has rapidly instituted unprecedented changes in how it collects money, raising taxes and cutting subsidies in ways that Saudi citizens once thought impossible.
Since the oil boom of 1970, the Saudi government has asked little to no help from its citizens financially. A Riyadh investment bank researcher told one of us the Kingdom wants to turn much of the $350 billion annual welfare outlay into cash benefits through the Citizen Account Program. The Saudi governments long-discussed Economic Diversification Program, Vision 2030, has been suspended, and $8 billion of expenditures are being slashed.
Promotion of digital payments solutions
One of the initial implementation plans for its National Economic Development Strategy is FSDP (Financial Sector Development Program), focusing on the promotion of digital payments solutions in order to turn Saudi Arabia into a less cash-based society, reaching 70% of payments not made with cash by 2025. At the time, we thought that this would primarily be coming from Lucid Motors, perhaps from other existing electric vehicle brands looking to invest in Saudi Arabia, but we now know that they are planning on having their own brands contributing. The company was famously involved in talks about taking Tesla private, although it has never followed through, and has invested heavily in Lucid Motors, which plans on building a factory in the country.
The investment was made through Saudi Arabias sovereign wealth fund (PIF). RIYADH (Reuters) – Saudi retail company Jarir Marketing Co plans to invest R1bn ($293m) in the next five years, about doubling its stores across Saudi Arabia and the Gulf, its president said. His son has bet his credibility on his ability — and his alone — to transform and diversify Saudi Arabias economy.
Opening an average of six stores every year helps to generate between 300 to 400 jobs annually, with the majority going to Saudis, its president said, adding that all Jarirs stores in the Gulf states are run by Saudis. The number of Saudis working in the private sector rose to 1.5 million at the end of last year, up from 681,481 in 2009, according to the latest figures available in the Ministry of Labors Annual Report 2013, released late July. Saudi labour reforms in the last three years helped tens of thousands of young citizens get jobs in the private sector, increasing household disposable income.
Labor market reforms are putting taxes on expatriate workers and pushing Saudis back into the private sector, helped by moves such as banning foreigners from driving for Uber. Government tenders are also giving preference to products made locally, as well as to Saudi companies. Saudi industries are exempted from paying customs duties for machinery and supplies used to produce goods at home.
In 1970, the free-market economics of Saudi Arabia introduced the first in a series of five-year ongoing development programs aimed at building up a modern economy that could manufacture the consumption and industrial goods previously imported. Subsequent plans sought to diversify the economy; to increase domestic food production; to improve education, job training, and healthcare services; and to further improve communications routes among the various regions of Saudi Arabia. In our Middle East Consumer Sentiment survey, conducted in November 2021, we asked over 2,200 consumers across two of the largest economies in the Gulf–the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE)–about over 2 aspects of their financial attitudes and spending habits.