Assi

gnmenti
nst
ruct
ion:

Cr
it
icalt
hinki
ng:i
nter
nat
ionalt
radet
heor
ies

Cont
ent
:

ThekeySuccessofExpor
ti
ng
Strat
egy
……………………………………………………………………………………………………2EconomyandI
nter
nat
ional
TradeTheor
y1……………………………………………………………………………………………2

Tr
ade……………………………………………………………………………………………………………………………………………………2

Bui
l
dAModer
nEconomy
……………………….
.……………………………………………………………………………………………3

Thechal
l
enges…………………………………………………………………………………………………………………………………….
.3

Technol
ogical
Rul
esand
Speci
fi
cati
ons…………………………………………………………………………………………………3

Cont
entandMar
ket
ing…………………………………………………………………………………………………………………………3

Obj
ect
ivesofPr
oduct
ivi
ty…….
.………………………………………………………………………………………………………………3

I
nter
nat
ional
TradeTheor
yII
…………………………………………………………………………………………………………………4

Expor
ti
ng……………………………………………….
..
.……………………………………………………………………………………………4

St
ruct
ureofSaudi
Arabi
a……………………….
..
……………………………………………………………………………………………4

Thechal
l
enges………………………………………………………………………………………………………………………………………5

Fr
aud…………………………………………………………………………………………………………………………………………………….
5

Pay
mentI
ssues………………………………………………………………………………………………………………………………………5

I
nfl
ati
on…………………………………………………………………………………………………………………………………………………5

Saudi
Arabi
aVi
sionon2030……………………………………………………………………………………………………………………5

Ref
erence……………………………………………………………………………………………………………………………………………….
6
 Economyandi
nter
nat
ionalt
radet
heor
y1:

Saudi Ar abia'sfreemar ketsy stem hasseenmaj orchangesi nar elativelyshor tper i

odoft i
me.It
hasgr ownf r
om abasi cagr iculturalsocietytoar egional andgl obal economi cpower housewi t
h
cutti
ng-edgei nfrastructure.TheeconomyofSaudi Arabi aisbui ltonoi l,andt hecount r
yist he
world'slar gestpr oducer .TheKi ngdom' seconomyhasbeeni ncreasi nglydi verseinr ecent
decades, andi tcurrentlymakesandsel l
sawi der angeofi ndust rialitemsar oundt hewor l
d.The
admi ni
st rationiscr ucialint ermsofeconomi candi ndust ri
aldev elopment .TheMi ni
st r
yof
Economi cAf f
airsandDev elopmentcr eatessoci al andeconomi cdev elopmentpl ans.Thi slays
outlong- ter m economi cobj ecti
v esOt herelement soft heeconomyar ehandl edbyi ndividual
ministri
es, suchasagr iculture,ener gy,tr
ansportat ion, communi cat i
ons, andf inance.Saudi
Arabia'spr ivatesect orisbecomi ngi ncr
easinglyv ital,account i
ngf or48per centoft hecount r
y'
s
grossdomest icpr oduct( GDP) .Thesect orisexpect edt ogrowmuchmor ei nt hecomi ngy ears,
especiallyasSaudi Arabi acont inuest oopeni tsdoor st oforeigni nvest ment .InNov ember2004,
Saudi Ar abiabecameamemberoft heWor l
dTr adeOr ganizat i
on( WTO) ,ahistor i
calmoment
thatexpandsgl obal fi
nanci almar ketsforSaudi goods, createsj obs, andat t
ract sforeignbuy ers
(Chandi a,2018)

Tr
ade:

Saudi Ar abi aist hewor ld's19thbi ggestexpor terandt hewor ld’sl ar gest20t hbi ggesti mpor t
destinat i
on.Al l sect orsoft heeconomyar enowr epr esent edbyexpor t
ers.Pet rol
eum pr oduct s,
polymer s, met al items, const ructionr esour ces, andel ectrical appl iancesar eamongt hel argest
expor terst o90count ries.Thebusi nessr egi oni n( Saudi Ar abi a)i sexpandi ngr apidl y.Thi si s
most l
yout standi ngt ost atesubsi di essuchasl engt hyat tent ionf i
nanci ngandot hersuppor ti
ng
servicesandf aci l
iti
es.Fur t
hermor e, or gani zationsofi ndust ryandcommer cei nlar get ownsand
areasencour agebusi nessendeav or s.I nt heKi ngdom, t
her ear eappr oximat ely594, 000l icensed
businessesi nvol v edineconomi coper at i
ons.Theent i
reinv est mentgai nsar ewor thandov er
$54bi lli
on, accor dingt oest i
mat es.TheSaudi Ar abi anGener al Inv est mentAut hority regul ates
theindust ryandi ncludesf r
eeconsul t
at ionandhel pt opr i
v ateent er pr i
sesaswel l asl ist i
ngsof
alt
er nativei nvest ment s.SAGI Adecl aredef fortst oconst ructof ficesi nChi na, theUni tedSt ates,
theUni t
edKi ngdom, andGer manyi nNov ember2004  toat tracti nv est menti ni nfrast ruct ure
projects.Thepr ivatesect orplaysasi gni ficantr olei nt heeconomy ,account i
ngf orabouthal fof
thecount ry '
s$247. 82bi lli
onGDP.Theypr oduce, di stribute, andsel l product smanuf act uredi n
theUni t
edSt ates.Pr i
v atebusi nesseshandl et hemostnumber  
ofconsumerandi ndust r
ial
goodsi mpor ts, aswel l ast hemaj or ityofnon- oi lexpor ts.Saudi Ar abi aisoneoft het opt en
expor ti
ngcount ries,wi thnon- oi
l shi pment st o135count riesav er agi ng$6bi ll
ioneachy ear.In
addition, theKi ngdom i sat tr
actingmor efor eignf inance.Ent repr eneur sfrom al laroundt he
worldar ef orm par t
ner shi pswi t
hSaudi par tner s,dr awnbyt heKi ngdom' sgov ernment al,
fi
nanci al,andpol i
tical har mony ,aswel lasi tssophi st i
catedi nfrast r ucture,low- costener gy
suppl y,andkeygeogr aphi calregi on.Saudi Ar abi amadei tsi mpl erf orf or
eignbusi nessesi nt he
Kingdom onMay21, 2001, wheni tpassedanewl awgr ant i
ngf or eigni nv estor sthesamer ight s,
benef it
s, andassur ancesasSaudi citizensandent erprises.I tal soal lowsf or eigner scanown
rent
alproper
ti
esandpr opert
ies.Thecor poratesect
orhasabr ightf
utur
e.SaudiAr
abia'
s
part
ici
pati
oninthe(Wor l
dTradeOr ganization)st
imulatesbusi
nessacti
vit
yandexpandsthe
marketforSaudipr
oductsaroundt hewor ld.SaudiArabia'
sfor
mat i
onofbusi
nesszoneswit
ha
numberofneighborcountri
esisanot herhopef ul
development.

Bui
ldamoder
neconomy
:

TheAr abWor l
dwasanagr ariancommuni tythatreli
edonf ar mingandcommer ce,part
icularl
y
dateexpor t i
ngandbusi nesscr eatedbypi l
grimagesMakkahandMadi nah,whent hepresent
Kingdom wasest ablishedin1930.I tlackst hef acil
i
tiestoenabl et hekindofeconomi c
expansiont hatitsf ounder,KingAbdul -AzizbinAbdur r
ahmanAl -Saud,hadenv isioned.That
i
mpr ovedi n1940, whensel lthei t
emsofoi lwerediscov ered.I mmedi atelysinceWor ldWarI I
,
consistentoi lsuppl iesgav ethecashnecessar ytoconst r
uctabasi ci
nfrastruct uresuchas
roads,airpor t
s, shippi ngports,universiti
es,andheal thcare.Saudi Arabialaunchedt hefirstofa
numberofsubsequentdev el
opmentpr ojectsin1971  toconst ructaneconomi csy stem capabl e
ofgener atingaut omot i
veandcommer ci
al i
temst hatwer eimpor tedfrom othercount ri
es.The
foundationoft henat ionwasi mpr oved, permitti
ngmanuf act uri
ngandt radet ogr ow.
Simultaneousl y, Aramco, t
henat ional petrol
eum f i
rm, i
nvest edi nnewpr oductionf acil
it
ies,
pipel
ines, facil
iti
es, andshi ppinginfrast r
ucture,aswel lascont i
nui ngexplorationf ornew
resources, inordert omaxi mizeoi li
ndust ryrevenues, whichwer er equiredtof undf uturegr owth
(Qahtany ,2001)

 Thechal
lenges

 Technol
ogi
calRul
esandSpeci
fi
cat
ions

SaudiAr abiakeepsmov ingforwar

di ntocompli
ancetoaconsistentstandardinregulat
ion
changest hatisoft
enpr emisedonI nter
nati
onalSt
andardsorganizati
onorInter
national
Elect
rotechnicalCompensat i
onrequirements,t
otherej
ecti
onofot herglobalst
andards
i
ncludingt hoseestabl
i
shedbynat ionalstandar
dsinst
it
uti
onslocat edintheUnit
edSt at
es.

 Cont
ent
sandMar
ket
ing

Mar ket
ingandintel
lect
ualcontentsmightbequitecontr
oversi
ali
ntheSaudi market
.
Organizat
ionsintheUnitedStatesareinspi
redtostudyaboutSaudit
radi
ti
ons,tr
adit
ions,and
str
ingentoccasionsoftheMusl i
mr el
igionsothatt
heirmarket
ingdoesn'
treal
lyupsetlocal
beli
efsandr ul
esunnecessari
ly.

 Obj
ect
ivesf
orpr
oduct
ivi
tyandi
nter
nat
ional
i
zat
ion

SaudiArabi
a'sgovernment -
cont r
oll
edindustri
esareprogressivel
yimposi
ngdomest iccontent
cr
iter
iaoninter
nationalcorporati
ons.Inadditi
on,AramcoI n-Ki
ngdom WholeworthAddi t
ion
i
niti
ati
veencouragest hatpurchaseofpr oduct
sf r
om localsuppli
ers,
wit
ht hegoalofincr
easing
Aramcor at
iooflocall
ymadeel ectr
ici
typroductsandservicesto69percentby2020.
 I
nter
nat
ionalt
radet
heor
yII

Thisst udyexami nesSaudi Arabia'

seconomicmodel ,whichisamongt her egi
onshighest
globally.Meanwhi l
e,theGov ernmenthasbeenonl yat t
empt ingintobecomi nggloball
y
connect edsince2001, withtheobjectiv
ebeingt opromot ecommer cializati
on,cr
eate
empl oymentf orSaudi cit
izens,andincr
easeinvestment .Wher eastheconsumerel ectr
onics
economyi sdependentonexpor ts,mostofthepr i
vatemar ketexpansi onhasbeenf ocusedon
massi veinfr
astructureinvestmentsandf i
nancialmarketsact i
v i
ti
es.Expor tsandimpor t
shav e
remai nedthemosti mportantcomponentofGDP, contri
but i
ngf ormor et han41%ofannual GDP
withexpor t
ingtoSaudi Arabiabecomingregardedasav iabl
eent ranceopt i
on(Shumaimar i
,
2001)

 Expor
ti
ng:

Whenacompany 'snat
ivedemandissohi gh,obsolet
e,orunprofi
tabl
e,theycontemplat
e
expandi
ngintogl
obalmarket
s,wheretherearemor eoptions.Export
sisthemost
str
aight
for
wardmethodofglobal
izat
ion,part
icular
lyforstar
t-
upsandsmal lercompanies.a
methodofglobal
i
zati
onthatevol
vesthrought i
me, wi
thsuchaemphasi sonexpor ts.

 Thest
ruct
ureofSaudiAr
abi
a

Saudi Arabia'
sf i
nancialplanni
ngSaudi Arabi
ahasest abli
shedamar ketbasedeconomy
struct
ureinpr i
nciple.Economi cpolici
esseekt osuppor teconomi cv entures,whi l
east r
ingent
understandingofMusl i
m mor esrest r
ictsbothpoli
cyalternativ
esandcommer cialenter
prises.
Saudi Arabia'
seconomyi sheav i
lyreli
antonpet r
oleum andcommodi ti
es,whichcont ri
butef or
85–95per centofforeignpr of
it
s,75per centofbudgetaryi ncome, andappr oximat el
y34–45
percentofGDP.Saudi Arabia'
sbirt
hr atetendstosurpasst hecountry'seconomi cgrowth.
Near l
y65%oft heyoungpeopl eundert heageof31.Foraboutt hefir
stt i
measof2010, GDP
growthsur passed$8, 000 in20010.GDPhadal readybeenpr ogressi
v el
ydecliningsincepeaki ng
i
n1982at$26, 600percapi ta.

 Thekeysuccessofexpor
ti
ngst
rat
egy

Af ewresearchfindingssuggestt hatacompanycanensur ethesmoot handneatandt i

dytry
ing
toexportundertakingbyev aluat
ingtheexpor topport
unit
iesofit
spr oductli
nes,seeki
ng
professi
onaladviceonadmi nist
rati
veandl egisl
ati
vethi
ngsmat t
er,careful
lychoosingmarket
segment s,
tryi
ngt of ormulateanexpor t-orientedeconomyinrelat
iontot hecompet i
ti
on,and
tr
yingtopursueef ficientsalesskill
s(Asafu,2004)
 Chal
lenges

 Fr
aud:

Incurr
enthistor
y,thestatehasestabli
shedstr
idesincombatingthespreadoff akegoods,
all
ocati
ngmor eresourcestomar ket
placesadminist
rat
ionandimposi ngtougherpuni
shments
onpatentandcopy ri
ghtinfr
ingement.However,compli
anceisfrequentl
yunequal,andpatent
complianceisimpededbyashor t
ageofinvest
igator
s.

 Pay
ment
sthatar
enotmadeont
ime

Corporat
ionswit
hconsi derablegov ernmentpurchasinghistoryinthenati
oncl ai
mt ohave
handledSaudigovernmentr ecei
vabl esoverdecades.TheSaudi Arabi
aGov ernment ar
en'tusi
ng
missedpay mentstoAmer icanmer chantsasapay mentpr ocessingstr
ategytoallev
iatebudget
short
fall
s.I
npasty ears,t
hegov ernmenthasbat tledwithabudget ar
yimbalancecausedby
i
ncreasedexpendit
ur eonGi ga 
projectsandloweroi l
prices.

 I
nfl
ati
on

From 2001 to2019,SaudiArabi
a'
sinfl
ati
onratewas2.5 percent.Unemploymentwas
2.
5 percentin2019,andithasaveragi
ngaround-2.
8percentin2020.Cuisineandnon-al
cohol
ic
dri
nks,tr
anspor t
ati
on,f
urni
ture,
andcostofhealt
hcareall i
ncreasedataquickerr
ate.
Furt
hermor e,cost
sforvari
ousproductsandserv
ices,
ent ert
ainment,andcult
ural
rose,whi
le
cl
othesandf ootwearcostsdecl
ined.

 2030Saudiv
isi
ononi
nter
nat
ionalt
rade:

Saudi Vision2030i samul t

i-
prongedst rategyf orr educingSaudi Arabia'soi lpr oduct i
on,
expandi ngi tseconomy , andexpandi nggov ernmentser vicesect orssuchasheal t
hcar e,
education, infrastr
uct ure, entert
ainment ,andt ourism.At tempt i
ngt oboostf inanci alandt rade
activi
ty,growi ngnon- oi
l foreigncommer ce, andpor t
ray i
ngt hegov ernmenti naf riendlier, l
ess
humani stlightar eal lessent ialgoals.I tal soimpl i
esi ncr easi ngt hegov ernment 'smi li
tar ybudget
aswel lasgunandequi pmentpr oduct ion.Saudi Ar abiaGov ernment  
est abli
shedSt rategy2030,
abr oadandcompr ehensi v esocial economi ctransf ormat ionst r
at egy,in2017t odi versi fythe
economyawayf r
om f uels.Thegoal oft heiniti
ativei stodi versifyitseconomy ,prov i
dej obsin
thepr i
vatesect orforani ncreasingpopul ation,andst abilizegov ernmentbudget s.Themost
i
mpor t
antgoal sandobj ect iv
esi nVi sion2030ar e: boost ingper sonal expansi on; enhanci ng
communi t
yr equirement si nindustrial product i
on, especi al l
yi nmi lit
aryhar dwar eandbasi c
mat eri
als;t r
y i
ngtoi mpr ov eSaudi gov er nmentef ficienci es; continuingt oi ncr easeear nings
throughaddi ti
onal taxes; conv ert
ingt hePubl i
cEqui tyFund  i
nt othenat i
on'sbi ggesti nv estment
fund;prov idingaf f
or dablehomest or esident sandconv ert i
ngt hePubl i
cI nv est ment
Scheme  i
nt othenat ion'sbi ggestinv est mentcompany .Est ablishingSaudi Ar abia'scapi tal
mar kets dev el
opingar enewabl eener gyi ndust r
y at t
ractingmor eov erseas
i
nv estment  
privat
izingnumer ousofgov ernmentagenci es  expandi ngt heDi gi tal
economy  
acceler
atingtheconstr
uct
ionofsoci
alroadtr
anspor
tandthepubli
ctr
ansport
network;
broadeningnat ur
algasandchemical
indust
ri
esmanufact
uringTheSaudiArabian
governmentiscurrentl
ynotevenontrackt
omeett heVisi
on2030tar
getsby2030,butitis
makingprogress(Seldon,1994)

Ref
erence:

Asaf
u,A.(2004).I
nter
nati
onalt
radeandsust
ainabl
edev
el .I
opment nt
ernat
ionalJour
nalof
Soci
alEconomics,417-429.

Chandi
a,K.(
2018).Scal
eEconomi
es,andTr
adePol
i
cyi
nDev
elopi
ngCount
res.i
i ntr
adepol
i
cy
i
ssuesandempiri
alanal
ysi
s,109-
144.

Qahtany
,A.(2001)
.Obstacl
esf aci
ngexport
ersofnon-
oil
pr s.Pr
oduct oceedi
ngsoft
he
Economiesofthegul
fcouncilcountr
ies,
13-15.

Sel
don,
T.(1994)
.‘Env
ironment
alqual
i
tyanddev
el .Jour
opment nalofEnv
ironment
alEconomi
cs
andManagement,147-162.

Shumaimari
,A.(
2001)
.Directmar
ket
ingi
nthegul
fcounci
lforcooper
ati
oncount
ri
es.
oppor
tuni
ti
esandchal
lenges,13-
15.