Constituting the majority of the Arabian Peninsula, Saudi Arabia is the fifth largest country located in Western Asia, with a land area of approximately 2,150,000 km². Also, it is geographically the largest sovereign state in the Middle East, sharing its borders with Iraq, Jordan, United Arab Emirates, Oman, Israel, Egypt, and total 10 other countries. Most of its terrain consists of arid desert, lowland and mountains, with the Persian Coast and the Red Sea Coast on both Eastern and Western borders.
Riyadh is the capital and the largest city in the country, which is famous for oil and ships. It has more oil than any other country in the world, and it is said to be a young country as it consists of the world's youngest population, close to half of its 33.4 million people are under 25 years old. As of October 2018, the Saudi economy was the largest in the Middle East and the 18th largest in the world, with a GDP of USD 782.48 billion.
Tourism: The top six places to visit in Saudi Arabia are Makkah, Mediana, Madain Saleh, Yanbu, Jeddah and Riyadh. Arabia mainly includes religious pilgrimages, such as Mecca accepts over 3 million pilgrims a year during the month of Dhu al-Hijjah in Hajj, and around 2 million during the month of Ramadan to perform Umrah.
Religion: Saudi Arabia is the birthplace of Islam and most people are Sunni Muslims. They have only a few of the population following other religions like Shi’i Muslims, Roman Catholics and Hindus.
Culture: The culture of Saudi Arabia is described by its Islamic heritage. The society is in common truly religious, conservative, traditional, and family-oriented. Literature and classical Arabic poetry are highly valued.
Since Saudi Arabia is a Muslim Kingdom, the principal perspective of the financial market is its Islamic banking sector, which is primarily a non-interest banking system, as per Islamic law, taking interest on loans is prohibited. They gain profits through equity participation, which means that a borrower gives the bank a portion of its profit. It is different from other conventional financial institutions as investments in fields like alcohol, pork, gambling, etc. are forbidden.
Approximately 30% of the Islamic banking transactions in the Gulf Cooperation Council (GCC) takes place in Saudi Arabia, making it a vital hub for this market. The National Commercial Bank generates almost 10 billion Saudi Riyal in the trade with shares. In Saudi Arabia, the chief commercial Banks operates on a loan to deposit ratio of 86 percent.
On April 24, 2017, the Council of Economic and Development Affairs (CEDA) launched the Financial Sector Development Program (FSDP). The program intends to develop a diversified and productive financial sector to support the growth of the national economy. The program enables financial institutions to encourage private sector growth, secures the creation of an advanced capital market, promotes and develops financial planning, without disclaiming the strategic aspirations of preserving the balance and solidity of the financial sector.
|Agriculture||Wheat, barley, tomatoes, melons, dates, citrus; mutton, chickens, eggs & milk.|
|Manufacture||Crude oil production, petroleum refining, basic petrochemicals, ammonia, industrial gases, sodium hydroxide (caustic soda), cement, fertilizer, plastics, metals, commercial ship repair & commercial aircraft repair|
|Services (Including financial)||35.5% (2013 estimate)|
|Kingdom Holding Company||Investment|
|Saudi Basic Industries Corp. (SABIC)||Petrochemical|
|Saudi Telecom Co.||Telecommunication|
|Saudi Aramco Mobil Refinery Co. Ltd||Petroleum Refinery|
|Saudi Electricity Co.||Electricity|
|Holding, Saad Group of Companies||Contracting|
|Al Rajhi Bank||Banking|
|The National Commercial Bank||Banking|
|Samba Financial Group||Banking|
Saudi Stock Exchange or Tadawul is the only stock exchange in the country and the leading stock exchange among the GCC countries, listing 171 publicly traded companies as of August 2017. It is under the control of the Capital Market Authority.
The market was initially informal throughout the 1970s, with only 14 companies listed. The government then formulated a ministerial committee to promote and regulate the market in 1984. The government formed the Capital Market Authority (CMA), the individual governor of the market in 2003. Later in 2007, the Saudi Stock Exchange was established. The market value of Saudi Arabia was about 451 billion USD in 2017.
The Tadawul All Share Index (TASI) is the main stock market index that tracks the execution of all companies listed on the Saudi Stock Exchange. However, the Tadawul is a relatively new and progressing stock exchange which does not offer derivatives products yet, such as prospects or alternatives.
The Arab countries had experienced rapid changes in their economic fortunes. During first quarter of 2008, oil, natural gas, and other commodity prices continued to rise quickly, leading to huge profits. At the same time, they had to manage with rapidly rising food and raw material prices that pressured their economies and social firmness. The financial crisis suffered decline in the terms of trade, and declining surpluses on their balance of payment. All countries were affected badly by the crisis including Saudi Arabia in 2009; the Kingdom was the least affected country in the GCC region due to the government’s intelligent and timely policies. The global economy has been recovering faster than expected, and that in turn brought a positive impact on the Saudi economy too.
In late 1997, Saudi Arabia once again encountered the challenge of low oil prices. Due to a mixture of circumstances- the East Asian economic crises, an expansion in non-OPEC oil production; demand for oil decreased and dragged oil prices down by more than one-third. In 1998, oil prices dropped to $11 per barrel, and remained at low levels throughout 1998 and until March 1999. Later, Saudi Arabia was a key player in regulating the victorious 1999 warfare of OPEC and led other oil-producing nations to increase the price of oil to its highest level since the Gulf War by controlling the production and supply.
The world price of oil had peaked in 1980 and demand caused to fall as a result of slowdowns in industrialized nations and more productive use of oil, which produced surpluses. As a result, there was a worldwide oil glut, with the price of oil declining from $36 per barrel to nearly $14 by 1986. Saudi oil production, which had expanded to almost 10 million barrels per day during 1980–81, descended to about 2 million barrels per day in 1985. Budgetary shortages developed, and the government dragged down its international assets. As a result of the oil glut and the pressure of decrease in production, Saudi Arabia began demanding production portions more loudly for OPEC segments after 1985.
Saudi Arabia is a home for the Arab people, who are the primary ones originated on the Arabian Peninsula. It is also the homeland of Islam, the world's largest religion, while Muhammad established Islam there, and the place of the two holy pilgrimage cities of Mecca and Medina.
Around the year 571, the Prophet Muhammad was born in Mecca. As Islam spread by following the early caliphates from the Iberian Peninsula in the west to the borders of China in the east, legislative power rested in the caliphs' capital cities: Damascus, Baghdad, Cairo, and Istanbul.
Because of the requirement of the hajj, or pilgrimage to Mecca, Saudi Arabia never lost its significance as the heart of the Islamic world. However, it stayed a backwater under tribal rule, loosely regulated by the far-off caliphs. It was true during the Umayyad, Abbasid, and into Ottoman times.
In 1744, a new political party emerged in Arabia between Muhammad bin Saud, the founder of the al-Saud dynasty, and Muhammad ibn Abd al-Wahhab, the founder of the Wahhabi movement. Together, the two families established political power in the Riyadh region and then immediately captured most of Saudi Arabia. Terrified, the Ottoman Empire's governor for the region, Mohammad Ali Pasha, commenced an intrusion from Egypt that turned into the Ottoman-Saudi War, lasting from 1811 to 1818.
The al-Saud family lost most of its holdings for a short period but was allowed to remain in power in the Nejd. In 1891, the al-Saud's rivals, the al-Rashid, commanded in a war over the administration of the central Arabian Peninsula. The al-Saud family fled into a brief exile in Kuwait. By 1902, the al-Sauds were back in control of Riyadh and the Nejd region. Their conflict with the al-Rashid continued.
The Hejaz and Nejd sections were joined to form the kingdom of Saudi Arabia in 1932, an absolute monarchy governed by sharia. A year later, the area of Asir was incorporated into the kingdom.
In 1938, however, Saudi Arabia's fates changed with the invention of oil along the Persian Gulf coast. Within three years, the U.S. owned Arabian American Oil Company was producing extensive oil fields and selling Saudi oil in the United States. The Saudi government did not get a share of Aramco until 1972 when it acquired 20% of the company's stock. Later Saudi Arabia took a 100% stake in Aramco in 1980. Although, its ties remained strong with the United States throughout the 1980s.
At the beginning of 1996, King Fahd passed authority to Crown Prince Abdullah, after undergoing a devastating stroke. Later, he announced economic reforms that intended to diversify the Saudi economy as well as limited social reforms. He died in January 2015. King Salman became the Crown Prince of the Kingdom of Saudi Arabia and was appointed as Deputy Prime Minister. He began instituting additional social reforms, including allowing women to drive as of 2018.
Nonetheless, Saudi Arabia remains one of the most authoritarian nations on earth for women and religious minorities.
Al-Waleed bin Talal
Abdullah of Saudi Arabia
The Saudi riyal is the currency of this country since it came into presence in 1925, and before Saudi Arabia was created, it was the currency of Hejaz.
Although the Hejaz riyal was the same weight as the Ottoman 20 kurus, it was minted in 0.917 fine quality, compared to 0.830 fine quality, for the Ottoman coin. The Saudi riyal and Hejaz riyal shared the same specification; therefore, it was circulated alongside Ottoman coins.
In 1925, coins were established for ¼, ½ and 1 ghirsh. ¼, ½ and 1-riyal coins followed soon thereafter, and were introduced in 1927. These coins were still recognized as the currency of the Kingdom of Hejaz.
The first coins issued as the currency of Saudi Arabia were introduced in 1935 and replaced the ¼, ½, and 1-riyal Kingdom of Hejaz coins.
In 1937, the ¼, 1/2, and 1 ghirsh Hejaz coins were also substituted by Saudi Arabian equivalents, and in 1946, 2 and 4 ghirsh coins were created.
The first “banknotes” were introduced in 1953 by the Saudi Arabian Monetary Authority (SAMA). Haj Pilgrim Receipts were intended to be used in pilgrim foreign exchange transactions.
In 1961, SAMA replaced Haj Pilgrim Receipts with regular banknotes in values of 1, 5, 10, 50, and 100 riyals. Pilgrim Receipts were officially phased out in 1964.
In 1986, the Riyal was pegged to the IMF’s Special Drawing Rights. In 2003, the Riyal was officially pegged to the US Dollar at 1 Riyal = 3.75 USD.
|National Song||"as-Salām al-Malakiyy"|
|Currency||Saudi riyal (SR) (SAR)|
|GDP||$1750.9 Billion USD|
|GDP Growth Rate||3.4 percent|
|GDP Per Capita||$55,158.2 (PPP)|
|Public Debt||12.4 percent of GDP|
|Unemployment Rate||5.5 percent|
|Labor Force (Occupation)||-|