Saudi Arabia at a glance 
Full Name: Kingdom of Saudi Arabia
Capital: Riyadh
Area: 2,149,690 sq km
Population(m): 30.0 (2013)
Head of state: King Salman bin Abdulaziz al-Saud, who is also prime minister
Currency: Saudi riyal (SR)
Religions:  Muslim 100%
Languages: Arabic
International organisations: Arab League, GCC, OIC, UN, WTO, Opec

As the birthplace of Islam, and home to the largest oil reserves in the world and the biggest population in the GCC, Saudi Arabia is guaranteed a position of regional and international importance.

The kingdom has close ties with allies in the West, particularly the US and the UK. The country’s role on the global stage is growing as the only Arab member and the only Opec member of the G20. Its economic dominance in the region means it is considered the most important voice within the GCC.

Internally, Saudi Arabia faces several challenges, despite its wealth the country suffers from huge income inequality. Development is tempered by religious elements in the country, whose strict Wahabi interpretation of the Quran views any development that could be described as Westernisation with contempt.

Saudi Arabia is named after King Abdulaziz bin Abdulrahman al-Saud, the founder of modern Saudi Arabia, who united the country under his family’s rule. Since 1953, the sons of Al-Saud have ruled the kingdom, along with the Majlis al-Shura or Shura Council, created in 1992 and comprising members appointed by the king.


Saudi Arabia is an absolute monarchy and has been ruled by the Al-Saud dynasty since its inception. The king is responsible for appointing a council of ministers, which he heads as prime minister, and also selecting a crown prince to act as deputy prime minister and heir to the throne.

The kingdom is mostly Sunni, with a smaller Shia population concentrated in the Eastern Province. The Shia often complain of marginalisation, and protests against the government frequently end in clashes with security forces.

The Quran is the constitution of the country.

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Saudi Arabia holds the world’s largest hydrocarbon reserves and its economy is dominated by oil income. Oil sales account for around a quarter of the gross domestic product (GDP) and the government sector another quarter. The private sector contributes around 50 per cent of GDP.

In mid-2010, the government announced a SR1.4 trillion ($385bn) five-year development plan from 2010-14. It aims to improve the standards of living, enhance labour skills, and diversify the production base in the kingdom. It predicts an average growth rate of 5.2 per cent a year.

The slowdown in the global economy and the fall in oil prices in 2008-09 has dented the state budget, but government finances remain strong. Government debt has continued to fall from a peak in 2003, and the government has the finances to continue to increase state spending as the budget returned to surplus in 2010 after a deficit in 2009.

Despite its wealth, unemployment among the rapidly growing population presents the kingdom with a significant challenge. Unemployment is thought to be just under 10 per cent.

The Supreme Economic Council was established in 1999 to lead the diversification of the economy away from oil, and was followed in 2000 by the formation of the Saudi Arabian General Investment Authority (Sagia) to encourage foreign direct investment into the Kingdom.


National oil company (NOC) Saudi Aramco, the largest oil company in the world, dominates the oil and gas sector. It is responsible for more than 95 per cent of the country’s oil output. Aramco is also regarded the region’s best-run state oil firm by industry leaders.

From its headquarters in Dhahran in the Eastern Province, the company manages almost all of Saudi Arabia’s hydrocarbon enterprises. Aramco has just completed a $100bn investment programme and will now move into a new phase of oil exploration.

Aramco can produce around 12 million barrels a day of oil, and is the ‘swing producer’ (can increase or decrease its oil production) for Opec.


The Saudi banking market is largely sheltered from foreign competition. There are 12 local lenders. Several have significant ownership by foreign banks, but otherwise the main area for foreign banks to compete is in investment banking.

The kingdom is home to some of the largest banks in the region by asset size, and after a difficult 2009, the banks are now extremely liquid and desperate to book new deals.

Retail products offer a great opportunity because of the kingdom’s large, under-banked population, and the lack of development of products like mortgages and insurance. Progress of a long-awaited mortgage law has been slow, hindering development of the home finance, and consequently the real-estate sector. In mid-2012 the government approved the new legislation, but it is unclear how long it will be before it is passed into law.

Financial Markets

The Saudi Stock Exchange (Tadawul) is one of the most liquid markets in the region, however international investors are allowed only limited access. The regulator, the Capital Market Authority (CMA), is currently looking to increase foreign participation, but progress has been slow.

The CMA is also hoping to reduce the influence of retail investors, who dominate the market and often cause wild fluctuations in share prices.

In 2007, the government announced that it was opening the market to trading by all GCC nationals as part of the deepening economic integration of the six-member group. Although there are expectations that the market will be opened to foreign investors, no clear timeline for this exists.

Industry & Petrochemicals

Like the oil sector, the kingdom’s petrochemicals and industrial sector is dominated by a single company, Saudi Basic Industries Corporation (Sabic). One of the most actively traded companies on the Tadawul, Sabic is still 70 per cent government owned.

It was established in 1976 to add value to the kingdom’s hydrocarbon reserves through the production of downstream materials such as petrochemicals. It has become one of the world’s largest petrochemicals suppliers.

The Saudi Arabian Mining Corporation (Maaden) was established in 1997 to take advantage of the country’s vast mineral resources. It is currently working on fertiliser, aluminium, gold and base metal projects.

A number of smaller players are also developing projects in these sectors, including petrochemicals and, increasingly, mining schemes. The Jabal Sayid copper mining project is one of the first private initiatives to be developed under Saudi Arabia’s mining law, and is expected to the first of many.


Huge investment is under way to improve Saudi Arabia’s transport infrastructure. These include the Mecca-Medina railway, Riyadh metro, Medina monorail and the Saudi Landbridge, to link the Red Sea coast to the Gulf.

Plans are also progressing to redevelop airports at Jeddah and Medina to handle growing numbers of pilgrims visiting Mecca. The government also intends to invest $670m to develop smaller airports around the country for internal travel.

New ports are planned for Jeddah and for the King Abdullah Economic City at Rabigh.