I was recently fortunate enough to visit The Kingdom of Saudi Arabia for the first time. Our member firm, Al Sabti & Bannaga, is based in the capital Riyadh and the trip was an important opportunity to learn more about the Saudi economy as well as potential future opportunities for RSM International.
Saudi Arabia is the biggest Arab economy, with the second largest oil reserves in the world, accounting for 90 per cent of its fiscal revenue (including 95 per cent of exports and 70 per cent of government revenue). It also has an incredibly large and young population, with around 27 million people and an average age of 26 years old.
Internationally known for its high-income economy – it has the 19th highest GDP in the world – I was particularly interested to see what was being done about the Kingdom’s youth unemployment problem. Brought about from a lack of proper education and a stagnant private sector which has relied too heavily on foreign workers (Saudi Arabia’s population includes nearly 8.5 million expatriates) I was pleased to learn of initiatives being introduced to boost spending on job training and education, with a particular focus on technical skills needed for the private sector. Indeed, just last week it was announced that UK skills providers have won contracts worth £1bn to run education colleges in Saudi Arabia as part of the Saudi plan to build 100 new colleges across the country.
The youth of Saudi are breaking with traditional careers in the public sector as a new wave of entrepreneurialism sweeps the country. As reported in a recent Financial Times article, only 43 per cent of Gulf Cooperation Council respondents preferred a public sector job, down from 64 per cent in 2012, with a greater number of young people in the Middle East and North Africa wishing to start businesses.
The Saudi government are also redirecting their focus for the economy as it looks to attract medium sized businesses and diversify beyond the oil industry. Social development and infrastructure projects, introduced to advance Saudi Arabia’s economy, have invested capital into its scientific and engineering sector, further cementing its prominence in these sectors. Nowhere has this been felt more than in Saudi’s second-largest city of Jeddah, (population 5.1 million), which has benefitted greatly from the government’s efforts. Keen to diversify beyond the capital Riyadh, the government has spent $373 billion since 2010 on establishing six “economic cities” in different regions of the country to promote foreign investment, and create new business and entrepreneurial hubs.
Change is happening quickly in Saudi and it is no surprise that the World Bank rates the country as the easiest place to do business in the entire MENA region. We at RSM International are keen to highlight this and look forward to seeing further business growth develop, both for our member firm and the country.