The ‘New’ Saudi Arabia

12 Feb, 2018 - Consumer & Retail

In my role as a trade and investment consultant, I sometimes deal with first-time business travelers to the UAE, especially women, who ask me questions about the culture and dress code: whether they can wear a skirt, if it’s ok for them to travel on their own, can they shake hands with men etc. While allaying their anxieties I’ve sometimes remarked, “this isn’t Saudi Arabia”.

I may have to eat my words now.

Last week I joined a trade delegation to Saudi Arabia organised by the UK’s Department for International Trade team at the British Embassy in Riyadh and the Consulate in Jeddah. This was my first business trip to Saudi Arabia. In the lead up to the trip, as a woman travelling on my own, I asked silly questions like whether it was ok for me to take an Uber on my own, could I go alone to shopping centres and other parts of town, whether I could walk on the roads unaccompanied, could I go to a restaurant in a mixed group etc. The answer was ‘yes’ to everything.

Saudi Arabia gets so much negative publicity that it’s not surprising for one to have these misconceptions, and to be fair, not too long ago they were not without reason. Now it seems that as long as I had an abaaya on (headscarf optional), I could do whatever I wanted. From the latest news I’ve seen, even the abaaya may become optional. While I covered my head out of respect, I met plenty of foreign and Saudi women who did not do so. To be fair Jeddah has always been way more liberal and open-minded than the rest of the country anyway. Having this conversation with two young Saudi women, they remarked, “This is the new Saudi Arabia”.

With the UK trade delegation at the British Consulate General Jeddah.

With the largest population in the region at about 31 Million, 67% middle class and a median age of 29 years old, the economic slowdown has led to rising unemployment and hence the drive towards Saudization which is creating other pressures on businesses, at least in the short term. In addition to demanding higher average salaries than expats, it will also take some time for workforce development as the local population, including women, newly move into jobs that were historically done by expats and migrant workers.

Guided by Vision 2030 and it’s three themes of “a vibrant society”, a thriving economy” and “an ambitious nation”, in the last year or so we have seen many bold economic and social policy changes and initiatives. We’ve all welcomed the news about women being allowed to drive, not requiring ‘mahrams’ to travel, women being allowed into sporting venues and stadiums and cinemas to finally open up in the Kingdom, amongst other initiatives. Of course, certain dress code rules and restrictions on alcohol remain in place.

While economic growth has slowed down with the fall in oil prices, economic diversification has been inevitable. The government is looking outward to drive investment into the country, which is also one of the key agendas of Vision 2030. Our OCO Global team is working with SAGIA to attract FDI into Saudi Arabia.

There are massive new tourism and hospitality projects underway, particularly in the West, and around the Holy Cities of Makkah and Madina. There was also plenty of excitement about the Red Sea islands project which would join Egypt and Saudi Arabia and would be treated like a “freezone” where the conservative regulations in the Kingdom will not be applied. The 50 islands and 180km (110 miles) stretch of coastline, will be developed to home luxury hotels and other necessary infrastructure in an effort to draw tourists to the country. Having high-profile investors like Richard Branson certainly helps.

Saudi Arabia is a massive market and the fundamentals of the economy remain strong. Alongside the massive challenges, there are also opportunities for international companies looking to invest into the country. The right guidance and support, whether for trade or investment, is definitely required in navigating this large and complex market. Happy to have a chat and put companies in touch with the right contacts if interested in knowing more about the Saudi market.