Saudi Arabia is a member of the WTO from 2005. Without any doubts this step has accelerated the international opening of the Saudi market. It is essential to note that in 2006 Saudi Arabia generated the highest State budget surplus ever (about 70 billion U.S. dollars). Moreover, in 2005 there too was the highest State budget surplus (about 55.5 billion U.S. dollars). After the mineral resources, extremely important as economic asset is the service sector, especially tourism with more than a million pilgrims each year. The currency in the Kingdom is the Saudi Riyal; it has a fixed exchange rate to the U.S. dollar, according to Doing Business in Saudi Arabia.
In 2006, Saudi Arabia export was valued at 313.4 billion U.S. dollars (including oil and oil products in the amount of 188.57 billion U.S. dollars), while the imports was valued at 108.3 billion U.S. dollars. As in previous years it was the trade surplus of 205.1 billion U.S. dollars in the balance. The main trade partners of Saudi Arabia are the U.S., Japan, South Korea, China and India, the main importing countries are USA, Japan, China, Germany and South Korea. Despite the traditionally high level of money transfers by foreign workers, private transfers and government payments, the current account surplus is over 90 billion U.S. dollars (2005), the approximately 6 million migrant workers have to made payments amounting up to 14 billion U.S. dollars. The country has substantial foreign exchange reserves. The main mineral resources of Saudi Arabia are: oil, natural gas, gold, limestone, gypsum, marble, clay, salt, iron and phosphorus. Saudi ARAMCO is the national oil producing company and the largest oil company in the world, with headquartered in Zahran. Saudi Arabia has the world’s largest proven oil reserves and is one of the biggest oil exporters. The importance of Saudi Arabia is not measured solely on the basis of high production and oil reserves, but also to its role as security in the world oil market: it has spare capacity that can be put in times of shortage of supply onto the market and in times of plenty withdrawn, according to Anthony Shoult (2006).
Also, describing the labor market of the country it should be noted that women have the equal employment rights, in particular they can not work in oil or gas industry. In 2006 there were 10.7% of women workers in the country. Mostly, women work in the fields of education, social services, health and media. On April 23, 2006 a new labor law came to force. The most important labor market policy instrument in this law is the Saudi program to replace the approximately 6 million migrant workers by increasing the amount of working women with their own nationality. According to this law, the companies are committed to increase their share of Saudi workers up to 75%. However, The Minister of Labor may reduce this percentage in the case, when there is no enough qualified Saudi employees for certain job. Also, the new labor law strengthens the rights of guest workers. In particular, employers are obliged to sign employment contracts and to bear the entire cost of entry and exit and the granting of leave. On the other hand, the law provides for a training commitment of the plants to gradually replace the foreign workers by Saudi workers. A strict visa policy accompanies this program. Thus, according to the will of the Minister of Labour, the number of visas for foreign workers is significantly reduced – by 100.000 visas per year, according to Doing Business in Saudi Arabia.
It should be noted that Saudi Arabia, as well as other Arab countries is greatly involved in globalization process. However, it has its own features. For example the globalization is widely seen in the process of skilled work force attraction, especially in oil and refines industries. The other distinguish feature is zealous attitude of the authorities of the country to save its culture, authenticity and prohibit the distribution of any other values in the Saudi Arabia. For example, the country still lives under the laws of Shiria and has a religious police force, whose main task is to ensure the observance of Islamic laws. However, the further tightening of world’s economic connections affects Saudi Arabia. As a key OPEC member, the country has direct impact on world’s oil prices and, in some sense, on the development of world’s economy. I am convinced that further Saudi Arabia will be increasingly involved in the world’s globalization process.
In my opinion, due to its territory, population and status of the leading oil producing country Saudi Arabia is considered as leading country in the region. However, recently Iran is trying to challenge this status. As a result, there is an open confrontation between these states. Concerning business trips, I would like to mention that foreign visitors should be dressed accordingly: men, despite the hot weather, wear suits or pants and shirts, and women should wear loose and long clothing without a cut in the neck. A mandatory addition to the well must be a handkerchief that shielding the hair. Women’s legs and arms to the wrist should be covered. Abaya traditional Arab clothes suits best for it. The religious police (mutavva) vigilantly monitor the violation of public morality, including clothing. In general, the neglect of these rules may, in some cases, result with significant trouble.
All in all, I would like to say that the economy of Saudi Arabia is based on the oil industry, which accounts for 45% of the gross domestic product. 75% of budget revenues and 90% of exports are petroleum products. Also, Saudi Arabia is involved in globalization process in general in the issue of skilled work force attraction, especially in oil and refines industries, which determines the future of the country. Moreover, unlike other oil-producing countries in Saudi Arabia, this figure is constantly growing, thanks to the discovery of new oil fields. Saudi Arabia plays a key role in the Organization of Petroleum Exporting Countries, with which regulates global oil prices. In the 90-ies the country experienced an economic downturn associated with the fall in oil prices, while a huge population growth. As a result, GDP per capita over several years fell from $ 25,000 to $ 7,000. In 1999, OPEC decided to slash oil output, which led to price spikes and help improve the situation. In 1999 n the country began an extensive privatization of electric utilities and telecommunications. Despite the huge revenues from oil exports, the level of life of Saudi Arabia is increasingly lagging behind the developed countries. If at the end of 1970 GDP per capita in Saudi Arabia was amounted 21 thousand dollars, in comparison in the U.S. 24 thousand dollars, at the present time – only 20.3 thousand dollars, while in the U.S. – 46.4 thousand dollars. All in all, it can be said that Saudi Arabia has a lot of economic problems, and fully dependent on oil, however recent high prices for this mineral resource allow this country to gradually grow and spend significant amount of money on the social needs.