Population (2018): 32.5 million GDP (2017): US$686.7 billion (S$927.0 billion) World Bank “Ease of Doing Business” Rank (2018): 92 Bilateral Trade with Singapore (2017): S$13.8 billion
Saudi Arabia was Singapore’s 19th largest trading partner in 2017. Among the Gulf Cooperation Council (GCC) countries, Saudi Arabia is Singapore’s second-largest trading partner. Singapore-based firms are also among the most active Asian investors in Saudi Arabia1, and Singapore’s expertise in oil & gas has long provided a connection between the two countries.
The country’s other natural resources include copper, gold, iron, natural gas, and ore. Saudi Arabia’s manufacturing sector has constantly expanded since 1976 to produce a wide range of products, from fertilisers to rolled steel and plastic products2.
The Saudi government continues to support varied manufacturing businesses, as well as the effort to move away from oil dependence. Singapore businesses should note there is room for more than oil & gas-related enterprises in Saudi Arabia.
Enterprise Singapore operates an overseas centre in the Saudi capital of Riyadh, to assist Singapore businesses expanding into the Middle East. You will also be supported by bilateral agreements signed between Saudi Arabia and Singapore to facilitate cross-border trade on both sides.
1 “Singapore investors among the most active in Saudi Arabia”, The Straits Times, 3 March 2017 2 Saudi Arabia, Encyclopedia Britannica
In 2016, Saudi Arabia embarked on an initiative – Vision 2030 – that aims to diversify its economy, and reduce dependence on oil. Vision 2030 consists of three primary themes:
Attaining these goals will require greater diversification and privatisation of the economy. Vision 2030 also emphasises development of the Kingdom’s public service sectors in education, healthcare, infrastructure, recreation, and tourism. Singapore businesses can find demand for their expertise in these fields, particularly if they are willing to partner with Saudi companies.
Some key areas include the opening of the Red Sea Luxury Resort - set to open by 2022, this is expected to bring one million tourists a year by 20353.
In 2016, Saudi Arabia issued a General Authority for Entertainment, into which around S$3.7 billion has already been invested. The first live music concert in 25 years was held in Riyadh in 20174. Amusement park giant Six Flags is also aiming to open three parks in Saudi Arabia by 2021, at around S$400 million to S$688 million each.5 Singapore’s events and media-related businesses can find increasing opportunity, as the Kingdom opens up its entertainment market.
Vision 2030 also aims to stimulate non-oil trade between Saudi Arabia and its partners, in goods and consumer products. The Kingdom plans to increase foreign direct investment from 3.8% of GDP to 5.7%, and to raise non-oil exports from 16% of GDP to 50%6. This will provide openings for Singapore businesses and investors, to tap into an affluent market.
3 “Saudi Arabia launches Red Sea beach resort plan”, CNN Travel, 4 August 2017 4 “Saudi Arabia allows concerts - even country music”, The Economist, 1 June 2017 5 “Six Flags aiming to open first Saudi park by 2021”, Reuters, 16 November 2016 6 Goals, Saudi Vision 2030 (http://vision2030.gov.sa/en/goals)
Saudi Arabia is unquestionably the world’s leading oil producer and largest exporter of petroleum7. It produces around 10.5 million barrels (and exporting 7.5 million barrels) of crude oil per day. Oil accounts for about half the country’s GDP, and 70% of its export earnings. The Kingdom holds 18% of the world’s proven petroleum reserves and is a founder and leading voice in the Organisation of Petroleum Exporting Countries (OPEC), giving it further influence on global oil supply.
The state-owned oil company, Saudi Aramco, intends to invest around S$412 billion over the next 10 years in upstream oil & gas projects. This will turn the country from a crude oil exporter, to a fully integrated, global energy and chemicals enterprise. This is likely to draw demand for businesses in the oil & gas sector, in which Singapore already has deep penetration.
7 “Saudi Arabia Facts and Figures”, Organisation of Petroleum Exporting Countries, 2018
According to the Middle East Economic Digest (MEED), Saudi Arabia is the largest projects market in the GCC, with around S$1.9 trillion worth of projects underway. This accounts for almost half of all major projects planned in the GCC, making it an ideal starting point for Singapore businesses looking to penetrate the region. The transport sector alone has the biggest pipeline of projects, with about S$712 billion worth of projects still in tender or study phase8.
Besides the wide availability of projects, Saudi Arabia is also the largest economy by population in the GCC. The median age of the Saudi population is 29.9, with a GDP per capita (based on purchasing power parity) of about S$74,000 in 2017.9 This indicates an affluent and young market, ideal for fast-moving consumer goods (FMCG) companies to expand into.
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8 “Saudi Arabia Market Report”, Middle East Business Intelligence, 22 February 2018 9 CIA World Factbook, 2018