In preparing for a post-hydrocarbon future, Saudi Arabia and the UAE are simultaneously seeking to develop some of the same sectors, notably tourism, financial services, petrochemicals, and technology. Of the two countries, the UAE made the earlier start and enjoys first-mover advantage in transforming itself into a business, trade, and tourism hub. Of late, however, Saudi Arabia has mounted a challenge, moving to expand its tourism sector and offering a larger market and loosening lifestyle restrictions to attract investors, international companies, and foreign talent.
The Emirates have implemented counter-measures, such as issuing new visa rules and switching to a Monday-Friday work week. In 2017, the Kingdom incurred a budget deficit estimated at 8.3% of GDP, which was financed by bond sales and drawing down reserves. Although the Kingdom can finance high deficits for several years by drawing down its considerable foreign assets or by borrowing, it has cut capital spending and reduced subsidies on electricity, water, and petroleum products and recently introduced a value-added tax of 5%. In January 2016, Crown Prince and Deputy Prime Minister MUHAMMAD BIN SALMAN announced that Saudi Arabia intends to list shares of its state-owned petroleum company, ARAMCO - another move to increase revenue and outside investment. The government has also looked at privatization and diversification of the economy more closely in the wake of a diminished oil market.
Historically, Saudi Arabia has focused diversification efforts on power generation, telecommunications, natural gas exploration, and petrochemical sectors. More recently, the government has approached investors about expanding the role of the private sector in the health care, education and tourism industries. While Saudi Arabia has emphasized their goals of diversification for some time, current low oil prices may force the government to make more drastic changes ahead of their long-run timeline. From 2005 to 2015, King ABDALLAH bin Abd al-Aziz Al Saud incrementally modernized the Kingdom. These reforms have accelerated under King SALMAN bin Abd al-Aziz, who ascended to the throne in 2015, and has since lifted the Kingdom's ban on women driving and allowed cinemas to operate for the first time in decades. Saudi Arabia saw some protests during the 2011 Arab Spring but not the level of bloodshed seen in protests elsewhere in the region.
Shia Muslims in the Eastern Province protested primarily against the detention of political prisoners, endemic discrimination, and Bahraini and Saudi Government actions in Bahrain. Riyadh took a cautious but firm approach by arresting some protesters but releasing most of them quickly and by using its state-sponsored clerics to counter political and Islamist activism. The UAE's dependence on oil is a significant long-term challenge, although the UAE is one of the most diversified countries in the Gulf Cooperation Council.
Low oil prices have prompted the UAE to cut expenditures, including on some social programs, but the UAE has sufficient assets in its sovereign investment funds to cover its deficits. The government reduced fuel subsidies in August 2015, and introduced excise taxes (50% on sweetened carbonated beverages and 100% on energy drinks and tobacco) in October 2017. The UAE's strategic plan for the next few years focuses on economic diversification, promoting the UAE as a global trade and tourism hub, developing industry, and creating more job opportunities for nationals through improved education and increased private sector employment. In fact, in addition to its political influence and its military power, Saudi Arabia has a strong economic leverage on its neighbors. The country has an oil-based economy; it is considered the largest exporter of petroleum in the world; and it owns around 16% of the global petroleum reserves.
Petroleum is the core of Saudi's economy and accounts for about 87% of all budget revenues (and 90% of export earnings). Monday's instruction is part of Bin Salman's broader campaign to turn Riyadh into a major business hub that rivals the UAE. In addition to giving foreign companies an ultimatum to establish their regional headquarters in Riyadh if they want to do business in the kingdom, Saudi Arabia hasamended trade rulesthat undermine the interests of Abu Dhabi.
The country remains a leading producer of oil and natural gas and holds about 16% of the world's proven oil reserves as of 2015. The government continues to pursue economic reform and diversification, particularly since Saudi Arabia's accession to the WTO in 2005, and promotes foreign investment in the Kingdom. In April 2016, the Saudi Government announced a broad set of socio-economic reforms, known as Vision 2030. Low global oil prices throughout 2015 and 2016 significantly lowered Saudi Arabia's governmental revenue. In response, the government cut subsidies on water, electricity, and gasoline; reduced government employee compensation packages; and announced limited new land taxes. In coordination with OPEC and some key non-OPEC countries, Saudi Arabia agreed cut oil output in early 2017 to regulate supply and help elevate global prices.
The government held its first-ever elections in 2005 and 2011, when Saudis went to the polls to elect municipal councilors. In December 2015, women were allowed to vote and stand as candidates for the first time in municipal council elections, with 19 women winning seats. After King SALMAN ascended to the throne in 2015, he placed the first next-generation prince, MUHAMMAD BIN NAYIF bin Abd al-Aziz Al Saud, in the line of succession as Crown Prince. He designated his son, MUHAMMAD BIN SALMAN bin Abd al-Aziz Al Saud, as the Deputy Crown Prince.
In March 2015, Saudi Arabia led a coalition of 10 countries in a military campaign to restore the legitimate government of Yemen, which had been ousted by Huthi forces allied with former president ALI ABDULLAH al-Salih. The war in Yemen has drawn international criticism for civilian casualties and its effect on the country's dire humanitarian situation. In December 2015, then Deputy Crown Prince MUHAMMAD BIN SALMAN announced Saudi Arabia would lead a 34-nation Islamic Coalition to fight terrorism . In May 2017, Saudi Arabia inaugurated the Global Center for Combatting Extremist Ideology (also known as "Etidal") as part of its ongoing efforts to counter violent extremism. Competition is heating up as the prince overhauls the oil-dependent economy and eases social restrictions in the conservative Islamic kingdom, making Saudi Arabia – a significantly larger market – a more attractive place to do business. DUBAI, United Arab Emirates — Saudi Arabia, in a bold and unexpected move, announced late Monday that by 2024 its government would cease doing business with any international companies whose regional headquarters were not based within the kingdom.
Saudi Arabia announced late Monday that by 2024 its government would cease doing business with any international companies whose regional headquarters were not based within the kingdom. This is a direct challenge to Dubai, which is currently the business hub of the region, and which does not rely on oil exports. Dubai has the largest man-made harbour in the world and is a hub for service industries like finance and IT, while its airport is the busiest in the world for international passengers. Saudi Arabia is famous for its well-known city Jeddah and is a world-famous tourist attraction. The country is famous for oil-based economy and they are the largest exporter of petroleum.
Well, one can say that petroleum is one of the products that counts in the economy of the country because it accounts for 87% of all budget revenues with export earnings of 90%. We compare hundreds of flights from Dubai to Saudi Arabia, from all the major airlines and travel agents, showing you where you can fly directly, the flight times for these options and the differences in cost. Helping you find the best deal on flights to Saudi Arabia within your budget. Reuters, the news and media division of Thomson Reuters, is the world's largest multimedia news provider, reaching billions of people worldwide every day.
Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Travelmath provides an online flight time calculator for all types of travel routes. You can enter airports, cities, states, countries, or zip codes to find the flying time between any two points. The database uses the great circle distance and the average airspeed of a commercial airliner to figure out how long a typical flight would take. Find your travel time to estimate the length of a flight between airports, or ask how long it takes to fly from one city to another. Saudi Arabia has an oil-based economy with strong government controls over major economic activities.
It possesses about 16% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 87% of budget revenues, 42% of GDP, and 90% of export earnings. The 'tax free zones' of the UAE have attracted a diverse portfolio of successful international service businesses which naturally attracts expatriate employees and the country is a 'go to' holiday destination which receives regular travel and tourism awards. Saudi Arabia and United Arab Emirates are two Muslim countries and the two main economic powers of the Arab region. Both countries have oil-based economies – although Saudi Arabia is the largest exporter of petroleum in the world while UAE is trying to reduce its dependency on oil exports – and both are important economic partners of Western countries.
Al-Monitor spoke to an executive working on a strategy in the region who said the overt move by the kingdom could be seen as an aggressive action to force regional headquarters to Riyadh. But, he added, "It could also be viewed as healthy business competition. But forcing the hand of global companies to move is never easy; it is all about enticing players with the right policies." Google Cloud, Alibaba and Western Union are some of the latest big names to establish stakes in the kingdom. And during Saudi Arabia's annual Future Investment Initiative in January, 24 international companies announced plans to move their regional head offices to Riyadh, including PepsiCo, French oilfield services company Schlumberger and Canadian fast-food chain Tim Horton's. Intensifying Saudi-Emirati competition in the maritime transport and logistics sector is part of the larger intra-Gulf jockeying for position to capture the increasing interregional cargo trade volumes flowing westward from Asia. Saudi Arabia and the UAE have sought to leverage China's deepening economic engagement in the Gulf and Red Sea arenas for the purpose of advancing their own economic diversification and geopolitical aims.
The current pattern of Saudi-Emirati relations — marked by separate though not necessarily conflicting diplomacy-first approaches to regional relations — also consists of heightened economic competition. The Covid-19 pandemic, combined with reduced global oil prices, highlighted the perils of over-reliance on oil for growth and intensified pressure on Gulf governments to accelerate economic diversification. Saudi Arabia, the UAE, and the other Gulf states are scrambling to lay the foundation for a post-hydrocarbon future.
Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Approximately 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors; at the same time, however, Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population. The Saudi crown prince also announced that he plans to spend about 147 billion USD to turn Saudi Arabia into the principal air and sea logistics hub for the region.
MBS's plan includes the establishment of a high-speed railroad, expanded port services as well as a new airline. The two countries are also known for being close allies in terms of foreign policy and geopolitical interests, collaborating closely during the 2017–18 Qatar diplomatic crisis and backing anti-Muslim Brotherhood governments in Libya, Tunisia and Egypt. A recent announcement by the UAE news agency stated that Dubai is merging its economy and tourism departments. Among the targets are increasing visiting tourists by 40% and expanding export markets by 50%. Another mission is to attract 100,000 companies within three years and 400 annual global economic events by 2025. A number of these firms are based in the UAE and in Dubai in particular, which for some time has housed a variety of headquartered regional companies.
Its proximity to Saudi Arabia has been a convenient gateway for multinationals to conduct business. In March 2020, the Saudi government instituted a national lockdown for three months to prevent the proliferation of the coronavirus. These extraordinary circumstances provide the perfect experiment for policymakers and researchers to investigate whether daily human activities significantly affect pollution levels in an oil-exporting country like Saudi Arabia. As Saudis' living standards rise, so will the opportunities to profitably trade with Riyadh, and the countries in the Kingdom's immediate proximity are best placed to exploit the emerging opportunities. Whether it is Saudi tourists spending their income in the bazaars of Bahrain, fishing in the Arabian Sea off of Oman, or purchasing luxury perfumes produced in the UAE, there is ample space to grow existing consumer markets.
The opportunities for mutual investment are tremendous, much like those accruing to the members of the Association of Southeast Asian Nations, the South American trade bloc Mercosur, and other regional economic blocs established. Unfortunately for the people of the Arab world, the region's economy has been hamstrung by poor economic statecraft since World War II. For some countries, the leftist economic policies exported by the former Soviet Union have stifled economic growth for decades. Poor education, marginalization of women, political instability, and violent conflict have also played a role in the region's economic stagnation.
A regional headquarters is what economists call an indivisible asset, which can't be divided into smaller pieces—meaning that Riyadh's gain must be Dubai's loss. This has set the stage for the narrative of an economic war between Saudi Arabia and the UAE. The UAE is focused on securing its first-mover advantage as part of the MSR. But Riyadh is determined to capitalize on the kingdom being the only country with coastal access to both the Persian Gulf and the Red Sea.
Although energy continues to be the core of Sino-Saudi cooperation, efforts to harmonize "Vision 2030" and the MSR and thus boost the kingdom's prospects for becoming a global logistics hub are making headway. In March 2017, Saudi Aramco awarded China Harbour Engineering Company , which has implemented over two dozen projects in the kingdom, a contract for the construction of a commercial port at Jazan Economic City. Last January, COSCO Shipping Ports acquired a 20% stake in the Red Sea Gateway Terminal at the Jeddah Islamic Port. The next month, Hutchison Ports signed an agreement to invest in and operate Saudi Arabia's multipurpose Jazan City for Primary and Downstream Industries port and industrial park on the Red Sea.
Saudi Ports Authority recently inaugurated the Gulf China Service , a weekly direct service between King Abdulaziz Port in Dammam and Ningbo, China. Thus, Saudi and Emirati regional diplomacy, while headed in the same general direction nonetheless reveals a certain loosening of the tight policy coordination of just a few years ago. It also suggests a desire on the part of Abu Dhabi to maintain a degree of independence from Riyadh in managing complex regional relationships. This is not surprising, as the UAE has never been a mere appendage of Saudi Arabia. Nor, as the UAE has become a more capable, active, and ambitious actor, has it warmed to the idea of serving as its larger neighbor's junior partner. Thus, while the UAE's military adventurism has been scaled back and diplomacy prioritized, the assertive and self-reliant features of its foreign policy remain intact.
As a result, a "new normal" in the Saudi-Emirati relationship has taken shape, one where their geopolitical differences and aspirations for regional leadership and influence have come to the fore and where the UAE appears determined to build its own brand. Saudi Arabia is the birthplace of Islam and home to Islam's two holiest shrines in Mecca and Medina. The modern Saudi state was founded in 1932 by ABD AL-AZIZ bin Abd al-Rahman Al SAUD after a 30-year campaign to unify most of the Arabian Peninsula.
One of his male descendants rules the country today, as required by the country's 1992 Basic Law. Following Iraq's invasion of Kuwait in 1990, Saudi Arabia accepted the Kuwaiti royal family and 400,000 refugees while allowing Western and Arab troops to deploy on its soil for the liberation of Kuwait the following year. The continuing presence of foreign troops on Saudi soil after the liberation of Kuwait became a source of tension between the royal family and the public until all operational US troops left the country in 2003. Major terrorist attacks in May and November 2003 spurred a strong ongoing campaign against domestic terrorism and extremism.
US troops returned to the Kingdom in October 2019 after attacks on Saudi oil infrastructure. It is bordered by Saudi Arabia to the west and south and by Oman to the east and northeast. Despite a 1974 secret agreement between the United Arab Emirates and Saudi Arabia said to have resolved their three border disputes, the agreement's legal standing is unclear. The United Arab Emirates claims a strip of coastline that borders Qatar to the northwest, which Saudi Arabia claims was ceded to it in the 1974 agreement. It likewise disputes Saudi claims over the Shaybah oil field to the south, while Saudi Arabia has at times challenged the emirates' claim on oases around the city of Al-Ain.
Since the early 1990s, moreover, the emirates have been in a dispute with Iran over the ownership of three islands—Abū Mūsā and Greater and Lesser Tunb (Ṭunb al-Kubrā and Ṭunb al-Ṣughrā). It is one of the main cities in the UAE and the capital city of the Emirate of Dubai. The city has attracted the world's attention through its huge sports events and construction projects especially the Burj Khalifa .
Prince Mohammed has ventured into diplomatic territory where previously the government refused to go. In 1989, a priceless 50-carat blue diamond was among an estimated $20 million worth of gems and jewelry pilfered by a Thai janitor from a Saudi prince's palace in the heist that wrecked relations between the countries. In Taif, mountain peaks, flower fields and ancient souqs await, or visit Al Ula, one of the kingdom's mega-projects where visitors can explore several ancient heritage sites and see the world's largest mirrored building. You can even take in the historic region from the sky, with a newly launched helicopter tour flying travellers over the kingdom's first Unesco-listed site. DUBAI, Feb The United Arab Emirates' plans for a corporate tax risk eroding one of its main attractions as the Gulf's premier destination for foreign firms, at a time when Saudi Arabia is opening up and pressuring multinationals to shift regional headquarters there.
The second route is the indirect impact on the quality of policymaking and governance across the entire region. Well-intentioned governments will benefit from Saudi Arabia's evolving experience in creating a dynamic Middle Eastern economy, while the more intransigent ones will face greater pressure to modernize their economies to keep up. Even the UAE—which has been at the forefront of sound economic statecraft for the last twenty years—has room to improve, and exposure to Saudi Arabia's aggressive experiment in economic reform will push Emirati policymakers to develop even better policies. Invest Saudi, the kingdom's investment promotion arm, previously launched "Programme HQ," offering special tax breaks and other incentives to blue chip multinational companies. Consultants from top American firms were flown in weekly from Dubai to develop strategy on how the conservative metropolis of Riyadh could compete with and supplant Dubai as the region's preeminent business hub. Indeed, the oil-rich kingdom — the region's largest market, with a population of 34 million, 70% of which are younger than 30 — has attracted a wave of new investment in recent years, coinciding with its liberalizing economic and social reforms.
Is Saudi Arabia In Dubai Currently, the volume of container traffic in the region handled by ports in the UAE is nearly twice that of Saudi Arabia — a dominance the Emirates is unlikely to relinquish any time soon. Nevertheless, as Saudi Arabia presses forward with its maritime agenda the UAE's advantage in terms of capacities, market shares, international investments, and trade connections can be expected to narrow. And Chinese commercial engagement is likely to play a key role in how this race unfolds.
But Saudi Arabia, in line with "Vision 2030," is also making a bid to become a leading regional and global logistics hub. Riyadh has launched an ambitious National Logistics and Transport Strategy. Plans are underway to turn King Abdulaziz Port Dammam into a mega-container hub. Maersk recently reached an agreement with Saudi Arabia Port Authority to establish a new, integrated logistics port in Jeddah Islamic Port. And like the UAE, Saudi Arabia has embarked on efforts to develop new outlets on the Red Sea to control trade flows and strengthen its position in global supply chains. Thereafter, even as they followed broadly compatible regional policies, Riyadh and Abu Dhabi's threat perceptions and understandings of regional conflicts differed.
