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It appears that Saudi Arabia is attempting to become more open to foreign direct investment. Currently they are a large exporter of oil. Saudi Arabia exports about 9 million barrels per day of oil. Since oil prices are high this has benefited Saudi Arabia, but they are attempting to plan for a less oil dependent society in the future. In order to do this, they will need to diversify the types of businesses in operation in the country and work more with foreign investors.
Some foreign companies have already begun to expand to Saudi Arabia. Reiss, a high quality fashion chain from the United Kingdom, is set to open a store in Saudi Arabia this spring. The country is attempting to lure more companies like this that will lead to a more diverse income base overall.
Many investors and companies are looking to get involved in emerging markets and Saudi Arabia hopes to benefit from this trend. Saudi Arabia is listed on our Market Potential Index as number 21 because of its many attractive qualities for foreign investors. Still, the country is nervous about hot money and desires long term investors looking to improve the economy.
Ensuring long term investors will require that Saudi Arabia maintains steady growth with an initial small amount of investors. The government will certainly play a role in this slow, steady growth. It will be interesting to see what types of industries begin to emerge as a result of new investments. What sectors do you think will succeed in Saudi Arabia? Leave your comments below!
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