Country Brief- Saudi Arabia ______

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COUNTRY BRIEF- SAUDI ARABIA ______

Prepared by: Export Development Board (EDB), Sri Lanka July, 2014

SAUDI ARABIA AT A GLANCE

GEOGRAPHIC LOCATION

Middle East, bordering the Persian Gulf and the Red Sea, north of Yemen

Total Area: 2,149,690 sq km

Climate: harsh, dry desert with great temperature extremes

DEMOPGRAPHIC Population: 27Million

Saudi Arabia officially known as the Kingdom of Saudi Arabia is the largest Arabian country in the Middle East. The country bordered by Jordan and Iraq on the north and northeast, Kuwait, Qatar, Bahrain and the United Arab Emirates on the east,

Oman on the southeast, and Yemen on the south. The Kingdom is sometimes called

"The Land of the Two Holy Mosques" in reference to Mecca and Medina. The political system of Saudi Arabia is a Monarchy.

Saudi Arabia is divided into 13 provinces Al Bahah, Northern Border, Al Jawf, Al Madinah, Al Qasim, Ha'il, Asir, Eastern Province, (Dammam city) Al Riyadh, Tabuk, Najran, Makkah and Jizan. These provinces are further divided into governorates.

Saudi Arabia has an oil-based economy with strong government control over major economic activities. Saudi Arabia possesses 25% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC.

Time difference – -2.30 hours – Sri Lanka (GMT +3 hours)

Flag - A green flag featuring in white an Arabic inscription and a sword. The inscription is the Islamic creed, or shahada.

Business days and hours – Saturday to Wednesday 9.00 a. m. to 5.00 p.m.

Special holidays – In addition to the weekend (Thursday and Friday) there are two Eid Holidays and the National Day:  Eid Al Fitr: from 25th Ramandan to 5th Shawwal.  Eid Al Adha: from 5th Dhul Hajja to 15th Dhul Hajja.  National Day: 23rd September (official holiday).

Currency unit and ratio to SLR – Saudi Arabia’s currency is Saudi Riyal 1 Riyal = 34.8215 LKR

ECONOMY

Main Economic Indicators:

2011 2012 2013 GDP (purchasing power $852.1 billion $895.8 $927.8 parity): billion billion

GDP - real growth rate: 8.6% 5.1% 3.6%

GDP - per capita (PPP): $30,000 $30,900 $31,300

GDP composition by sector: Agriculture: 2% Industry: 62.5% Services: 35.5% (2013 est.)

Main Agriculture Products

Wheat, barley, tomatoes, melons, dates, citrus; mutton, chickens, eggs, milk

Main Industries : Crude oil production, petroleum refining, basic petrochemicals, ammonia, industrial gases, sodium hydroxide (caustic soda), cement, fertilizer, plastics, metals, commercial ship repair, commercial aircraft repair, construction

INTERNATIONAL TRADE

EXPORTS: Total (2013 ) - $376.3 billion

Main export commodities - petroleum and petroleum products 90%

Main Export partners: - US 14.2%, China 13.6%, Japan 13.6%, South Korea 9.9%, India 8.2%, Singapore 4.3% (2012)

IMPORTS: $147 billion (2013 est.)

Import Commodities: machinery and equipment, foodstuffs, chemicals, motor vehicles, textiles

Main Import Destinations : China 13.5%, US 13.2%, South Korea 6.6%, Germany 6.5%, India 6.3%, Japan 6% (2012)

SRI LANKA – SAUDI ARABIA RELATIONS;

Although, there is no bi-lateral trade agreement between two countries, Sri Lanka has been trading with Kingdom of Saudi Arabia for a considerable time and in year 2013,

Saudi Arabia ranked as the 28th export destination for Sri Lanka.

The EDB has identified Saudi Arabia as one of the gateways to enter the growing Middle Eastern Market by considering its market potential. 4

TRADE WITH SRI LANKA

Trade between Saudi Arabia and Sri Lanka (Value – US$ Mn) Year Sri Lanka’s exports Sri Lanka Imports Total Trade to Saudi Arabia from Saudi Arabia

2009 40 42 82

2010 43 129 172

2011 63 80 143

2012 59 601 660

2013 63 111 174

Source – Sri Lanka Customs S tatistics

Sri Lanka’s main export products to Saudi Arabia: Tea in Bulk, Tea packets, Vegetables, Garments, Kernel products, Fruits, fresh or dried, Tea bags, Rubber products, Chemicals & plastics Products, Cloves, Gems,

Wood & wood products.

Sri Lanka’s Potential Products in Saudi Arabia:

 Tea bulk & value added  Processed Fruits & Fruit Juices  Processed Food  Fruits fresh or dried  Coconut Kernel Products & By Products  Textiles and Garments  Gem & Jewellery  Fisheries Products - Aquarium Fish, Preserved Fish and Frozen Fish  ICT Services

 Constriction

Main imports from Saudi Arabia to Sri Lanka:

Petroleum products, Artificial resins, Plastic materials cellulose, esters, ethers, Confectionery & bakery products, Tanning & dyeing, Paints, varnishes, Chemicals & plastics products, Glass & glass ware, Copper & copper products, Transport equipment & parts, Iron & steel products

Top ten Sri Lankan exporters to Saudi Arabia

No Company Name Products

1 Vintage Teas Ceylon (Pvt) Ltd Tea

2 Load Star (Pvt) Ltd. Rubber finished products

3 Expolanka (Pvt) Ltd. Tea, Spices, Desiccated Coconut

4 Dole Lanka (Pvt) Ltd Bananna (Fruits )

5 Finlays Colombo Plc Tea

6 Mabroc Teas (Pvt) Ltd. Tea

7 Adamjee Lukmanjee & Sons Spices, Desiccated Coconut, Ltd. 8 Spice of Life Pvt Ltd Spices

9 Jumeirah Lanka (Pvt) Ltd Apparel

10 Sunshine Tea (Pvt) Ltd Tea

Issues and Constraints

 Among the Sri Lanka exports to KSA, tea represents for 30 percent.

Therefore, differentiation of export is less.

 Saudi Arabia maintains a negative list of sectors in which foreign investments

are prohibited.

 Import restrictions on some goods.

 India, China and Pakistan dominated businesses.

 Poor communication on business contacts, follow-up

 Special certification requirements on foodstuffs. Ex: SASO

Source: CIA World Fact Book and Sri Lanka Customs