Saudi Arabia country brief
The Kingdom of Saudi Arabia is the largest Arab country of the Middle East. It is 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 origins of Saudi Arabia go back to 1744 with the establishment of the first Saudi State. The formation of the current Kingdom began in 1902, when Abdulaziz bin Saud captured the Al-Saud's ancestral home of Riyadh, and culminated in 1932 with the proclamation and recognition of the Kingdom of Saudi Arabia.
Saudi Arabia is a monarchy. King Salman bin Abdulaziz Al Saud succeeded to the throne on 23 January 2015, following the death of his brother, the late King Abdullah bin Abdulaziz Al Saud. The second in line to the throne is the son of the King, Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud.
The King is assisted by a Council of Ministers that he appoints. In recent years the consultative Shura Council, which consists of 150 members (including 30 women) appointed by the King, has developed a modest but increasing role in public debate. Municipal elections were last held in December 2015, with women granted the right to vote and to run as candidates for the first time.
Saudi Arabia has embarked on a program of economic reform and diversification called the Vision 2030 plan. This plan includes social reforms as a driver of economic diversification. From June 2018 women have been granted the right to drive and, in August 2019, elements of the male guardianship system were dismantled to grant women additional rights.
In June 2017, Bahrain, Saudi Arabia, the United Arab Emirates and Egypt, cut off diplomatic ties and implemented a blockade of Qatar. At the GCC Leaders Summit on 5 January 2021, agreement was reached between leaders to re-establish diplomatic relations with Qatar and gradually re-open borders and airspace.
Saudi Arabia is a member of the Gulf Cooperation Council (GCC). It is also a member of the Arab League, the Organization of Islamic Cooperation (OIC), the G20, the United Nations, World Trade Organization (WTO) and the Organization of Petroleum Exporting Countries (OPEC). Saudi Arabia will host the G20 in 2020.
Australia and Saudi Arabia's friendly relationship is underpinned by commercial ties and shared membership in the G20. This is complemented by Australia's engagement with the GCC and OIC, which are both headquartered in Saudi Arabia (Riyadh and Jeddah respectively).
Australia and Saudi Arabia have well-established cooperation in countering terrorism and are both members of the Global Coalition to Defeat-ISIS and the International Syria Support Group.
People-to-people contacts are an important aspect of the relationship, with over 6,200 Saudi students studying at Australian education institutions in 2019.
Saudi Arabia is an important trading partner in the Middle East region for Australia. There is significant potential for economic ties to grow, given areas of complementarity in agriculture, mining services, education and construction. Vision 2030 also provides potential opportunities for Australian business in priority sectors.
With a population of around 33.4 million (2018) and nearly 20 per cent of the world's conventional oil reserves, Saudi Arabia is the Middle East's largest economy. Real GDP growth in 2019 was 0.2 per cent. Continued low oil prices as a result of the COVID-19 pandemic is likely to have a further negative impact on the Kingdom's fiscal position.
The Saudi Government initiated structural reform measures in the 1990s designed to encourage privatisation, liberalise foreign trade and reform investment regimes. Commercial laws were revised and initial steps were taken to free up foreign investment and privatise parts of the state sector. Education and skills development are a major focus for the government, as the policy of 'Saudisation' looks to increase the percentage of Saudi citizens working in the private sector.
An approximately $5 billion scholarship program was launched in 2005, funding over 185,000 young Saudis to undertake tertiary studies abroad. The program, titled the King Salman Scholarship Program, has recently been refocused to ensure closer alignment between scholarships and in demand skills. The Saudi Government is also engaged in a major program for the construction of educational institutions in Saudi Arabia.
As part of Saudi Arabia's economic reform plans, the Kingdom announced, on 27 September 2019, a new tourism visa program.
The COVID-19 pandemic has had a significant impact on Saudi Arabia’s economy, particularly due to the impact of COVID-19 measures on commerce and the pandemics effect on global oil prices.
Trade and investment
Saudi Arabia is an important trading partner for Australia. In 2019, the two-way goods and services trade totalled $1.78 billion. Saudi Arabia is a substantial market for beef, sheep meat, barley, wheat, dairy products, cosmetics, pharmaceuticals, vehicle parts and accessories and vegetables.
Saudi Arabia is also an important source of investment into Australia with an estimated $3.9 billion worth of assets (2018). In 2017 the Saudi Arabia government held its first annual Future Investment Initiative. It is the Kingdom’s premier investment forum for discussion of the global economy and investment trends.
Exports of services, notably education, are also significant. A large number of Saudi tertiary students study in Australia, mostly under the King Salman Scholarship Program. In 2019, there were more than 6,200 Saudi students studying in Australian educational institutions, representing the largest cohort from the Middle East region. Australia is now considered the third most popular destination for Saudi students, after the US and the UK.
Saudi Arabia's needs are well suited to Australian capabilities - a fast-growing and young population, a well-managed banking system, good infrastructure, and generally low import duties and barriers. Its business community is sophisticated and familiar with Western practices. Austrade is represented in Riyadh.
High level visits
- September 2018: A delegation from Saudi Arabia's Shura Council visited Australia. The delegation was invited by the Parliament of Australia.
- September 2018: Saudi Assistant Minister for Defence visited Adelaide to attend Land Forces 2018.
- October 2017: Minister for Trade, Tourism and Investment visited Saudi Arabia with business delegation.
- October 2017: Minister for Defence Industry visited Saudi Arabia.
- September 2017: Assistant Minister for Trade, Tourism and Investment visited Saudi Arabia.
- April 2017: Minister for Trade, Tourism and Investment visited Saudi Arabia with business delegation.
Updated January 2021