What Are the Political, Economic, Social, and Cultural Challenges That Face Pmg When Entering Saudi Arabia?

To: _                        Prof. Raghda El Ebrashi

Name:                Mahmoud Mohamed Abdelkhalek

Question:

What are the political, economic, social, and cultural challenges that face PMG when entering Saudi Arabia? Please relate your answers to the content of the lectures. Don’t talk in general!

Answer:

The political challenges,

1. Saudization policy and program that launched by Saudi government as a solution of unemployment problem to replace white caller foreign workers with local workers and although this is settled but a weak-end applying of this program make it difficult to plan the needed manpower accordingly due to the shortage of needed experience in local workers.
2. The Investment law (Foreign Investment Regulations’), signed in 2000, and its entry into the World Trade Organization the Saudi economy is opening up to foreign investment. Foreign investors are allowed to invest in all sectors of the economy, except for ones protected by a ‘‘negative list’’.
3. High state involvement
4. Bureaucracy, high uncertainty of government orders for foreign firms, very unclear communication of the Saudi Arabian General Investment Authority (SAGIA).
5. Legal system, it is clear in difficulties with the application process for establishing a legal entity, Even the local lawyers were, at many points of the establishment process, unable to advise whether the requirements were satisfied or if there were further documents to deliver.

The economic challenges,

1. Membership of gulf cooperation council GCC where The GCC members, to a large extent, require the inclusion of a domestic partner for foreign investment and selling activities in the region. Some sectors are fully protected from foreigners. This practice curtails foreign access to the GCC economies and allows for a large degree of local control of foreign investments
2. Increase in inflation through last years,
3. High unemployment percentage

The Sociocultural Challenges,

1. Presence of different culture due to importing 60% of work force from other countries make it difficult to deal with them
2. lower priority of time compared to other societies which can lead to some frustration of westerners
3. The family is the central institution for most Arabian employees,
4. Educational system is in Arabic language which fails to impart students with the knowledge and skills of joining the modern workforce,

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