As Saudi Arabia's information-technology industry booms, U.S. computer hardware and software suppliers could benefit.
State-run oil company Saudi Aramco, national air carrier Saudi Airlines and most privately owned banks have invested significantly in high-tech computer networks. Many new firms, particularly hotel chains, are also trying to modernize computer and communications systems.The government is cracking down on computer piracy and the illicit reproduction of other intellectual property rights products. It plans to grant licenses soon to local firms to provide Internet access throughout the country.
''Saudi Arabia is keen on getting on the latest technology wave. That's creating great opportunities for U.S. businesses,'' said Matt Toolan, director of international research at International Data Corp. in Framingham, Mass.
Mr. Toolan estimates the Saudi information-technology market will grow 23 percent on average through 2001, twice the global industry average.
The country's $225 million computer and peripherals market is the largest information-technology market in the Near East, according to a recent report of the U.S. Embassy in Riyadh. More than 300 local computer dealers, including Acer, Digital, Gateway 2000 and IBM, sell more than 30 brands of computer hardware.
U.S. manufacturers enjoy a good reputation for quality, but they face stiff competition from third-country manufacturers, particularly in Southeast Asia, according to the report.
BUYING FROM . . .
Petroleum and petroleum products.
Principal exports to the United States
Mineral fuels and oils, crude petroleum, organic chemicals, methyl tertiary butyl ether and unleaded gasoline.
Principal foreign markets
Japan, the United States, South Korea, Singapore and France.
The government participates in regional and international export finance programs of the Islamic Development Bank and the Arab Investment Guarantee Corp.
National Commercial Bank, Riyad Bank, Saudi American Bank, Arab National Bank and Al-Rajhi Investment and Banking Corp.
Rate: U.S.$1 = 3.75 riyals.
Arabic is the official language.
Public holidays, business hours
1998: Jan. 30; April 8 and subsequent five days; 28; May 7; July 7; Nov. 17. Holidays may vary according to the Islamic lunar calendar. Business hours: Mon.- Fri. 8 a.m.- noon and 3 p.m.- 6 p.m.
There are three international airports: King Abd al-Aziz in Jeddah, King Khalid in Riyadh and King Fahd, which serves the Eastern Province.
SELLING TO . . .
Machinery and equipment, foodstuffs, chemicals, motor vehicles and textiles.
Principal imports from the United States
Aircraft and aircraft parts, machinery, military vehicles and passenger transport vehicles.
Potential growth imports from the United States
Computer software, electrical power systems, air conditioning and refrigeration equipment, franchising, and oil and gas equipment and services.
Barriers to trade
The average import tariff is 12 percent. However, in some cases tariffs are raised to 20 percent to protect nascent Saudi industries.
Principal foreign suppliers
The United States, Britain, Germany, Japan, Switzerland and France.
The population was an estimated 20.1 million, growing at 3.4 percent annually, in July 1997.
Before you go
U.S. travelers must carry a passport and visa. For more information, contact the Embassy of Saudi Arabia, 601 New Hampshire Avenue N.W., Washington, D.C. 20037. Telephone: (202) 342-3800.
INVESTING IN . . .
The government generally encourages foreign investment, particularly in joint ventures with Saudi firms and in partnerships with Saudi businesspeople that bring industry or transfer technology to the country. Legislators are revising the 30-year-old foreign investment law and tax code to make investment conditions more favorable for foreigners. There are no taxes, fees or controls on the remittance of earnings abroad.
Crude oil production, petroleum refining, basic petrochemicals, cement, two small steel-rolling mills, construction, fertilizer and plastics.
Electric power generation, industry, construction, mining, petrochemicals, oil, energy, transportation and telecommunications.
Economic growth slowed from 8.6 percent in 1996 to 7.1 percent in 1997. Inflation, 1 percent in 1996, remains low.
The labor force comprises approximately 1.8 million Saudi citizens and 6 million expatriates. Saudi law forbids union activity, strikes and collective bargaining.
Income tax rates for foreign companies range from 25 percent to 45 percent. There is no personal income tax.
Land ownership is restricted to Saudi companies and citizens or those from other Gulf Cooperation Council countries.
Saudi Arabia has the only rail system in the Arabian peninsula. A central line carries freight between Dammam port, on the Persian Gulf coast, and Riyadh. Most inter-kingdom freight is hauled by truck over a good highway system connecting the major business centers. A causeway links Saudi Arabia with Bahrain. There are modern seaports on the Red Sea and on the Arabian Gulf; the main ports are Jeddah and Dammam. Telecommunications services are very modern.
Ministry of Industry and Electricity, P.O. Box 5729, Riyadh 11127. Telephone: 966-1-477-6666. Fax: 966-1-477-5488.