Increasing American Businesses in Saudi Arabia
With my 55th written page completed during finals week (being an English major at Santa Clara University has its downsides), I hopped on a plane home to spend the holidays with my parents in Dhahran, Saudi Arabia. My parents are both employees of Saudi Aramco—the largest oil producing company in the world—and have been since their early twenties. Although I was born on U.S. soil, I spent the majority of my life growing up on a company-owned compound in the Eastern Province of Saudi Arabia. Dhahran’s compound hosts a variety of people from more than 25 different countries all with varying languages, religions, and beliefs. It’s quite the melting pot—weather included.
Rather than spending this holiday season in Saudi Arabia sleeping away my immense jet lag, I’ve decided to dedicate much of my time to writing about life in such a misunderstood and feared location. After taking classes from Professor Mike Malone—who boasts an incredible background in professional writing and who also occasionally writes for Ricochet—I have been inspired to make better use of my time and to use Ricochet as an outlet for sharing my observations and experiences.
On Tuesday, I attended an event at the U.S. Consulate here in Dhahran where a speaker, who I’d rather leave unnamed since it was a privately held event with no press coverage, gave an effective speech on the incredible opportunities available for American businesses in Saudi Arabia. With a current GDP of roughly $600 billion, a number expected to continue growing, Saudi Arabia is flourishing in wealth and already spending. More and more American businesses are encouraged to consult with U.S. owned companies already present in Saudi Arabia in order to learn how to acquire a presence as well. In 2011, 102 American companies exported to Saudi Arabia—a number hoped to grow even more in 2012.
The speaker proceeded to highlight two areas in need of work in order to strengthen the U.S.-Saudi tie. One area consists of the difficulty many businessmen and women face in attempting to travel between the two countries. Increasing business between the U.S. and Saudi Arabia would require both countries to allow a greater free flow of business partners. Another area consists of making Saudi Arabia an acceptable place for American families to live. The need for proper education and expatriate communities are essential in convincing Americans to bring their businesses and families to Saudi Arabia. Already demonstrated possible through the present Saudi Aramco compounds, such as Dhahran, which can house up to 11,500 expatriates in its all-inclusive gated community, this task shouldn’t prove a restricting factor in U.S.-Saudi business relationships. All 50 attendees intently listened as the speaker successfully increased awareness of the great opportunities available for American businesses in Saudi Arabia from the beginning of his speech to the end.
I personally believe the cultural differences between Saudi Arabia and the United States should not be looked upon as insurmountable barriers restricting the two countries from enhancing international business. Rather, American businesses should take advantage of the opportunities to expand across borders. It is understandable that with 9/11 came a wave of fear and hatred aimed at Saudi Arabia; however, as a westerner in Saudi Arabia at the time the Twin Towers were hit, I can readily say that the Saudis here were in as much shock as the westerners and greatly embarrassed for being associated with such an atrocity.
American oil companies first discovered oil in Saudi Arabia in the early 1930’s and with such a long history between the two countries why get left behind now? American businesses should take advantage of including themselves in Saudi Arabia’s bright future noted by Saudi Aramco’s vision on its official website:
“Our commitment to remain the world leader in the production of petroleum-based energy is complemented by our commitment to help solve a host of pressing issues. We believe we can make a difference wherever we do business by investing in innovation and entrepreneurship, creating educational opportunities, powering economic progress, increasing environmental awareness, and working in partnership for energy sustainability.”
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May '10
Re: Increasing American Businesses in Saudi Arabia
Thank you for this perspective, Lauren. One question: to what extent are those 11,500 expatriates allowed to practice non-Islamic religions? That's certainly a factor with some families in assessing the long-term attractiveness of a life abroad.
While I've of course heard about Saudi prohibitions against churches, I really don't know if this extends to the confines of a gated expatriate community.
Dec '11
Re: Increasing American Businesses in Saudi Arabia
I've always wanted to do business in a country where women are beheaded for sorcery.
May '10
Re: Increasing American Businesses in Saudi Arabia
That right there is why Americans aren't jumping at the chance to work in Saudi Arabia.
Someone once told me about an interesting experience she had in the UAE. Her hotel abruptly kicked her out, along with dozens of other guests, because an emirate was coming and had purchased every room in the hotel. In other words, her contract with the hotel was nullified by a new contract with someone more important. How reliable are contracts in Saudi Arabia?
Re: Increasing American Businesses in Saudi Arabia
Roughly 25 people lost their lives in the United States for witchcraft back in 1692. Yes, I realize that was close to 300 years ago and a lot of change has occurred since then, but such an act was once not out of reach even for people in the United States. I absolutely agree it should not have happened and I am in no way defending the act but change in Saudi Arabia is occurring at a slower rate than the United States. The solution I see is education and foreign countries being a part of Saudi Arabia's positive advancements.
Edited on Dec 15, 2011 at 6:53pmMay '10
Re: Increasing American Businesses in Saudi Arabia
Lauren, you seem pretty bullish about Saudi Arabia, but I detect some skepticism on the part of your fellow travelers (metaphorically). Can you describe any non-monetary advantages to a Westerner relocating her family there rather than in Turkey, Switzerland, Singapore, etc?
May '10
Re: Increasing American Businesses in Saudi Arabia
147... That is the number of steps in the Saudi Aramco procurement process, though if you are lucky, or smart enough to get a sole source procurement, well then there are only...147 steps. I headed a well known American company, and lived in country for four years, with my family, in Jeddah and Riyadh, and did business with Saudi Aramco, and the University of Petroleum and Minerals, also in Dhahran, as you no doubt know.
I'm curious about how many Saudi born friends you might have had that lived off the compound, and the same for your parents. I would guess that the number of times you had dinner in a Saudi home in Al-Krhoba or Dammam would be very few over all those years. There is a physical gate, and a cultural one, not to mention religious one in Saudi, and a Westerner, or infidel shall not pass through. If you have ever gone to Jeddah and driven to Taif, you pass Mecca, and there is a road sign, that looks exactly as one on the Interstate does, with an arrow to separate route infidels.
Do business in Saudi? Nope, not a good idea.
Jul '11
Re: Increasing American Businesses in Saudi Arabia
Bernstein's principles of what allows an economy to prosper do not exist there.
Scientific freedom from religious authority, no.
Property and civil rights for all, no.
Freedom to get capitalization for ideas, maybe.
Infrastructure for commerce, yes.
I think I'll wait until women have equal rights and religious freedom exists to visit. Furthermore aren't binding contracts with infidels not really binding, just more of a guideline?
Your experience sounds fascinating by the way.
Jul '10
Re: Increasing American Businesses in Saudi Arabia
Lauren Ionta
Roughly 25 people lost their lives in the United States for witchcraft back in 1692. Yes, I realize that was close to 300 years ago and a lot of change has occurred since then, but such an act was once not out of reach even for people in the United States. I absolutely agree it should not have happened and I am in no way defending the act but change in Saudi Arabia is occurring at a slower rate than the United States. The solution I see is education and foreign countries being a part of Saudi Arabia's positive advancements. · Dec 15 at 6:21pm
Edited on Dec 15 at 06:53 pm
[Rude comment removed by editor.]
Edited on Dec 15, 2011 at 8:16pmMay '10
Re: Increasing American Businesses in Saudi Arabia
That has to be a no for any foreign company. 100% of all business carried out in Saudi must be done through a company owned by a Saudi national, and must follow Saudi law, including those elements from Islam that make charging interest illegal. It's not all down side however, if you are importing product you sell it to your agent company, and he worries about collecting, and if you are involved in a project it is the agent that must debate change orders and completion criteria. However I was threatened more than once with the loss of my exit visa (Igama is the foreign work document).
Saudi Aramco is the only company that lives and works in total isolation from the country, in fact the women can drive on the compound, which is vast, and now includes an irrigated golf course, 20 million gallons a day of reclaimed waste water. Saudi Aramco is "near" Saudi Arabia, but a long way from being part of it, save funding everything in the nation.
Edited on Dec 15, 2011 at 7:25pmJul '11
Re: Increasing American Businesses in Saudi Arabia
Very interesting F.L.
Jun '10
Re: Increasing American Businesses in Saudi Arabia
I dunno, isn't it true that you can't have booze in Saudi?... what will the fat cats drink when they're making their business plans? There will be no Saudi Don Draper I'm afraid...
The most interesting question in my mind is can a country achieve great economic success that lasts without democratic freedoms and luxuries (freedom of speech, women's rights, freedom to talk to women on the street who don't have a man with them, right to a fair trial... things like that)?
Sep '10
Re: Increasing American Businesses in Saudi Arabia
Welcome Lauren,
I'm Canadian and still have vivid memories of Bill Sampson who's very disturbing treatment by the Saudi's colors my perspective (which is putting it mildly). The concern of North Americans remains not only the radical Islam taught in the most extreme forms of wahabbi mosques, but also the inconsistent application of the rule of law on the part of the Saudi Arabian government.
Do you have any insight as to what concrete steps the Saudi government has taken to alleviate these concerns?
Thank you,
Pseud
Re: Increasing American Businesses in Saudi Arabia
Welcome Lauren,
I'm excited to read more of your reporting from Saudi Arabia while you're home. Especially interested in attitudes of your Saudi contemporaries toward the West and toward their own country. Are these young Saudis interested emigrating (if so, where to?), or do most like the idea of doing business and making a future right there in Saudi Arabia? And do the answers differ between men and women?
Your insights are appreciated. I don't believe we've ever had anyone write on Ricochet from SA.
May '10
Re: Increasing American Businesses in Saudi Arabia
Welcome Lauren!
I'm glad you're posting about your experiences in SA. I'm looking forward to reading more. However, I have to admit that when I first read your post, I got a little miffed. I wondered how an enlightened, modern, intelligent young woman such as you seem to be could countenance encouraging further business transactions with a country that treats all women as chattel and 2nd class citizens. It doesn't make sense to me.
But then again, I haven't lived in SA nor visited there. I have a friend who also grew up there in the 70's because her parents also worked for Aramco. Her perspective is quite different from yours. So, if you are up for it, please post some more about your experiences. I'm all eyes.
May '10
Re: Increasing American Businesses in Saudi Arabia
Back when a former employer was selling tank ammunition to SA (for the M60A2 tanks provided by the US government), you had to hire a prince to be the front man for you and act is the SA "business". That wasn't hard, because there were several hundred of them.
Oct '10
Re: Increasing American Businesses in Saudi Arabia
I'm not sure Saudi Aramco really represents the whole of Saudi Arabia. While I agree we can do business there, the same can be said of any two-bit dictatorship. I would never, ever migrate there. And keep in mind that displays of sanity come cheap; Saudi society may have held massive wakes and dedicated 9/11 as a day of mourning for all I care; but if the Saudis are still financing terrorism and Islamist extremism, they are our enemies.
Edited on Dec 16, 2011 at 9:03amMay '10
Re: Increasing American Businesses in Saudi Arabia
Joseph Eagar: but if the Saudis are still financing terrorism and Islamist extremism, they are our enemies.
People in Saudi, rich sheikhs and clerics no doubt fund militant Islamists, but I can assure you that the Royal family, therefore the government, does no such thing. The West is a secondary target for Islamist extremists, they want to take over Saudi Arabia, and Mecca and Medina, the holy cities, as their prime goal. In 1982 Saud ordered 10 747's, which the national airline did not need, to be used in a reconfigured bench seating mode in order to evacuate the royals. At that time they numbered about 5,000, today perhaps 50,000, if not more. It's said that Ibn Saud fformed Saudi Arabia with a sword of steal and a sword of flesh, Ibn Saud was born in 1876, formed Saudi Arabia between 1926-1932, and one of his many sons is king still today. Defense never was concerned with Israel but the same sort of Islamist militant that OBL and al Qaeda represent. Saudi Arabia the nation is hardly an enemy of the USA.
Jan '11
Re: Increasing American Businesses in Saudi Arabia
Thanks for your perspective, Lauren.
We're all aware of the deep injustices of Saudi society, and I think we'd all like to see them end. The key question is whether increased economic ties between the US and the Saudis will speed societal reform -- as you hope -- or merely fund those who intend to keep reform as slow and insignificant as possible. I don't know the answer, and I suspect nobody does. Not even the kingdom's rulers, which might go a long way explaining their schizophrenic stance toward foreign investment and societal reform.
May '10
Re: Increasing American Businesses in Saudi Arabia
Bump
Dec '11
Re: Increasing American Businesses in Saudi Arabia
I certainly agree with several of the comments above re: the societal issues in SA; however, can't argue with the concept that "American businesses should take advantage of the opportunities to expand across borders."
I'm with the Steve Miller Band- Take the Money and Run.