Social landscape of Kingdom Saudi Arabia: Demography, Key Indices, Income Distribution, Education, Healthcare, Culture, Nitaqat, Religion, Culture Tips, Labour, Kafala, Hafiz, Social Welfare, Corporate Social Responsibility (CSR), Outlook

1. Social Landscape
Saudi Arabia

2. DEMOGRAPHY
• Population – 29.3 million (Euromonitor, 2013);
By 2020, it will grow to 33.5 million
• Population Growth Rate – 1.53%
• MedianAge – 26.7 years in 2013, up from 17.8 years in 1980.
• Urbanization – 85% of total population (2011)
32.40%
64.80%
2.80%
Age Structure
0–14 years 15–64 years 65 years and above
0 1 2 3 4
Others
Filipino
Bangladeshi
Yemeni
Egyptian
Indian
Pakistani
3.6
0.5
0.5
0.8
0.9
1.3
1.5
Foreign Nationals Population
Foreign Nationals Population (Million)

3. POPULATION BY AGE AND SEX
• Gender Inequality
– Gender Inequality Index Rank – 145/186
– Gender Inequality IndexValue – 0.682/1.0

4. KEY INDICES
GDP per Capita – $ 25,736.21
(World Bank, 2013)
CPI – 3.5
(World Bank, 2013)
HDI (Human Development Index) – 0.782 (Rank – 57/187)
(UNDP, 2012)
Corruption MeasurementTools
Corruption Perception Index – 46/100 (Rank – 63/177); Bribe Payers Index – 7.6/10
(Rank – 22/28)
(Transparency International, 2013)
Press Freedom – 56.88 (Rank - 163/179)
(Reporters without Borders, 2013)
Youth Development Index – 0.56 (Rank – 103/170)
(CommonwealthYouth Programme, 2013)

5. INCOME DISTRIBUTION
• High income inequality
• GPI GINI Index – 32
• Saudi government discloses little official data about its poorest citizens
• Between 2 million and 4 million of the country's native Saudis live below
poverty line (about $530 a month)
• Poverty rate among Saudis continues to rise as youth unemployment
increases sharply

6. EXPENSES
Consumer Price Index (Excluding Rent) – 61.26
Rent Index – 15.9
Groceries Index – 68.37
Restaurants Index – 33.76
Consumer Price Plus Rent Index – 39.45
Local Purchasing Power – 97.55
Relative to NYC

7. LITERACY AND EDUCATION
• Based on Islamic Principles – traditionally little attention to Science and
Mathematics
• Education system inadequate to meet the country’s technological needs
• Government investing into Education reforms – $ 3.1 Billions
• 8th Highest Education Spender
• Expected years of Schooling – 14.3 years
• 90% attend public schools; 840 private schools for rich Saudis and Expats
• Youth (15-24 years) Literacy Rate 2008-2012 (Unicef, 2013) –
Male 99%
Female 97%

8. HEALTHCARE
• Brisk growth in market size
Hospital beds to increase from 51k to 70K
• Unmet demand in value chain including medical education, research,
facilities, provisions and reimbursements
• Upcoming insurance based system
• High incidence of major diseases including diabetes, heart disease, and
congenital disorders
• Private hospitals, pharmaceutical companies and medical devise
manufacturers seek international partners

9. CULTURE

10. NITAQAT

11. RELIGION
• Sunni Islamic State
• 97% of total population is Muslim and 100% of domestic population is
Muslim
• Of Muslim population, 85-90% are Sunni Muslims and 10-15% are Shia
• Public worship of other religions is prohibited by law although they can
practice their religion privately
• Zakat System of taxation

12. CULTURE TIPS FOR DOING BUSINESS
• Things move much more slowly than they do in the west. This is part of the
culture, it is important to do things like ask about the family of the people you
are meeting with. It is a critical part of business in the Arab world.
• The other big thing that you will notice is that religion plays a much more
important role in business than it does in other countries.
• Most Arabs will not openly disagree with you or say no to something. Instead
they will allow you to save face by seeming to agree when they don't.
• Arabs tend to say a lot more with non-verbal communication. Other things
like personal space are also issues that you need to be aware of. Arabs will
stand much closer to you when they talk than is normal in the west.
• Do not probe too much into personal matters
• Do not serve alcoholic drinks

13. LABOUR
FACTORS OF LABOUR
Hafiz
Kafala
Nitaqat

14. NITAQAT SYSTEM
• Based on Nationalization
• Performance calculated on moving average of 13 weeks
• Incentivise those who implement and sanctions for non
compliance
• Better than Saudisation:
– Flat 30% Saudi population inWork force
– Repercussions:
• Costly Labour
• Hard to Layoff if not efficient
• Unwilling to engage in low skilled tasks
• Labour Law:
– Article 35
“Prior to renewing the work permit, it shall be ascertained that none of the
Saudi applicants possesses the required qualifications and is willing to
undertake the same work.”

15. KAFALA SYSTEM
• Residence Card (Iqama ) andWork permit
• Passport surrendered to Kafeel (Sponsor forWorkVisa)
• Can’t change job unless previous sponsor releases the employee
• Can terminate contract at anytime without explanations and ban
employee from Saudi Arabia permanently

16. HAFIZ SYSTEM
• SR 2000 for unemployed Saudi a month up to 1 year
• 78 % of Hafiz benefits are women
Cons
• Being exploited by people
• Housewives enrolled for extra cash at household

17. VISA AGGREEMENTS

18. LABOUR WORKFORCE FACTS
• Education Sector comprises of 87.4%Women workforce
• In 2011, 89.1 % of private sector manpower was expat
• 9.1 million Expat population
38%
32%
21%
5% 4%
% COMPOSITION
Construction Wholesale Private Household Health Education

19. SOCIAL WELFARE
• Administered by the General Organization for Social Insurance (GOSI)
• Saudis and citizens of the Gulf Cooperation Council pay no income tax
• Commitment to the well-being of the community underlies the KSA’s social
stability and is in line with Islamic principles
• Ninth five-year plan looks promising – $385 billion was allocated to projects
• Higher allocations for social infrastructure – allocation of $4 billion to fund 22 new
healthcare projects across the country
• Welfare programs like Social security pensions, benefits and relief assistance to the
disabled, elderly, orphans and widows without income
• Wasta is intrinsic to the operation of many valuable social processes and is central
to the transmission of knowledge and the creation of opportunity

20. CORPORATE SOCIAL RESPONSIBILITY
• CSR Saudi Arabia summit
• Efforts to bridge the perception gap between Jakat (Charity) and CSR
• Reduce risk from Saudisation where young citizens are often unable or unwilling to
compete with well-educated and cheap foreign labour; Similar to Emiratisation in
UAE
Challenges
• Need for a more strategic governmental umbrella for CSR that encourages,
incentivizes and supports companies
• Non-existent role of consumer-driven CSR
• Incidents of disregard of labor standards
• Gender equality is a non-issue

21. OUTLOOK AND IMPLICATIONS
We propose that the following areas need to be invested in:
Growing
Industries
Education
Chemicals
Mining (Gas
and
Phosphate)
Solar
Energy

22. THANK YOU