Riyadh Welcomes Business

Don’t let the office towers and looping freeways mislead you into thinking Riyadh is your run-of-the-mill urban metropolis. While the gleaming skyscrapers and multilane highways may look typical, interspersed spires, minarets and domes betray procedures and customs different from those in most other parts of the world. Saudi Arabia’s largest city is a thriving business center built around a strait-laced society in which Islamic beliefs are the law: Women and men don’t comingle in public, alcohol is banned, only men are allowed to drive, and public floggings and executions are not uncommon.

A late-20th-century “boom town” with pre-Islamic roots, centrally situated Arriyadh was named capital in 1932 after King Abdul Aziz consolidated the kingdom, and it is still the location of the Royal Court and most central government agencies. While expansion started in the 1940s, in the 1970s the kingdom set about full-scale modernization and industrialization. In 1972, the High Commission for the Development of Arriyadh was established to enhance quality of life by officially developing the economic, social, cultural, urban and environmental aspects of the city. From a historic walled oasis, Riyadh emerged as one of the world’s fastest-growing cities, the regional headquarters of numerous international companies and an urban center of 5.6 million people, 34 percent under age 15.

North of the remnants of the original walled town lies Olaya, the city’s commercial center crowned by the 44-story Al Faisaliah and 100-story Kingdom towers. To the west, parks, restaurants and nature trails in the sprawling triangular Diplomatic Quarter, or DQ, scatter among embassies designed by renowned international architects. Interconnecting the city sectors, a major highway system outfitted with speed bumps and cameras attempts to control traffic in the car-oriented city. Pedestrians are scarce, although a metro system is being developed.

From 2003 to 2013, the city privatized water, electricity and telecommunications, and desalinated water piped from the coast supplements the local artesian wells. Landscaped parks and botanical gardens thrive on the sand. A four-stage plan for sanitary waste disposal is on track to launch its final stage in 2021. “Arriyadh Future Vision” strategies for economic development, public services, public utilities, transportation, environment and housing are more than two-thirds complete.

With few historic sites and a hot, arid climate, the city focuses on business, and managing the country’s oil resources is the prime concern. Oil and gas production and refining accounted for almost half of the country’s economic activity in 2013, leaving the gross national product highly vulnerable to fluctuations in oil prices. To relieve that dependence and add employment opportunities for the growing population, the government has undertaken an elaborate path of diversification.

Created in 1974, the Saudi Industrial Development Fund was the first government agency organized to provide interest-free loans for setting up industrial plants in agriculture, industry and construction. With headquarters on Abdul Aziz Road in Riyadh, the SIDF helped launch thousands of new factories and enabled expansion of existing facilities, permitting private sector and foreign investor participation. Another key agency, the Saudi Arabian General Investment Authority, dating from 2000, encourages foreign direct investment.

Different aspects of economic development are concentrated in designated sectors of town. Riyadh houses two industrial cities with almost 800 factories producing foods, fertilizers, metal parts, garments, paper, plastics, detergents and building supplies. The King Abdullah Financial Center now under construction will contain 59 office towers with more than 3 million square feet of space to accommodate local and foreign financial firms. At King Saud University’s Riyadh Techno Valley, scientists develop profit-generating products by collaborating with Nobel Prize winners to incubate and foster research in the fields of chemicals and materials, agriculture and environment, and information and communications. Ranking No. 1 in patents in the Arab world, Riyadh Techno recently earned a U.S. patent on digital authentication in cybersecurity.

The defense sector manufactures small arms and provides airframe, jet engine and hydraulics maintenance and repair, plus a computer center at Riyadh’s King Khalid Airport. With the growing demand for housing and office space, the real estate and construction sectors continue to flourish. Thirty-five percent of the kingdom’s production of grains, dates, vegetables, fodders and fruit, plus camels, sheep, cows, goats, bees and dairy products emanates from Riyadh, making it a center of agricultural distribution. Joint stock mineral resources company Ma’aden operates five gold mines and is exploring development of phosphates and aluminum.

One of the largest and most modern medical facilities in the Middle East, King Fahad Medical City is the centerpiece of 10 hospitals, 63 primary health and preventive care centers, and anti-smoking clinics, providing free diagnosis and treatment beside research with a focus on diabetes causes and care. Educational programs at three government and five private universities provide technical, vocational and college training. With more than 42,000 students, Riyadh’s Princess Nora bint Abdulrahan University is the largest all-female college in the world. Supplementing the local institutions, King Abdullah’s scholarship program annually sends thousands of students to schools overseas with full tuition.

While overseas visitors are denied visas unless on missions of work or pilgrimage, tourism is a major industry. Riyadh boasts more than 331 travel agencies, 44 tour guides, 19 museums and 60 top-grade hotels, 16 of them 5-star. Promoting regional tourism, the Saudi Commission for Tourism and Antiquities launched a program of 29 tourist festivals held throughout the country. The state-of-the-art Riyadh International Convention and Exhibition Center hosts trade shows and conferences, and recently the country’s borders began opening to some specially selected groups.

A member of the World Trade Organization since 2005, Saudi Arabia was cited by the World Bank in 2013 as the 22nd most economically competitive country in the world. The orderly succession of King Salman after King Abdullah’s death in January projected an impression of stability and the expectation of maintaining strong ties to the United States. But the new king faces the challenges of finding new revenue streams, cutting public spending, reversing the system of entitlements and finding jobs for a rapidly growing and unemployed youth population.

Barring major Middle East upsets, the International Monetary Fund projects continued high growth rates and strong future prospects for the Saudi economy. While the World Bank rates the country high in ease of doing business, and despite government incentives promoting joint ventures with Saudi firms, confronting the combination of absolute monarchy, feudal fealty and modern political patronage can be frustrating to overseas businesses. While English is widely spoken, shops must close during prayer times, which shift through the year, and working hours adjust to observe the torrid daytime temperatures. Passports or local IDs should be carried all the time. Interchange between genders must observe strict protocols.

Despite lifestyle drawbacks, the prospects of no income tax, free housing, generous salaries and frequent paid holidays minimize the hardships of a posting in Riyadh. Since years of oil windfall and a Saudi tradition lacking in manual labor have deteriorated the incentives for local workers, the overseas guest workforce will continue to be in demand. Nonprofit agencies such as the U.S.-Saudi Arabia Business Council and the American Business Group of Riyadh foster business alliances with members including prominent U.S. firms such as Alcoa, Bechtel, Black & Veatch, Citibank, Chevron, Dow, Exxon, Honeywell, Pratt & Whitney and Raytheon. Despite the clash of cultures, U.S. companies are expected to continue pursuing financial opportunities as Riyadh endeavors to balance progress with traditions of the past.

Things to Do in Riyadh

Given strict religious regulations, Riyadh’s entertainment opportunities are limited. Sightseers may want to visit what remains of the historic section of town. Al-Thumairi, one of the city’s nine original gates, ornately restored, rises among scattered sections of the old mud-brick city wall. Nearby lies the maze of rooms and courtyards of the partially restored Masmak Fortress, one of the country’s most significant monuments and the site of Ibn Saud’s daring raid to recapture control of Riyadh in 1902. Also close by is the clock tower of Deera Square, surrounded by the Great Mosque and other public buildings. The square is where public executions occur.

The King Abdul Aziz Historical Centre features the Murabba Palace complex where traditional clothes, crafts, camel saddles and carpets are on view. The architecturally modern National Museum uses virtual and interactive displays to chronicle the history of Arabia, dating from the creation of the universe.

Some of the best shopping in Saudi Arabia is found in Olaya’s mammoth multistory malls stocked with electronics and international luxury goods. One floor of the Kingdom Tower is designated for women only. The gold souk is near Deera Square, and just south of Masmak Fortress sits the bazaar Souq al-Thumairi with its conglomeration of booths selling Bedouin bags, half-moon pendants, silver daggers, coffee pots and dangling earrings.

While some restaurants, particularly in hotels, do not enforce gender segregation, in most places unrelated men and women must dine separately. Much of the entertaining takes place in private homes where the hospitality is warm and the atmosphere more casual. Hotel fitness facilities tend to be men-only, with some offering masculine facials, massages and body treatments. DQ’s Al Manahil Spa and Salon provides similar spa services and swimming for women only. Two English-language newspapers, the Saudi Gazette and the Arab News, may list concerts, theater performances and cultural events organized by the diplomatic community.

CHECKING IN WITH LYLE WHITE

Vice President, Power Generation, Black & Veatch

What is it like to do business in Saudi Arabia?
The Saudis are what you’d call “tough clients,” but in a good way. They’ve had a tremendous amount of money over the years running OPEC, so they often dictate the meeting — they’re less collaborative. For example, we’re a big international engineering and construction company and they know us well, but they required a certain license in place; and even though they had worked with us before, the rules state you need it. It takes a long time, but you have to play their game. Once you get through the red tape, they are good people to do business with.

How is the protocol different, and what adjustments are required?
You can’t assume Saudi businesspeople think as internationally as you would imagine. You have to speak to the right people and go through the proper channels. If you’re working on a specific project and know someone one or two levels down, here in the States you might call the guy up or go to dinner and talk about it. There, you have to see the proper person first; you can’t go around. It takes a lot of patience. It’s also a different pace. Business adjusts to prayer hours, so they don’t negotiate straight through until it’s over. Maybe just when you’re getting wound up, they’re taking time out for sweet tea.

How do you deal with women in business?
Women are still kind of in the back seat. I have not met with or called on anyone in business who is a woman. You see them on the street, all covered, and you might attend an event with wives invited, but it’s structured.

How do businesspeople relax after work?
You can’t just go out for beer and pizza. The expats have private clubs where they can have dinner and cocktails and dance and have parties. Soccer, camel racing and cricket are available, but Saudis are not huge on sports. Expats tune into U.S. sports via the satellite airwaves.

What are the advantages of working in such a restricted environment?
It’s a rich country needing international involvement, so there’s a lot of opportunity.

Riyadh: Just the Facts

Time Zone: GMT + 3
Phone Code: Country code: 966 City code: 11
Entry/Exit Requirements: Only people on official business are allowed into the kingdom. Visitors must arrive with a visa, a passport valid for six months and a return ticket. Women are required to be met at the airport by their sponsors or husbands and must have confirmed accommodation for the duration of the stay.
Currency: Saudi riyal
Official language: Gulf Arabic
Key Industries: Oil, petrochemical, financial, transportation, agriculture, communication

Riyadh Info to Go

About 20 miles north of the city, Riyadh’s vast and extravagant King Khalid International Airport (RUH) utilizes three terminals: international, domestic and one for Saudi Arabian Airlines. Visitors must state their religion; luggage is apt to be inspected; and customs officials target pork, alcohol or drugs for confiscation. Metered taxis into town charge a purported flat rate; a metered ride should cost $20–25. More reliable hotel limousines charge about the same for the ride into town, which takes about half an hour in good traffic. Return passengers should allow plenty of time for X-ray screening before and after check-in and after passport control.

Where to Stay in Riyadh

AL FAISALIAH HOTEL Located on seven floors of the city’s landmark tower, this Rosewood hotel is centrally located in the business district with meeting rooms, an ESPA spa and seven international restaurants. King Fahad Road $$$$$

FOUR SEASONS HOTEL RIYADH AT KINGDOM CENTRE Guestrooms’ wall-sized windows overlook the central city in the hotel located in the “bottle opener” Kingdom Tower which also features three restaurants, a lobby lounge, meeting venues and an all-men’s spa. King Fahad Road $$$$$

THE RITZ-CARLTON, RIYADH Life-size horse statues in the lobby greet guests arriving at the Versailles-like palace on 52 acres convenient to the city’s Diplomatic Quarter. Six restaurants and a fitness center are similarly opulent. AlHada Area, Mekkah Road $$$$$

Restaurants in Riyadh

AL NAKHEEL Middle Eastern and North African specialties, regarded as the country’s best Arabic food, are served in authentic ambience with spectacular views and a seasonal terrace for evening dining. Al Khozama Center, 7th floor $$$

THE GLOBE The three-story sphere atop the Al Faisaliah Tower provides the dramatic setting for Arabic and international cuisine served with signature strawberry-watermelon “fireball” cocktails, skyline views and a cigar lounge retreat. Al Faisaliah Hotel, King Fahad Road $$$$$

MONDO Curry, lentil soup, lobster risotto and prawns tempura are among Asian and Western fusion dishes served with non-alcoholic Cabernet Sauvignon or Chardonnay in a tropical poolside setting. InterContinental Riyadh, Al Maather Street $$$$