Introduction
Saudi Arabia is known to be the world’s largest exporter of oil products. It is one of the richest nations in the world and is dominated by the Islamic region. The kingdom is both powerful and complex in both economic and social aspects.
Discussion
Different agencies in the Saudi Arabia Kingdom promote export from it. These include the Islamic Development Bank and OPEC Fund for International Development. These are the agencies that joined the Arab Funds and became the big donors to developing countries. In addition, a number of traditional aid institutions do exist alongside others that are funded by governments. All these provide export finance support within the Kingdom through these export finance bodies operate differently from traditional donor institutions (Arrow smith, Linarelli and Wallace, 2000).
Official Export Credit Agencies (ECA’s). These emerged in the economic market and played a dominant role in the export sector. It was a government or state-owned organization that runs under charter or laws that defines powers and responsibilities (Choudhury, Kikuchi, Mansilla and Wang, 2005).
These agencies’ main function is to promote exports from their own countries. They aim to promote the export of capital goods thus making short and long-term financing that is available to overseas buyers some of which are government and public enterprises. There are various bilateral agencies some with joint financing from an export creditor agency of the same country as the aid agency.
The above agencies encourage Saudi firms to export to the rest of the world because of the following; there is the free spirit of entrepreneurship, private ownership as well as respect for the powerful private sector. This makes it easier for firms to export their products which further means prosperity for their businesses. Trademarks protection is well managed. Copyrights and patent laws have contributed greatly to the Kingdom’s export sector. Similarly, adequate capital base and stable exchange rates have contributed to a stable export capacity.
Better services are being provided in the firms by various existing agencies. The country largely depends on business activities because of the abundant extraction of natural resources and huge investments. In addition, the country has well-developed banking systems. It also gets aid from other banks like World Bank. There is also an effort to improve conditions for foreign investments by reducing taxes to attract more foreign investors to the country.
It has multiple establishments of business contacts. Various advertising agencies in the newspapers, televisions, and trade shows contribute to a high export rate. Commercial contacts and business shows are being sponsored by the government. Trade exhibitions and missions to the United States also facilitate exports. All this has been achieved because of stable financial investments in the Kingdom. There are no capital and income mobility bottlenecks. Initially, the capital movement was not controlled thus making the country attract huge investments. Most of the profits made by businesses and investments in foreign countries are eventually brought back to the country.
Conclusion
The various programs offered by the above agencies promote exports and the economic expansion of local and foreign markets. This has led to higher investments which effectively encourage new foreign investment and100 percent foreign ownership of firms. This makes it easier for the country to run the export sector efficiently. Saudi Arabia managed to build strong regulatory and versatile infrastructures which are adequately financed by investments and good payment systems similar to those in major industrialized countries. In addition, economic diversification and privatization have played an important role in the economy. Export markets have been opened up and the implementation of policies that coordinate between various government departments and agencies has led to the growth of exports.
References
Arrowsmith, S., Linarelli, J., & Wallace, D. (2000). Regulating Public Procurement: National And International Perspectives. Rotterdam: Kluwer Law Internationals.
Choudhury, S., Kikuchi, Y., Mansilla, M., & Wang, J. (2005). Officially Supported Credits In a Changing World. Washington.D.C: International Monetary Fund.