I was in Los Angeles last week, in large part to attend the annual US-Saudi Business Opportunities Forum. This yearly event brings together a wide range of top tier speakers along with business people and government officials from around the world (mainly the USA and Saudi) for 3 days of panels, discussions, and networking meals. If I had to underscore a single theme, it was that there is a lot more to the Kingdom of Saudi Arabia (KSA) than most in the US probably know.
Ambassador James Smith, the US’ chief diplomat in KSA delivered a very interesting speech outlining the many different facets (and geography) of the Kingdom. Why is this relevant? Beyond giving us non-Saudis in the audience a better understanding of the country, it highlights the fact that KSA has a very unique economy. Beyond being the largest market in the Gulf Cooperation Council (GCC), I was interested to see that KSA has a significant industrial base and an impressive number of qualified nationals who can help the country move into the new milenium.
Key areas of interest appeared to be energy, oil & gas (no surprise there) but also health care. I was impressed to see that the country is planning over 100 hospitals in the next few years and will have a shortage of about 80,000 physicians by some measures. How they will make up for this, I do not know. Given that one Saudi legal professional at the conference told me, the country also only has about 2,000 lawyers. This leaves the door wide open to not only skilled experts (more broadly) but also individuals with the bandwidth and capacity to help get big projects running.
This leads me to my next point – the legal landscape. Not surprising, this is often overlooked. It’s amazing how many people still do not know the difference between a branch and a subsidiary, or the type of rights they need to guarantee in a joint venture or franchise agreement. Often simply wanting to get a deal quick, businessmen commonly overlook these legal implications, even though they can be significant. Making sure you have the right local partner, do not run afoul of US laws and have recourse locally (and the US arguably) are just among the most basic of concerns one should consider addressing before entering any foreign market, but especially one like that of the KSA. Just another reason why not only contracts should be used but should also be solid.