## Saudi Arabia: Selected Issues

_IMF Staff Country Reports, September 9, 2019_

## Source details

**Canonical URL:** [Saudi Arabia: Selected Issues](https://www.imf.org/en/publications/cr/issues/2019/09/09/saudi-arabia-selected-issues-48660)

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- [Markdown version](/en/publications/cr/issues/2019/09/09/saudi-arabia-selected-issues-48660/index.md)
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## Bibliographic details
- Published: September 9, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513513485.002

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### Key findings
- Diversification is needed to create jobs for Saudis and to mitigate the impact of uncertainty in oil markets.
- Although the business climate should be improved, and remaining infrastructure gaps addressed, reforms need to go beyond these areas.
- Diversification that creates jobs for nationals could be held back by the effects of relatively high wages and their impact on cost competitiveness.
- High government wages and employment have an adverse impact on competitiveness and require creative solutions.
- Industrial policy could help overcome incentives that encourage companies to focus on the nontradable sector, but such policy should be handled carefully and informed by lessons from other countries’ experiences.
- Export orientation and competition are crucial mechanisms to ensure discipline in the economy.
- Strengthening human capital to raise productivity and provide workers with the skills needed in the private sector will be essential to success.

### Policy recommendations and considerations
- Implement measures to improve the business climate and address remaining infrastructure gaps.
- Develop creative approaches to mitigate the competitiveness effects of relatively high wages and large public employment.
- Use industrial policy selectively to encourage tradable-sector activity while applying lessons from other countries to avoid pitfalls.
- Promote export orientation and competition as central mechanisms for disciplining firms and supporting diversification.
- Strengthen human capital policies to raise productivity and align workforce skills with private-sector needs.

### Subjects and keywords
- Subject: Commodities, Excises, Exports, International trade, Oil, Revenue administration, Tax incentives, Taxes, Value-added tax
- Keywords: CR, excise tax, Excises, Exports, GCC VAT agreement, Global, IMF staff calculation, ISCR, labor market, Oil, oil revenue, opportunity cost, revenue benefit, tax rate, tax revenue, Value-added tax, venture capital

### Publication metadata
- Saudi Arabia: Selected Issues
- September 9, 2019
- Pages: 38
- Volume: 2019
- Issue: 291
- Series: Country Report No. 2019/291
- DOI: https://doi.org/10.5089/9781513513485.002
- Stock No: 1SAUEA2019002
- ISBN: 9781513513485
- ISSN: 1934-7685

*International Monetary Fund. Middle East and Central Asia Dept. "Saudi Arabia: Selected Issues", IMF Staff Country Reports 2019, 291 (2019).*

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## Content in this bundle

- **Saudi Arabia: Selected Issues; IMF Country Report No. 19/291; June 21, 2019**
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_Source: https://www.imf.org/en/publications/cr/issues/2019/09/09/saudi-arabia-selected-issues-48660_