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A Subsidiary of an MNC in Saudi Arabia - Research Paper Example
Author : corkeryeloy
Finance & Accounting
Pages 4 (1004 words)
A subsidiary of an MNC in Saudi Arabia Introduction Regional outlook of nations surrounding Saudi Arabia (that is, North Africa and Middle East) indicates that the region has a number of wealthy oil generating countries. The region is characterized instances of regional violence and regional instability…
Best Company, Inc, 2011). All these factors are set to affect political and financial stability of Saudi Arabia. The paper will look into the political and financial risks that will affect a subsidiary of an MNC coming to do business in Saudi Arabia for the first time. Political Risk The political risk in Saudi Arabia is moderate. Saudi Arabia is among the six countries that frame the Gulf Cooperation Council (GCC). The objectives of GCC are formulation of consistent regulatory environment, cooperation of the private sector, and the establishment of a common currency. The regional political unrest, mainly in Bahrain, is a major concern for Saudi Arabia. There are expectations that King Abdullah will go on with his reform agendas in the next few years (A.M. Best Company, Inc, 2011). There are pressures mounting on the ruling House of Saud and several factors are set to compromise the political stability of the Kingdom. The first factor is the long-term implications of the population explosion in the Kingdom in the past 25 years. Population explosion linked with rapid urbanization, insufficient education system, persistent and increase in the numbers, and the lack of employment opportunities is straining the Saudi Arabia social fabric. ...