A guide to doing business in Saudi Arabia: government structure
- Saudi Arabia: Monday, October 15 - 2012 at 08:03
The modern Kingdom of Saudi Arabia was founded by King Abdulaziz al-Saud in 1932. It has been ruled by his sons since his death.
The king also holds the roles of prime minister, head of state and commander of the armed forces. He chairs cabinet meetings and is the highest authority in the country. The cabinet, or Council of Ministers, comprises 22 members.
An advisory body to the king, the Consultative Council (or Majlis al-Shura), can propose and amend laws and consists of 150 people appointed by the king for four-year, renewable terms.
According to the basic system of government published and entrenched in law in 1992, Saudi Arabia is an Islamic state governed by sharia. As such, all rules and regulations are subordinate to the word of God as revealed in the Quran and the sunna (words) of the Prophet Muhammad. However, the king sits at the top of the legal system, acts as the final court of appeal and can issue pardons.
Despite this, a system of secular laws and regulations has developed, creating a complex legislative patchwork.
Under the basic system, the country should be ruled by the sons and grandsons of King Abdulaziz. The current ruler, King Abdullah bin Abdulaziz al-Saud, introduced a new body to govern succession in 2006. The Allegiance Council includes members from all branches of the Al-Saud family, and is intended to institutionalise the rules of consultation within the royal family about succession.
The king nominates up to three candidates to be crown prince. The Allegiance Council then selects one, or it can nominate its own candidate. The issue of succession is one of the most contentious issues in Saudi politics due to the age and ill health of most of the sons of King Abdulaziz, and the impending transfer of power to the next generation of the Al-Saud family.
The current government is headed by King Abdullah, who became king in 2005 after the death of his half-brother King Fahd. Prince Salman, a former governor of Riyadh, is the current crown prince, after being appointed in June 2012. He is also deputy prime minister and defence minister.
There is currently no second deputy prime minister, a title that has historically been given to the crown prince-in-waiting. However, Prince Ahmed, Prince Salman's brother, has been appointed as interior minister. The prominence of this role lines him up for a place in the future succession.
Members of the Al-Saud family hold most of the other strategic government posts.
The kingdom is also divided into 13 provinces, each with its own governor, a position of ministerial rank. The governors report to the interior minister and are often members of the Al-Saud family.
Outside the main cabinet, several other figures wield considerable influence over government policy. The president and chief executive officer of state oil firm Saudi Aramco, Khalid al-Falih, holds sway over the most important sector of the economy. As Aramco takes on a greater role in developing non-oil infrastructure, such as the King Abdullah University of Science and Technology, Al-Falih's influence is growing.
Fahad al-Mubarak was appointed governor of the central bank, the Saudi Arabian Monetary Agency (Sama), in December 2011. He is considered a reformist and is expected to champion further moves to liberalise the Saudi economy, along with Abdulrahman al-Tuwaijri, chairman of the Capital Market Authority, who is pushing for the opening of the Saudi Stock Exchange (Tadawul) to foreign investors.
Al-Mubarak's appointment, along with the movement of former Sama governor Mohammed al-Jasser to the Ministry of Economy and Planning, suggest that King Abdullah's agenda of slow economic reform is set to continue.
The government uses five-year development plans to map out future spending priorities and development goals, which fits within the framework of the Long Term Strategy up until 2025.
Municipal elections were held in 2005 and 2011, and last year King Abdullah announced that, for the first time, women would be able to stand and vote in the 2015 municipal elections. The municipal councillors have only limited power.
Prince Bandar bin Sultan, a former ambassador to the US, was appointed director general of the Saudi Intelligence Agency in July 2012, a move considered part of Saudi Arabia's attempts to instigate a more assertive foreign policy in an atmosphere of heightened tensions with Iran and civil war in Syria.
Saudi Arabia enjoys strong diplomatic and economic ties to the US. US citizens can apply to stay for longer periods in the kingdom than other nationalities. Saudi Arabia also has close links with the UK and is considered a leader of the Arab world.
This article is part of MEED magazine's Doing Business in Saudi Arabia Guide, for more information please visit MEED.com
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