· Select a country of your choice and explain the role of government protectionism in business activities and economic growth. · What are the different viewpoints about the government protectionism?...

Running head: GOVERNMENT PROTECTIONISM IN BUSINESS    1
GOVERNMENT PROTECTIONISM IN BUSINESS     6
ECONOMICS
GOVERNMENT PROTECTIONISM IN BUSINESS
AUTHOR’S NAME: _____________________
AUTHOR’S AFFILIATION: _____________________
Introduction
Safeguarding the interest of the local businesses, directly benefits the government of a country, while the degree of contribution of foreign business organizations are also deemed important, therefore, government of each country, imposes policies over foreign business organizations that gives local competitors benefits. In the current paper, the protectionism in business adapted by Saudi Arabia’s government has been discussed in details, offering knowledge about the impact on business and economic activities of the country.
Impact of Government Protectionism on Business Activities in Saudi Arabia
Saudi Arabia has a very strong and fast developing economy and the country is one of the major exporters of oil, while being a lucrative market for foreign companies, resulting in significant amount of product import in the country. As mentioned by Majava and Isoherranen (2019), as the governments of country realize the potential economic risk they face due to the major access of foreign companies in market and outflow of monetary resources, protectionist policies are enforced by the governments.
In Saudi Arabia, the government has encouraged the exports and free trade provisions for the foreign companies as a gesture of support towards developing global economy; on the other hand, it has targeted specific business industries, creating uneven competition between foreign and local manufacturers, giving the locals the benefits of lower tax impositions.
It is seen that in Saudi Arabia government protects its local businesses mainly from American companies dealing in cigarettes, energy drinks and carbonated drinks. It is seen that in recent times, Saudi Arabia government has added 5% value added tax on the existing 100% tax on imported cigarettes, while imposing 50% import duty on carbonated drinks and 100% import duty on energy drinks (Export, 2018).
It is also seen that the government of Saudi Arabia also trying to adapted the use of the technological standards of International Organization for Standardization (ISO), which would give leverage to the local manufacturers, while would make the business of American products standard meeting difficult. Saudi Arabia is currently following the Gulf Standards of Organization for its technological industry, which also hampers foreign technology companies (Export, 2018).
Impact of Government Protectionism on Economic Growth in Saudi Arabia
In the earlier decades, Saudi Arabia mainly focused on the production of petroleum. However, the over-prioritization of the petroleum industry has undermined the growth and developed of other sectors, making the economic...