In the late 1950s, in the middle of the Arabian Desert, renowned historian Arnold Toynbee could hardly believe his eyes. Enveloped in shimmering heat haze, he faced something more outlandish than any mirage.

“One does not often see a whole city being built at one moment,” he wrote, “but that is what is happening here.”

More than half a century later, visitors to the same sun-baked place gaze with equal incredulity and might be tempted to utter precisely the same words.

The city of Riyadh has been built in dramatic spurts. The latest leap forward is centered on a 395-acre site north of the current downtown. The commuters who drive past on the adjacent highways are able to monitor the daily progress as new floors are relentlessly added to more than 50 towers currently under construction.

The King Abdullah Financial District will shift the economic center of gravity not only of Riyadh, but of the entire Middle East. Once completed later this year, this state-of-the-art development will effectively become the region’s financial capital, with a high-tech stock exchange and more than 32 million square feet of office space. The entire complex will be threaded through with monorails, air-conditioned skywalks and, an audacious flourish in a desert setting, multistory aquarium tanks. The future is being forged in Riyadh.

But why here? Why this city in the midst of one of the harshest environments on the planet?

Riyadh’s success bubbled up from under the desert sand, a natural oasis attracting the first settlers. Of all the commodities in Arabia, fresh water is most precious, and this remote inland spot was blessed with a natural supply. For centuries, rival Bedouin tribes tussled for control of the priceless water source.

By the 20th century, the settlement — still little more than a collection of mud buildings enfolded by a protective wall — was ruled by the Al Saud clan, who made it their capital when the eponymous Kingdom of Saudi Arabia was formally established in 1932.

In the early years, the nation’s main income came from receipts from pilgrims to Islam’s most sacred site, the city of Mecca, in the east of the country. But for generations the Bedouin nomads observed patches of black liquid oozing out of the desert, and in the 1930s they commissioned American geologists to explore the phenomenon. The first successful drill for oil was completed in 1938, and then, 10 years later, the world’s largest oil field — Ghawar — was discovered east of Riyadh.

When Arnold Toynbee arrived, Riyadh was a boom town. The oil money had precipitated unprecedented growth, though almost immediately the inhabitants discovered the underlying vulnerability of their location.

Oil was no substitute for water. The natural sources dried up. Artesian wells were sunk to more than 4,500 feet, but soon even that supply was running short.

Ever since, Riyadh’s bursts of development have depended on the availability of water — by sinking additional wells, creating dams and constructing a vast water pipeline system to import fresh water from the world’s biggest desalination plant at the Arabian Gulf port of Jubail.

Sustained by this imported supply, Riyadh’s population increased from below 50,000 at independence to more than 5 million today (40 percent are foreign nationals, primarily from the Indian subcontinent and the Philippines).

The oil money continues to flow into the city, generating around $1 billion per day. However, production from the Ghawar field is expected to go into decline soon, and at the same time the country’s growing indigenous population is putting 340,000 high school and university graduates into the job market each year. Unemployment among young Saudis is now around 25 percent.

To tackle these problems, the Saudi authorities embarked on an ambitious plan of economic diversification, of which the new King Abdullah Financial District is one of the keystones.

For all its international ambitions, Saudi Arabia remains one of the world’s most enigmatic — and difficult — countries for outsiders. Just getting permission to enter the kingdom can require a formidable amount of paperwork and patience. The real culture shock hits on arrival.

It is illegal to import or consume alcohol or pork products (including bacon). It is illegal to practice openly any religion other than Islam. Men are not permitted to wear shorts in public. For women, the strictures go further: They must wear an abaya (a neck-to-toe black dress), must always be accompanied in public by a male relative or a chaperone and are not allowed to drive.

Beyond the headline prohibitions, there are many other cultural and legal intricacies that must be mastered by anyone intending to do business in the kingdom. For instance, the country abides by the Islamic calendar; the current year is 1433. The working week begins on Saturday and ends on Wednesday. And everything comes to a 30-minute standstill five times a day for prayers.

Everyone who ventures into public comes under the scrutiny of the mutaween, or religious police (officially known as the Committee for the Promotion of Virtue and the Prevention of Vice). They zealously patrol the streets on the lookout for any behavior considered to be un-Islamic.

In recent years, there has been a slight softening of the country’s conservative stance. Deliberate moves were made to develop the tourist industry beyond traditional pilgrimages to Mecca, and a dedicated Tourist Trail was established incorporating the kingdom’s top archaeological and natural attractions (though, for non-Muslims, Mecca is out of bounds).

Meanwhile, business travel increased by 11 percent in the past two years, and the kingdom is seeking to host an increasing number of important exhibitions and conferences. The recently opened, 161,000-square-foot Riyadh International Conference & Exhibition Center is already established as a world-class venue.

Planes carrying new arrivals still cross hundreds of miles of pale, empty desert, with only the occasional ribbon of highway to hint at modern civilization. Suddenly, on final approach, there it is: a sprawling metropolis bisected by palm-lined avenues. Minarets rise from flat-roofed residential districts, evoking the tales of the Arabian Nights. Shimmering, ultra-modern skyscrapers lend a sci-fi aspect to the skyline. Is it a mirage? No, it’s Riyadh.

Diversions

In this famously dry country, it is with deliberate irony that foreign workers have dubbed the capital city’s most distinctive landmark “the Bottle Opener.” The Kingdom Centre rises to 992 feet. Although it is still officially Riyadh’s tallest building, it will slip sharply down the pecking order when the skyscrapers of the King Abdullah Financial District begin to top it. For now, the Centre’s top-floor SkyBridge observation deck, open 10 a.m. to midnight, affords the best view of Riyadh. At the foot of the tower is one of the region’s swankiest shopping malls (be aware that most of the city’s malls reserve certain times for families only — to the exclusion of single men).

As the skyline continues to be transformed by cutting-edge, 21st-century architecture, it is easy to overlook Arabia’s exceptionally long human history. You can gain a concise introduction to the region’s past at the impressive eight-floor National Museum of Saudi Arabia (check with the hotel concierge for admissions information; Tuesday mornings, for instance, are reserved for women and school groups), which boasts an extensive collection encompassing prehistory to the present day. One of the highlights is a full-sized reconstruction of a 2,000-year-old Nabatean tomb. The origins of Riyadh stretch back at least as long, though few historic vestiges remain. Some sense of old Riyadh can be gained in the King Abdulaziz Center for World Culture around the National Museum, where several traditional adobe buildings have been preserved, including King Abdul Aziz’s Murabba Palace, where exhibits include the Rolls-Royce presented by Winston Churchill in 1946.

The oldest part of Riyadh, Al-Bathaa, lies to the south of the historical center. The centerpiece is Masmak Fortress, a formidable mud-brick castle originally built around 1865. The old town adjacent to the fortress is the site of the city’s most extensive souk — a sprawling labyrinth of shops and shaded alleys. Approximately 25 miles east of the city is the Souq al-Jamal, aka the Camel Market, where the finest camels are bought and sold most afternoons. Riyadh’s most important landmark, listed as a UNESCO World Heritage site, is the ancient town of Al-Diriyah on the northwestern outskirts of the modern city. This is the ancestral home of the Al Saud dynasty and dates back 550 years. Some of the mud buildings have been restored to their former glory while others lie, evocatively, in ruins.

Just The Facts

Time Zone: GMT +3
Phone Code: Country code: 966 City code: 1
Entry/Exit Requirements: U.S. visitors require a passport valid for at least six months and a visa, secured in advance. All visas require a Saudi-based sponsor (business contact, relative or employer) and can take several weeks to process. Dates on visas are recorded according to the Islamic calendar. Overstaying your visa, even accidentally, is a criminal offense.
Currency: Saudi Arabian riyal
Official Language: Arabic
Key Industries: Crude oil production, petrochemicals, construction, finance, administration

Lodging

Al Faisaliah Hotel Riyadh

In addition to accommodations with high-tech gadgets and five restaurants, the 224-room property offers 24-hour butler service. King Fahd Road $$$$

Mercure Value Hotel

Resembling a cruise ship beached in the desert, the Mercure is strategically located between the airport and downtown, close to a major shopping mall. Building N7183, Exit 8, Granada Mall $$$

The Ritz-Carlton, Riyadh

Translocating the traditions of the European palace hotels to Saudi Arabia, this recently opened 493-room hotel is superlative in every aspect. Al Hada Area, Mekkah Road $$$$

Dining

b+f Burger Boutique

It’s not exactly McDonald’s. Familiar American favorites (burgers, pizza, buffalo wings) are served in an extravagantly trendy setting. Govents Shop Building, Mousa bin Nosair Street $$–$$$

The Globe

At the top of the 44-story Al Faisaliah Tower, there’s a striking golden globe; that’s the restaurant. The three-floor interior is equally breathtaking. Al Faisaliah Hotel, King Fahd Road $$$$

Najd Village

There are two outlets in the city, both in traditional, mudwalled buildings. The illustrated menu helps you make an informed choice of local delicacies. Al Takhassusi Street or Abu Bakr Al Siddiq Street $$$

Checking In With Les Janka

President, Quincy International LLC, and Chairman of the American Business Group of Riyadh

What Are The Key Opportunities In Riyadh For American Investors?

Riyadh offers many attractive opportunities to American investors interested in establishing a long-term presence in Saudi Arabia. The kingdom is committed to a major program of industrial diversification and technology transfer to create jobs for its large, youthful population. The private industrial sector has matured significantly in recent years, offering competent business partnerships. Key sectors under expansion are health care, residential housing, transportation, technical education and renewable energy, including water desalinization technologies. Attractive financing facilities also exist to support viable industrial projects, including long-term loans at low rates from the Saudi Industrial Development Fund.

What Cultural Differences Should Foreign Investors Be Aware Of When Doing Business In Saudi Arabia?

Success in entering the Saudi marketplace requires a focus on the “Five Ps” — product, price, partnership, patience and persistence. American partners, products, service quality and business practices are strongly preferred in Riyadh, but everything moves slowly. Careful selection of local business partners is extremely important, and potential investors must be prepared to commit the time and resources to a long process of building relationships, tough negotiations and bureaucratic hurdles. However, the long-term payoffs are plentiful for the persistent. Shortcut temptations are less frequent, but scrupulous adherence to the American Foreign Corrupt Practices Act is paramount.

What Impact Will The King Abdullah Financial District Have On The City And The Region?

When the 54 office towers of the district open next year, the commercial office space market in the rest of Riyadh will suffer a major glut. But the concentration of the Capital Markets Authority, the Tadawul Stock Exchange, the Saudi Arabian Monetary Agency, the Ministry of Finance — along with the headquarters of major commercial banks, premium hotels and conference center facilities — will create a great deal of economic energy for Riyadh and the kingdom at large. Saudi Arabia is the center of gravity economically, politically and religiously for the entire region, and the KAFD will support international recognition of this reality. And may heaven help the traffic planners!

Which Local Attractions Do You Recommend To Visiting Business Travelers?

Anyone’s first visit to modern Riyadh is in itself a significant eye-opener and huge destroyer of Western preconceptions. Just seeing this city of 5 million in the middle of the starkly beautiful desert is valuable, but not to be missed is a visit to the National Museum, offering a superbly displayed tour of the kingdom’s development from Neolithic kingdoms to the advent of Islam to the discovery of oil. In the center of the old city, the mud-brick Masmak Fort has a very informative display of Riyadh’s cultural history, starting with the capture of the fort by Abdul Aziz in 1902 — his spear point is still visible in the massive gate. The Thursday camel souk on the city outskirts is a great photo op. A nd every February, the two-week cultural festival of Janadriyah is a chance to see Saudis from every region showing off their best costumes, specialty foods, dances, handicrafts and warm smiles for all visitors.

Weblinks

Ar-Riyadh Development Authority

King Abdulaziz Center for World Culture

King Abdullah Financial District

Kingdom Centre

Saudi Commission for Tourism

Visa Validity Service