Read the passage carefully and answer the questions: CorporateSocial Responsibility (CSR) in Saudi Arabia Corporate SocialResponsibility (CSR) has recently assumed strategic significance inthe industrial world for companies and government alike. Inemerging countries that seek to build vital Economies, CSR hastaken on an added value. Increasingly, there is the understandingthat national development and CSR are characteristicallyintertwined. Indeed, it has become clear that nations will not beable to move forward without the purposeful engagement ofcorporations in societal affairs and their active contribution tocapacity building. The underlying reasoning is that the competitiveposition and the national standing of a country and the well beingof its citizens are inextricably linked to environmental,technological and competency challenges. These mounting challengescan only be managed through corporate initiatives in partnershipwith government. The United Nations Industrial DevelopmentOrganization has reported that corporations in partnership withgovernments can make a vital contribution to developing innovativesolutions to developmental challenges. Furthermore, in its study,“CSR and Developing Countries,” the UN’s Division for SustainableDevelopment has argued that governments across the globe havepromoted CSR to enhance national competitiveness and to helpdeliver public-policy goals and priorities. The Arab countries areno exception. Governments in the Arab world have in recent decadesespoused certain tenets of CSR. In particular, there has beenincreasing emphasis on environmental sustainability, waterconservation and healthy living. The Arab Forum for Environment andDevelopment (AFED) has underscored the major challenges that Arabcountries face. In 2011 report, it concluded that, given mountingchallenges, “transitioning to the Green Economy is not only anoption for the Arab region; rather it is an obligation to secure aproper path to sustainable development.” The report identifiedSaudi Arabia as one of the pioneering countries on issues relatedto urban planning, organic agriculture and water conservation,among others. Saudi Arabia is one of the world’s rapidly risingeconomic powers. Endowed with natural resources and having strongmilitary and political ties to the West, the kingdom has sought tobe responsive to western nations’ economic priorities andprescriptions, while aiming at maintaining traditional politicaland social systems. Since the early 1970s, the government hasespoused comprehensive economic plans aimed at achieving economicand technological progress for its citizens, while integrating itseconomy into the global market. Earlier plans had sought toincrease the rate of growth in its gross domestic product (GDP),develop human resources, and diversify the economy. The most recentplans have focused on encouraging research, development andtechnological assimilation; promoting scientific activities;strengthening Saudi Arabia’s role in the global economy; enhancingprivate-sector participation in the development process; expandingbasic services offered to citizens; protecting the environment,natural resources and wildlife; and developing and conserving waterresources, among other things. These recent plans give priority notonly to building capacity (e.g., enhancing the skills of citizensand enabling them to seize economic opportunities and engage inproductive activities), but also to strengthening the competitiveposition of the kingdom, allowing it to gain the flexibility neededfor dealing with a changing global economic environment. Thekingdom is in a race against time to achieve social cohesion andsound economic development, while trying to tilt regional upheavalsto its advantage. CSR is an instrument appropriate to theseprojects. There are, however, certain challenges that have to beconfronted. Some are embedded in the entitlement mentality, whichhas hardened over the years; others are structural in nature. Inits study, The Evolution of CSR in Saudi Arabia, TamkeenSustainability Advisors found that corporations in the kingdom havebegun to appreciate the value of engaging in responsible businesspractices rather than just charity. These companies recognize threeareas for contributions: employees, community and environment. Mostimportant, the study found that “systematic government incentivesand initiatives for social and environmental performance aregenerally missing. Due to the cultural heritage, there is a generalperception, however, both in the business community and the publicat large, that social responsibility and welfare is the primaryrole of government.” In addition to these challenges, there arestructural obstacles to integrating CSR into the strategic planningof corporations in the kingdom. These stem primarily from the factthat the majority of Saudi corporations are small and medium-sizedfirms (SMFs), which neither generate high employment nor includedevelopment goals as part of their CSR. In the absence of powerfulNGOs, SMFs are not expected to take initiatives to partner withgovernment agencies or institutionalize CSR processes. This maymake it difficult, if not impossible, for the government to channelprivate-sector energy and capacity into fruitful CSR. In a studycommissioned by Saudi Arabian General Investment Authority (SAGIA)and the Harvard Kennedy School, it was observed that there areeight global trends in CSR: competitiveness; strategic,competence-led philanthropy; accountability and transparency; newtypes of public-private partnerships to tackle complex global andnational problems; industry-led business coalitions; new models ofleadership and cooperation from key emerging markets in Asia,Africa, Latin America and the Middle East; integrating CSR intobusiness schools and university curricula; and the growing role ofthe media in promoting and articulating CSR. These trends are notonly a challenge; they also constitute a blueprint for broaderintegration of CSR into business and societal affairs. Indeed, thisbroad perspective represents a departure from the earlierperception of CSR as narrow moral obligations, instituting broaderthinking about CSR where strategic dimensions and the necessity tostrengthen the corporate role in social affairs and capitalformation are considered. Reference: Abbas J. Ali and AbdulrahmanAl-Aali, “Corporate Social Responsibility in Saudi Arabia” MiddleEast Policy, Vol. XIX, No. 4, Winter 2012. Q. 1. Write down thesignificance of CSR in the Socio-Economic development of a nation.Q. 2. Discuss some challenges of CSR in K.S.A.