This website uses cookies to ensure you have the best experience. Learn more

Current Economic Issues Facing Saudi Arabia

4107 words - 17 pages

Current Economic Issues Facing Saudi Arabia

Saudi Arabia is a developing country in the Arabian Gulf region that has been growing dramatically over the past two decades. Saudi Arabia's 2011 population has grown tremendously and is estimated to now be about 26.1 million, including about 5.6 million resident foreigners. Until the 1960s, most of the population was nomadic or semi-nomadic but now due to rapid economic and urban growth, more than 95% of the population is settled now.
Out of that 26 million people in Saudi Arabia, is has been found that the annual per capita income is anywhere from $11,500 to 24,500. This sounds kind of ridiculous because the country is known to the world to ...view middle of the document...

However, this figure is misleading. A large proportion of GNP is channeled towards the leaders while a disproportionate sum is filtered to the citizens. A large amount of construction was initiated using the revenues earned.
However, most of the workforce consisted of cheap foreign labor while the Saudi Arabian citizens suffer an enormous 25% unemployment rate compared to the United States 5% unemployment. This economic success dropped somewhat as oil prices dropped tremendously in 1998-1999. Large amounts of construction work were halted and social programs were cut to reduce costs.
However, since late 1999, the oil producers cartel agreed to lower the production rate of oil so that the price of oil would rise. Their move was very successful and oil rose from US$10 per barrel US$31 per barrel. Recently, at a meeting of the oil cartel, the rate of production was increased in order to reduce the price of oil to a stable level (US$25 per barrel) and satisfy the western world-- this shows the politics of oil.

ECONOMY

 The fact of the matter is that oil was only discovered in Saudi Arabia by U.S. geologists in the 1930s, although large-scale production did not begin until after World War II. Oil wealth has made possible rapid economic development, which began in earnest in the 1960s and accelerated spectacularly in the 1970s, transforming the kingdom.

Saudi oil reserves are the largest in the world, and Saudi Arabia is the world's leading oil producer and exporter. Oil accounts for more than 90% of the country's exports and nearly 75% of government revenues. Proven reserves are estimated to be 263 billion barrels, about one-quarter of world oil reserves. 

More than 95% of all Saudi oil is produced on behalf of the Saudi Government by the parastatal giant Saudi ARAMCO. In June 1993, Saudi ARAMCO absorbed the state marketing and refining company (SAMAREC), becoming the world's largest fully integrated oil company. Most Saudi oil exports move by tanker from Gulf terminals at Ras Tanura and Ju'aymah. The remaining oil exports are transported via the east-west pipeline across the kingdom to the Red Sea port of Yanbu.

Due to a sharp rise in petroleum revenues in 1974 following the 1973 Arab-Israeli war, Saudi Arabia became one of the fastest-growing economies in the world. It enjoyed a substantial surplus in its overall trade with other countries; imports increased rapidly; and ample government revenues were available for development, defense, and aid to other Arab and Islamic countries. 

But higher oil prices led to development of more oil fields around the world and reduced global consumption. The result, beginning in the mid-1980s, was a worldwide oil glut, which introduced an element of planning uncertainty for the first time in a decade. Saudi oil production, which had increased to almost 10 million barrels per day (b/d) during 1980-81, dropped to about 2 million b/d in 1985. Budgetary deficits developed, and the government drew down...

Other Papers Like Current Economic Issues Facing Saudi Arabia

Education and Gender Equality Within Millennium Development Goals

3183 words - 13 pages economic growth the country craves. Crystal (2005), depicts that, Saudi Arabia has made significant progress in women’s education and empowerment in line with the objectives and set goals of the Millennium Development goals. The author however notes that that gender discrimination is built into the Saudi Arabian society and even the government as well as its social structures. The article further state that even with initiatives to promote

Saudi Arabia Enterprise It Services Market Size, Share, Trends and Forecast 2015

976 words - 4 pages offer network performance solutions for operators that are concerned with maximizing efficiency with current spectrum allocations and addressing the rapid increase in data traffic. Browse Detail Report With TOC @ http://www.hexareports.com/report/saudi-arabia-rising-data-traffic-and-strong-demand-for-enterprise-it-services-will-underpin-growth-through-2019/details Synopsis This report provides an executive-level overview of the

King Lear Essay

629 words - 3 pages answer the question that he been asked by the doctors, also, how its difficult for the doctor to check up on the patient, because they are fully covered from head to toe. And they are not allowed to take it off or show their face or any part of their body to anyone. each country has its own issue weather its, economic issue, health issue, food issue, and way more. But in the article of patient behind the veil: medical culture shock in Saudi Arabia

Oil Dropping Prices

670 words - 3 pages demand for fuel is logically decreasing. Added to this is the fact, on the supply side, the oil cartel OPEC is determined not to cut production as a way to prop up prices. Moreover, countries like Saudi Arabia, Nigeria and Algeria are now competing to the Asian markets so producers had to drop prices and USA has gave up the imports as its domestic production has doubled these years. Finally lot of competitors are rising such as Canadian, Iraqi

Anime' Effects On Students

309 words - 2 pages The Philippines has around one million OFWs in Saudi Arabia, according to the DFA. Saudi Arabia is currently the largest hirer of Overseas Filipino Workers (OFWs), and has the largest Filipino population in the Middle East. "All undocumented Filipinos are advised to take advantage of this extension and immediately proceed to concerned Saudi government agencies or seek the assistance of our Embassy and Consulate in Saudi Arabia for their

Bath and Shower in Saudi Arabia

572 words - 3 pages Hygiene, Liquid Soap, Talcum Powder. Data coverage: market sizes (historic and forecasts), company shares, brand shares and distribution data. Report Overview * Discover the latest market trends and uncover sources of future market growth for the Bath and Shower industry in Saudi Arabia with research from team of in-country analysts. * Find hidden opportunities in the most current research data available, understand competitive threats with

Saudi Arabia Foreign Policy

1474 words - 6 pages Analyzing the foreign policy of Saudi Arabia, this paper aims to show the ways in which Saudi foreign policy is unique and then go on to highlight the fact that Saudi policy is characterized by moderation and centrism. Its stance on issues pertaining to security and international relations will be demonstrated to be unique for a Middle Eastern state due a number of inter-linked issues; Saudi Arabia's geographical location as the ‘Heart of Islam

Technology Transfer in Context with Saudi Arabian Small-Medium

3834 words - 16 pages addition, regional economic integration agreements have created new requirements for managing and adapting these changes. Since Saudi Arabia has opened its market to foreign investors, it has increased the competitive pressures on large firms and small and medium enterprises (SMEs), in particular. Therefore, SMEs have to adapt and respond to these changed conditions and to meet consumer preferences in the marketplace by improving the productivity and

Jabwood International

1410 words - 6 pages in Saudi Arabia in past. -Already established market contacts and distribution channel in middle east. Threats -Middle eastern uprising, leading to political uncertainty Middle East and falling demand. -Loss of exclusive rights for TANITA ( Jabwood’s competitive edge) can make Jabwood loose a major share if the issue is ignored. -New problems in the industry such as Environment and social sustainability issues. -Some markets prefer steel

Saudi Arabia Is a Medium Political Risk

1034 words - 5 pages Saudi Arabia is a medium political risk country. Saudi Arabia is the No. 1 oil exporter, underpins U.S. security policy in the Middle East and holds great sway over the world's 1.6 billion Muslims through its guardianship of Islam's two holiest sites.  The first political risk facing is the succession. King Abdullah turns 90 this year and his heir, half-brother Crown Prince Salman, turns 77. In February he named his youngest half-brother

Zakat Tax Law in Islam

3608 words - 15 pages Zakat in Islam and Zakat of Trades in Saudi Arabia as an Example Contents Section 1: Zakat in Islam 1 Introduction 1 Conditions that require Zakat 2 Purposes and Benefits of Zakat in Islam 4 1- Economic benefits 4 2- Social benefits 5 How to Spend Zakat 5 Funds that are Subject to Zakat (Taxable Money) 6 Zakat Rates 7 Section 2: Zakat of Trades in Saudi Arabia 8 Calculating Zakat 8 General Rules by (DZIT) 9 Conclusion 10

Related Essays

Major Social Economic Problems Of Saudi Arabia In Xxi Century

753 words - 4 pages The main and the most important problem of Saudi Arabia's economy is a strong dependence on the oil sector. The oil sector accounts for about 58% of GDP. In this regard, appears the question of economic diversification. The development of diversification plan began in 1996, according to the second five-year plan of economic development. However, the plan still has not brought significant results (you can see it from the statistics in the

Saudi Arabia And Its Role In The Wto

1879 words - 8 pages environment, a foreign investment environment, transparency in trade issues, legal recourse for trade partners, and elimination of technical barriers to trade, all in compliance with WTO requirements. In order to discuses the competitive advantages and benefits that could be generated from joining WTO , we will first highlight the economic indicators of the country and the general outlook. Saudi Arabia is known to be one of the main exporting

Pest Analysis Saudi Arabia

2545 words - 11 pages well for doing business in SA. Be aware, “you may be refused entry to Saudi Arabia if your passport contains evidence of previous travel to Israel or indicates Israel as your birthplace.”2 The kingdom is facing some issues when it comes to money laundering. Together with the GCC, the Gulf Cooperation Council, remarkable ambition has been executed to fight against money laundering from an early phase. Actually SA was one of the first countries to

Color Schemes Essay

516 words - 3 pages | | | Saudi Arabia | | | | | | Algiers