History Of Economic Growth in Saudi Arabia
The economic history of Saudi Arabia dates back to the early civilization of the Arabian Peninsula. The Arabian Peninsula played a central role in shaping the modern economic condition in Saudi Arabia as the key trade center. Various factors shape the economy of Saudi Arabia in different ways. Its location in the desert denies it a chance to practice any form of agriculture or livestock keeping. For many years, the economy of Saudi Arabia relied heavily on trade with its neighbors and the international community. With the development and progress in technology, Saudi Arabia can now practice significant percentage of agriculture and utilize a better portion of the desert land. Oil also forms the backbone of the Saudi Arabian economy today with 90% of its population relying on it for employment. It is now possible to practice agriculture through desalinizing seawater and practicing irrigation in many oases.
Economic Development in Saudi Arabia
Historically, the Saudi Arabian economy depended on trade as its backbone. The Saudi Arabian people, acting as intermediaries and large buyers and sellers of different goods practiced a significant percentage of trade in the Arabian Peninsula for ages. With its strategic location, Saudi Arabia provided the necessary routes to main trade centers, and sources of goods such as the Nile valley and the Mediterranean basin. The network of trade routes also connected Mesopotamia, which was the main source of agricultural goods that were highly sought after in many parts of the Arab world. Significant changes in the pace of economic development in Saudi Arabia occurred when oil exploration and production began in the early years of the 20th century (Owen & Pamuk 229).
The oil industry dominates the Saudi Arabia economy and contributes 90% of export earnings annually. This industry provides employment to the constant rising population of Saudi Arabia in both oil refineries and other related industries. Oil exploration and discoveries in agricultural production methods increased diversification in the Saudi Arabian economy where a large percentage of the population shifted its attention to agricultural production. Through improved agricultural production methods, Saudi Arabia could now produce important food crops such as barley, wheat, tomatoes, citrus fruits, dates and melons. With the discovery of oil and diversification of the economy, the Saudi Arabian economy is currently the largest free market economy in the Middle East. The geographic location of Saudi Arabia further facilitates economic development in the kingdom of Saudi Arabia, which provides easy access to markets in different parts of the world such as Europe, Africa and Asia.
Significant economic growth in Saudi Arabia results from political stability from early 1990s. This environment is conducive for both foreign and local investments, which boost the economy of Saudi Arabia. Stable political environment and strategic economic policies of the Saudi Arabian government have open up the doors for foreign investment and settlement in Saudi Arabia. These laws allow full foreign ownership of projects and real estates. This move has seen many foreign experts and professionals to practice in Saudi Arabia, and consequently raise the economy. Improvement and maintenance of a stable financial sector has also contributed heavily to the development of the Saudi Arabian economy. Application and controlling of the fiscal and monetary policies through the Saudi Arabian Monetary Agency (SAMA) has effectively managed a range of monetary issues in the nation (Ramady 6)
Factors for the High GDP in Saudi Arabia and high population
In relation to the oil exploration and diversification of the economy into agricultural production and manufacturing, the Saudi Arabian population rose significantly from the 1990s. High population growth rate stems from better living and health conditions provided by the growing and stable Saudi Arabian economy. There are no clear statistics concerning the actual population growth rate in Saudi Arabia, but according to one study by the CIA indicate that, the population in Saudi Arabia was over 22 million in the year 2000. The rate of population growth is high such that by 2002 the population estimates were 23.5 million out of which 5.36 million people were non-nationals. Despite the uncertainties in the actual statistical data, it is clear that there is a high...
Saudi Arabia's International Business Law Saudi Arabia and Socio Economics Oil wealth, which led to dramatic standard of living increases in the Gulf for much of the second half of the twentieth century, no longer is enough to ensure the prosperity of several states. Living standards in Saudi Arabia, Bahrain, and Oman have remained at a standstill in recent years. For example, from 1980 to 1998, the Saudi economy grew at an
Cia.gov/library/publications/the-world-factbook/geos/sa.html World Bank. (2009). Key development data and statistics. World Bank. Retrieved October 27, 2009 from http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20535285~menuPK:1192694~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html Williams, J. (2009). Oil price history and analysis. WTRG Economics. Retrieved October 27, 2009 from http://www.wtrg.com/prices.htm Kawach, N. (2008). Saudi debt set to drop sharply this year. Emirates Business. Retrieved October 27, 2009 from http://www.business24-7.ae/Articles/2008/8/Pages/Saudidebtsettodropsharplythisyear.aspx Abocar, a. (2009). Saudi debt woes not derailing interest in mideast. Reuters. Retrieved October 27, 2009 from http://www.reuters.com/article/MiddleEastInvestment09/idUSTRE59P3NJ20091026 Kawach, N. (2009). Saudi Arabia's
The final form of these tables and charts will be dependent upon the form and types of data that are found during the conduct of the research. Data Analysis Methods Data analysis methods will be similar to those used by Asseery & Al-Sheikh (2004). They will include multiple regression analysis based on cointegration techniques. Error correction techniques will be applied that are similar to that which was found in Plazolo &
Thus, Saudi Arabia is caught between a short-run dependency on oil that has it opposing tight restrictions on oil consumption, but has a long-run interest in moving away from the oil economy, something that will only be forced by decreasing oil revenues. There are indications that Saudi Arabia is willing to be flexible in negotiations. It is unlikely that the country would accept limits on its own consumption of fossil
This also includes the well-known Saudi offshore portion of the Persian Gulf which was the focus of much interest and debate during the first Gulf War in early 1990's as a result of Iraq's invasion of Kuwait. Geologically, these oil fields "are mostly the result of what is known as extensional block faulting" in ancient sedimentary rock layers (i.e., sandstone and shale) "in the crystalline Pre-Cambrian basement (or subfloor)" which
Approximately 4.5 million have main telephone lines; almost 20 million have mobile cellular telephones; and more than 6.25 million have radio sets (Bureau of Democracy, Human Rights and Labor 2004). More than 5 million own television sets, 4.7 million people use the internet, and there are around 22 internet service providers. Saudi Arabia has 213 airports; 8 heliports; 1.392 km railways; 59 marine ships. The average consumption of electricity by
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