Saudi Arabia Economy

By | September 29, 2021

ECONOMY

Economically, Saudi Arabia relies almost entirely on oil. Thanks to it, the country has recently been able to initiate a process of transformation that has been delayed only by the conservatism of the Wahhabi dynasty. The accession to the throne of King Fayṣal, however, marked a turning point in a progressive sense, leading to the overcoming of many delays: in the first place, a more equitable and far-sighted exploitation of the substantial royalties was implemented proceeds from the sale of oil abroad; secondly, social interventions were promoted (school and vocational training, health care, etc.), infrastructures were built, works were carried out and projects were developed in the agricultural and industrial fields. Severely affected (1991) by the cost of the Gulf War (arms and security), the Saudi economy went through a moment of deep crisis and only since 1994 has it registered signs of recovery. At the end of the decade, however, the fall in oil prices caused a 40% decrease in revenues. A considerable public deficit was thus formed, determined by the large expenditure items. This situation forced the Higher Council for Mining Political Affairs, established in January 2000, to open up oil and gas distribution and refining activities to foreign companies. The mining activities have been reconfirmed to the exclusive management of the state monopoly through the national company Saudi Aramco. Visit weddinginfashion for Economy of Middle East.

This helped to raise the price of crude oil and improve the country’s revenues, which since then have remained high and accompanied by modest inflation – which rose heavily only in 2006 due to the weakness of the dollar and the increase in domestic demand -, and it has allowed an ever wider opening of the government towards private initiative despite the marked presence of the State in the control of the productive apparatuses. Saudi Arabia is in fact one of the richest states in the world, with a GDP of US $ 369,671 million (2009) and a GDP increase in domestic demand -, and has allowed an ever wider opening of the government towards private initiative despite the marked presence of the state in the control of production systems. Saudi Arabia is in fact one of the richest states in the world, with a GDP of US $ 369,671 million (2009) and a GDP increase in domestic demand -, and has allowed an ever wider opening of the government towards private initiative despite the marked presence of the state in the control of production systems. Saudi Arabia is in fact one of the richest states in the world, with a GDP of US $ 369,671 million (2009) and a GDP per capita of US $ 14,486 (2008), more than doubled compared to the values ​​of the late 1980s, when, in the face of the marked demographic increase, it had suffered a collapse. The picture of the Saudi economy is expanding and involves agriculture, defense and telecommunications. The conspicuous investments in the primary sector of the last years of the century. XX allowed to increase the arable areas through the free government allocation of plots. The authorities also favored the granting of financial aid to farmers and the development of modern cultivation and irrigation techniques through the rationalization of water resources, the exploitation of wells, the desalination of sea water. Saudi Arabia has thus achieved food self-sufficiency. Main crops are cereals (millet, sorghum, barley, rice and wheat), fruit (especially dates) and vegetables, typical products of the oases. The richest agricultural region is naturally the rainiest one (especially the other lands of Asīr). Breeding is widespread (especially sheep and goats), a fundamental resource of the bedouins. The fishing sector is also significant. As mentioned, the country’s wealth is entirely based on oil, whose proven reserves (corresponding to about a quarter of the world total) ensure the kingdom a considerable production. The largest oil fields are concentrated in the eastern region and the Persian Gulf. Through an extensive network of oil pipelines, crude oil is transported to the large refineries and to the terminals of Saida (Sidon), in Lebanon, and of Yenbo on the Red Sea. The five-year plans for the diversification of the economy have led to the development of new branches in the industry sector. An extensive pipeline network makes it possible to use the substantial natural gas reserves to fuel the export of liquefied gas even though most of the gas is destined for domestic consumption. Among the mineral resources are present bauxite, iron, copper; in the mid-1980s it was found in the province of Al-Qaşīm, in the center of the country, a rich coal deposit and at the same time the exploitation of gold mines (Mahd adh-Dhahab) has begun.

The industries include, in addition to the petrochemical complexes, steel plants, others related to heavy mechanics and building materials (cement factories). In 2007, the government approved the establishment of four new industrial districts. It is the tertiary sector that employs most of the active population while the number of Saudis working in other sectors is reduced. Imports, mainly of industrial, food and textile products, come largely from the United States, Japan and Germany; exports (almost exclusively hydrocarbons) are mainly directed to the United States, Japan, South Korea, India and Singapore. In addition, starting from the new millennium, as in other countries, China has become one of the most important trading partners. Since 2004, the European Union has been present in Riyadh with a delegation that takes care of bilateral relations with the countries of the area; EU states have commercial relations with Saudi Arabia from which they mainly import fuel and where they export machinery for industry and transport. After years of waiting, thanks also to the development and diversification policies of the economy, in 2005 the country entered the The European Union is present in Riyadh with a delegation that handles bilateral relations with the countries of the area; EU states have commercial relations with Saudi Arabia from which they mainly import fuel and where they export machinery for industry and transport. After years of waiting, thanks also to the development and diversification policies of the economy, in 2005 the country entered the The European Union is present in Riyadh with a delegation that handles bilateral relations with the countries of the area; EU states have commercial relations with Saudi Arabia from which they mainly import fuel and where they export machinery for industry and transport. After years of waiting, thanks also to the development and diversification policies of the economy, in 2005 the country entered the WTO. The economic contribution of the more than 2 million pilgrims who visit the holy places annually, coming from all the Muslim countries of Asia and Africa, is substantial, making tourism one of the first voices in the tertiary sector. In addition, the presence of some large banks and especially the capital stock exchange, have made Saudi Arabia the main financial center of the Middle East. Over the years, investments in road infrastructures have been enormous; asphalted roads connect practically all the centers of the country.

Saudi Arabia Economy