The Saudi Arabian Economy

Paper Summary:

This paper explains that, although Saudi Arabia appears to be wealthy, the nation's economy is dependent upon a singular natural resource, oil. The paper points out that Saudi's declining oil revenue to population ratio is creating a budgetary deficit in which the state cannot invest enough in the private sector to employ its many out-of-work young people. The paper then explains that, to truly create a strong economy, small and medium sized-enterprises (SMEs) must become the backbone of the new Saudi economy. Thus, Saudi Arabia is attempting to create a business environment friendlier to SMEs.

From the Paper:

"The most obvious states suffering this 'rentier state' syndrome are those of the Middle East, including Saudi Arabia. The Middle East is rich in oil, and the world's near-universal dependence on this fossil fuel for economic survival has enriched many of the nations of this politically troubled region. But oil wealth has also served as what might be called a 'crutch' and actually impedes these nations' future development by providing a disincentive to innovate and to explore other industries."

Sample of Sources Used:

• Al-Sayari, Hamad. (2007, May). "Financing a Changing World." Speech at the Euromoney Saudi Arabia Conference 2007. Retrieved 21 Aug 2007 at http://www.sama.gov.sa/en/news/2007-05/20070508.htm
• Bundagji, Fatin Yousef. (2005, Oct 24). "Small Business and Market Growth in Saudi Arabia." Arab News. Retrieved 21 Aug 2007 at http://www.benadorassociates.com/article/18663
• "IMF Concludes 2002 Article IV Consultation with Saudi Arabia." (2002, Oct 25). IMFPublic Information Notice (PIN) No. 02/121. Retrieved 21 Aug 2007 at http://www.imf.org/external/np/sec/pn/2002/pn02121.htm
• Looney, Robert. (2004, Mar). "Development Strategies for Saudi Arabia: Escaping the Rentier State Syndrome." Strategic Insights. 3(2). Retrieved 21 Aug 2007 at http://www.ccc.nps.navy.mil/si/2004/mar/looneyMar04.asp

More papers on The Saudi Arabian Economy:

• Analytical Essay # 105750 : "Saudi Arabian Private Sector and Small Enterprises"
• Analytical Essay # 146681 : "Foreign Economic Policy of Saudi Arabia"
• Essay # 58456 : "Foreign Labor in Saudi Arabia"

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