Saudi and United Arab Emirates

Paper Summary:

The Middle East usually comes across as a conglomerate of several countries, all-behaving similarly. However there are extreme differences even among neighboring countries with same religion and language. This paper discusses sharp differences between the two Middle East countries, namely Saudi Arabia and United Arab Emirates.

From the Paper:

"Saudi Arabia is a kingdom with one of the largest oil deposits which, to date remain the focus of the Saudian economy, taking away a major percentage of the Gross Domestic Product. Saudi Arabia's economy is thus dependent on oil and oil derivatives, which account for 90-95% of Saudi export earnings, 75% of the budget, and about 35-40% of GDP. To reduce this dependency, the Saudi Arabian government is studying non-oil revenue generating sources. Saudi per capita GDP which was highest in 1981, when both the U.S. and Saudi Arabia had a per capita GDP, in current dollars, of about US $28,600, is approximately $7000.
Public sector debt (almost all central government domestic debt) has been hovering between 90 to 100% of the GDP for the past few years. The accumulating interest payments due on this debt form a major portion of the capital expenditures in the budget. Though, it is interesting to note that overseas Saudi private capital amounts to $600-700 billion, or four to five times the Saudi GDP. Moreover, foreign worker remittances, about US $16 billion annually, continue to be a burden on the current account. Thus the Saudi economy, as a result of oil dependency and state-controlled enterprises is heavily burdened (Saudi Arabia Country Analysis Brief, 2003)."

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