+1 914 979 2828
+1 914 979 2828

Saudi’s Economic diversity

Discuss the idea of diversification in investments and how can Saudi Arabia’s economy benefit from this concept?

Sample Solution

Despite being considered as the largest and having the best economy in the Middle East region and a member of the group of 20 {G20}, the Saudi economy is still undergoing myriads of challenges in an unstable regional economic surrounding. Its reliance on a finite source of interest amongst which oil is ranked as the first and highest as one of the most serious shortcomings her economy is facing.

The export of energy goods consists of over 90% of Saudi exports. This even puts their economy in quandary. Being consistent and diversifying its economy and markets for their products export while facing an emerging competitor in the energy markets.

As much, as the rise of oil cost and revenue during the period of [2003 – 2013] increased the credibility of the Saudi economy and built the welfare of its people, its force hasn’t yet brought about an economy that can constrain economic and financial shocks. Therefore, in the long run, the country’s economy cannot grow and surpass the revenues it gains from oil.

To overcome this vital economic stance, the vision 2030 was implemented, and it stresses on economic diversification as an important step towards making sure there is economic sustainability in Saudi Arabia. As much as, the nine Cental programs tend to distribute the economy, not one of them better established better the pillars of such shift as done in the vision 2030, as indicated clearly in its goals and visions: “To raise the share of non-oil exports in non-oil GDP from 16% to 50%” [vision 2030 state of Saudi Arabia] with almost 4 years of the vision elapsed already, and more than a decade still to go, there is need for the legislators to revisit their vision 2030, and to decide how to accomplish it within the remaining period, or make a some more corrections and adjustments the earlier set target. Boasting of over $684 Billion United States Dollars Gross Domestic products, Saudi Arabian economy is the largest in the MENA area and also amongst the largest globally. Some economic factors had enabled the Saudi economy to be ranked amongst the most developing and the fastest rising economies in the world. Amongst these factors is its unending dependence on oil, and the muscular government takeover in controlling the major economic activities. Considering the importance of the oil department and the ever changing oil markets, rising and falling of the oil prices will recurrently cause seasonal disturbance to Saudi economy. The main cause of price inflation or fluctuation, which also affects other oil producing countries, is the ability to control pricing. This stands in as a major threat to controlled economic growth. Therefore, economic difference is equally important for these states in making sure, they succeed in sustaining economic growth. In fact, there are a rising number of empirical studies in support of oil fluctuations on macroeconomics Variables. As of late, the Saudi government has accepted, that the objective of a long term economic sustainability is hard to attain with independence on one or limited revenue income. Therefore, a long term economic goal had been revised with an aim of beating the dependence on oil exports and to hasten structural diversity.