Economic Position of Saudi Arabia

Saudi Arabia is a key economic power in the international market because of its large reserves of oil and the dependence that the rest of the world has on oil. A key member of OPEC, Saudi Arabia influences both the price and production levels of oil and uses its key position for political as well as economic strategy. However, the nation is also dependent on its trading partners to provide it with much of the goods that it cannot produce internally, and its heavy reliance on the United States has resulted in an odd strategic alliance between the two nations. This research considers the current economic position of Saudi Arabia relative to other Middle Eastern countries as well as its own performance, and what is likely to occur in the nation's economy in the future.

Saudi Arabia has one of the strongest economies in the Middle East, due in large part to its significant oil reserves. In 2000, Saudi Arabia's gross domestic product (GDP) stood at US$168.8 billion, second only to Turkey's for the region (Turkey's GDP was more than US$187.4 billion during the same year). Due to population differences, Saudi Arabia outpaced Turkey in terms of per capita GDP, with 2000 per capita GDP of US$7,621 compared to Turkey's US$2,797. However, if per capita GDP is used as a rough approximation of the standard of living of a particular country, both Turkey and Saudi Arabia are well behind several Middle Eastern neighbors. Qatar's 2000 per capita GDP sto

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Saudi Arabia's export level of more than US$78 billion: the UAE exported US$43 billion and Turkey US$31 billion while Iran and Kuwait exported US$28 and 19 billion, respectively ("Databank," 2001, p. 32). The nation's move to attract foreign investment has been successful in that outside companies were recently selected to participate in natural gas development inside Saudi Arabia. The announcement came in mid-2001 that Exxon-Mobil, British Petroleum and Shell would participate in three different development programs with an aggregate cost in excess of US$30 billion. This is a direct result of the liberalization of foreign investment rules that took place in 2000. Such international involvement is necessary if the nation is to create jobs for its younger workers that will enable them to participate in the nation's overall economic strength. This investment also lessens the nation's dependence on exporting oil, and increases the likelihood that the nation will be accepted into the World Trade Organization (WTO), an organization in which Saudi Arabia has sought membership for several years ("Happy Days," 2001, p. 2.) Despite Saudi Arabia's strong GDP figures and low inflation rate, the nation has a relatively high (14 percen

Category: Foreign - E