Redefining Saudi Arabia’s Dependence on Oil

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Submitted By sameeribrahim
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Redefining Saudi Arabia’s Dependence on Oil
Sameer Ibrahim
DeVry University

Redefining Saudi Arabia’s Dependence on Oil

Instability in the Middle East and the current decline in oil prices have forced oil-led countries to reevaluate their economic models. Saudi Arabia has seemingly enjoyed long periods of prosperity, but it has come with costs both hidden and obvious. Economic terms such as “resource curse,” and “Dutch disease,” are generally applied to the economic reality Saudi Arabia faces, but a central question emerges: which is the best way forward for one of the United States most consistent Middle East partners to assure Saudi Arabia’s economic viability? Five scholarly journals are examined and policy prescriptions are discussed: Karl (2007) suggests prosecuting corruption; Ross (2001) suggests reforming governmental policies that hinder efficiency; Hamid (2014) suggests promoting gender equity in financial transactions, as well as promoting tourism and agriculture; Gylfason (2001) suggests advancing education reforms; and Hausmann and Rigobon (2002) suggest diversification of Saudi Arabia’s national economy.

Of the Middle Eastern countries that export oil around the world, no country has a more paradoxical relationship with its primary economic resource than Saudi Arabia. Many westerners I have met presume, based on its economic history during the 20th century, that Saudi Arabia is a rich country, of virtually unlimited resources, with very few internal social conflicts or economic restraints. However, this presumption is quickly revised when the historical data of corruption, slow growth, gender bias, a foundering education system, and a lack of diversification are examined. Redefining Saudi Arabia’s Dependence on Oil

Karl (2007) points out that states with the greatest resource reserves, especially oil-exporting countries, have…...

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