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Posted on March 19th, 2013, by

Describing the industry of Saudi Arabia it can be said that 25% of workers in the Kingdom of employed in the industrial sector. The most important industry is the petroleum refinery, followed by the gas refinery. In addition, basic petrochemical products, fertilizers, cement, steel, textiles are important export products for the country. Also, despite the lack of water and little fertile land, since the 1970’s in the Arabian Desert, large farms were built, which made the country less dependent on meat imports. As a fact, the water for agriculture comes from deep wells, oases and sea water desalination. With the oil wealth it is hard to imagine any financial limits. The only known since the oil boom, however, deep wells fall back on fossil resources and will eventually run out. It is essential to note that Saudi Arabia also avoids political dependence, which would bring the water imported from other countries like Iraq. The strong population growth and political plans for further expansion of industrial and agricultural equipment increases the consumption of water and electricity about 8% annually. It is estimated that by 2025, the country needs $ 250 billion investments to meet the rising consumption in the future. The bulk of these costs will raise the Saudi government. Part of the investment comes from the private sector, as stated in Saudi Arabia Business Guide.
Also, I would like to describe the state budget situation in Saudi Arabia. As a fact, state budget included expenditures in 2009 of the equivalent of 146.7 billion U.S. dollars, the state revenue over the equivalent of 134.7 billion U.S. dollars. This result shows a budget deficit on the level of 3.1% of GDP. Public debt of Saudi Arabia in 2009 amounted to $ 87.9 billion or 22.9% of GDP. In 2006, the share of biggest government expenditure (% of GDP) was in the following areas: health: 3.3%; education: 6.8%; military expenses: 10.0%. The economy of Saudi Arabia, as any other, has advantages and weaknesses. As a fact, it has following advantages: huge reserves of oil and gas, and an excellent companion processing industry. Moreover, there is well-controlled surplus and a stable current income. Tourism is growing rapidly, especially revenues from approximately 2 000 000 pilgrims to Mecca annually. However, Saudi Arabia’s economy has following weaknesses: poor vocational education, high subvention for food. Also, there is significant import of most consumers’ goods and industrial raw materials and high youth unemployment. Moreover, there is such negative aspect as the dependence of the country’s wealth from the ruling family, because formally all wealth of the country belongs to the king, as described in Doing Business in Saudi Arabia. Saudi Arabian Social and Business Culture.
Saudi Arabia has enormous problem with infrastructure. For example, the country has a relatively less-developed rail road network. Currently, passenger traffic is carried only on the line between Riyadh and Dammam. Other stations on the route are Harada and Haufuf. However, trains are consistent with European standards of comfort and service. Nowadays, there is an active construction of new railway lines in remote parts of the country: Abu Adzhram (200 km south-east border with Jordan) and between Mecca and Medina via Jeddah. In turn, the total length of highways is 152 044 miles. Among them only 45 461 miles paved and 106 583 miles unpaved. In Saudi Arabia, women of any nationality are forbidden to drive a car. This rule was adopted in 1932 as a result of conservative interpretations of the Quran. As a fact, road transport is the main means of transportation in the Kingdom. Also, in Saudi Arabia there are 208 airports, including 73 – with concrete runways and only 3 have international status. Saudi Arabian airlines have an extensive network of domestic flights. The flights are operated between all major cities of the country; the planes are usually in excellent condition. The level of comfort and service in line meets European standards. Hub is the capital, Riyadh, and a large part of inter-regional flights through the capital. The cost of flights varies from $120 to $150 one way depending on the direction. Saudi Arabia has following ports: on the Red Sea – Jeddah, Yanbu Al-Bahr, Oak, Rabih, Jizan, Farasan. On Persian Gulf – Dammam, Jubail, Khafji, Al-Hubar, as stated in Doing Business in Saudi Arabia.
It should be noted that issuance of tourist visas is associated with the following restrictions: tourists are required to travel only in groups and with the mediation of Saudi travel agents, who will accompany them to leave the country. Moreover, to Saudi Arabia it is denied entry the following categories of citizens: those, who have an Israeli passport, persons, in whose passports there is an Israeli visa, persons, in whose passports there is a mark of the Jewish faith. Moreover, there is a ban on the import of alcoholic beverages, and products, in which structure there are components of pork. However, there are no restrictions on movement in the country, except the holy cities of Mecca and Medina, which are forbidden for the non-Muslims. Alcohol and drug use is strictly prohibited and punishable by law. First aid and treatment for foreigners are paid. Private health institutions are taking a cash or cashless forms of payment. To receive medical care are urged to complete medical insurance of international standard. The state religion of Saudi Arabia is Sunni Islam. Any other religions in the country are strictly prohibited. Moreover, it is not permitted to have religious items, paintings of temples and rites of other religions, greeting Christmas cards, etc.
I presume that due to its territory, population and status of the leading oil producing country Saudi Arabia is considered as leading country in the region. However, recently Iran is trying to challenge this status. As a result, there is an open confrontation between these states. Concerning business trips, I would like to mention that foreign visitors should be dressed accordingly: men, despite the hot weather, wear suits or pants and shirts, and women should wear loose and long clothing without a cut in the neck. A mandatory addition to the well must be a handkerchief that shielding the hair. Women’s legs and arms to the wrist should be covered. Abaya traditional Arab clothes suits best for it. The religious police (mutavva) vigilantly monitor the violation of public morality, including clothing. In general, the neglect of these rules may, in some cases, result with significant trouble.
To sum it up I would like to say that the economy of Saudi Arabia is based on the oil industry, which accounts for 45% of the gross domestic product. 75% of budget revenues and 90% of exports are petroleum products. Moreover, unlike other oil-producing countries in Saudi Arabia, this figure is constantly growing, thanks to the discovery of new oil fields. Saudi Arabia plays a key role in the Organization of Petroleum Exporting Countries, with which regulates global oil prices. In the 90 countries experienced an economic downturn associated with the fall in oil prices, while a huge population growth. As a result, GDP per capita over several years fell from $ 25,000 to $ 7,000. In 1999, OPEC decided to slash oil output, which led to price spikes and help improve the situation. In 1999 n the country began an extensive privatization of electric utilities and telecommunications. Despite the huge revenues from oil exports, the level of life of Saudi Arabia is increasingly lagging behind the developed countries. If at the end of 1970 GDP per capita in Saudi Arabia was amounted 21 thousand dollars, in comparison in the U.S. 24 thousand dollars), at the present time – only 20.3 thousand dollars, while in the U.S. – 46.4 thousand dollars. All in all, it can be said that Saudi Arabia has a lot of economic problems, and fully dependent on oil, however recent high prices for this mineral resource allow this country to gradually grow and spend significant amount of money on the social needs.

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