Analysis of “Saudis Look Beyond Oil to New Economy in Desert” Essay
Analysis of “Saudis Look Beyond Oil to New Economy in Desert” by Faiza Saleh AmbahA growing economy is always good for a business and Saudi Arabia is one economy that has been growing steadily, particularly because it is the leading producer of oil. Recently, the value of has dropped and is still steadily is dropping. The kingdom of Saudi Arabia, acknowledging that continued prosperity cannot be assured with oil as the only source of revenue, has decided to expand other non-oil industries. This will help solve underemployment rates as well as be of great benefit to foreign investors from countries like the United States.
Saudi Arabia has expressed plans that it will be developing a new city situated in the desert and this is good news for businesses. It is another place where establishments can be put up as the people move in to the location. Expansion will be the keyword here. The new city will be located in an area which will attract a lot of tourist that businesses can take advantage of. It is situated in an area of great importance to Muslim heritage.
With Saudi Arabia increasing the production rates of oil to compensate for its low price, the US as the leading consumer of oil can buy more oil while it is cheaper. This all happens as Saudi Arabia is trying to meet the demand and fight the urge of other countries in the development of renewable energy. It is expected that the oil industry will go down the drain as other countries develop a reliance on renewable energy.The expansion of business entities will also be of great benefit to the Saudi Arabian workforce since business expansions will create more job opportunities. This will be helpful for the local citizens since the kingdom was not able to provide a steady supply of jobs to its increasing workforce.
The kingdom has also recognized the need to do business, thus it is making an effort to ease the lifestyle at the country and cut down on restrictions on visa applications that prevent foreigners with good business ideas to live and invest in Saudi Arabia. This is good news for international companies. This will allow their businesses to open products or services to a whole new market. Being a Muslim country places certain restrictions on women and the leadership indicated that they will also ease up on some of these restrictions such that women will be allowed to drive and foreigners who are women will also be allowed to invest in the country. Gender equality will make the kingdom more competitive and more attractive to foreign investors.The reliance of oil has brought prosperity to Saudi Arabia but oil being a main source of economic revenue has negative implications such that the strain is entirely wrought upon nature while the people remain unproductive or untrained to be productive. This is exactly the reason why Saudi Arabia is feeling the full force of the negative implications brought about by the decrease in the price of oil. Oil makes for 90 percent of Saudi Arabia’s revenue which is why the changes in oil prices have extreme implications on its economic performance.
It is expected that increased foreign investment will prevent a major economic slump caused by decreasing oil prices. On the other end, it will be good for American businessmen as they open their doors to new and diverse markets within Saudi Arabia.With a much livelier business within the country, it will provide the increasing population with jobs while also becoming another source of revenue aside from oil. Little by little, Saudi Arabia will develop less dependence on income from oil.
Consequently, foreign investors will also benefit from this scheme.