...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...
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...Economic development of south arabia Name: Institution: Economic development of south Arabia South Arabia is one of the developing nation,it largely depends on petroleum income for its budget revenues.It is one of the largest oil producing countries in the world and petroleum income accounts for more than 50% of its budget revenues and 90% of earning from export. since the discovery of oil in 1930s the economy of south arabia has grown tremendously to a high level(Oxford,2012).Its economy has since shifted from subsistence farming to the service and oil industries. South arabia economy is ready for economic take off,with huge investment by government on infrastructure and other social amenities, high and stable income from oil and increase export of non-hydrocarbon (IMF,2012).The economist have projected this years economic growth to be 7% citing reasons such as increase oil revenues and massive government investment(Oxford,2012).In the recent past the government has rolled out plans of investing back Increased revenues from oil export into economy by announcing new development programmes like housing units,infrastructure and other economic stimuli programmes. South Arabias increase in economic growth is also being contributed to by government plans to diversify the economy, the government has invested heavily in industrial and agricultural sector, while also encouraging both local and foreign investors to invest in the economy(Worldbank,2012). The government...
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... an indispensable source primarily for transportation and industrial production. This makes oil prices one of the most important elements of today’s economy. In that sense, the Kingdom of Saudi Arabia is on the centre of world economy because of her rich reserves also because the Kingdom has the lowest production cost in the world. Saudi production capacity and the Kingdom’s political stability are key elements for the international oil prices and consequently the world economy. Saudi Arabia is essential to the international oil market also, because she is the swing producer, meaning that she has the ability to affect the price by changing the supply and the other producers’ behaviours. Saudi Arabia is given an example par excellence for the leader in an oligopolistic market by Bhattacharya as the country holds an important market share, Saudi Aramco figures state that Saudi Arabia has 260 billion of oil, which accounts near one fourth of the known reserves, also high flexibility in capacity utilization, low financing requirement thanks to the low cost and it is negligible sensitivity to the changes in the market. Rising world oil prices and Saudi Arabia's capability to quickly respond to the market demand by increasing its output levels in times of the crises. Most recently, Saudi cover supply shortages, as regime change in Libya, during the Arab Uprisings and continued sanctions imposed to Iran proved the Kingdom's importance as a supplier in the international market...
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...Economic Diversification Name: Institution: Course: Tutor: Date: Introduction In Middle East, the Saudi Arabia telecom industry is the largest with over fifty million mobile phone subscribers. At the end of 2011, the mobile penetration was about 188% with the sector enjoying stable growth. Saudi Arabia is the world’s largest oil exporter with oil being its largest income earner. However, to avoid the overreliance on the oil sector, the government of Saudi Arabia has been embarking on measures to diversify the economy through investments in other sectors as well as privatization of some industries. Their efforts have been successful and the telecommunication industry have benefitted from this diversification with a good growth rate which seems to be sustainable in the future. The United Arab Emirates on the other hand has had an unstable growth rate in their telecommunication industry. This paper compares the telecommunication industries of Saudi Arabia and United Arab Emirates and shows how economic diversification has been successful in growing the non oil sectors in Saudi Arabia. In addition, recommendations will be provided on improving the telecom sector of the UAE. Introduction to Saudi Arabia and its Economic development Saudi Arabia occupies the largest part of Arabian Peninsula, it is located on a 1,960,582 sq km area most of it being a desert. Saudi Arabia hosts...
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...effects of oil prices on oil- consuming economies and the economic alternative to oil production and consumption. Many economies depend on oil as their main source of revenue. It has many effects on these economies, positive and negative. To start with, income from oil reduces poverty in the society and improves its welfare. Oil revenue also contributes highly in the producing countries GDP. Angola, for example is the place where most of Africa’s oil is produced, exports 1.9 million barrels per day. Exporting countries can also use oil in funding schools, hospitals and construction. Low oil prices would normally be considered a downside, but sometimes it forces oil exporting countries to diversify its economy and use oil resources to develop other sectors which is in this case a good thing. On the other hand, low oil prices damage national economies and put a lot of pressure on governments to generate the best solution. Producing countries struggled heavily when oil prices went down and had to lay off large number of employees which gave poverty a rise. Even though the petroleum industry has its upsides, it still has many downsides. World Bank Report remarked “The exploitation of petroleum and mineral resources has been linked to corruption, conflict and poverty”. (Energy and, 2006, p.11). To put it in other word any change any oil prices highly affects both producing and consuming economies. Oil prices are not stable and always fluctuating. Low oil prices positively...
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...Issues Facing Saudi Arabia Saudi Arabia is a developing country in the Arabian Gulf region that has been growing dramatically over the past two decades. Saudi Arabia's 2011 population has grown tremendously and is estimated to now be about 26.1 million, including about 5.6 million resident foreigners. Until the 1960s, most of the population was nomadic or semi-nomadic but now due to rapid economic and urban growth, more than 95% of the population is settled now. Out of that 26 million people in Saudi Arabia, is has been found that the annual per capita income is anywhere from $11,500 to 24,500. This sounds kind of ridiculous because the country is known to the world to be oil rich. At first glance, one would view economic statistical indicators and convey the fact Saudi Arabia is a developed nation. However, close analysis of political and social statistical indicators would suggest that their standard of living and individual freedoms are severely suppressed. Believe it or not, this 'developed' nation has abnormalities in its statistical indicators which are similar to those that characterize third world nations. As a person who was born into this culture and is originally of Saudi Arabian descent, I find these statistics hard to believe. During my time there I never witnessed despair or poverty. These indicators and information is why I chose to research this topic and see for myself what this once wealthy nation is in fact doing now. Economic Success Saudi Arabia was...
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...while some nations are heavily dependent on export of only oil and oil-related products (such as Saudi Arabia, the UAE and Kuwait), others have a highly diverse economic base (such as Cyprus, Israel, Turkey and Egypt). Industries of the Middle Eastern region include oil and oil-related products, agriculture, cotton, cattle, dairy, textiles, leather products, surgical instruments, defense equipment (guns, ammunition, tanks, submarines, fighter jets, UAVs, and missiles). Banking is also an important sector of the economies, especially in the case of UAE and Bahrain. Main economic sectors & main actors Middle Eastern Oil-Exporting Countries The oil exporters comprise 12 countries: the six countries of the Gulf Cooperation Council (GCC—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates) and Algeria, Iran, Iraq, Libya, Sudan, and Yemen. Together, they account for 65 percent of global oil reserves and 45 percent of natural gas reserves. The countries are mainly exporters of oil, gas, and refined products, with oil and gas contributing about 50 percent to GDP and80 percent to revenue. They are diverse and differ substantially in terms of per capita GDP, which in 2008 ranged from $1,200 in Yemen to over $70,000 in Qatar. The GCC subgroup is relatively homogenous, however, with similar economic and political institutions and relatively less diverse per capita incomes. To be given the comprehensive economic background of Oil-Exporting Countries, Bahrain is one of...
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...ECONOMICS II THE ACCESSION OF SAUDI ARABIA TO THE WTO ANALYSING THE FUTURE CHALLENGES SUBMITTED BY: AKANKSHA PRAKASH I.D.NO.: 1785 IIND YEAR B.A.LL.B. {HONS.} TABLE OF CONTENTS RESEARCH METHODOLOGY___________________________________________________________2 INTRODUCTION_________________________________________________________________________3 THE ACCESSION OF SAUDI ARABIA TO THE WTO: AN ANALYSIS OF THE FUTURE CHALLENGES____________________________________________________________________________4 • Objectives________________________________________________________________________4 Diversification of the economy______________________________________4 Development of modern infrastructure________________________________4 Access to Foreign Direct Investment (FDI) and modern technologies________4 Enhancement of purchase power of the population_______________________4 Employment Generation___________________________________________5 Maximization of competitive advantage in petrochemicals________________5 Open Access to international Market__________________________________5 Open Access to international Market__________________________________6 Integration of Saudi Arabia’s economy with the global economy____________6 • Reforms__________________________________________________________________________6 Foreign Investment_______________________________________________7 Trade in Goods___________________________________________________8 ...
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...Introduction Savola Group has requested a SR5 million line of credit loan from Bank (X) with the promise of repaying the loan after a period of one year. The Savola Group is known for its strong assets base, inventory, sales, efficient management of non- interest expense and the strong demand for it products in the Kingdome of Saudi Arabia. The aim of this paper is to figure out Savola’s creditworthiness to receive such a loan from bank (X). To determine this, my group and I had to go through a complete financial analysis of the company's financial statements by the credit analysis department of the bank. Regardless of the financial difficulties the company was facing in its expense control, marketability of costumer’s products, liquidity position, coverage ratio, and profitability, the bank, in due course, approved the loan for Savola Company. However, it had imposed many restrictions and covenants on the company in order to insure the recovery of the funds loaned. This paper will first present a general-idea of Savola, then the background of Savola Company, its history, owners and management. Afterwards, the paper will provide a comprehensive and detailed financial analysis of Savola Company loan application by the credit analysis department in Bank (X).. The aim is to determine the credit standing of Savola Company and find out whether it has sufficient cash flow and backup assets to repay the loan. The company's last five years financial...
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...Annual Report 2012 Table of contents Chairman’s Statement .............................................................................. Mission and Vision .................................................................................... Company Overview ................................................................................... Board of Directors’ Report ...................................................................... Board of Directors’ Profile ....................................................................... Our Brands ................................................................................................. Our Human Resources ............................................................................. Our Social Responsibility ......................................................................... Detailed Review of Principal Activities for 2012 ................................... Sales by Product Group ............................................................................ Operating Costs .......................................................................................... Share of Results of Associates and Joint Ventures ............................... Cash Flows .................................................................................................. Distribution Policy ....................................................................................... Board Meetings and Directors’ Disclosure ..............
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...Comparative and Absolute Advantage ECO 561 Alfred Igbodipe 7/24/16 Introduction Due to the differences between the countries in its profitable fundamentals; the International Trade occurs. The contracts between the countries consider as the primary driver of the global exchange. These contracts concluded on the basis of the countries beneficial elements and advantages. Each international trade between the countries depends on numerous focal points of this exchange process. The economics and producers effectiveness measured by absolute advantage for these economics/producers. For example; if the producer needs lesser amount of contributions/inputs to provide specific product, then this producer has an absolute advantage in producing process. Comparative advantage discusses the economy/producer ability to produce a specific product with a minimum opportunity cost comparing to another producer. "There is a possibility of each nation to have an absolute advantage in producing and delivering the products; however; the different nations could in any case have distinctive comparative advantages". The international trade theory based on two dynamic concepts; "Absolute and comparative advantage". The main difference between these concepts is that the absolute advantage measure nation ability to produce more profits per unit of beneficial input than another. However; the comparative advantage measure the ability that one nation has an absolute advantage in each kind of produce. ...
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...Table of contents S.No Titles 01- About Company 02- History 03- Mission statement 04- Vision statement 05- Management Philosophy 06- Marketing mix Product • Price • Place • Promotion 07- Target market 08- Market Segmentation • Demographical • Geographical • Behavioral • Psychographical 09- Macro Environmental Factors • Economical factors • Technological factors • Political factors • Demographical factors • Socio/cultural factors 10- SWOT Analysis 11- Bibliography ABOUT COMPANY Type Public Industry Consumer electronics Telecoms equipment Semiconductors Home appliances Founded 1969 (Samsung Electric Industries) 1988 (Samsung Electronics) Headquarters Suwon, South Korea Area served Worldwide Key people Lee Kun-hee (Chairman) Lee Jae-yong (Vice Chairman) Kwon Oh-hyun (Vice Chairman and CEO) Products LCD and LED panels Mobile phones Semiconductors Televisions Other Employees 369,000 (2011) Parent Samsung Group Website www.samsung.com Samsung Electronics Co., Ltd. (Korean: 삼성전자) is a South Korean multinational electronics company headquartered in Suwon, South Korea. It is the flagship subsidiary of the Samsung Group and was the world's largest technology company by revenues from 2009 to 2012.Samsung Electronics has assembly plants and sales networks in 61 countries and employs around 369,000 people. Samsung Electronics is the world's largest mobile phone maker by 2012 unit sales and world's second-largest semiconductor...
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...Case Study: The Red Bull GmbH Marketing Strategy Prepared For: Prof. Dr. Christian Schuchardt GLOBAL MARKETING STRATEGIES IMBA 2014/15 International Graduate Center (IGC) Hochschule Bremen University of Applied Sciences Prepared By: Bakaa Chkeir Sahil Sabharwal Eric Branson Smith Khandaker Nazmul Alam Table of Content Part – 1: Introduction Part – 2: Red Bull’s General and International Strategic Approach By Sahil 1-2 3-6 Sabharwal 7-10 Part – 3: Red Bull’s Branding & Segmentation Strategy By Eric Branson Smith 11-15 Part – 4: Red Bull’s BCG & ANSOFF MODEL By Bakaa Chkeir By Bakaa Chkeir Part – 5: Market entry and distribution strategy By Khandaker 16-24 Nazmul Alam 25-26 Part – 6: Bibliography PART 1: INTRODUCTION A Brief History of Red Bull from Red Bull Inspired by functional drinks from the Far East, Dietrich Mateschitz founded Red Bull in the mid 1980's. He created the formula of Red Bull Energy Drink and developed the unique marketing concept of Red Bull. In 1987, on April 1, Red Bull Energy Drink was sold for the very first time in its home market Austria. This was not only the launch of a completely new product, in fact it was the birth of a totally new product category. Today Red Bull is available in more than 166 countries and around 40 billion cans of Red Bull have been consumed so far. As of the end of 2013, Red Bull employed 9,694 people in 166 countries - compared to the end of 2012 when we had 8,966 employees...
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...UAE 2004-2014 | 20 | Contents Topic | Pageno. | 1.Introduction | 4 | 2.GDP of UAE | 6 | 3.Factors affecting GDP | 6 | 4.Contribution of different sector | 8 | 5.GDP of UAE in 2013 | 9 | 6.Hydrocarbon Sector | 11 | 7.GNP of UAE | 13 | 8.Unemployment rate in UAE | 16 | 9.Implication of unemployment rate | 17 | 10.Inflation | 18 | 11.BOP | 20 | 12.Fiscal Policy | 21 | 13.Monetary Policy | 21 | 14.Analysis of exchange rate | 22 | 15.Recovery from global Recession | 23 | 16.Conclusion | 24 | INTRODUCTION Thirty years ago the United Arab Emirates was considered as one of the least developed countries of the world. But now an income level has been reached which can be compared to the industrialized nations. The UAE’s economy is the second largest in the Arab World (after Saudi Arabia) with GDP of $377 billion in 2012. The UAE has been trying to diversify its economy and they have been successful as well as 71% of its GDP comes from sectors other...
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...downloaded from the website ec.europa.eu/economy_finance/publications A great deal of additional information is available on the Internet. It can be accessed through the Europa server (ec.europa.eu) KC-AI-10-415-EN-N ISSN 1725-3187 ISBN 978-92-79-14901-6 doi 10.2765/42450 © European Union, 2010 Reproduction is authorised provided the source is acknowledged. The Changing Pattern in International Trade and Capital Flows of the Gulf Cooperation Council Countries in Comparison with Other Oil-Exporting Countries Marga Peeters1 Abstract During the past decade the GCC countries have achieved a remarkably high degree of trade and financial integration in the world economy. Before the global crisis began, they invested their abundant oil income which resulted from high energy prices and high world demand, in return abundantly abroad. Thanks to policies that are...
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