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 has provided private sector participation through incentives and generous financing which has now led to huge private investment into telecom and energy generation industry. This government initiative on diversification has seen non- oil export increase to 15% this year way from 10% in 2007(IMF, 2012) In its quest for diversification the Saudi Arabia faces myriad of challenges which