Economic Growth And Saudi Arabia

1733 Words Nov 12th, 2015 7 Pages
Economic Growth in Saudi Arabia
Saudi Arabia has an economy that is largely dependent on oil, with the government maintaining the biggest control over the country 's significant economic activities. Saudi Arabia owns about 16% of the global oil reserves and is the number one exporter of oil (Saudi Arabia, 2013). In addition, the Kingdom of Saudi Arabia was instrumental in the formation of the OPEC (Organization of the Petroleum Exporting Countries) group, which initially comprised Iraq, Venezuela, Iran, Kuwait and Venezuela (Energy indicators, 2004). Currently, the petroleum industry constitutes about 80% of the country 's budgetary incomes; about 40% of the country 's GDP and 87% of Saudi 's export earnings. Agriculture, in addition to petroleum products, has been a major contributor to the kingdom’s economy since 1970s (Saudi Arabia, 2013). The country has been able to produce enough agricultural products for their consumption as well as surplus for exportation to the GCC member countries.
Saudi 's Pattern of Economic Growth
Initially, Saudi Arabia was largely a subsistence economy, gaining its revenues from subsistence agriculture and sale of natural resources. The Saudi population was highly dependent on subsistence farming and was very poor, given that climatic conditions in Saudi Arabia are not favourable for food production. However, the situation drastically changed when oil was first discovered in 1930 's. Although a highly sought after commodity, oil prices were…
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