The richest country in the Arab world is successfully developing thanks to untold oil we alth and a balanced economic policy. Since the 1970s, Saudi Arabia's GDP has increased about 119 times. The country receives its main income from the sale of hydrocarbon raw materials, despite the significant diversification of the economy in recent decades.
General information
Saudi Arabia is a small developing country in the Middle East, the catalyst for the development of which was the oil industry. The country has about 25% of the world's oil reserves, about 6% of natural gas and large deposits of gold and phosphates.
The GDP of Saudi Arabia in 2017 was 659.66 billion dollars, according to this indicator, the country ranks 20th in the world.
The country's population is 0.4% of the world's, while Saudi Arabia produces 0.7% of the world's product and has the most developed economy in Western Asia. Saudi Arabia's GDPper capita is 20,201.68 US dollars, and is in 40th place between Portugal (39th) and Estonia (41).
Economic Review
The basis of the country's economy is oil production and export, which are under the direct control of the government. It is the largest oil exporter in the world. This industry sector brings about 80% of the state budget revenue. As in Russia, Saudi Arabia's GDP is largely formed by the oil and gas industry. In an Arab country, it accounts for approximately 45%. 90% of the country's export earnings come from the sale of oil.
In the past few decades, the government has been making efforts to reduce dependence on hydrocarbon production. The processing sector of the industry is developing, including the production of petrochemical products, mineral fertilizers, steel and building materials. Government efforts are focused on the development of energy, telecommunications, natural gas exploration and petrochemicals. The industrial sector employs mainly foreign workers - approximately 6 million people.
Change in GDP
In 1970, Saudi Arabia's GDP was 5.4 billion dollars, ranked 50th and was at the level of the poorest countries in the world - Cuba, Algeria and Puerto Rico. For the period 1970-2017. the indicator in current prices increased by 654.26 billion dollars, an increase of almost 119 times. Saudi Arabia's average annual GDP growth was 10.9% or $13.8 billion.dollars a year. The maximum level was reached in 2014 - 756.4 billion dollars, in 2017 - 659.66 billion dollars. The share of the country in world GDP in 1970 was 0.16%, at present it is 0.7%.
The increase in Saudi Arabia's GDP was made possible by the sharp rise in oil prices that began in the 70s and the economic reforms carried out. National income is traditionally considered the income of the king, so for a long time it was spent at the request of the monarch.
Public sector
The country is an absolute monarchy, the ruling Saudi dynasty dominates the country's economy. The state directly manages most economic processes and disposes of almost the entire industrial complex. The royal family controls more than 50% of the assets of Saudi companies. According to experts, members of the ruling dynasty and their relatives hold senior positions in 520 Arabian corporations, in many cases being only a brand, a sign of a company under which investments are attracted. Numerous Arabian princes act as "invisible" partners who do not participate in management, but only ensure the interests of companies in the country, receiving significant remuneration for performing representative functions.
The state has a comprehensive impact on economic life, in addition to the large public sector, various financial instruments are used for this. The country's government manages 5 state-owned banks and 9insurance companies. To support private entrepreneurship, an investment fund (Saudi Arabian Public Investment Fund) has been created, which issues interest-free loans for the construction of industrial enterprises, and gives subsidies for the consumption of electricity and water. There are special programs to support agriculture, including fixed purchase prices for grains and dates. Priority areas for public investment are: processing of hydrocarbon raw materials, production of steel, fertilizers, cement and energy.
