Saudi Arabia’s Volatile Oil Economy

Saudi Arabia’s government is looking to diversify its economy in a shift away from oil. Not only is the government looking to shift from oil due to the recent drop in prices, but they are also working to improve their sustainable development and increase the use of renewables. Because of the volatility of oil prices, Saudi Arabia is attempting to divert from its prior economic model and modernize its processes to align with global development. This process of increasing transparency could greatly impact the royal family and the control they have over the economy. Anyone with a stake in the oil sector, including middle class workers, could be impacted by this divestment. Prince Mohammed has spoken on the shift away from oil and has encouraged the introduction of new industries to diversify the work sector. Ultimately, Saudi Arabia is looking to create a city reliant on renewable energy with a thriving economy that could act as a model for global development in the future.

This article discusses the problems that a volatile, oil based industry can have on the economic development of a country. Although the resources can help improve the economy if the oil price is high, a decline in oil price can harm the further development of an area. Because Saudi Arabia relies so heavily on oil for its economic development, there are few alternatives when oil prices suddenly drop. Diversifying the industries and shifting away from a resource based economy could greatly improve their economy overall and make them a global player in both renewables and future urban planning.


Source: https://www.nytimes.com/2017/10/25/world/middleeast/saudi-arabias-grand-plan-to-move-beyond-oil-big-goals-bigger-hurdles.html?rref=collection%2Fsectioncollection%2Fworld&action=click&contentCollection=world&region=stream&module=stream_unit&version=latest&contentPlacement=36&pgtype=sectionfront

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