The Developing Economy of Saudi Arabia - Coursework Example

Saudi Arabia’s Developing Economy Saudi Arabia is one of the fastest developing economies that have seen tremendous changes in its socio-economic development processes. The oil mining has greatly improved the economy of the region and raised the living standard of the people. The state has made strategic alliances with various foreign corporations in the field of oil and gas exploration and refineries. It has also forged strategic business partnership in the various upcoming projects comprising of infrastructure development, education, healthcare, consumer durables, telecommunication, electronics etc. Its major plans are focused towards improving education and technical skill and developing knowledge based capabilities in terms of technology and skilled labor. Today, the country has successfully diversifies from oil based economy to the knowledge based state that has well developed infrastructure, highly acknowledged academia and healthcare system. Introduction In the twenty first century, the economic development of the countries is linked to multifaceted and multi dimensional progress, both in terms of socio-economical paradigms and political stability that facilitates growth. McConnell, Brue and Flynn (2009) assert that economic is a social science concerned with how individuals, institution and society make optimal (best) choices under conditions of scarcity. Scarcity is interpreted in terms of limited resources vis-à-vis natural, human and manufactured resources that are used to produce resources. Thus, developing economy can broadly be classified as one that is capable of exploiting its resources to raise the living standard of the people. Yet another major feature of the economy is that it has emerging market with vast potential, which attracts lots of foreign investments and multinationals with their numerous products. Saudi Arabia satisfies both paradigms of a developing economy. Overview of Saudi Arabia Saudi Arabia is prominent country of the South East Asia with Islamic culture. In 1932, diverse areas of Arabian Peninsula had come together to form Kingdom of Saudi Arabia headed by single ruler, King Saud. In the last 30 years, it has undergone tremendous transformation in almost all areas of public concern vis-à-vis health, education, transport, environment and infrastructure development. Network of roads, application of technology for improving public health and local economy have been the key areas of development. It has state of the art hospitals, education centers, universities and tourists attractions and recreational facilities. The oil and gas mining has been the major source of wealth creation that has been well utilized to improve the socio-economic status of 22.6 million population. Saudi Arabia’s oil revolution Saudi Arabia is one of the fastest developing economies that have seen tremendous changes in its socio-economic development processes. Saudi’s economy is primarily oil based. The oil mining has greatly improved the economy of the region and raised the living standard of the people. The state has made strategic alliances with various foreign corporations in the field of oil and gas exploration and refineries. The huge oil assets and oil production are highly important to the industrialized nations and have brought Saudi Arabia to the forefront of international oil market. The oil revolution has also brought in huge surge of immigrant population that has been a major catalyst for socio-economic changes in the country. Urbanization and development Multinational companies and strategic business partnership with companies from America, Japan, United Kingdom, Germany, France etc. have made their presence in the various upcoming projects comprising of infrastructure development, education, healthcare, consumer durables, telecommunication, electronics etc. It has fully developed infrastructure encompassing roadways, state of the art transport system, telecommunication and housing. Few of the areas that significantly contribute to the socio economic development of the nation are described as below: Education Saudi Arabian General Investment Authority or SAGIA is main body that overseas policy decision making in development. The Eighth Development Plan has placed emphasis on diversifying oil based economy to ‘developing science and technology capabilities’ (SAGIA, 2009). The majority of its local population is unskilled and uneducated that has resulted in huge influx of foreign skill labors. It therefore plans to focus on education and technical skills to enhance its capabilities in terms of human resources. It has welcomed foreign partnership in academia and established state of art King Saud University and Women’s University. The young workforce, thus prepared through education and technical knowledge are envisaged to participate in the growth process by 2020. Use of technology It has also ushered in rapid urbanization that has adversely affected the delivery system of various public welfare imperatives of different government departments. The introduction of information technology has significantly improved administrative mechanisms. The e-government strategy and initiatives of the government promotes equity, accessibility and affordability and quality of the government welfare programs and schemes. Healthcare The safety and health of individuals, family and community is incorporated in the constitution of Saudi Arabia. The mission of the health ministry states, ‘The provision of comprehensive health care comprising preventative, curative and rehabilitative components commensurate with the Saudi Arabian culture, health ethics, citizens approval and having equitably distributed health services in addition to taking care of the health personnel in a means that will influence an acceptable performance’ (MOH, Saudi Arabia, 2002). While the citizens are covered by the government’s health strategy, the expatriates, who form the larger part of the workforce, have to pay for their healthcare needs. Thus, government’s healthcare strategies, especially the private public partnership to improve healthcare services are important initiatives that emphatically declare its intention to move upwards in the global economy. Tourism industry and entrepreneurial ventures Tourism is one of the most flourishing industries in the non oil sector of Saudi Arabia. The country has made huge strides in technology and greatly improved its infrastructure to attract foreign tourists. Dubai Festival, held every year, is renowned for its spectacular display of goods. Burj-Al-Arab hotel in Dubai is the world’s tallest luxury and the costliest hotel of the world with world’s tallest atrium lobby. The hotel is the landmark hotel of Dubai that offers exclusive internal and external architectural ambience and services to the select niche clientele (burj-dubai). DP World is another entrepreneurial leadership venture that is one of the global giants in the area of marine terminal operations. They have successfully adapted changing technologies in their work methodologies to meet the challenges of the recessive trends of the contemporary times. It operates 49 marine terminals with 12 new development projects spread across 31 nations and employs more than 30,000 people (dpworld). Corporate Social Responsibility The fast transforming socio-economic paradigms of Saudi Arabia make it imperative for the foreign investors to become more conscious of their social responsibilities and become proactive participant in conserving and preserving the environment. The ethical considerations of business compulsions and corporate social responsibility have become essential for long term business partnership with their host countries. While it is true that Saudi Arabia has welcomed foreign investors and multinationals in various areas of development, it is important that the investors do not take advantage of the liberal policies of the state. In fact, it becomes all the more important that the foreign companies ensure effective corporate governance to overseas compliance of national and international law in their work methodologies and incorporate all the pertinent guideline of corporate governance so as to exhibit CSR in their work environment. Conclusion Developing economies are countries that are in the process of development where their standard of living is gradually improving with rise in per capita income. Saudi Arabia has huge natural resources like oil, mineral and land. Through judicious foreign collaboration, it has exploited its resources for its development processes and significantly improved its living standard. Today, the country has successfully diversifies from oil based economy to the knowledge based state that has well developed infrastructure, highly acknowledged academia and healthcare system. (words: 1143) Reference Burj-Al-Arab hotel. Dubai. Retrieved from: DP World. Retrieved from: SAGIA. (2009). Creating a Knowledge Economy in Saudi Arabia. Retrieved from: Ministry of Health. (2009). Annual Health Report. Abu Dhabi Saudi Arabia. McConnell, Campbell., Brue, Stanley and Flynn, Sean. (2009). Macroeconomics. 18th ed. NY. McGraw-Hill Irwin. Read More