Saudi Arabia is known to the world as the center of Islam and one of the very few countries in the world to have maintained Islamic law the sharia. According to the U.S department of state (2010) Saudi Arabia remained as an absolute monarchy until 1992, at which time the Saud royal family introduced the country’s first constitution based on the sharia. With an area of about 865,000 square miles, Saudi Arabia is roughly one-third the size of the continental United States, and the same size as all of Western Europe.
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Saudi Arabia’s oil region and main source of wealth lies along the Persian Gulf. This oil-derived wealth allowed the country to provide free health care and education while not collecting any taxes from its people. At the time of World War II Saudi Arabia had one-third of all known oil reserves, but falling demand and rising production outside the Organization of Petroleum Exporting Countries (OPEC) endangered the country with domestic unrest and undermining its influence in the Gulf area. However, they swiftly recovered with a blossoming economy.
Standard of living is calculated by ranks, such as real income per person and poverty ranks. Measures such as access and quality of health care, income growth inequality and educational standards are also used. The best statistic for measuring standard of living is the same one the UN uses to measure the level of development of a nation. The human development index (HDI) which is used as an alternative to measuring GDP in order to determine the country’s well-being. The HDI provides a measure of the average three aspects of human development, living a long and healthy life, education and having a decent standard of living. According to the latest U.N human development report (2007) Saudi Arabia’s HDI value is .843. This denotes that Saudi Arabia ranks high on the human development index.
Other aspects taken into consideration when measuring the kingdom’s HDI are life expectancy rates, under 5 mortality rates, and literacy rate. According to the latest U.N human development report (2007) Saudi Arabia’s life expectancy rate is 72.7 years old. The under 5 mortality rate in Saudi Arabia is 21.27 deaths per 1,000 according to the World Bank (2008). In terms of literacy rate only 85% of Saudi Arabians are literate. The Saudi government is working on improving the literacy rate in Saudi Arabia. According to the latest U.N human development report (2009) Saudi Arabia’s GDP rank minus HDI rank is at -19 a negative number indicates that the HDI rank is lower than the GDP per capita (PPP US$) and that poverty is low in that country.
Gender inequality occurs on a daily bases in Saudi Arabia. According to Abdella (2010) the kingdom allows men to twice the inheritance that women are allowed. Women are required to have a guardian escort them for many of life’s daily tasks. Without the presence of a guardian, a woman cannot study, access health services, marry, travel abroad, have a business or even access an ambulance in an emergency. Saudi women do not have the right to drive. It is illegal for a woman to be in the company of a man who is not in her immediate family. Young women are still not allowed to study certain subjects, such as geology however it is indicated that women can travel abroad alone for studies .On the subject of polygamy, men are permitted by law to have up to four wives. Women do not have equal access to the courts or an equal opportunity to obtain justice. Abdella (2010) acknowledged that the government ought to evaluate laws and policies and revise basic Laws in order to ensure gender equality and exclude the discrimination of women.
In Saudi Arabia population growth is outpacing the economic growth and availability of services and infrastructure in the country. The CIA world fact book (2010) proved that by contrast to the U.S, Saudi Arabia experiences a high population growth rate of 1.85%. Saudi Arabia’s growth rate is lower than average developing countries, which is typically around 2.5%; but higher than the U.S 1% population growth rate. Due to its population Growth Issues Saudi Arabia is facing difficulties in providing jobs, water, food and energy to its indigenous young population and there is a widening gap between the ability of the economy to create jobs and the population growth rate.
A major difference between economic growth and human development is that economic growth focuses on the enlargement of income, while Human development focuses on enlarging all human options. According to United Nations human Development Program (2010) education, health, clean environment and material well being do not necessarily depend on income. Thus, the options available for improving people’s lives are inclined to the quality of economic growth in its wider sense, and the impact is by no means confined to quantitative aspects of such growth. The end goal of investment in human capital, in terms of health, education, nutrition and training, is to boost production and generate additional income.
Investments in physical infrastructure are a crucial attribute of Saudi Arabia’s current economic development drive. According to Hayward (2009) the kingdom seeks to reduce its reliance on the oil industry. Saudi Arabia announced a huge economic stimulus budget for 2009, allocating more money for education and an increase in public spending by 15.8 per cent. The Saudi Government plans to spend a tremendous amount of money on infrastructure projects in the next five years as the kingdom seeks to benefit from lower construction costs amid the global financial crunch.
The construction division will be motivated by the launch of six economic cities to be completed by 2020. According to Hayward (2009) these six new industrialized cities will diversify Saudi Arabia’s economy and are expected to amplify GDP. Projects currently underway in the Kingdom include two huge railway initiatives, which will boost trade and tourism networks. Work continues to expand in Saudi Arabia’s port network as the country contests with other Gulf States to offer a gateway to Middle East markets. With the expanding population growth issues the pressure is being put forth on the country’s utilities.
The Saudi agricultural sector is the second largest industry in the Kingdom. Saudi Arabia has achieved immense agricultural development, conquering the difficulties of scarce rain, meager subterranean water, limited local manpower and widely dispersed cultivatable lands. According to the CIA world fact book (2010) many individuals migrate to Saudi Arabia for employment. In 2009 only 6.75% of the population was employed in agriculture and 21.40% employed in the services. Agriculture has grown at an average annual rate of 8.7 percent since 1970 and accounts for more than 9.4 percent of Saudi Arabia’s GDP.
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According to The Saudi network (2010) in order to maintain agriculture, the Saudi Government has built more than 200 dams to preserve rainwater, with storage capacity of 689 million cubic meters. In order to finance this development, the Saudi Agricultural Bank was established in 1964. It is a specialized agricultural bank; it extends long-term, interest-free loans to farmers and agricultural companies. According to The Saudi network (2010) the Saudi Government has also supplied seeds and saplings at nominal prices. It has afforded veterinary and agricultural guidance and plant protection services. Other measures include the purchase of strategic agricultural crops, such as wheat and barley at high prices, through the General Organization for Grain Silos and Flour Mills.
Public discussion about environmental issues has increased significantly throughout Saudi Arabia, Following a series of floods in the Kingdom. According to the Saudi network (2010) the most important environmental issue facing Jeddah is sewage. The estimates on the area of the city that is currently connected to the sewer pipes vary from 8-14%, with around 80% of houses using septic tanks. In recent years, the waste from the city’s septic tanks has been discarded in the Briman Sewage Lake, better known as Musk Lake centre. However, environmental and health anxiety following last year’s floods, coupled with a royal decree ordering the emptying of the lake, have prompted city officials to find alternate solutions. The use of percolating pits – septic tanks without a concrete bottom that allow sewage to drain into the ground led to soil and underground water contamination as well as a rise in the water table. The lack of a proper sewer system has created an ecological calamity. Global warming has also affected Saudi Arabia more than any other country recently. The temperature in Saudi Arabia has never allowed it to snow in Saudi Arabia. However, due to global warming it recently snowed in Saudi Arabia. Due to political conflict resulting from the wiki leaks incident the Saudi government is hesitant towards implementing environmental policies.
No country in the world will be spared from the effects of the financial crisis and resulting in a global recession. According to Bourland (2008) For Saudi Arabia, it has completely shifted the focus of economic policy from controlling inflation to restoring confidence in the financial sector. We see the following key implications for the Saudi economy. Oil prices will be significantly lower than previously anticipated and reduced production will exacerbate the impact on oil revenues. Finance for local and foreign companies doing business in the Kingdom will be less easily available and more expensive. According to Bourland (2008) economic growth will slow as problems accessing suitably priced financing and lower oil revenues delay project implementation and impair confidence. Lower oil revenues will mean the end to the huge budget and current account surpluses of recent years. Sharply lower commodity prices and a strengthening of the riyal will cause inflation to fall back rapidly over the next 12 months.
Due to corruption in Saudi Arabia, the Public choice theory would help improve Saudi Arabia. The Public choice theory is most effective when government agents are self interested and will not do things in the public interest and in situations where the government is corrupt. Public choice theory encourages minimized Government and maximized market in development strategies. Government policies in Saudi Arabia encourage gender, social, and educational inequality.
Corruption is perceived as significant. According to the index of economic freedom (2010) Saudi Arabia ranks 80th out of 179 countries in transparency. International’s Corruption Perceptions Index for 2008. The absence of transparency in government accounts and decision-making encourages a perception of corruption on the part of some members of the royal family and in the executive branch. Government procurement is an area of concern. Bribes, often disguised as commissions, are allegedly commonplace. Corruption is currently preventing Saudi Arabia from reaching its full economic potential. The less fortunate population of Saudi Arabia relies on paying off officials to get things done. Those without money are always left behind. Even wealthy citizens are affected by corruption due to the fact that they are unable to invest and expand their wealth.
Crime rates are very low in Saudi Arabia due to their extreme punishments set by sharia laws. Consequently, crime does not have a significant impact on Saudi Arabia’s economic development. The main problem pertaining to crime in Saudi Arabia is its transnational trafficking Issues. According to the result of the Eighth United Nations Survey on Crime Trends and the Operations of Criminal Justice Systems (2002) Saudi Arabia has become a destination country for workers from South and Southeast Asia who are allegedly subjected to involuntary servitude physical and sexual abuse, non-payment of wages, confinement, and withholding of passports as a restriction on their movement. Domestic workers are predominantly vulnerable because they are restricted to the house in which they work, without being able to seek help. According to the result of the Eighth United Nations Survey on Crime Trends and the Operations of Criminal Justice Systems (2002) Saudi Arabia is also a destination country for Nigerian, Yemeni, Pakistani, Afghan, Somali, Malian, and Sudanese children trafficked for forced begging and involuntary servitude as street vendors; some Nigerian women were reportedly trafficked into Saudi Arabia for commercial sexual exploitation
Saudi Arabia is an absolute monarchy. The national government consists of a Council of Ministers, headed by the King, who holds the post of the Prime Minister. Its absolute monocracy regime has helped increase corruption within Saudi Arabia. The kingdom would be a very poor country without its oil revenues. There is a definite need for economic diversification for economic diversification is Saudi Arabia. Inequality and corruption are also major economic setbacks for Saudi Arabia. Gender inequality and human right violations occur on a daily bases in Saudi Arabia. Unfortunately, the government uses whatever interpretation of the Quran that is convenient for them in order to justify their greed and human Right Violations.
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