Diversification as the nucleus of economic reform *policies in the Kingdom of Saudi Arabia: A tripartite study

2006 2006

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Abstract (summary)

The economy of the Kingdom of Saudi Arabia (KSA) suffered from major structural problems during the last two decades. Massive subsidies, inefficient industries, and the lack of a fully developed free-market system all hampered the ability of the Kingdom to pull itself out of its public debt, which reached 98 percent of gross domestic product (GDP) in 2001.

Saudi decision makers realize that neither the return of higher petroleum prices nor oil as the main source for Saudi Arabia government revenues are the permanent solution for tackling these structural problems. They, also, realize that new reserves, new international treaties limiting green house gas emissions, new energy-creating technologies or new exploration, extraction, or refining technologies could all force prices down in the long-term.

Subsequently, the Saudi decision makers have asserted in the latest Eighth Five-Year National Development Plan (2005-2010) to reform the economy by focusing on diversification with emphasis on promising areas such as manufacturing industries particularly energy and related derivatives, intensive industries, mining, tourism and information technology industries.

The policy of the government of Saudi Arabia (GSA) to diversify its economy in the areas of investment facilitation, privatization, and tourism development will depend on the ability and competence of the implementing agencies such as The Supreme Economic Council (SEC), Saudi Arabia General Investment Authority (SAGIA), and The Supreme Commission for Tourism (SCT).

In this regard, we apply the requirements of public choice theory to study these implementing agencies and to determine what conditions are necessary within each agency and the society at large to maximize the government's chances to achieve their objective of developing alternative revenue streams for government sponsored programs.

Finally, the paper attempts to stress why now is the specific time to urge for a comprehensive economic reform program that could potentially benefit the entire Saudi community an economic reform that could result in minimum social costs through high wages, low unemployment rates, reduction in poverty, adoption of a totally free market system, and increasing the productivity of the Saudi labor force. By responding to these challenges, with determination and vitality, the decision makers will be fulfilling the requirements that Allah demands from believers when He decrees that He would not change the circumstances of those who do not change themselves in the first place.

Indexing (details)

Public administration;
International law;
International relations
0617: Public administration
0616: International law
0616: International relations
Identifier / keyword
Social sciences; Diversification; Economic reform; Policies; Saudi Arabia
Diversification as the nucleus of economic reform *policies in the Kingdom of Saudi Arabia: A tripartite study
Alsaleh, Shakir Bin Ahmed
Number of pages
Publication year
Degree date
School code
DAI-A 67/09, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
Frazier, Michael
Howard University
University location
United States -- District of Columbia
Source type
Dissertations & Theses
Document type
Dissertation/thesis number
ProQuest document ID
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
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