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Saudi Arabia

Beyond oil score(out of 100 points) 62.0
Index ranking(out of 26 countries ranked) 10
Overall status*  
General Economic Framework  
Political Framework  
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(Beyond) oil related factors  


According to the Oil and Gas Journal, Saudi Arabia contains 261.9 billion barrels of proven oil reserves (including 2.5 billion barrels in the Saudi-Kuwaiti Divided, aka "Neutral" Zone), around one-fourth of proven, conventional world oil reserves. Around two-thirds of Saudi reserves are considered "light" or "extra light" grades of oil, with the rest either "medium" or "heavy."

Oil provides around 95% of Saudi arabia’s export income, as well as 40% of the country’s GDP..

The Saudi economy is still very reliant on oil. However over the last number of years the Saudi government has focused and invested in the non oil sector. Its most recent achievement was the admission of Saudi Arabia into the World Trade Organisation (WTO). This was a big vote of confidence in the Saudi government’s investment laws and in its efforts to nurture the non oil sector into more solid and continuous growth.

Further evidence of government plans to reduce dependency on oil is evident in the Saudi government’s five year plan to reduce the oil’s contribution to Saudi GDP from a figure of 39% to 34% in the year 2009. This is despite a planned increase in oil production. Increased revenue from oil channelled into the non oil sector plus admission into the WTO made the Saudi Stock Exchange one of the best performers in the Middle East in the year 2005, where more than $1 trillion worth of Saudi shares were traded in 2005. Saudi change in investment laws allowing tax breaks and full investment in certain sectors has lead to increases in investment in certain sectors such as Tourism, Transportation and Construction. Furthermore Saudi plans to invest US$ 650 billion in infrastructure projects, such as the construction of highways, airports and ports, between the years of 2006 and 2015 is expected to add to the non oil sector’s growth and efficiency. The Tourism sector, receipts from the Hajj especially, from Saudi Arabia’s biggest non oil sector and income. Meanwhile the Saudi construction sector occupies the third position in the non oil sector. The Saudi transportation sector is also expected to continue its growth after government approval for the establishment of a second airline in Saudi Arabia, plus plans to expand the railway sector.

Beyond Oil summary

Saudi Arabia’s efforts to diversify its economy away from oil, have started to show results. Although Saudi Arabian is still quite dependent on oil, its level of dependency is lower than in the 80 and 90s decade. Meanwhile, Saudi Arabia’s relatively large oil and gas reserves, its entry into the World Trade Organization, and investment in sectors such as transportation, health, manufacturing and construction have increased the diversity and range of income from non oil sources. This is notwithstanding the country’s regular income from the Haj pilgrimage, which runs into billions every year.

  Indicates high preparedness   Indicates deficits but potential for development   Indicates unfavourable preconditions.
 
     
   
 
 
Beyond oil © 2007.