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©Ali Jarkeji/Reuters/Popperfoto.com
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The
Saudi Arabian economy used to depend on selling dates
and the annual Hajj.
All this changed in 1936 when the Californian Standard
Oil company discovered oil in the desert. With an output
of 8 million barrels a day, Saudi Arabia is the world’s
largest oil producer and relies on oil for 90% of its
income. |
Saudi oil is entirely in the hands of one
national company, Saudi Aramco. The company’s oil production
is greater than the two biggest transnational
oil corporations (Exxon-Mobil, Royal Dutch/Shell) put together.
Opportunities from oil
Oil has brought enormous opportunities
for development. All Saudis live tax-free and are guaranteed
free health care and education.
| Oil
money has paid for an extensive road network criss-crossing
the desert, linking cities with expressways of up to eight
lanes. The country has three international airports, and
there are plans to extend the rail network in order to
transport the plentiful supplies of resources. |
©Guiseppe Bizarri/Panos
Pictures
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The government is trying to diversify
the economy to develop other industries like construction,
food processing and agriculture. With the help of private
investors, agricultural production has been increasing to
include wheat, barley, tomatoes, melons, dates, citrus, mutton,
chickens, eggs and milk.
| Why
is it important for Saudi Arabia to move away from its
dependence on oil money? Imagine that you are an advisor
for the government of Saudi Arabia. It is your job to
write a paper stating why diversification
is important. Visit Focus on Oil/The
Power of Oil for some ideas to help you. |
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