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Economy of Saudi Arabia

Saudi Arabia has an oil-based economy with strong government control over major economic activities. Saudi Arabia possesses 18% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and played a leading role in OPEC for many years. The petroleum sector accounts for almost all of Saudi government revenues, and export earnings. Most workers, particularly in the private sector, are foreigners.

Saudi oil reserves are the second largest in the world, and Saudi Arabia is the world's leading oil exporter and second largest producer. Proven reserves, according to figures provided by the Saudi government, are estimated to be 260 billion barrels (41 km3), about one-quarter of world oil reserves. Petroleum in Saudi Arabia is not only plentiful but under pressure and close to the earth's surface. This makes it far cheaper and thus far more profitable to extract petroleum in Saudi Arabia than in many other places. The petroleum sector accounts for roughly 92.5% of Saudi budget revenues, 97% of export earnings, and 55% of GDP.

Another 40% of GDP comes from the private sector. An estimated 7.5 (2013) million foreigners work legally in Saudi Arabia, playing a crucial role in the Saudi economy, for example, in the oil and service sectors. The government has encouraged private sector growth for many years to lessen the kingdom's dependence on oil, and to increase employment opportunities for the swelling Saudi population. In recent decades the government has begun to permit private sector and foreign investor participation in sectors such as power generation and telecom, and acceded to the WTO. During much of the 2000s, high oil prices enabled the government to post budget surpluses, boost spending on job training and education, infrastructure development, and government salaries. More than 95% of all Saudi oil is produced on behalf of the Saudi Government by the parastatal giant Saudi Aramco, and the remaining 5% by similar parastatal companies as of 2002.

Future Plan

Saudi Arabia has announced plans to invest about $46 billion in three of the world's largest and most ambitiou Tanura integrated refinery and petrochemical project, the $9 billion Saudi Kayan at the Wayback Machine (archived March 15, 2009) petrochemical complex at Jubail Industrial City, and the $10 billion Petro Rabigh refinery upgrade project. Together, the three projects will employ more than 150,000 technicians and engineers working around the clock. Upon completion in 2015-16, the Ras Tanura integrated refinery and petrochemicals project will become the world's largest petrochemical facility of its kind with a combined production capacity of 11 million tons per year of different petrochemical and chemical products. The products will include ethylene, propylene, aromatics, polyethylene, ethylene oxide, chlorine derivatives, and glycol.

Saudi Arabia had plans to launch six "economic cities" (e.g. King Abdullah Economic City, to be completed by 2020, in an effort to diversify the economy and provide jobs. They are being built at a cost of $60bn (2013) and are "expected to contribute $150bn to the economy". As of 2013 four cities were being developed.

Non - Petroleum Sector

Saudi Arabia has natural resources other than oil, including small mineral deposits of gold, silver, iron copper, zinc, manganese, tungsten, lead, sulphur, phosphate, soapstone and feldspar. The country has a small agricultural sector, primarily in the southwest where annual rainfall averages 400 mm (16"). The country is one of the world's largest producers of dates.

Privet Sector

Saudi Arabia's private sector is dominated by a handful of big businesses in the service sector, primarily in construction and real estate—Bin Laden, Olayan, Zamil, Mahfouz, and Al Rajhi. These firms are "heavily dependent on government spending", which is dependent on oil revenues.

From 2003-2013, "several key services" were privatized—municipal water supply, electricity, telecommunications—and parts of education and health care, traffic control and car accident reporting were also privatized.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Saudi Arabia"

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