Content area
Full text
ABSTRACT
This paper discusses Saudi Arabia's weighty dependence on oil revenue. Heavy dependence on oil income at the exclusion of the development of other sources of revenue is a risk factor threatening not only Saudi Arabia's economy, but also that of the other Gulf countries. Although there have been several attempts in the last three decades to diversify the sources of revenue, there does not appear to be any significant changes. The main reasons contributing to the lack of diversification are high entrance barriers for new businesses, the government bureaucracy, and lack of commitment by the government. In addition, this paper evaluates the high unemployment rate in Saudi Arabia that results from the lack of diversification despite economic growth.
Introduction
There are six countries in the Gulf region: Saudi Arabia, Bahrain, Qatar, United Arab Emirates, Oman and Kuwait (Amadeo, 2013). The culture, religion, climate, customs, traditions, language and economic status are very similar in all of these countries (Spender, 2009). The culture is considered to be conservative, and is based on Islamic Law, which is Sharia Law. The main language spoken in the Gulf countries is Arabic and the dominant religion is Islam. The climate is very hot in the summer and dry and cold in the winter. Relative to the topic is that all of these countries are major oil exporters to the world and oil revenues are their major source of income (Al-Awsat, 2006). The table below (Table 1) illustrates the extent to which Gulf countries are dependent on oil for their revenue.
These percentages clearly show the extent to which each of the above countries is dependent primarily on oil as a source of income.
Oil Production for each Country
According to the (ELA report, 2013), Saudi Arabia's daily production of oil is 11.6 million barrels per day, making it the largest oil exporter in the world. The United Arab Emirates comes in third place producing 2.6 million barrel per day, then Kuwait in fourth place with a production of 2.5 barrels per day. Qatar comes in the tenth place producing 1.7 million barrel per day. Oman produces 9.5 thousands barrel per day, and Bahrain produces 9.3 thousands barrel per day. All the refineries operating in the Gulf countries are...