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Comment classmate f: Although the situation in Saudi Arabia is more stable than other countries that had hit by Arabic Spring. There are some issues that preoccupy many Saudis such as unemployment...

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Comment classmate f: Although the situation in Saudi Arabia is more stable than other countries that had hit by Arabic Spring. There are some issues that preoccupy many Saudis such as unemployment rate and politics participation. Unemployment rate is a bone of contention between government and a people who are interested in this subject. There is no a clear percentage of unemployment rate but you can feel how big is this rate by looking around you. I know some people who don't have jobs or they may have jobs but the salary is too low. So, as I have read the government has pushed the labor ministry to find jobs for those people in private sector. In my opinion, the suitable way is by creating new jobs in the government sector because it is a favorite sector for many saudis to work in.
In addition, since most of saudis are young, I don't believe that they are interested in politics participation. But some people have raised this issue and the government responded to these requests by allowing to municipal elections. Many people think that municipal elections is a first step and they think that other steps will follow it such as allowing to the elections to the Shura Council, and the Shura Council is similar to some extent the US Congress, but the appointment is done by the government, not by the elections.
Comment Prof:Interesting comment; however, I am, not surprised, but a little concerned when you state that saudis prefer to work for the government rather than the private sector. Although I am one of those who believe in having an efficient government sector, not a weak one, I don't see how a country can be well-developed without a strong private sector. Is there anybody in SA who is concerned that the Saudi government may have too much control over the economy?
Comment classmate f: The advantage of working in government sector is that the number of working hours is less than the number of working hours in private sector. In general, private sector offers better jobs and better future but you should be a qualified and able to work at least 8 hours a day, as well you may work in weekend. So, some Saudis (I won't say many because I don't have evidence) prefer to work in government especially when the salaries are close for a certain job.
I don't see that government has too much control over the economy. Of course, the government controls the oil production by ARAMCO, but it gives citizens the opportunities to invest in oil industries such as Petrochemical and Chemical industries. We have many successful private companies in oil industry and other industries, and if they faced any restrictions from the government, they would not invest their money in Saudi Arabia
Comment Prof: Do you have any data on how much is produced by private firms versus those that are nationalized?
Comment classmate f: Aramco is the only company which extracts and sells the oil in Saudi Arabia and it was nationalized between XXXXXXXXXXIn other oil industry, there is SABIC which is one of the biggest petrochemical and chemical producers in the world and the government owns 70% of it and 30% is traded in saudi stock market. As well there are several company working in this field such as TASNEE, SAHRA, SIPCHEM and APPC which are considered as completely private companies and all are traded in saudi stock market. Petro Rabigh which is a joint venture between ARAMCO and japanese sumitomo chemical, and there are also other companies operate comfortably there.
I'm not sure if that what you are asking for.
Comment Prof: It seems that all the companies you mention are oil-related and highly dependent on the government-owned Aramco. This gives the government a lot of control, both direct and indirect, on the economy; perhaps too much?
Comment classmate f: To some extent you are right. To run petrochemical factories we should buy the feedstock (Naphtha) from ARAMCO which is a sole provider in Saudi Arabia. But when I was working there, I did not remember that we have faced any difficulties (shortage) or restriction (cost) for getting the feedstock from ARAMCO. We are treated by ARAMCO like any other company though some companies are owned by the government.
What I want to say is that I can assure you that the investment in Saudi Arabia grows clearly in different ways without any difficulties or strong restriction from the government, but the only problem is the absence of diversity in investment, and that may cause lots of problems in our income when oil price decreases sharply or even when oil is dispensed which I hope not happen. As I mentioned in other comment, we will invest in the solar energy soon, which is the future of energy as some people think, and that will give our economy big push in diversification the income
Comment Prof: Your point is well taken as it is certainly possible for government owned firm to be well managed and efficient.
As far as solar energy is concerned, note that your country will face a lot more competition as the sun is more evenly distributed than oil across the world. Thus Saudi Arabia will eventually need to diversify its economy and be less dependent on energy exports to earn foreign exchange reserves.
Comment classmate f: I agree with you specially when you said that the sun is evenly distributed across the world. But not all countries have enough money to invest in solar energy. Investment in solar energy needs more money and the technical that uses in solar energy is too expensive, and I don't believe that many countries are able to invest in it, but they able to buy electricity from other countries, I guess. About diversification of income, we considered as a poor country in terms of natural resources with the exception of the oil of course and the high heat of the sun. Hope in SA depends on young people in the future to look for ways to diversify our income by establishing new industries
Answered Same DayDec 31, 2021

Solution

Robert answered on Dec 31 2021
43 Votes
Saudi Arabia by far has been an oil producing nation. There has been growth and
development in the economy mainly due to the existence of oil reserves. This has shaped its
economy to a great extent. The nationalization of Aramco does lead to the public sector not
eing a lesser lucrative...
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