Question

1. Based on information from a variety of sources, out of all countries –

Saudi Arabia ranks 26^th in healthcare while the United States ranks 31^st

Saudi Arabia ranks 95^th in the lack of civil unrest while the United States ranks 97^th

Saudi Arabia ranks behind the United States in terms of education

Saudi Arabia has investment of 30.75% of GDP while the United States is 19.754%

All of this suggests that the standards of living in the United States and Saudi Arabia are very similar - using this, answer the question below.

Suppose a country with a low standard of living asks for your advice on whether it should try to emulate Saudi Arabia or the United States in pursuing its goal of increasing its standard of living. What would you advise?

Answer 1

I would advise a country to follow the path of the United States rather than Saudi Arabia in pursuing its goal of increasing the standards of living. The growth of Saudi Arabia is mainly driven by Oil as Saudi is an oil-rich country. The high amount of oil exports help Saudi Arabia sustain a high standard of living. However, oil is a depletable natural resource. Moreover, countries across the world are putting efforts to decrease dependence on oil and explore alternative sources of energy. So, the economic growth of Saudi is seriously threatened in the near future. Saudi Arabia's growth is not based on the development of human capital or technology. Improvement in human capital helps in innovation and sustainable growth. The economic growth of the United States is based on human capital development, investment in education and supporting and entrepreneurial spirits. The US economy is much more innovative and resilient to deal with economic challenges. So, one should follow the model of the US rather than that of Saudi Arabia.