Question

Please name two pillars of economic insight and illustrate them with clear examples related to the KSA economy.

Answer 1

The two main pillars of an economy to rise and grow are :-

i) Investment , &

ii) Revenue

However, in case of the Kingdom of Saudi Arabia (KSA), things are little different in comparison of other countries as it is one of the major oil producing countries. It has no taxation policy and minimum custom duties. While its dependency on oil exports makes its economy to be very uncertain and unpredictable. As a fall in the rates of crude oil badly jolts the economy.

The nation needed economical reforms like :-

a) Introduction of a Tax-system in the economy

b) Cutting short on Investments in the construction sector

c) Privatization of different sectors

d) Having cordial relations with neighbouring countries

Subsequently, Investments done in different sectors like : hospitality & tourism, mining, manufacturing, trade & technology, financial services and healthcare etc,. will reduce the dependency on oil and rather create revenues from non-oil sectors more. It will also decrease the subsidies given on food items, energy sector and many more, hence, controlling the government spendings.

Introduction and privatization of various sectors in the economy will create more job opportunities, making more people employed, thus, generating more income and demand in the economy leading to GDP growth.