Al Naimi, S. M. (2021). Economic Diversification Trends in the Gulf: the Case of Saudi Arabia.
Circular Economy and Sustainability. https://doi.org/10.1007/s43615-021-00106-0
Author
Sarah Muhanna Al Naimi
The Article Title
The article is titled “EconomicDiversification Trends in the Gulf: the Case of Saudi Arabia.Circular Economic and Sustainability “
Main Points
The article addresses Saudi Arabia’s dependence on crude oil as its primary source of energy as dangerous precedence. In addition, the crude oil that is a primary sustainer of the Kingdom’s economy is a non-renewableenergy. It suffers the threats of price fluctuations and uncertainties due to a considerable shift to new forms of energy sources more so solar energy around the globe. The Kingdom believes in diversification as an ideal way to cushion her economic future from plummeting. The Kingdom moved closer o the goal by formulating its vision 2030, whose core is diversification. Some targeted sectors include education, focus on human capital and non-oil investments such as promoting tourism.It is the fact that research and education advance human capital. However, the fluctuating oil prices, traditional education nature, and huge budget deficit are prominent challenges in realizing the goal. The context of the research is the Gulf area in the Kingdom of Saudi Arabia.Current problem is the reliance on the supply of oil products as the chief driver of the nation’s economic growth and development. The author claims that Saudi Arabia focuses on k knowledge-oriented economy via enhancement of research, and I vestment in education leads to economic growth. It will, however, suffer from unstable oil prices and the nation’s existing education system.
Literature Review
Al-Saidi et al. confirm that focusing on education as a driver is timely since it helps manufacturers profit from quality labor, thus producing competitive products.
Wirba claims that while the Gulf area records huge success in economic development, theaggregate allocation in research and development is same as developing nations. It highlights the importance of research and development to sustain economic growth. In addition, Ozilin argues for a circular economy that distances itself from the use of natural raw materials and disposal of waste. According to Ozil, a circular economy suits the new idea of Gulf nations since it invests in recycling waste through technology for sustainable development.
Conclusion
The author proposes diversification of the economy of Saudi Arabia through a focus on knowledge-based investment as an alternative to overdependence on oil. The oil industry is unsustainable due to its price fluctuations.
Quotes and Usefulness of Source
“Wirba argues that success in building a knowledge-based economy represents the basis for improved global competitiveness dependence.”(Al Naimi, 2021).
The article is useful in improving the clarity of the arguments. For instance, it focuses on investment in education as a conduit for realizing economic growth further from oil depending on oil. “If creating a knowledge-based economy is the cognitive bridge to creating a diversified economy, then educational reform and investment in R&D provide the infrastructure for building that knowledge-based economy, which would enable Saudi Arabia to transition away from an oil-based economy.”(Al Naimi, 2021).
Winder, B. (2020, June 18). Challenges and Opportunities for the Saudi Economy. Carnegie Endowment for International Peace. https://carnegieendowment.org/sada/82104
Author
This articlewas written by Bayly Winder.
Title
The tikes are “Challenges and Opportunities for the Saudi Economy—Carnegie Endowment for International Peace”.
Main points
The main issue is the shock that the Saudi economy has sustained due to covid 19, which caused the fluctuation of oil prices due to a demand reduction. The shock also affected non-oilsectors that the Kingdom decided to use as an alternative to reliance on oil resources. The article considers the vision of the Kingdom 2030, which consists of the Crown Princess flagship projects that are suited to relieve the Kingdom from economic reliance on oil resources. It is thus essential to note that the crises in the Saudi economy can lead to opportunities away from traditional reliancethrough diversification of the Kingdom’s economy.Saudi economy can emerge from the shocks of covid 19 via radical reforms, which prepare it for future prosperity outside the confines of dependence on oil. Achieving it means focusing on the private sector to relieve the public as the sole provider of jobs in the economy.
Literature Review
From various scholars’ perspective, the government, therefore, needs to formulate and implement critical measures to help Saudi emerge stronger from the economic problems associated with Covid 19 and fluctuations in hydrocarbons. Problemeconomy hurdles due to overreliance on oil as the backbone of the economy, which greatly suffered during Covid 19.
Conclusion
The author is hopeful that the Kingdom can emerge stronger from the economic turmoil, more rejuvenated than ever. Through investment in private industry for an alternative source of jobs for young Saudi nationals. It serves as a learning opportunity where the government does not undertake to implement policies that would prevent Saudi from shocks due to over-reliance on oil and gas resources that are not consistent in revenues.
Quote and Usefulness of the Paper
“This is also a chance to reshape Saudi Vision 2030 and mold that grand plan into a more realistic, trimmed-down form.”(Winder, 2020).
The paper is useful because of the new information regarding research gaps. At the same time, most researchers spell doom on the Saudi dependence on oil. It gives hope for recovery; thus, new research should focus on better ways to bring back the Saudi economy to its glory days in post covid19. Besides, the source helps to demonstrate that through proper execution of alternative economic policies such as tourism through the building of tech cities, the economy can withstand the depression from constant oil prices slumps.
Tejvan Pettinger. (2017, June 26). The knowledge economy | Economics Help.
Economicshelp.org. https://www.economicshelp.org/blog/27373/concepts/the-
knowledge-economy/
Author
Tejvan Pettinger is the author of the study
Title
“The Knowledge Economy.”
Main points
The article holds that a knowledge-based economy is developed on knowledge-oriented activities that hugelydepend on intellectual capital. It, however, has less emphasis on physical inputs such as natural resources. It would require an economy, especially the Kingdom of Saudi Arabia, to reconsider its economic prospects past oil reliance in its national projects such as social programs. In addition, knowledge economy favors the followingaspects:
- Service-oriented industries such as health care, tourism, software, and education
- High tech manufacturing, especially aerospace and computer engineering
- Business-oriented services, more so communication, insurance.
More importantly, the knowledge economy does not limit labor in narrow confines, and it provides a lot of flexibility for youths to work everywhere in the globe.
Literature Review
STAN database provides a graphical presentation showing the increase of high-tech industries, thus necessitating the knowledge economy. On the contrary, Spicer Andre, in a post to the Guadian, dismisses knowledge economy as a myth that needs less emphasis. Such as statement needs to provoke new research to prove or disapprove the claims.
Conclusion.
The author regards the knowledge economy as an essential sector that provides numerous critical jobs that would continue to grow. It has opportunities for self-employment for super-qualified individuals. The paper proposes considering knowledge economy as a viable form alternative to traditional economies that rely on physical inputs.However, less skilled people would struggle to find employment, thus reaffirming the importance of investing in education, research, and development.
Quote and Usefulness of the Source
Quoting the paragraph on the importance of knowledge economy provides the relevance of the ideas, thus making it applicable to economies such as the Gulf economies that depend on natural resources.
Notably, the article is useful because provides an opportunity to find new knowledge regarding a distinct sustainable form of an economic ideology moving with changing labor trends in the market.The source helps strengthen the argument for adopting the knowledge-based economy due to the numerous advantages it provides. The benefits of multiple job opportunities are what Gulf economies such as the Kingdom of Saudia Arabia need to absorb their growing young people.
What are the possible causes and consequences of higher oil prices on the overall economy? (n.d.). Federal Reserve Bank of San Francisco.https://www.frbsf.org/education/publications/doctor-econ/2007/november/oil-prices-impact-economy/#: ~:text=Oil%20price%20increases%20are%20generally.
Author
The Federal Reserve Bank of San Fransisco
Title
“What are the possible causes and consequences of higher oil prices on the overall economy?”
Main Points
The article is premised on increases in prices of oil in the international markets., Notably. Prices of oil rise due to excess demand, especially in developing economies such as India and China. The need for the commodity is due to the appetite for economic growth in those nations. In addition, the fear of supply disruption is another cause of the rise in oil supply. The increase in oil prices leads to inflation that limits economic growth. Oil hikes depress the collection of many goods, thus limiting economic development. The Problem is low economic growth due to increase in oil prices.The author argues that while oil remains an essential commodity in the production of goods, currently, there is less a weak link between inflation and prices of goods. Economists have determined that flexibility in job markets and robust monetary Policies have reduced the effects of increasing energy prices.
Literature Review
Gregory Mankiw suggests that a rise in energy efficiency such as renewable and nuclear is one reason why fluctuations in oil prices may not have a massive impact on economies. In addition, Blanchard and Gali (2007) assert that better monetary improvements and flexibility in labor markets contribute to limiting effects of rising of oil in the economy.Policymakers were likely worried about output and not necessarily inflation due to oil hikes when devising regulations. (Clarida, Gali, and Gertler 2000).
Conclusion,
The author believes that oil prices have little effect on the economic r4ecession or boom. It is not clear the exact role the oil prices played in recessions. In addition, changes touching on labor markets and stability in energy sources are some of the reasons to limit the vast effects that oil had on the world economy in the 1970s.
Quote and Usefulness
Quoting the second last paragraph is important since it explains why oil has lost its place as an undisputed important commodity in world trade. It explains why the notion of oil being the ultimate influencer on the economy is biased.
The information is useful to reinforce the idea of avoiding overreliance on natural resources for economic growth. Currently, nations such as Saudia Arabia cannot fully depend on oil as a tool for their economic growth since the importance of oil has gone down. New energy sources such as nuclear and solar energy and diverse labor market are some reasons to reduce fat as the controller of the world economy.It is clear that changes in the labor market are imperative and are currently mitigating the effects of oil. Notably, nations such as Saudi Arabia must prepare
References
Al Naimi, S. M. (2021). Economic Diversification Trends in the Gulf: the Case of Saudi Arabia. Circular Economy and Sustainability, 1-10.https://doi.org/10.1007/s43615-021-00106-0
Economicshelp.org. https://www.economicshelp.org/blog/27373/concepts/the-
knowledge-economy/
What are the possible causes and consequences of higher oil prices on the overall economy?
(n.d.). Federal Reserve Bank of San Francisco.
https://www.frbsf.org/education/publications/doctor-econ/2007/november/oil-prices-
Tejvan Pettinger. (2017, June 26). The knowledge economy | Economics Help.
Winder, B. (2020, June 18). Challenges and Opportunities for the Saudi Economy. Carnegie Endowment for International Peace. https://carnegieendowment.org/sada/82104