Economic Interdependence and Saudi ArabiaI will start with a bit of history, the world’s biggest petroleum reserve was discovered when anAmerican-owned oil well in Dhahran, Saudi Arabia, dug into it on March 3, 1938. Saudi Arabia,the Middle East, and the world’s political, human, and physical geography were all drasticallyaltered by the finding. Saudi Arabians were primarily nomads prior to the discovery. The touristindustry, which derived from devout Muslims traveling to Mecca, was the backbone of thenation’s economy. The demographics of the kingdom were also altered by the discovery of oil.Saudi Arabia is home to millions of international workers who come from the Middle East,Ethiopia, India, Pakistan, and the United States.The economy of Saudi Arabia has traditionally been heavily dependent on oil exports, which hasrendered the nation particularly susceptible to fluctuations in global markets and geopoliticaldevelopments. Recognizing the necessity for economic diversification, the kingdom has soughtto diminish its reliance on oil. This shift has fostered increased trade relations with variouscountries, thereby creating opportunities for Saudi enterprises to penetrate new markets andbroaden their operations.Furthermore, the kingdom’s advantageous geographic position and economic potential havedrawn considerable foreign investment. Nonetheless, challenges persist, as the dependence onoil exports exposes the economy to the volatility of global oil prices; a downturn in these pricescan significantly affect the nation’s economy, resulting in decreased government revenue, risingunemployment, and potential social unrest. Additionally, the kingdom’s economic advancementhas relied heavily on foreign technology, which has made it vulnerable to disruptions in supplychains and risks of intellectual property theft.This raises the question of what measures Saudi Arabia is undertaking to address thesechallenges and diversify its economy. To illustrate, two notable initiatives are presented: first,Vision 2030, a comprehensive long-term plan aimed at transforming the kingdom into a globalinvestment hub and a center for innovation; second, the economic reforms that Saudi Arabiahas enacted, which include privatization, deregulation, and the liberalization of its labor market.So far, we are living through the time of which Saudi Arabia is taking serious steps towrdsinternational cooperation. The measure of implementing globalization in Saudi Arabia is notablewhere services, as an example, is exchanged from and within and to Saudi Arabia.ReferencesOil discovered in Saudi Arabia. (n.d.).Raid, M., Ahmad, N., Bagadeem, S. A., Alzyadat, J., & Alhawal, H. (2024). The non-oilinstitutional sectors and economic growth in Saudi Arabia. Cogent Economics &Finance, 12(1).Saudi Arabia – United States Department of State. (2023, December 7). United StatesDepartment of State.2C%20createSaudi Arabia confronts its oil dependence – Kleinman Center for Energy Policy. (2023, November21). Kleinman Center for Energy Policy.0to%20some%20extentSaudi Arabia to grow at fastest pace in a decade. (2022, August 9).IMF.20just%20three%20minutes)%2CModule 1 – What do you know about Globalization?Saudi Arabia’s economy has been significantly impacted by globalization, which has led to agreater degree of economic interdependence with other countries. Saudi Arabia, a significant oilexporter, has benefited from the increased demand for energy resources around the world,solidifying its position in the global economy. The kingdom’s economy has been bolstered by theinflow of foreign capital and its enhanced access to global markets, positioning it as a leader inthe global energy sector. Globalization has also made it possible for Saudi Arabia to draw ininternational capital, diversify its economy, and import cutting-edge technology that support itscontinued growth (Saudi Vision 2030 Document, 2017).Economic interconnectedness is not without risk, though. Due to its continued reliance on oilearnings, Saudi Arabia may experience severe economic volatility as a result of changes in theprice of the commodity globally (Saudi Arabia Oil & Gas Report, 2021). Geopolitical upheavalsand the global switch to renewable energy sources exacerbate this reliance. Even with programslike Vision 2030 aimed at diversifying the economy, the monarchy is still susceptible to outsideeconomic shocks. Even while it has a positive effect on the world stage, this economicinterdependence calls for strong risk management and long-term stability plans.Saudi Vision 2030 and International CompetitivenessSaudi Vision 2030, which lays out a new economic path centered on modernization anddiversification, is essential to raising the kingdom’s standing internationally. The majority ofSaudi Arabia’s national income has historically come from oil exports, which have a significantimpact on the country’s economy. But because of this reliance, the monarchy is now moresusceptible to changes in the price of oil globally and in the demands for energy. Vision 2030(Saudi Vision 2030 Document, 2017) tackles this issue head-on by placing a strong emphasis onthe growth of non-oil industries like tourism, technology, entertainment, and renewable energy.Saudi Arabia is in a better position to manage the volatility of the world energy market andmaintain long-term economic stability as a result of its decreased reliance on oil.The globalization process is closely linked to the project as well. Through the promotion of amore hospitable regulatory environment and the improvement of infrastructure to meetinternational standards, Saudi Vision 2030 seeks to draw foreign direct investment (FDI). Withits investments in many industries demonstrating the kingdom’s commitment to building astrong and diversified economy, the Public Investment Fund (PIF) has emerged as a crucialinstrument in this respect. Particularly the entertainment and tourist industries have drawn a lotof attention, and this strategy heavily relies on large-scale initiatives like NEOM, a futuremetropolis designed to spur innovation. Saudi Arabia aims to modernize its economy andeffectively participate in the global market by generating these opportunities (Saudi Arabia Oil &Gas Report, 2021).In line with the tenets of globalization, Vision 2030 also aims to establish Saudi Arabia as a hubfor international trade, investment, and innovation. Through the reduction of regulatorybarriers and enhancement of business facilitation, the monarchy is extending its invitation forglobal partnerships and collaborations. This emphasis on fostering a climate that is businessfriendly draws in global companies and promotes capital flows, technology adoption, andknowledge transfer—all of which can lead to additional economic growth. Saudi Arabia isstrengthening its position internationally and moving closer to being a significant hub forinternational trade by taking use of its advantageous location at the intersection of Europe, Asia,and Africa.ReferencesAltman, S. A., & Bastian, P. (2021). The state of globalization in 2021. Harvard Business ReviewDigital Articles, 1-9. Retrievedfromt-liveSaudi Arabia Oil & Gas Report. (Q1 2021). Fitch Solutions Country Industry Reports, 1-84.Saudi Vision 2030 Document. (2017). Kingdom of Saudi Arabia. Retrievedfrom
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