Saudi Arabia

Saudi Arabia officially known as the Kingdom of Saudi Arabia (KSA),[d] is an Arab sovereign state in Western Asia constituting the bulk of the Arabian Peninsula. With a land area of approximately 2,150,000 km2 (830,000 sq mi), Saudi Arabia is geographically the fifth-largest state in Asia and second-largest state in the Arab world after Algeria. Saudi Arabia is bordered by Jordan and Iraq to the north, Kuwait to the northeast, Qatar, Bahrain, and the United Arab Emirates to the east, Oman to the southeast, and Yemen to the south. It is separated from Israel and Egypt by the Gulf of Aqaba. It is the only nation with both a Red Sea coast and a Persian Gulf coast, and most of its terrain consists of arid desert or barren landforms.

The area of modern-day Saudi Arabia formerly consisted of four distinct regions: Hejaz, Najd, and parts of Eastern Arabia (Al-Ahsa) and Southern Arabia (‘Asir).[8] The Kingdom of Saudi Arabia was founded in 1932 by Ibn Saud. He united the four regions into a single state through a series of conquests beginning in 1902 with the capture of Riyadh, the ancestral home of his family, the House of Saud. Saudi Arabia has since been an absolute monarchy, effectively a hereditary dictatorship governed along Islamic lines.[9][10] The ultraconservative Wahhabi religious movement within Sunni Islam has been called “the predominant feature of Saudi culture”, with its global spread largely financed by the oil and gas trade.[9][10] Saudi Arabia is sometimes called “the Land of the Two Holy Mosques” in reference to Al-Masjid al-Haram (in Mecca), and Al-Masjid an-Nabawi (in Medina), the two holiest places in Islam. The state has a total population of 28.7 million, of which 20 million are Saudi nationals and 8 million are foreigners.[11] The state’s official language is Arabic.

Petroleum was discovered on 3 March 1938 and followed up by several other finds in the Eastern Province.[12] Saudi Arabia has since become the world’s largest oil producer and exporter, controlling the world’s second largest oil reserves, and the sixth largest gas reserves.[13] The kingdom is categorized as a World Bank high-income economy with a high Human Development Index,[14] and is the only Arab country to be part of the G-20 major economies.[15] However, the economy of Saudi Arabia is the least diversified in the Gulf Cooperation Council, lacking any significant service or production sector (apart from the extraction of resources).[16] The state has attracted criticism for its treatment of women and use of capital punishment.[17] Saudi Arabia is a monarchical autocracy,[18][19] has the fourth highest military expenditure in the world,[20][21] and in 2010–14, SIPRI found that Saudi Arabia was the world’s second largest arms importer.[22] Saudi Arabia is considered a regional and middle power.[23] In addition to the GCC, it is an active member of the Organisation of Islamic Cooperation and OPEC.


Saudi Arabia’s command economy is petroleum-based; roughly 75% of budget revenues and 90% of export earnings come from the oil industry. It is strongly dependent on foreign workers with about 80% of those employed in the private sector being non-Saudi.[247][248] Among the challenges to Saudi economy include halting or reversing the decline in per capita income, improving education to prepare youth for the workforce and providing them with employment, diversifying the economy, stimulating the private sector and housing construction, diminishing corruption and inequality.
The oil industry comprises about 45% of Saudi Arabia’s nominal gross domestic product, compared with 40% from the private sector (see below). Saudi Arabia officially has about 260 billion barrels (4.1×1010 m3) of oil reserves, comprising about one-fifth of the world’s proven total petroleum reserves.[249]

In the 1990s, Saudi Arabia experienced a significant contraction of oil revenues combined with a high rate of population growth. Per capita income fell from a high of $11,700 at the height of the oil boom in 1981 to $6,300 in 1998.[250] Taking into account the impact of the real oil price changes on the Kingdom’s real gross domestic income, the real command-basis GDP was computed to be 330.381 billion 1999 USD in 2010.[251] Increases in oil prices in the aughts[peacock term] helped boost per capita GDP to $17,000 in 2007 dollars (about $7,400 adjusted for inflation),[252] but have declined since oil price drop in mid-2014.[253] Office of Saudi Aramco, world’s most valuable company and main source of revenue for the state.

OPEC (the Organization of Petroleum Exporting Countries) limits its members’ oil production based on their “proven reserves.” Saudi Arabia’s published reserves have shown little change since 1980, with the main exception being an increase of about 100 billion barrels (1.6×1010 m3) between 1987 and 1988.[254] Matthew Simmons has suggested that Saudi Arabia is greatly exaggerating its reserves and may soon show production declines (see peak oil).[255] Al-Rajhi Bank is world’s largest Islamic bank.
Kingdom Holding Company has investments in Apple, Euro Disney S.C.A., Twitter and Citigroup
Saudi Telecom Company is world’s 15th largest mobile network operator.

From 2003–2013 “several key services” were privatized—municipal water supply, electricity, telecommunications—and parts of education and health care, traffic control and car accident reporting were also privatized. According to Arab News columnist Abdel Aziz Aluwaisheg, “in almost every one of these areas, consumers have raised serious concerns about the performance of these privatized entities.”[256] The Tadawul All Share Index (TASI) of the Saudi stock exchange peaked at 16,712.64 in 2005, and closed at 8,535.60, at the end of 2013.[257] In November 2005, Saudi Arabia was approved as a member of the World Trade Organization. Negotiations to join had focused on the degree to which Saudi Arabia is willing to increase market access to foreign goods and in 2000, the government established the Saudi Arabian General Investment Authority to encourage foreign direct investment in the kingdom. Saudi Arabia maintains a list of sectors in which foreign investment is prohibited, but the government plans to open some closed sectors such as telecommunications, insurance, and power transmission/distribution over time.

The government has also made an attempt at “Saudizing” the economy, replacing foreign workers with Saudi nationals with limited success.[258]

Saudi Arabia has had five-year “Development Plans” since 1970. Among its plans were to launch “economic cities” (e.g. King Abdullah Economic City) to be completed by 2020, in an effort to diversify the economy and provide jobs. As of 2013 four cities were planned.[259] The King has announced that the per capita income is forecast to rise from $15,000 in 2006 to $33,500 in 2020.[260] The cities will be spread around Saudi Arabia to promote diversification for each region and their economy, and the cities are projected to contribute $150 billion to the GDP.

In addition to petroleum and gas, Saudi also has a small gold mining sector in the Mahd adh Dhahab region and other mineral industries, an agricultural sector (especially in the southwest) based on dates and livestock, and large number of temporary jobs created by the roughly two million annual hajj pilgrims.[261]

Statistics on poverty in the kingdom are not available through the UN resources because the Saudi government does not issue any.[262] The Saudi state discourages calling attention to or complaining about poverty. In December 2011, the Saudi interior ministry arrested three reporters and held them for almost two weeks for questioning after they uploaded a video on the topic to YouTube.[263] Authors of the video claim that 22% of Saudis may be considered poor (2009).[264] Observers researching the issue prefer to stay anonymous[265] because of the risk of being arrested.