Saudi Arabia has an economy based on oil with strong government control over major economic activities. And Saudi Arabia has 25% of the proven oil reserves in the world, and ranks as the largest exporter of oil, and play a leading role in OPEC.
With private institutions exist, but it is regulated by the government.
[Edit] Overview
The petroleum sector accounts for about 45% of budget revenues, 45% of GDP, and 90% of export earnings. About 40% of GDP comes from the private sector. The government encourages growth in the private sector to ease the UK dependence on oil and increase employment opportunities for the growing number of the population. The government began allowing the private sector and foreign investors to participate in power generation sectors and communications. As part of its efforts to attract foreign investment and diversify the economy has joined Saudi Arabia to the World Trade Organization in 2005 after many years of negotiations.
With rising oil revenues, making it possible to achieve budget surpluses the government sought to increase spending on job training, education and infrastructure development and to increase the salaries of the staff of the Saudi government.
[Edit] the overall direction of the economy
In the seventies arrived in per capita gross domestic product (GDP) in the Kingdom of Saudi Arabia to the world record 1.858%, thanks to the oil boom. However, this bubble could not be continued, and thus shrank per capita gross domestic product (GDP) by 58% in the eighties. But the successful diversification efforts helped to register a growth rate of 20% in the nineties.
[Edit] oil sector
Oil was discovered in Saudi Arabia by geologists from the United States in the thirties, although the large-scale production did not begin until after World War II. The oil wealth has enabled the rapid economic development, which began in earnest in the sixties and stunning acceleration in the seventies, the Kingdom changed radically.
Saudi Arabia's oil reserves are the largest in the world, and Saudi Arabia is the largest producer and exporter of oil in the world. The proven reserves estimated at 260 billion barrels or a quarter of the world's oil reserves.
More than 95% of the total Saudi oil production is from the government before the giant company Saudi Aramco. Most of Saudi Arabia's exports of oil transported by ship from liquidation stations at Ras Tanura. The remainder of the oil exports move through the pipeline to the port of Yanbu on the Red Sea.
Due to the sharp rise in oil revenues in 1974 after the Arab-Israeli war in 1973, Saudi Arabia became one of the fastest growing economies in the world. But high oil prices led to a further development of the oil fields and increase production in all parts of the world, which led to market saturation and thus lower prices.
Saudi oil production, which had risen to nearly 10 million barrels (1.6 million cubic meters) per day during 1980-81, dropped to about 2 million barrels / day (300,000 cubic meters per day) in 1985. The growing budget deficit, and the government was forced to withdraw its foreign assets. In response to financial pressures, Saudi Arabia abandoned for role Kmrgeh within OPEC in the summer of 1985, and agreed to determine the share of production.
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