Saudi Arabia
General
Saudi Arabia is filled with oil reserves. Ever since the discovery of Saudi Arabian oil in a Dammam well in 1923, these reserves have been exploited by countries all over the world. In fact, United States was one of the first ones to start buying the Saudi Arabian oil. A few years after the oil discovery, United States quickly became involved in Saudi Arabia’s oil commerce through businesses like Standard Oil of California (SOCAL) and Texas Oil Company.
Resources
As the world’s top producer and exporter of oil, Saudi Arabia has by far the largest oil reserves, having a fourth of the world’s total reserves. The country as a whole depends on the oil industry. The majority of the government revenues come from oil. Although environmentalists around the world encourage all nations to start using renewable energy, Saudi Arabia knows well that this won’t happen in the near future. With their current oil reserves alone, they would last another 90 years of producing and exporting at this rate. Saudi Arabia is going to continue to produce and export oil for the world for many years to come.
Money & Distribution
Many nations around the world have many oil reserves in their grounds. However, many nations do not have the money and therefore the technology to extract these resources from the ground. This is not Saudi Arabia’s case. Because of its foreign commerce with nations all over the world due to oil exports, Saudi Arabia has managed to become a very rich state. Most of this money goes to the rich families that control the Saudi Arabian government; the rest of the nation has comparatively very little.
Government Policies
Saudi Arabia is a monarchy. Although Saudi Arabia generates huge amount of income from its oil resources, the income is concentrated with the government-controlled corporations that deal with oil and foreign commerce and the wealth is not well distributed among the people. The income of common people in Saudi Arabia is surprisingly low.
Poverty Situation
For the past decade or so, the Saudi Arabian government has been working on improving the prosperity and distribution of wealth, but experts claim that the government is still reluctant to reveal the true nature of poverty in the kingdom. Turki Faisal al Rasheed, a wealthy businessman, believes that there are nearly three million Saudis living in extreme poverty. “So when we’re talking about Saudi’s population of 18 million, that’s a big percentage of Saudis who are below the poverty line,” he said. The Saudi Arabian poverty primarily exists along the countryside and rural areas of the nation.
What is being done?
King Abdullah has pledged 37 billion dollars in grants and loans to struggling Saudi Arabians in February 2011. However, this may not the proper solution for Saudi Arabia. Simply handing out money to the Saudi Arabians, often doubling the salaries of many workers, only addresses the problem just for the short term but increases inflation in the long run. It further makes the poor become dependent on the cash and handouts. Saudi Arabians no longer have the need to find a job and make money for themselves as the cash provided by the government would give them sufficient amounts of money. Instead, the money should be used to provide the poor a more permanent way out of the poverty cycle, such as through education, and skills training.
Our Proposal
Saudi Arabia needs to invest in somewhat available natural gas to be more energy efficient and cost effective. This will create more energy in the long run and be better for the environment until the world is wealthy enough to run on renewable energy. More importantly, it needs to ensure that its poor have access to all of the benefits of energy that the rest of its population enjoys, such as food, shelter, education and jobs.