The role of foreign trade has been crucial to the structure and pace of economic development in Saudi Arabia. Trade itself has been dependent upon oil production and the price of oil; crude and refined oil constitutes almost all the country’s exports; the revenue so derived finances the vast developmental projects of the government, which, in turn, bring, directly and indirectly, the high value of imports. There is very little alternative to this position. Oil can be kept in the ground, or exported. In the ground it offers no immediate revenues to the government. Out of the ground the massive revenues it generates give the government a choice — either to invest at home or abroad or a combination of the two. To invest in government debt abroad or in foreign companies confines the role of Saudi Arabia to that of rentier in the world economy and increases its dependence on other countries. The much more meaningful approach is to use the revenues to assist the development process within the country itself, to build up domestic industry and in the long term reduce economic dependence upon both oil and upon other countries.
KeywordsSaudi Arabia Import Price Infrastructure Project Domestic Industry Suez Canal
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