Economic development of south arabia research proposal examples

South Arabia is one of the developing nation, it largely depends on petroleum income for its budget revenues. It is one of the largest oil producingcountries in the world and petroleum income accounts for more than 50% of its budget revenues and 90% of earning from export. since the discovery of oil in 1930s the economy of south arabia has grown tremendously to a high level(Oxford, 2012). Its economy has since shifted from subsistence farming to the service and oil industries.

The main purpose of this research will be to analyse economic development of south Arabia using indicators of devlopment such as government investment in infrastructures, decrease in illitracy level, unemployment level, inflation rate and general increase in GDP. It will also look at the challenges that the government of south arabia faces in its quest of becoming a developed country.


South arabia economy is ready for economic take off, with huge investment by government on infrastructure and other social amenities, high and stable income from oil and increase export of non-hydrocarbon (IMF, 2012). Despite govenment having huge foreign debts the inflation of the country has really being kept low, and there is mushrooming of modern industries especially in manufacturing sector which is very impressive(IMF, 2012).

The economist have projected this years economic growth to be 7% citing reasons such as increase oil revenues and massive government investment(Oxford, 2012). In the recent past the government has also rolled out plans of investing back Increased revenues from oil export into economy by announcing new development programmes like housing units, infrastructure and other economic stimuli programmes which has greatly improved the living standard of citizens as people now can have easy access to schools and medical facilities.

South Arabias increase in economic growth is also being contributed to by government plans to diversify the economy, the government has invested heavily in industrial and agricultural sector, while also encouraging both local and foreign investors to invest in the economy(Worldbank, 2012). The government has provided private sector participation through incentives and generous financing which has now led to huge private investment into telecom and energy generation industry. This government initiative on diversification has seen non- oil export increase to 15% this year way from 10% in 2007(IMF, 2012) which has led to a strong balance of payment and increase in foreign exchange reserve.

In its quest for diversification and development the Saudi Arabia faces myriad of challenges which include among others high unemployment rate and high inflation. Rapid increase in population has put a lot of pressure on the facilities available forcing the government to re-allocate the resources meant for other development project to build social amenities for the increased population (Oxford, 2012).

Unemployment is also a major problem in south Arabia which has been contributed to by high population growth rate and mismatch of job skills of college graduate and the job available, this situation has led to many foreigners being hired so as to fill the vacancies which are highly needed in the economy especially in the oil sector (Oxford, 2012). It remains to be a key predicament to the diversification and development of Saudi Arabia economy. To curb this problem of unemployment the government has budgeted huge amount of money this year for job creation, and the economic analysts have predicted that this will lead to an increase in job opportunities than any other state in the region. But given the large number of graduates who enters the labor market every year, unemployment will continue to be a bottleneck for the economic development of Saudi Arabia (World Bank, 2012).

Another impediment to development in Saudi Arabia is rise in inflation rate which is caused by high government spending, increase in income of the people and general increase in price of imported goods such as textile and foodstuffs. The international monetary fund has projected that the inflation this year will rise to 6% up from 5% last year (IMF, 2012).

Another potential threat to Saudi economy is raising demand of oil by domestic population at a time when the oil production has relatively remained stagnant (Oxford, 2012). This has a severe effect on the economy as it will deprive off the government the highly needed foreign exchange reserve and also reduce the government revenue from oil which is a major income earner to the government. Therefore the government should look for another alternative source of energy such as nuclear and solar energy so as to reduce domestic demand on oil.
In conclusion for the economy of Saudi Arabia to grow tremendously the government should continue with its plan of diversifying the economy so that the petroleum should not be the only determinant of economic growth in the economy. The government should also come up with policies and measures like increasing interest rates to curb the high rate of inflation in the country which has become a threat to the economic development.


The research will be done in South Arabia; the data needed is secondary data which will be obtained from the relevant authorities such as IMF, World Bank and the ministry of planning and finance of South Arabia. Also primary data will be collected through an administered questionnaire to verify and supplement the secondary data obtained.

The data collected will then be analyzed using economic models and presented using charts and graphs. From the analysis and report a final report is then drafted with recommendations and conclusion.


1. International monetary fund (2012), Saudi Arabia
2. Oxford business group (2012), economic development of Saudi Arabia. Retrieved from
www. oxfordbusinessgroup. com
3. World bank(2012): south Arabia, strongest Arab economy. Retrieved from www. infoprodcoil. com