Saudi Arabia a typical rentier state generating about 90% of government revenue and 30-40% of GDP from oil exports. In the mid-2010s, Saudi Arabia is experiencing unprecedented economic and political challenges. Low oil prices caused by the ‘Shale R...
Saudi Arabia a typical rentier state generating about 90% of government revenue and 30-40% of GDP from oil exports. In the mid-2010s, Saudi Arabia is experiencing unprecedented economic and political challenges. Low oil prices caused by the ‘Shale Revolution’ makes oil rich Kingdom’s dominant position as a price controller in the world oil market weaker and it is predicted that low oil prices will be continued for a long time. Low oil prices since the half of 2014 have caused economic difficulties recording a decrease in GDP, massive fiscal deficit, and the fall of Saudi Arabia’s net foreign assets. In addition to the increase of its population, high unemployment rate of young Saudi nationals is a key for Prince Muhammad bin Salman to sit on the throne in the near future. As the efforts to overcome these political and economic challenges, he announced on 25 April 2016 “Saudi Arabia’s Vision 2030.” This paper tries to assess the efforts of the Saudi government in diversifying its economy. In addition, it will look into the political and economic background of implementing “Vision 2030” and discuss the future of this unprecedented economic reform.