Volume XXVI – Number 2
Abstract: This article analyzes the economy of Saudi Arabia with a special focus on three Five-Year Economic Plans implemented by the Saudi government. Saudi Arabia holds an estimated 25% of the world’s oil reserves, a reserve which the Saudi economy relies heavily on as the foundation of the national economy. To address over-reliance on the oil economy, Saudi Arabia implemented three Five-Year plans. The first, focused on urban development, failed to achieve many of its goals and failed to address the education and economic needs of rural areas. The second Five-Year plan focused on infrastructure to stimulate the development of a non-oil sector. This plan should be considered an important success. The final Five-Year plan expanded on the successes of the second plan and worked to further expand non-oil-based economic development. Using analysis of the Saudi economy and these three economic plans, this article argues that while Five-Year plans each had difficulties and failures, Saudi Arabia must continue to expand the non-oil sectors of their economy. Saudi oil reserves, while expansive, are a finite resource and the development of alternative energy sources will prove a mortal threat to the Saudi economy without increased diversification.
Keywords: Saudi Arabia, OPEC, economy, economic planning, economic diversification, petroleum