Saudi Economy Growth in the Midst of Turbulence
: 13, 2012

The Arab world still bears the scars and feels the effect of the so called "Arab Spring". It has been two years since the region's major changes which sparked in Tunisia and spread to Egypt, Yemen, Libya, and is now turning into a somewhat civil war in Syria, where the regime has committed all kinds of human rights' violations and even massacres to stem the demonstration unsuccessfully. Almost all Arab countries had some forms of demonstrations in support or as a result of the so called "Arab Spring".

Saudi Arabia had faced attempts of demonstrations where a date was set and the call to rally Saudi people against their government was launched through Facebook and Twitter with the help of the traditional opposition figures who tried to ride the wave. However, the day came and nothing happened and the international media who was waiting for some excitement was disappointed. With time Blogs and Tweets started revealing that the call for that demonstration was most probably not coming from the countrymen but from an outside source.

When King Abdullah returned home from his medical treatment abroad, hundreds of thousands of citizens went to the street to celebrate his safe return. This seemed to surprise some foreign journalists who had believed the lies about the Saudi Kingdom. On the other hand, experts who knew the nature of the relation between the Saudi Royal Family and the Saudi people were not surprised at all. While the wind of change seemed to hit most Arab countries, the Saudi people opted for stability. The high oil prices coupled with an increased government spending on its people made the Saudi economy the most stable and most promising in the region. The foreign investments increased and the trickle-down effect of the growing economy touched all businesses. The conservative fiscal policy made the control of inflation possible while allowing for a healthy 4.5% growth in the first half of 2012, as per the Saudi finance Minister.

The Saudi economy is not all rosy as there are many extraordinary challenges facing the government among which youth unemployment, housing shortage for middle and low income, as well as the global financial crises to name a few. For the Saudi economy to continue to grow and prosper, it has to alleviate its dependence on oil by investing in alternative energy while slowing down the huge increase in the domestic consumption of oil.

By : Hamad AlAmmari