AS - Saudi Studies Lesson 1 PDF

Pakistan International School Jeddah (English Section) 2024-2025 AS - Saudi Studies Lesson 1 Name: _____________________________ Dat...

Pakistan International School Jeddah (English Section) 2024-2025 AS - Saudi Studies Lesson 1 Name: _____________________________ Date: ________________________ Economy & Global Trade Building a modern economy: When the modern Kingdom was established in 1932, the Arabian Peninsula was an agricultural society that depended on farming and commerce – especially date exports and trade generated by pilgrims coming to Makkah and Madinah. It lacked the infrastructure needed to support the kind of economic growth envisioned by its founder, King Abdelaziz bin Abdulrahman Al-Saud. The discovery of oil in commercial quantities in 1938 changed that. Soon after World War II, steady oil exports provided the funds to build a basic infrastructure of roads, airports, seaports, schools and hospitals. Saudi Arabia’s free market economy has undergone remarkable changes in a relatively short period of time into a regional and global economic power with a modern infrastructure. The government plans long-term economic goals and the private sector is playing an increasingly larger role in the Saudi economy – it now accounts for 48 percent of the gross domestic product (GDP). The sector is expected to continue growing, especially as Saudi Arabia opens its doors further to foreign investment. In December 2005, Saudi Arabia joined the World Trade Organization (WTO), a significant development that gives Saudi products greater access to global markets, creates jobs and encourages foreign investment. In 1970, Saudi Arabia introduced the first of a series of ongoing five-year development plans to build a modern economy capable of producing consumer and industrial goods that previously had been imported. The result has been a steady economic transformation of the country. Today, Saudi Arabia is one of the fastest developing countries in the world.  Industrial Cities: Today, industrial products make up more than 90 percent of the Kingdom’s non-oil exports. Saudi Arabia exports petrochemicals, plastics, metal goods, construction materials and electrical appliances to some 90 countries. Petrochemical and other oil-based industries are concentrated at industrial cities in major urban centers. The Jubail Industrial City on the Arabian Gulf has dozens of factories and industrial facilities. The Yanbu Industrial City on the Red Sea. King Abdullah Economic City near Jeddah, which broke ground in December 2005. In 2006, Custodian of the Two Holy Mosques King Abdullah launched similar economic cities in Rabigh, Hail and Madinah. Development Plans: Achievement of such an economic transformation required deliberate planning and careful implementation of a development program with clearly defined objectives. The quest for economic development and growth began in earnest with the introduction of the First Development Plan in 1970. This began a series of five-year plans that continues today. Government Support for the Private Sector: The government plays an essential role in industrial and economic development. In order to facilitate the expansion of the private sector's role in the national economy, the government established five specialized credit institutions, which provide economic opportunities to many traders who were previously unable to compete in the marketplace. These financial institutions have provided loans to citizens for development projects in agriculture, industry and construction.  Banking Saudi Arabia has a modern banking industry with 13 commercial banks. Saudi banks provide retail and corporate banking, investment services, brokerage facilities, and derivative transactions in addition to credit cards, ATMs and point-of-sale transactions. There are also banks in the Kingdom that provide Islamic banking services. Islamic banking is a system of banking that is consistent with the principles of Islamic law (Shari’ah). It prohibits usury, the collection and payment of interest and trading in financial risk. Trade: Saudi Arabia is the 19th largest exporter and the 20th largest import market in the world. Exports now represent all economic sectors. Topping the list of exports to some 90 countries are petrochemicals, plastics, metal goods, construction materials, and electrical appliances. The role of the private sector in commerce is substantial – private companies account for some 48 percent of the nation’s GDP. On April 11, 2000 Saudi Arabia made it easier for foreign investors in the Kingdom by introducing a new law giving foreign investors the right to the same benefits, incentives and guarantees offered to Saudi individuals.  Dete:…………………. Quest for knowledge Exercise 1: Answer the following Questions: 1. What percentage of Saudi Arabia's GDP does the private sector currently account for? ---------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------- 2. Name at least three industrial cities in Saudi Arabia and their locations. ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- 3. When did Saudi Arabia introduce its first development plan, and what was its objective? ----------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------- 4.How does the government support the expansion of the private sector in Saudi Arabia? --------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------- 5. When did Saudi Arabia make it easier for foreign investors to operate in the country, and how? ------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------