The Saudi Arabian Economy Introduced
The Saudi Arabian economy is one of the largest in Middle East and the country is one of the wealthiest in the world. The economy of Saudi Arabia is based almost entirely on oil, they are the world's largest producer of oil and that has made the country wealthy. However it has also left the country with virtually no other industry. At some point Saudi Arabia is going to run out of oil. When that happens they are going to have some very serious problems. The government are trying to encourage the development of other industries but have so far met with little success.
The economy of Saudi Arabia is controlled by the government it is a traditional command economy. Unfortunately because of the easy money that the government made from oil production they never bother to develop other sectors of the economy. It is believed that Saudi Arabia has the world's largest reserves of oil but nobody really knows. We basically only have the Saudi's word for it. Regardless of how much they have left the fact remains that it will run out at some point. In addition to potentially running out of oil there are a number of other issues facing the Saudi economy.
One of the oddest problems that Saudi Arabia has is massive unemployment. Normally this wouldn't seem strange except that most of the people working in Saudi Arabia come from other countries. There is a constant need to recruit new workers to go to Saudi Arabia while at the same time there are huge numbers of unemployed Saudis. Part of the problem is that the poor education system means that most Saudis don't have the training to take on the more skilled jobs. What education there is focuses almost exclusively on religion and does little to prepare students to enter the work force. At the other end of the spectrum a large number of people are recruited from third world countries to come and do the unskilled jobs. Most Saudis consider these jobs beneath them and won't do them. Fortunately the country's wealth has made it possible for them to do this. But how much longer the government can continue to pay the majority of the citizens to not work is an open question.
Another issue that may restrain the Saudi Arabian economy is that besides oil they have few other resources. They rely heavily on imported food products for example since there is no agriculture. Even water is in short supply in the country. Having to import all of these items is going to limit how much the economy outside of the oil sector can grow. There is also the issue of fluctuating oil prices. If for example the increased use of biofuels causes the price of oil to decline and the price of food to increase, Saudi Arabia is going to be in some real trouble economically.