How has the resource curse affected Saudia Arabia?

Answer 1

The resource curse has affected Saudi Arabia in several ways:

1. One-dimensional economy: Saudi Arabia's heavy reliance on oil revenues has led to an economy that is highly dependent on oil exports. This has left the country vulnerable to fluctuations in oil prices, leading to economic instability and limited diversification of the economy.

2. Rentier state: The abundance of oil wealth has allowed the Saudi government to provide extensive social welfare programs and subsidies to its citizens. However, this has also resulted in a rentier state where the government derives most of its revenue from natural resources rather than taxes, leading to a lack of accountability and transparency in government spending.

3. Limited job opportunities: The oil industry in Saudi Arabia is highly capital-intensive and does not create a large number of jobs for the country's rapidly growing population. This has led to high levels of unemployment, particularly among the youth, and a reliance on expatriate labor to fill skilled positions.

4. Political implications: The resource curse has also had political implications in Saudi Arabia, as the government uses oil revenues to maintain power and suppress dissent. This has led to a lack of political reform and limited civil liberties in the country.

Overall, the resource curse has hindered Saudi Arabia's economic development, limited diversification, and created challenges for sustainable growth in the future.