Saudi Arabia says it can move beyond crude | World Defense

Saudi Arabia says it can move beyond crude

Redheart

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Saudi Arabia says it can move beyond crude — RT Business

Riyadh has outlined an ambitious economic development plan aimed at dramatically reducing its dependence on crude prices, Reuters reports. Last year Saudi Arabia saw a $98 billion deficit because of low oil prices.

The authorities intend to restructure the economy by investing more in other sectors, particularly in healthcare, tourism and IT. Saudi Arabia also says it intends to liberalize the market in order to attract foreign investors.

"It's going to switch from simple quantitative growth based on commodity exports to qualitative growth that is evenly distributed across the economy,” said Khalid al-Falih, chairman of national oil company Saudi Aramco.

Commerce and Industry Minister Tawfiq al-Rabiah said Saudi Arabia had been a victim of the so-called "Dutch disease" - total dependence on oil in the economy - but is now trying to change that.

Saudi Arabia had $628 billion in reserves in November, but analyst doubt Riyadh’s ability to implement the changes, as almost two-thirds of local workers are in the public sector.

"The transition away from being a renter state is not a comfortable one,” David Chaudron, managing partner of the California-based Organized Change Consultancy told Reuters.

"They’re trying. But the fundamental question is: will their trying bear enough fruit before the downside of the current system hits? Or is it a day late and a dollar short? Will the forces of change ultimately be enough to overcome the inertia of the current system? I don’t know,” he added.

Saudi Arabia, the leading country in OPEC, is considered by some to be the main culprit behind the crude price collapse. The Kingdom refuses to cut crude production despite the supply glut on the global market.

Prices have fallen from $115 in July 2014 to about $30 per barrel on Tuesday.
 

xTinx

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Well if Saudi Arabia wants to continue being one of the world's leading oil exporters, then they should learn to vary their oil products and be more innovative. Countries outside of the Middle East become less and less dependent on oil as new energy sources emerge.
 

Redheart

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The oil rout will force all countries which were dependent on oil to invest in other industries too. Some thought it would decades before circumstances forced them to do that but it has happened earlier than it was expected and I believe that it's all for the best because in less than 4 decades the world won't be using a lot of fossil fuel.
 

vegito12

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It will be interesting to see what will happen later on as the oil prices can change from time to time and also it will take time for other people to understand how the oil prices work and hope that we see good results from this later on and Sauda Arabia wants to be supreme in this oil world where you can profit and they will do well if they keep good prices. I think that it will be interesting to see how other countries compare when it comes to the oil prices and hope that we see positive results which can make the governments think of what prices they should try to negotitate. I think the dollar rates will go up and down and also need to think about what the profits will be and also it will take some time to get used to the changes and when the dollar is high it means more profits for the country.
 

Corzhens

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So maybe the rumor is true that Saudi Arabia is pumping excessively so it can gather funds that it can invest in other businesses. And it's because of their fear that oil would be obsolete soon because of the threat of alternative energy. I don't blame them albeit I admire their good foresight. For non-oil producing countries, that act of Saudi Arabia is heaven-sent because we are benefiting from that oversupply of oil.
 

djdefense

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UAE is already doing it, successfully might I add. Depending on oil is not healthy, since every country that has respectable amounts of oil has started producing it. Shale has become much more viable in places where it wasn't earlier. Saudis have to move away from the oil based socialistic economy that it is now.
 
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