Economic Diversification and its Impact on Labor Needs in Saudi Arabia

An economy that relies solely on one source of income is susceptible, particularly if that income is derived from non-renewable resources. Therefore, the effective use of economic diversity is essential to long-term economic prosperity. The secret to developing a nation’s attractive, wealthy environment, as well as to raising the standard of its institutions and residents’ lives, is diversification. With their national visions reflecting the shared objective of guaranteeing a sustained high quality of living for future generations, the nations that make up the Cooperation Council for the Arab States of the Gulf (GCC) are working harder to encourage economic diversification.

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Diversification: what is it?

A nation’s sustainable growth and prosperity are positively impacted by achieving economic diversification. This essay will start by defining economic diversification and closely examining the meanings of a number of related phrases in order to provide readers with a thorough understanding of the concept. 

In the context of the Gulf region, economic diversification means reducing the dependence of its economy on hydrocarbon resources such as oil and gas. Dependence on a single source of income directly affects the economy by linking it to the price of that primary source. In this region, consumption levels and population growth are putting increasing pressure on depleted resources in the Gulf. Domestic energy resource consumption will outpace global demand in the GCC countries’ future, endangering the foundation of the region’s economy as a whole.

What is meant by diversification?

The process of changing an economy that relies heavily on one source of income—oil and gas earnings, similar to the GCC countries—to one in which other sectors, particularly non-hydrocarbon sectors, play a substantial role is known as economic diversification. Non-hydrocarbon sectors include, for instance, tourism, agriculture, and industry. The goal of economic diversification for GCC nations is to lessen the risks brought on by changes in the price of oil by distributing their reliance on a single limited resource among several potentially limitless ones.

Economic diversification is anticipated to reduce the economy’s short-term susceptibility to price-related concerns while simultaneously enabling the economy to sustain prosperity for future generations in the event that oil and gas sources run out.

Inability to accomplish this objective would mean an injustice to future generations, according to the State of Qatar’s 2008 publication of Qatar National Vision 2030, which states that “the rights of future generations will be jeopardized if the depletion of non-renewable resources is not offset by the creation of new sources of renewable wealth.” Al-Jundi also talks about the necessity of changing the UAE economy so that it “can survive without the stimulus of oil revenues and…. maintain economic gains following the conclusion of the oil era.”

Program for the Implementation of Vision

Program for Housing

The Housing Program seeks to improve housing conditions for present and future generations by offering appropriate and guaranteed financial solutions, in addition to allowing Saudi families to possess and profit from appropriate homes based on their individual needs and financial capabilities.

This goes hand in hand with expanding the supply of affordable housing in record time, putting in place programs that focus on housing low-income groups, creating and enhancing the legal and regulatory framework for the housing industry, and optimizing the industry’s overall economic impact. Therefore, it makes sense that building specialties would be significant. If you want to find a handyman job position, use employment search sites.

The following initiatives have been started with the goal of completing them by 2030:

The Public Investment Fund Program

By developing and optimizing the impact of the fund’s investments, the program seeks to strengthen the role of the Public Investment Fund, which actively promotes economic diversification in the Kingdom and the growth of particular important sectors. Additionally, it seeks to build solid economic ties that support the Kingdom’s increased power and involvement in the regional and international arenas, as well as to make the fund one of the biggest sovereign wealth funds in the world.

An outline of the Saudi economy as of right now

The Saudi economy has been reliant on oil earnings ever since the oil was first found in the area. Saudi Arabia is the world’s second-largest producer of crude oil, accounting for almost 30% of global production. It ranks sixth globally and has 22% of proven gas reserves. Oil earnings have a significant impact on Saudi Arabia’s total budget. However, over the next 20 years, officials anticipate that these resources will run out.

However, Saudi economists have developed a bold strategy that they intend to carry out by 2030. The main goal of this vision is to diversify the Saudi economy in order to lessen its reliance on oil earnings.

According to Saudi Arabia’s goal, a number of actions are required to achieve a sustainable and diversified economy. Building a knowledge-based economy, encouraging entrepreneurship and expanding private sector involvement, attaining gender equality in the home labor market, and investing in non-oil industries like tourism are the foundations of these.

Since it makes sense that other industries, like construction, would become more relevant in the coming years, you are quite likely to receive a job in this sector with favorable working circumstances if you use job search services like Layboard.

Saudi Arabia’s transition to a knowledge-based economy

If developing a knowledge-based economy is a direct route to diversifying the economy, then education reform and R&D spending offer the framework for doing so, enabling Saudi Arabia to transition from an oil-based economy.

The development of a knowledge-based economy necessitates that citizens possess the critical thinking skills and other critical competencies that the private sector values and that are required to compete in an international marketplace. Investments in education and the creation of research institutions are necessary to raise the standard of education. A precise and quantifiable educational vision is therefore necessary for this.

Through unfettered access to information sources, education reform will increase knowledge if it is successful. Additionally, it will divide up educational responsibilities among several parties, including the business sector collaborating with the Ministry of Education. In addition to promoting education, the nation has ambitions for building development, with numerous large-scale projects due to be finished by 2030.

The Doyof Al Rahman Initiative

The program’s goal is to give as many Muslims as possible the chance to fully participate in the Hajj and Omrah while also attempting to enhance and improve their experience.

To do this, the Two Holy Mosques must be prepared, the universal message of Islam must be spread, tourism and cultural sites must be prepared, and the best services must be offered prior to, during, and following visits to Mecca, Medina, Munawarah, and the holy places. Serving pilgrims and the Two Holy Mosques while projecting a dignified and noble image of the Kingdom is another aspect of the job.