I noted with delight that amongst the first decisions taken after the people of Saudi Arabia pledge allegiance to the Custodian of Two Holy Mosques, King Abdullah bin Abdulaziz, was that of His Royal Highness retaining the control of the Supreme Economic Council.
This decision to keep hold of the leadership of the Council reveals King Abdullah’s determination to pursue economic reform, which has suffered from a number of challenges due to low state revenues, an increase in national expenditure, and the rise in unemployment.
Economic reform is undeniably one of the most important future aims of the Kingdom as it carries important implications for the country as a whole. Development, not just reform, will ensure Saudi Arabia enjoys more influence and power, especially as oil prices continue to soar to unprecedented levels. The continuing guidance of King Abdullah in economic matters is noteworthy given that, in the last few days, the government has announced it intends to privatize a number of public sectors such as water desalination as well as the postal service. These latest decisions are a continuation of earlier Council pronouncements, such as the projected expansion of rail links from the north to the south of Saudi Arabia and canceling the government monopoly on civil aviation to allow national companies to enter in the sector.
The task ahead is huge; The Financial Times newspaper regarded the challenges facing King Abdullah’s administration as the most difficult a Saudi monarch had to handle in over 40 years. The more obvious problems concern the economy of the Kingdom with unemployment the number one problem as over one fifth of those aged 30 an under are currently seeking jobs. Despites these difficulties, the economic infrastructure is solid; Saudi Arabia enjoys a free market economy where the government supports the private sector. Hopes are high for a future where great success can be achieved as the economy develops, non-oil productivity increases, youths increase their skills and training and find adequate jobs.
Despite all the challenges created by mounting national debt, increasing numbers of university graduates, a weak local economy, decreasing productive investments and a lack of training, the government is fully capable succeeding in its mission no matter what foreign observers may lead us to believe. The latest move by King Abdullah to remain head of the Economic Council goes to show the Saudi economy is one of his top priorities.
The Kingdom’s economy carries important implications for its 20 million citizens and the rest of the Arab world. When Saudi Arabia flourishes so doest he Arab world and when it is experiences sluggish grows, the region follows suit. The positive and negative impacts of the Saudi economy on other regional economies can easily be traced since the late 1970s until today. Not to mention that around 5 million Arab economic migrants live and work in the Kingdom in a variety of jobs and send back remittances to their countries of origin. This linkage will prove positive if Saudi Arabia succeeds in developing its economy as we all hope.