Oil 1 Peak Oil 21
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HIGH PRICES K2 ECONOIL PRICES KEY TO GOVERNMENT SPENDING ON ECONOMIC PROGRAMS Library of Congress – Federal Research Division Country Profile: Saudi Arabia, September 2006 http://www.stat-usa.gov/miscfiles.nsf/vwNoteIDLookup/NT000F8F26/$File/SAUDI_ARABIA.PDF?OpenElement Government Budget: Since 2002, when oil revenues began to increase dramatically, Saudi Arabia has produced large budgetary surpluses. Before that time, high defense spending and government subsidies to consumers, coupled with low oil production rates and prices, generally yielded significant budgetary deficits. Saudi Arabia’s 2006 budget includes government spending of nearly US$90 billion, a 20 percent increase over 2005. This plan will continue the government’s strategy of using record oil revenues to provide broad economic stimulus. Government spending priorities include education, health and social affairs, municipal services, transportation, and infrastructure. Even with its ambitious spending plans, the government projects a budget surplus of US$15 billion in 2006, based on estimated 2006 revenues of US$104 billion. About 20 percent of revenue will be from non-oil income. Government officials expect tariff and duty revenue to decrease as the full effects of Saudi Arabia’s ascension to the World Trade Organization are borne out. Because of the significance of oil revenue, Saudi Arabia imposes only minimal income taxes on Saudis and does not have a capital gains or value-added tax, although a payroll tax supports social insurance programs, and the government collects the Islamic tithe of 2.5 percent of net worth from both businesses and individuals. Joint ventures and non-Saudi individuals and businesses are taxed at varying rates. OIL MAKES UP OVER 90% OF SAUDI EXPORTS AND OVER 3/4 OF STATE REVENUES Library of Congress – Federal Research Division Country Profile: Saudi Arabia, September 2006 http://www.stat-usa.gov/miscfiles.nsf/vwNoteIDLookup/NT000F8F26/$File/SAUDI_ARABIA.PDF?OpenElement Mining and Minerals: Extraction efforts in Saudi Arabia focus on petroleum and natural gas. According to the U.S. Energy Information Administration, oil makes up 90−95 percent of Saudi Arabia’s exports, 70−80 percent of state revenues, and about 40 percent of the country’s GDP. Despite its economic clout, however, the oil industry employs only 1.5 percent of the working population. Government-controlled Saudi Aramco, the world’s largest producer of petroleum, facilitates the oil industry in Saudi Arabia and in fact dominates the entire mining industry. Moreover, the company’s influence and role in overall economic planning and performance cannot be overstated. GDP GROWTH DEPENDENT UPON OIL REVENUE Library of Congress – Federal Research Division Country Profile: Saudi Arabia, September 2006 http://www.stat-usa.gov/miscfiles.nsf/vwNoteIDLookup/NT000F8F26/$File/SAUDI_ARABIA.PDF?OpenElement Gross Domestic Product (GDP): According to estimates, Saudi Arabia’s gross domestic product (GDP) will reach between US$308 billion and US$338 billion in 2005. Should these estimates prove accurate, the total would represent a healthy increase over the US$215 billion to US$251 billion posted in 2003 and 2004. Estimated per capita GDP was US$12,800 in 2005. Projections for future GDP growth remain bright: 5.4 percent for 2006 and 4.6 percent for 2007, following high annual growth rates of 7.7 percent, 5.2 percent, and 7.5 percent, respectively, in 2003–5. Oil prices and production will undoubtedly determine the validity of such forecasting. HIGH PRICES K2 ECONOIL WEALTH IS THE DETERMINING FACTOR OF SAUDI ECONOMIC HEALTH Ben Berry, Acting Deputy Director, ATS Agriculture & Agri-Food Canada, Agri-Food Trade Service “Agri-Food Past, Present & Future Report: Saudi Arabia” December 2006 http://www.ats.agr.gc.ca/africa/4290_e.htm Overview Saudi Arabia is the world's largest oil exporter, with by far the greatest proven reserves of crude oil. Based on current output, there are sufficient reserves for almost 90 years of extraction. This oil wealth has transformed the country's economy, although politically and socially Saudi Arabia remains highly conservative. DESPITE EFFORTS FOR ECONOMIC DIVERSIFICATION, OIL STILL DOMINATES SAUDI ARABIA’S ECONOMY Ben Berry, Acting Deputy Director, ATS Agriculture & Agri-Food Canada, Agri-Food Trade Service “Agri-Food Past, Present & Future Report: Saudi Arabia” December 2006 http://www.ats.agr.gc.ca/africa/4290_e.htm Saudi Arabia is not simply an oil rich country; it is the oil rich country. Saudi Arabia has the largest petroleum reserves and is the largest exporter of petroleum in the world. While the government continues to make efforts to diversify the economy, it will be difficult to displace a sector that accounts for 45% of GDP and 90% of export earnings. By way of comparison, the agricultural sector, which is currently benefiting from aggressive expansion plans, represents only 6% of Saudi Arabia's GDP. OIL PRICES KEY TO ECONOMIC GROWTH—STOCK MARKET AND GDP Ben Berry, Acting Deputy Director, ATS Agriculture & Agri-Food Canada, Agri-Food Trade Service “Agri-Food Past, Present & Future Report: Saudi Arabia” December 2006 http://www.ats.agr.gc.ca/africa/4290_e.htm The last three years have seen very impressive growth in the Saudi economy due to high oil prices, but also government actions to diversify the economy through the finance, manufacturing and tourism sectors. The current economic picture of Saudi Arabia shows a country in its prime. The stock market has hit all time highs, export revenue is soaring and GDP growth has maintained a level at, or above, 5% for three years. Actions are being taken to better distribute the country's enormous wealth, increase the standard of living across the board, and introduce political and social reforms. In addition, Saudi Arabia joined the World Trade Organizaiton (WTO) in 2005 and was deemed by the World Bank to have the best overall environment in the Middle East/North African region for doing business. Current
HIGH PRICES K2 ECONOIL PRICES ARE THE KEY DETERMINANT OF SAUDI ECONOMIC PERFORMANCE Howard Handy. Chief Economist & General Manager of Samba The Saudi Economy: Recent Performance and Prospects for 2008-09 April 2008 http://www.saudi-us-relations.org/articles/2008/ioi/080410-samba-economy.html As Saudi Arabia's global economic importance grows, so the gyrations of the world economy are having a more immediate impact on the Kingdom's economic health. Three variables are foremost: * Global demand. The pace of global economic activity has an important bearing on oil prices, which are in turn the key determinant of Saudi Arabia's external and fiscal positions, and to a lesser extent its own pace of GDP growth. * US interest rates. Because of the riyal's peg to the dollar, US interest rates have a significant influence on domestic liquidity conditions. * Global commodity prices. The prices of a range of global commodities have surged, with higher food prices in particular feeding through into sharp rises in Saudi Arabia's CPI. Global demand for oil is firm.. Global demand for oil is strong. Despite the uncertainties besetting global credit markets, the International Energy Agency (IEA) expects stronger growth in oil demand this year compared to 2007. The organisation anticipates additional demand of 1.7 million b/d in 2008, up from 0.9 million b/d in 2007, reflecting, in the main, continued robust demand, especially for transport fuel, in China and the Middle East. The supply outlook is also tight. Despite prices surpassing $100/barrel, OPEC members remain generally cautious, reflecting their own large and growing budgetary commitments. As such, the organisation decided at its early March summit to roll over its existing quotas until the end of the summer. To view this report in its entirety, click here. April 2008 For comments and queries please contact: Howard Handy Chief Economist & General Manager of Samba HIGH PRICES K2 ECONHIGH OIL PRICES SUSTIAN SAUDI-ARABIA’S ECONOMY, ALLOWING EXPANSION INTO STABILIZATION PROJECTS Businessweek, 2007 “Saudi Arabia Intelligent infrastructure” (Subtitle- DESPITE A PERIOD OF UNPRECEDENTED WEALTH FOR SAUDI ARABIA , KING ABDULLAH IS COMMITTED TO AN AMBITIOUS REFORM AGENDA . AND DELIVERING A WORLD - CLASS INFRASTRUCTURE IS CENTRAL TO HIS GOVERNMENT’S PLAN FOR ECONOMIC DEVELOPMENT”) www.businessweek.com/adsections/2007/pdf/09172007_Saudi.pdf+thrive+oil-prices+%22saudi+economy+%22&hl=en&ct=clnk&cd=6&gl=us&client=firefox-a Like neighboring countries, the Kingdom of Saudi Arabia is feel- ing the impact of billions of petrodollars. State coffers have amassed some $300 billion, according to analysts. That is what oil prices can do for an economy that is 80% dependent on nat- ural resources. Much of the capital at Riyadh’s stock exchange is being allocated to construction and development. HIGH PRICES BENEFIT MID EAST ECONOMY It's nuclear power, not oil, that worries the Middle East By Con Coughlin http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/23/do2303.xml Last Updated: 12:01am BST 23/05/2008 With oil prices topping $135 a barrel yesterday, you might imagine the one part of the world that is not desperately searching for new energy sources would be the Middle East. While Western governments have been thrown into paroxysms of economic angst over soaring oil prices, those countries lucky enough to contain an abundance of this liquid gold have never had it so good. It was not so long ago – the turn of the century, in fact – when prices were struggling to rise above $10 a barrel, that there were dark mutterings about the ability of some of the world’s largest oil producers to survive the dramatic turn-around in their own economic fortunes. Autocratic regimes, such as that presided over by Saudi Arabia’s ruling family, for example, have always been able to counter calls for greater democracy and fiscal accountability by showering the grateful populace with the oil largesse. But when the good times ended, and serious questions were asked about where the all the money gone, there were fears many of these governments might fall. Rather as Mr Brown is discovering here in Britain today. Now the tables have been reversed, and while Mr Brown struggles to come to terms with the implications of soaring energy costs, the economic fortunes of the world’s main oil producers have been transformed. Not since the hey-day of the politically-motivated Opec price rise in the 1970s, when Arab oil producers sought to punish the West for supporting Israel during the 1973 Yom Kippur war, has the region been so awash with petro-dollars. As a senior member of one of the Gulf States’ leading royal families recently remarked to me, “For us the good times are back again, and this time we’ve got to make the most of it.” Apart from the usual sharp increase in conspicuous spending, with orders for top-of-the-range models such as Roll Royce and Bentley exceeding supply, Arab governments are busily investing in multi-billion dollar domestic construction projects while at the same time desperately looking for promising overseas investment opportunities. Directory: file -> view view -> Western Europe after wwii view -> Author study: paul fleischman view -> Qpa1 7ela study Guide view -> Arctic Oil/Gas Neg view -> November 1970 Approximately 150,000-500,000 deaths Bhola Cyclone Bangladesh view -> Grade Level: 6 Unit of Study: Caribbean glce view -> Citation: Duffield, Katy view -> Table of Contents Lesson # view -> Chinese Wind Energy Disad Download 9.54 Mb. Share with your friends:
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