Globalization is thought as a process where people companies and government authorities of different countries interact and integrate among one another. This technique has been found to be motivated by international trade and it is also significantly aided by information technology. Since we have been more considering its effect on the financial condition of Saudi Arabia, hence the term that is of higher importance for us is the term economic globalization that identifies the integration of nationwide economies to form an international current economic climate. When speaking of financial globalization we are more interested in knowing the international direct investments, migration, capital flows and the get spread around of technology for a country.
The process of globalization affects the environment, culture economic trends, success and the physical health of humans. As people heading to different places and accomplishing business at different places impact the people of that place and so we can say that globalization has led to widening of social boundaries across the world.
Although globalization is regarded as a comparatively new process but if we go in depth background we find that globalization has been affecting the people around the world for a long time. If we go into the record we find symptoms of globalization since the time when China and European countries were linked to each other through the famous Silk Street in the centre Age ranges. If we the features of compare current influx of globalization with the time right before the First World Warfare in 1914 we find that there are many similarities
Although there have been cases of globalization since traditional times however the speed of which the planet globalized was never the same as it is in the current era. The main reason because of this have been technical developments and the procedures carried out by the countries before few decades. Entering the facts of information we find that the quantity of world trade is becoming 20 times of its amount in the entire year 1950. The tempo of globalization can be observed by observing the foreign investment funds taking place across the world. Observing this factor our declaration gets even more support as moves of foreign investment funds were witnessed to be doubled in a period of just 2 yrs in the time from 1997 to 1999 when they increased from $468 billion to $827 billion. Thus observing these characters we can say that the globalization today is taking place at a much faster rate than it has ever experienced the past.
Observing the upsurge in the speed of globalization it is important to see the factors behind this rapid increase in the speed of globalization throughout the world. The guidelines followed by the government authorities of varied countries round the world have offered as an accelerator for globalization. The policies of governments about the world since the second world have led to checking of economies around the world. The countries have used free market financial systems throughout the world. These steps have led to numerous opportunities for international trade and purchases. It has also been noticed that various constraints on foreign investments and ventures have been laid back within the last few years especially the previous two decades. Thus these insurance policies have helped in the obtaining the aim of international, commercial and financial business framework.
Since the Second World Warfare the politicians have been likely to break down borders that hampered deals along the way they have got found several international institutions designed to see that process could be easily facilitated. Organizations like World Bank and International Monetary account (IMF) were set up in the process. There have been many contracts on opening up of trades following the Second World Battle which resulted in the formation of General Agreement on Tariffs and Trade (GATT). Since that time World Trade Business (WTO), that was found as consequence of agreements authorized under GATT has been dealing with an goal of promoting Global investments freely.
As mentioned previously technology has dished up as one of the key drivers for globalization. IT in particular has played a dramatic role in changing economic life across the world and has played a key role in promoting globalization it has brought consumers, buyers, business together through internet and e-commerce. It has brought all the information from surrounding the world open to each person who needs to get access to the information. It includes resulted in faster and more descriptive analysis of financial developments, has made the transfer of property easier and has also made communication between distant people much easier.
History of Saudi Arabia:
Saudi Arabia, the homeland of Arabs is also considered to be the place of origination of the next largest religion- Islam. The holy towns of Mecca and Medina are located in Saudi Arabia which appeals to a large quantity of pilgrims each year to the united states.
Ibn Saud who ruled from 1882-1953 is known as to be the main inventor of the kingdom of Saudi Arabia. Ibn Saud was a descendant of Wahhabi market leaders and emerged out as a head of the Arab nationalist motion.
The breakthrough of essential oil in 1936 dished up as a milestone for Saudi Arabia as Saudi Arabia is a significant producer of engine oil and has huge reserves of olive oil since historic times. With the start of commercial production of oil through the World Battle II huge revenues started flowing into the country thus leading to a big amount of wealth for the united states. Because of this free healthcare and education were provided to the residents of Saudi Arabia with no collection of taxes. Saudi Arabia was permitted to be to be the charter person in United Nations even though it was neutral through the World War II. The country became a member of the Arab category in 1945 and played out an important role in the 1948-49 war against Israel and still does not discover Israel as a country. The entire year 1953 designated the fatality of the king that is considered as the inventor of the kingdom of Saudi Arabia. Together with the loss of life of Ibn Saud 11 time long reign of his kid Saud began. Saud's reign was proclaimed by increasing hostility of Egypt's Gamal Abdel Nasser towards radical Arabism. In 1964 Saud was dethroned and changed by the Best Minister. Crown Prince Faisal was appointed as the leading minister of Saudi Arabia. Faisal didn't give any armed forces support to Egypt through the 1967 Arab - Israel warfare but provided only vocal support.
Faisal was assassinated in 1975 with a degraded kinsman. This assassination shook the Middle East but Faisal's kingdom continued to be unperturbed and he was been successful by his brother Prince Khalid. Prince Khalid's support Egypt during negotiations on withdrawal of Israel from Sinai desert was quite important. King Khalid passed away credited to a coronary attack in 1982. King Khalid's half sibling, Prince Fahd Bin Abdulaziz became the successor of Prince Khalid but he decided his half brother Abdullah as the crown prince.
With worries of becoming Ayatollah Ruhollah Khomeini's next focus on if Iraq was conquered by Iran Saudi Arabia along with smaller petrol rich state governments of the Arab on the Persian Gulf made huge financial contributions in the 1980s towards Iraqi war effort. Due to conserved attempts of oil eating countries and Saudi Arabia being cheated by other customers of Company of Petroleum Exporting Countries (OPEC) led to a decrease in olive oil prices. The revenues coming from essential oil into Saudi Arabia reduced from $120 billion to $25 billion within the period of 5 years from 1980 to 1985.
After troubled an incapacitating stroke, King Fahd handed down his regulators to Crown Prince Abdullah. In 1998 Saudi Arabia inserted its first recession in six years when its essential oil income dropped by 40% scheduled to an internationally decrease in oil prices.
An summary of Saudi Arabia's market and the condition of their economic progress:
During the last fifty years the current economic climate of Saudi Arabia has developed at a swift rate as the Saudi point out has been founded and expanded. The country is economically very diverse however the income coming from oil revenues has played a substantial role in the development of the state by the help of modern companies of bureaucracy.
It would have been quite difficult to think about a separate status of before the discovery of engine oil. Before 1930s the region which later arrived under the talk about of Saudi was composed od several areas with different parts depending on different products for his or her income. The Hijaz that was a traditional western province, for example was centered chiefly on subsistence agriculture, long distance trades and pilgrims arriving to visit the holy places of Mecca and Medina as a way to obtain revenue for their state. Since there many deserts in Saudi Arabia and the living conditions were quite hostile due to its harsh climate and lack of water there was a huge geographical separation between people of the united states as almost all of the population focused at places where normal water was available. The effect from the outside world was quite negligible a as it was not only difficult to travel within the country but also the country lacked natural resources that may attract folks from outside.
There three main incidents that have triggered the current framework of the Saudi Arabian economy. These occasions were the finding of oil just six years following the establishment of Saudi Arabia, the rebuilding of Europe following the World Warfare II that was greatly based on industrialization and the increasing demand of engine oil. All these occurrences did the trick as a catalyst in increasing the development rate of Saudi Arabia and resulted in enhancement in its position.
With the breakthrough of oil there is a huge upsurge in revenues moving into Saudi Arabia and the united states witnessed an enormous increase in the treasury during the rule of Abd Al Aziz Al in Abd also called Rahman Saud from 1932 to 1953. This inflow of funds helped him to exert better economic and political control over the territories under his control. This control helped him to apply all his ideas effectively and successfully and during his reign their state saw a significant financial change with a change from the traditional economy with an overall economy which depended mostly on state's outlay.
The huge reserves of essential oil in Saudi Arabia never have only influenced huge income for the united states but have also added to the importance of Saudi Arabia to the planet. In the beginning with industrialization Europe was dependent on Saudi Arabia but today the move of oil has become very essential the economical stability of the world. Saudi Arabia being the one major engine oil producing country that has significant unwanted capacity of crude essential oil has made the oil development and investment plans of Saudi Arabia an issue of international importance as the united states has a strong effect on prices and equipment of engine oil internationally. Regardless of the attempts of specialists to diversify the overall economy and create a non oil based sector in the united states but practical execution of these programs have proved to be more difficult than was expected by the government bodies as Saudi is still under the influence of its traditional traditions and even though huge earnings have been flowing into the country since the invention of engine oil but the average standard of living of the average citizen of Saudi Arabia has increased as would be expected. Hence the true source of income for Saudi Arabia continues to be the revenues via export and trading of olive oil.
In the 1990s Saudi Arabia set out to meet the problems of increasing oil development with the increasing demand and lower equipment from the ex - Soviet Union countries. As a result the authorities applied expansion programs for oil industry. Along the way firstly the national essential oil company, Saudi Aramco planned to raise the domestic crude petrol creation from 8. 4 million barrels per day in 1992 to between 10. 5 million and 11 million barrels each day in the year 1995. In the process increased the talk about of production of lighter grades of crude essential oil. Due to pollution and global warming becoming important aspects for those countries and with the demand of olive oil increasing Saudi Arabian Marketing and Refining Company (SAMAREC) decided to up grade its refineries in order to meet high environmental standards followed under western culture. This step may be seen as a step to increase development and keeping the demand of olive oil for Saudi Arabia frequent without being damaged by having less demand due to raised standards of olive oil required by the traditional western countries. Thirdly the united states acquired refineries far away and also planned to get refineries in places nearer to their key consuming markets in order to lower the price of transport incurred by the company and also led to an increase on the market talk about of Saudi Arabia on the planet market.
There was a well-defined upsurge in the petrol prices during 1970s and early 1980s which led to a huge upsurge in profits for Saudi Arabia. This increase helped Saudi Arabia to get out of the persistent financial constraints that Saudi Arabia have been facing during the last couple of years. Since Saudi Arabia's market was not among the finest at time so its absorption capacity was also limited which led to delays in using the money which led to creation of a large amount of money for both government and private areas of the Dubai current economic climate and a huge part of these surpluses were in international financial institutions and in securities of american government.
In 1982 the emphasis of the federal government changed from handling surpluses to coping with growing budgetary and focused on balancing payments shortfall. During the same time the globe noticed a decrement in the olive oil prices which resulted in a reduction in revenues for the united states. This led the federal government into a challenge as they were largely committed to big projects and the government had to make a large budget which resulted in a drawdown of overseas assets of the united states. The united states was also strike by the devaluation of buck in the international market as the olive oil payments are created in dollars therefore the country had to face a dual blow due to a reduction in engine oil prices and the weakening of dollars.
The impact of quick financial change or growth on occupation and the labor force of the united states:
There have been many speedy economic changes nowadays. Most of these have affected virtually all the countries across the world. Economic changes round the world have taken place since ancient times but with the opening up of economies round the world their impact is experienced by virtually all companies around the world. As today almost all of the countries are involved in cross boundary businesses and investments. The effects of globalization have afflicted almost all the countries. Despite the fact that Saudi Arabia still has a comparatively much close market but it too has been affected by the swift changes taking place throughout the world. Saudi Arabia is a major exporter of engine oil and its products which has become a need for just about any country across the world hence the market of Saudi Arabia will be damaged by any economical changes taking place globally. As olive oil payments are made in dollars a big change in buck prices affects Saudi Arabia. Any tough economy reaching the world also influences Saudi Arabia as the demand for oil reduces during a good hint of recession.
Out of the many fast changes, globalization has been a change that has affected the earth greatly and there have been positive as well as negative responses of globalization. With globalization economies have opened up and restrictions on trades have been reduced greatly. Restrictions on imports and exports have been calm greatly in all parts of the globe. The entire world today has turned into a global community.
As a result of globalization which includes been one of many economic changes over the last few years the grade of engine oil produced within the country has been increased. The workforce of the country although still comprises generally of the residents of Saudi Arabia only as the overall economy has not opened up as much as other countries have exposed. Also the education system and the original means of working are still implemented in Saudi Arabia. The employment has increased with the recent changes and the planet arriving to industrialization increasingly more petrol refineries have been set up to be able to meet up with the increasing demand of petrol across the world.
Challenges and opportunities for Saudi Arabia:
The checking of the world and the closed down framework of Saudi Arabia's market in addition has created some obstacles for the united states. It's been internationally acknowledged that the typical of surviving in Saudi Arabia is much less good as other parts of country. The attitude of people living continues to be more influenced by the Arabic and Islamic ethnicities and the people are not quite available to admit views of others even if indeed they might be much better than what they might have thought. The country today also has challenging of improving the education standard of the folks living in the country. As the training standard of people surviving in Saudi Arabia is much below specifications. Also the technical advancement is significantly slower than other areas of the world. The major obstacle for the overall economy of Saudi Arabia is to develop other areas of the marketplace also and reduce its dependency on petrol as oil being a non - alternative source will be worn out one day which is important to have other resources of income also.
Although the country also offers many opportunities and also offers the inflow of income required to help them achieve their goals. The income coming in from their petrol reserves can be integrated in order to develop other sectors of market. The people of the country need an contact with the outside world which may be possible if the current economic climate opens up. The typical of education is currently a big matter which needs to be tackled properly. The current up comings have disclosed that the government of Saudi Arabia has realized the importance of English and has started laying stress on promoting British amongst the people of the country. If the united states is able to develop theoretically and the typical of education could be increased then there are probabilities that the outcome for the united states would be quite good and do it yourself explanatory and will have a fortifying effect in its position among other countries of the world.
Interesting Facts about Saudi Arabia:
Some of the interesting factual statements about the united states are listed below:
Kingdom of Saudi Arabia is the state name of Saudi Arabia.
The system of overall monarchy s adopted in Saudi Arabia.
In terms of area it is the largest country in the Middle East.
Saudi Arabia is also known as 'the land of two holy mosques' as it stores Mecca and Medina both holiest places in Islam.
Oil accounts for more than 75% of the governments revenues and forms part of more than 90% exports from Saudi Arabia.
The largest essential oil producing company ARAMCO can be found in Saudi Arabia.
The first university or college in Saudi Arabia was found in 1957.
Conclusion:
From the study made to put together this paper it is quite clear that the overall economy of Saudi Arabia is based on revenues coming from oil. The analysis has also discovered the closed structure of overall economy of Saudi Arabia and has revealed the lower requirements of living and education requirements in this country which is the largest producer of petrol on earth. The united states has a good effect on the earth as it is the largest manufacturer of oil on the planet and oil is vital for just about any country in the current period of industrialization. All to compete with the globe in a more profound manner it's important to allow them to improve their platform in technological industries and also improve the education specifications of the united states. The focus on English also must be increased to be able to promote discussions internationally and remove alternative party treatment in international discussions. Lastly I would like to state that the country has large inflow of income because of its richness in essential oil reserves if the funds to arrive from the essential oil production are applied in right route and with emphasis on technology and education Saudi Arabia can form into a country which can compete with any top notch country.
