The Viability of Saudi Arabian Industrial Diversification Efforts: The Consequences of Declining Government Expenditures
Abstract
Given the probability that Saudi Arabia will not be able to significantly increase its oil revenues in the near future, the major problem facing the government will be how best to utilize its dwindling oil revenues to generate positive overall rates of economic growth, while at the same time meeting to the fullest extent possible the basic needs of the majority of the population. Clearly any future growth strategy must involve devising means whereby the private sector will assume a more important role in expanding not only output, but perhaps more importantly in sustaining a level of effective domestic demand to stave off any further recessionary tendencies stemming from reduced government expenditures. This is especially critical in the non-hydrocarbon manufacturing sector, which is almost totally dependent on the local market for sales. In this context, the main purpose of the analysis below is to examine the consequences of declining oil revenues for the Saudi Arabian economy. In particular, the paper is interested in examining several alternative austerity strategies open to the government. In which general areas of government expenditure--consumption (current), investment (infrastructure) or defense (military)--would budgetary cuts be the least disruptive on the non-oil manufacturing sector and in what sense?
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1991
- Accession Number
- ADA529118
Entities
People
- Robert E. Looney
Organizations
- Naval Postgraduate School