Kingdom of Saudi Arabia Pandemic Recovery

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Table of Contents

Introduction
Pandemic Consequences
Initiatives
Services
Tourism Issue
Initiatives Details: Saudi Arabia Oil Exports
Initiatives Details: Card template
Agricultural Area Initiatives
References

Introduction

The Saudi government has allocated funds and established a list of initiatives to accelerate the industrial sector’s recovery from the Corona pandemic.

Pandemic Consequences

Coronavirus cases in Saudi Arabia are relatively low. However, the external economic environment related to the pandemic might have a higher financial impact on Saudi Arabia than the internal coronavirus cases.

Initiatives

Further promotion of the tourism sector development;
Enhancement of domestic tourism opportunities;
Offering discounts and extra opportunities for foreign visitors;
Development of new commercial attractions and entertainment for tourists;
Active investment in the local economy (2025 projections)

Services

The main sectors of industry in Saudi Arabia are the oil industry, services, and agriculture. The last-mentioned sector only takes 2-3% of total employment and added value, whereas other sectors have a much more considerable economical importance (“The economic context of Saudi Arabia,” 2021).

Tourism Issue

Pandemic restrictions caused a vast decrease in tourism, as traveling and commercial flights in particular have five times lower rates than before (“Global Flight Tracking Intelligence,” 2021). Tourism is significantly influenced by foreign consumers, hence the decrease in global demand for provided services as well as the ability to provide them has a considerable influence on the industry.

Initiatives Details: Saudi Arabia Oil Exports

Almost half of the national income in Saudi Arabia is generated by oil production and export, which makes the industry globally dependent. During the previous year, oil prices and demand underwent a dramatic drop. Such events had a significant impact on any oil-focused economy, including Saudi Arabia.

Initiatives Details: Card template

As it is impossible to immediately end the pandemic and resume global tourism, it is crucial to develop two main strategies, First, specific measures should be taken to help service-aimed businesses survive the pandemic without bankruptcy. Second, alternative sources of domestic revenue should be supported by the government to sustain the economy. Provided initiatives may contribute to the solution of the above-mentioned issues. Subsidizing the agricultural sector should be considered as it may create more employment and an alternative source of production and revenue, which does not depend on the global environment.

Introducing tax benefits and a bankruptcy moratorium may allow tourist-aimed businesses to get through the pandemic. Such initiatives may maintain the tourism industry and help it recover as soon as pandemic restrictions end.

Legislation should be modified to prevent the recruitment of foreign workforces to decrease local unemployment which may positively affect all industry sectors and increase domestic purchasing power.

Small and medium-sized enterprises should receive financial support as well as subsidized loans to support business continuity and provide necessary resources to preserve hard-hit industries.

The establishment of new trade agreements related to oil export may prevent overproduction and unnecessary storage costs caused by lower consumption.

Agricultural Area Initiatives

Particular attention should be focused on the development of the agricultural segment of the industry. The modern Kingdom of Saudi Arabia has a global dependent economy, which significantly relies on export and tourism. Pandemic restrictions and the oil crisis have shown that such allocation of financial resources may lead to a list of internal problems. Therefore it is crucial to develop local manufacturing of diverse products to at least supply the internal market. Such products should include technical devices, clothing, food, and building services.

The most perspective area, that may grant needed economical independence to Saudi Arabia is agriculture. Even though agriculture provides only a couple percent of revenue, it is already established as an industry and is relatively significant. Introducing various tax credits, grants, and legislation benefits may help the agricultural area develop rapidly with a list of positive consequences. First, it may not only decrease unemployment but also benefit from the current state, when people are in search of jobs. Second, it may provide the domestic market with basic foodstuffs, decreasing import costs. Finally, it may transform the Arabian Oil production economy into a less oil-dependent state.

References

Gornall, J. (2020). How Saudi Arabia conducted Hajj amid the COVID-19 pandemic. Arab News. Web.

KPMG. (2020). Government and institution measures in response to COVID-19. Web.

Global flight tracking intelligence: Live flight tracker and airport status. (2021). AirNav Radarbox. Web.

Saudi Arabia oil exports. (n.d.). Trading Economics. Web.

The economic context of Saudi Arabia. (2021). Nordea Trade Portal. Web.

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