Current Economic Development of Oil Exporting Countries

Topics: OPEC, Petroleum, Saudi Arabia Pages: 9 (2960 words) Published: May 5, 2010
Current economic development of oil exporting countries.
(by the example of Saudi Arabia)
OPEC and oil prices.4
Common development problems of OPEC member countries6
Saudi Arabia8
Economic development9
Main goals9
Role of the government10
New industry sectors10
Private sector11
Foreign labor11
Social and politic structure12

The subject of this research is the economy and society of the oil-exporting countries while the topic can be described as current economic development of the oil-exporting countries and their prospects. As the best example we have chosen Saudi Arabia. The oil-exporting countries are important players on the world market. They can set up oil prices reducing or increasing extraction rates, and mostly this is the only way they get money for their budgets, oil deposits have great influence on their economy. That’s what is called Dutch disease and what their biggest problem is. Some measures in many fields should be taken to get rid of this disease, to change economic and social structure, to make a shift to new phase in their development. This statement constitutes the thesis of this term-paper. The general purpose of this research is to find common stages and common problems of oil-exporting countries development, try to explain them and suggest some solutions. The goals can be determined as the following:

1.To look at the OPEC, its history and common problems of the Member Countries; to follow the interconnectedness between oil price and prosperity of the oil-exporters. 2.To consider brief history of Saudi Arabia for better understanding of that country. 3.To estimate the role of the government, private sector, new industry sectors, foreign labor and social and politic structure in economic development; to show current situation and topical problems in all these spheres. 4.In conclusion try to forecast the possible ways of further development. This term-paper can be used for further research in this sphere. OPEC and oil prices.

Today oil is natural resource that has great influence on the development of oil-producing countries like Russia or the OPEC countries. If a country exports huge amount of oil its price determines budget of the country, political situation, prices for a wide range of goods. It's so because oil isn't just raw material for gasoline production, also for plastics, construction materials and so on. Many oil-exporting countries can set up oil prices reducing or increasing extraction rates, and in the same time no one in the modern world can live without gasoline or electricity. So, we can say that oil is a race in which the main targets are power and money, huge sum of money. But sometimes oil exporters go to the extremities – their budgets depend only on oil prices, in fact this field is a real money spinner. That's how the Dutch disease begins. A good example could be the OPEC countries. OPEC has the biggest oil deposits in the world (almost 80%) and they play a crucial role in oil pricing. This organization controls extraction rates (what leads to controlling of oil prices), foreign policy and strategy of Member Countries. That's why we'd like to consider OPEC itself, its history and common problems.

The Organization of Petroleum Exporting Countries (OPEC) is a cartel of 12 countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. The organization has maintained its headquarters in Vienna since 1965, and hosts regular meetings among the oil ministers of its Member Countries. T he OPEC Member countries came together to form this international organization with several aims. Some of the aims are: •To protect the interest of the member countries.

To make sure that the price of petroleum products do not change much. •To make certain a regular supply of petroleum oil...
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