Editing Economy of Saudi Arabia (section)

==History==
{{see also|History of the oil industry in Saudi Arabia}}
[[File:Dammam No. 7 on March 4, 1938.jpg|thumb|[[Dammam No. 7]] on March 4, 1938, the day the well struck oil in commercial quantities, becoming the first in the kingdom to do so]]

Saudi Arabia was a [[subsistence economy]] until the 1930s. In 1933, the Saudi government signed an oil concession agreement with the [[Standard Oil]] Company of California;<ref>{{Cite web|url=http://www.saudiaramco.com/en/home/about/history/1930s.html|title=1930s|website=Saudi Aramco|language=en|access-date=18 August 2018|archive-url=https://web.archive.org/web/20180915165704/http://www.saudiaramco.com/en/home/about/history/1930s.html|archive-date=15 September 2018|url-status=dead}}</ref> five years later, [[Dammam No. 7|commercial volumes of oil were discovered]] in the kingdom.<ref>{{cite book |last=Kingston |first=A.J. |chapter=Chapter 1: The Black Gold Rush: Saudi Arabia's Oil Revolution (Early 1900s)|author-link= |date=2023 |title= House of Saud: Saudi Arabia's Royal Dynasty|volume=Book 2: Oil, Power and Influence — House of Saud in the 20th Century (1900s–2000s)|chapter-url= https://books.google.com/books?id=WlXaEAAAQBAJ&dq=dammam+no.+7&pg=PT70 |location= |publisher=A.J. Kingston |page= |isbn= 9781839384820}}</ref><ref>{{cite book |last= Mababaya|first=Mamarinta P. |author-link= |date=2002 |title= The Role of Multinational Companies in the Middle East — The Case of Saudi Arabia|url= https://books.google.com/books?id=4GSO2h_XCksC&dq=dammam+no.+7&pg=PA359 |location= |publisher= [[University of Westminster Press]]|page=359 |isbn= 9781581121728}}</ref> The development of oil fields continued in Saudi Arabia, managed mainly by [[Saudi Aramco|Arabian American Oil Company]] (Aramco), a company formed by the partnership of [[Texaco]] and [[Chevron Corporation|Chevron.]]<ref>{{Cite news|url=https://graphics.wsj.com/what-is-aramco/|title=Aramco: How The World's Most Important Energy Company Works|work=The Wall Street Journal|access-date=18 August 2018|language=en|archive-date=19 August 2018|archive-url=https://web.archive.org/web/20180819003112/https://graphics.wsj.com/what-is-aramco/|url-status=live}}</ref> In 1951, the first offshore field in the Middle East was established by Aramco at Raʾs Al-Saffāniyyah area.<ref name=":3">{{Cite web|url=https://www.britannica.com/place/Saudi-Arabia|title=Saudi Arabia – Economy|website=Encyclopedia Britannica|language=en|access-date=4 February 2019|archive-date=3 May 2015|archive-url=https://web.archive.org/web/20150503055449/https://www.britannica.com/EBchecked/topic/525348/Saudi-Arabia|url-status=live}}</ref> By 1949, Saudi oil production reached 500,000 barrels per day (bpd) and rose rapidly to 1 million bpd in 1954.<ref>{{Cite web|url=http://www.saudiaramco.com/en/home/about/history/1940s.html|title=1940s|website=Saudi Aramco|language=en|access-date=18 August 2018|archive-url=https://web.archive.org/web/20180819051410/http://www.saudiaramco.com/en/home/about/history/1940s.html|archive-date=19 August 2018|url-status=dead}}</ref><ref>{{Cite web|url=http://www.saudiaramco.com/en/home/about/history/1950s.html|title=1950s|website=Saudi Aramco|language=en|access-date=18 August 2018|archive-url=https://web.archive.org/web/20180819051418/http://www.saudiaramco.com/en/home/about/history/1950s.html|archive-date=19 August 2018|url-status=dead}}</ref> Moreover, in 1951, Aramco started operating the [[Trans-Arabian Pipeline]] that moved oil from the eastern region of Saudi Arabia to the Mediterranean Sea through Jordan, Syria, and Lebanon. However, in 1981, this line was no longer used after a new line began operations that linked [[Jubail]] on the [[Persian Gulf]] and [[Yanbu]] on the [[Red Sea]]. The new pipe contributed greatly to speed up oil transport.<ref name=":3" /> In 1960, [[OPEC]] was established, with Saudi Arabia as one of its founding members.<ref>{{Cite web|url=https://www.opec.org/opec_web/en/about_us/24.htm|title=OPEC : Brief History|website=opec.org|language=en|access-date=18 August 2018|archive-date=9 May 2019|archive-url=https://web.archive.org/web/20190509233733/https://www.opec.org/opec_web/en/about_us/24.htm|url-status=live}}</ref> During the [[1973 oil crisis]], the price of oil rose from $3 per barrel to nearly $12, and the Saudi economy started growing rapidly,<ref name="HT2009: vi">[[#HT2009|Tripp, ''Culture Shock'', 2009]]: p. vi</ref> with GDP increasing from approximately $15 billion in 1973 to almost $184 billion by 1981.<ref>{{Cite web|url=https://data.worldbank.org/country/saudi-arabia|title=Saudi Arabia {{!}} Data|website=data.worldbank.org|language=en-us|access-date=18 August 2018|archive-date=17 August 2018|archive-url=https://web.archive.org/web/20180817234544/https://data.worldbank.org/country/saudi-arabia|url-status=live}}</ref> After gradually purchasing Aramco assets, the Saudi government nationalized the company in 1980. In 1988, [[Saudi Aramco]] was established to take over the responsibilities of Aramco.<ref>{{Cite web|url=http://www.saudiaramco.com/en/home/about/history/1980s.html|title=1980s|website=Saudi Aramco|language=en|access-date=18 August 2018|archive-url=https://web.archive.org/web/20180819051421/http://www.saudiaramco.com/en/home/about/history/1980s.html|archive-date=19 August 2018|url-status=dead}}</ref>

In 1980, the price of oil peaked, and demand started decreasing as a result of [[recession]]s in industrialized nations and more efficient oil use, which produced surpluses.<ref>{{Cite news|url=https://www.nytimes.com/1982/03/21/business/the-dark-side-of-the-oil-glut.html|title=THE DARK SIDE OF THE OIL GLUT|last=Hershey|first=Robert|date=21 March 1982|work=The New York Times|access-date=18 August 2018|archive-date=19 August 2018|archive-url=https://web.archive.org/web/20180819051242/https://www.nytimes.com/1982/03/21/business/the-dark-side-of-the-oil-glut.html|url-status=live}}</ref> This created a [[1980s oil glut|worldwide oil glut]], with the price of oil dropping from approximately $36 per barrel in 1980 to approximately $14 by 1986.<ref>{{Cite web|url=https://www.statista.com/statistics/262858/change-in-opec-crude-oil-prices-since-1960/|title=OPEC crude oil price statistics annually 1960–2018 {{!}} Statistic|website=Statista|language=en|access-date=18 August 2018|archive-date=19 August 2018|archive-url=https://web.archive.org/web/20180819082919/https://www.statista.com/statistics/262858/change-in-opec-crude-oil-prices-since-1960/|url-status=live}}</ref> Saudi oil production, which had increased to almost {{convert|10|Moilbbl|m3}} per day during 1980–81, fell 80% to about {{convert|2|Moilbbl/d|m3/d}} in 1985.<ref>{{Cite news|url=https://www.reuters.com/article/us-saudi-oil-policy-analysis/facing-new-oil-glut-saudis-avoid-1980s-mistakes-to-halt-price-slide-idUSKCN0I229320141014|title=Facing new oil glut, Saudis avoid 1980s mistakes to halt price slide|last=Gamal|first=Rania El|work=U.S.|access-date=19 August 2018|language=en-US|archive-date=19 August 2018|archive-url=https://web.archive.org/web/20180819051325/https://www.reuters.com/article/us-saudi-oil-policy-analysis/facing-new-oil-glut-saudis-avoid-1980s-mistakes-to-halt-price-slide-idUSKCN0I229320141014|url-status=live}}</ref> Budgetary deficits developed, and the government drew down its foreign assets.<ref>GDP per capita (PPP) shrunk by 0.8% on average during the 1980s, grew 2.1% during the 1990s and 4.4% during the 2000s. (source: [http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/weorept.aspx GDP (PPP) per capita trend during 1980–2010]) Annual imports grew 44% on average during the 1970s, but shrunk 1.9% during the 1980s, grew again 2.4% during the 1990s and 14% during the 2000s.(source: [http://www.indexmundi.com/facts/saudi-arabia/imports-of-goods-and-services Saudi Arabian imports grew 14% during the 2000s] {{Webarchive|url=https://web.archive.org/web/20180819082816/http://www.indexmundi.com/facts/saudi-arabia/imports-of-goods-and-services |date=19 August 2018 }})</ref> As a result of the oil glut and the pressure from declines in production, after 1985 Saudi Arabia started enforcing production quotas more harshly for the OPEC members.<ref>{{Cite journal|last=Molchanov|first=Pavel|date=April 2003|title=A Statistical Analysis of OPEC Quota Violations|url=https://sites.duke.edu/djepapers/files/2016/08/paveldje.pdf|journal=Duke Journal of Economics|volume=XV|pages=9|access-date=19 August 2018|archive-date=28 October 2018|archive-url=https://web.archive.org/web/20181028061057/https://sites.duke.edu/djepapers/files/2016/08/paveldje.pdf|url-status=live}}</ref>

In June 1993, Saudi Aramco absorbed the state marketing and refining company (SAMAREC), becoming the world's largest fully integrated oil company. Most Saudi oil is exported by tankers from oil terminals at [[Ras Tanura]] and Ju'aymah in the [[Persian Gulf]].<ref>{{cite web | url=https://2009-2017.state.gov/outofdate/bgn/saudiarabia/6075.htm | title=Saudi Arabia (09/98) }}</ref>

[[File:Oil Reserves Updated.png|thumb|left|upright=1.5|A map of world [[oil reserves]] according to OPEC, 2013]]
In the 1990s, Saudi Arabia experienced a significant contraction of oil revenues combined with a high rate of population growth. Per capita income fell from a high of $11,700 at the height of the oil boom in 1981 to $6,300 in 1998.<ref>{{cite web |title=Country Profile Study on Poverty: Saudi Arabia |url=http://www.jica.go.jp/english/global/pov/profiles/pdf/sau_eng.pdf |url-status=dead |archive-url=https://web.archive.org/web/20080226202420/http://www.jica.go.jp/english/global/pov/profiles/pdf/sau_eng.pdf |archive-date=26 February 2008 |access-date=26 February 2008 |website=jica.go.jp}}</ref> Taking into account the impact of the real oil price changes on the kingdom's real gross domestic income, the real command-basis GDP was computed to be 330.381 billion 1999 USD in 2010.<ref>{{cite report |title=The Impact of Oil Price Volatility on Welfare in the Kingdom of Saudi Arabia: Implications for Public Investment Decision-Making |last1=Pierru |first1=Axel |last2=Matar |first2=Walid |date=16 July 2012 |publisher=USAEE Working Paper No. 2110172 |ssrn=2110172}}</ref> [[World oil market chronology from 2003|Increases in oil prices in the early 2000s]] helped boost per capita GDP to ${{gaps|17|000}} in 2007 dollars (about $7,400 adjusted for inflation),<ref>{{cite web |title=CPI Inflation Calculator |url=http://data.bls.gov/cgi-bin/cpicalc.pl |publisher=Data.bls.gov}}</ref> but have declined since oil price drop in mid-2014.<ref name="wti">{{cite web |title=Crude Oil WTI (NYMEX) Price |url=http://www.nasdaq.com/markets/crude-oil.aspx?timeframe=10y |access-date=16 March 2015 |website=nasdaq.com}}</ref>

However, beginning in late 1997, Saudi Arabia again faced the challenge of low oil prices. Because of a combination of factors—the East Asian economic crises, a warm winter in the West caused by [[El Niño]], and an increase in non-OPEC oil production—demand for oil decreased and pulled oil prices down by more than one-third.<ref>{{cite web |url= https://ora.ox.ac.uk/objects/uuid:8e176905-4979-44a5-bc97-3096e5adea6c/download_file?file_format=application%2Fpdf&safe_filename=The%2Boil%2Bprice%2Bcrises%2Bof%2B1998-9%2Band%2B2008-9.pdf&type_of_work=Journal+article |title= The Oil Price Crises of 1998–9 and 2008–9 |last= Mabro|first= Robert|author-link=Robert Mabro|date=May 2009 |website=ora.ox.ac.uk |publisher=[[Oxford Institute for Energy Studies]] |access-date= October 9, 2023}}</ref>

Saudi Arabia was a key player in coordinating the successful 1999 campaign of OPEC and other oil-producing countries to raise the oil price to its highest level since the (Persian) [[Gulf War]] by managing petroleum supply and production. That same year, Saudi Arabia established the [[Supreme Economic Council of Saudi Arabia|Supreme Economic Council]] to formulate and better coordinate economic development policies to accelerate institutional and industrial reforms.<ref>{{Cite web |title=World Atlas - About Saudi Arabia |url=https://www.traveldocs.com/world-atlas/Saudi-Arabia-atlas194 |access-date=2022-06-23 |website=www.travel docs.com |archive-date=18 January 2023 |archive-url=https://web.archive.org/web/20230118135540/https://www.traveldocs.com/world-atlas/Saudi-Arabia-atlas194 |url-status=live }}</ref>

Saudi Arabia joined the [[World Trade Organization]] (WTO) in 2005 after many years of negotiations.

===Foreign investment===
Before 2000, there were strict limits placed on foreign direct investment in Saudi Arabia. The 1979 Foreign Investment Act prohibited foreign ownership in some sectors of the economy, allowed foreign investment only if the investor qualified for a license based on their expertise, and gave priority to businesses that were Saudi-owned or partially Saudi-owned.<ref name="Almahmood">{{cite thesis |last=Almahmood |first=Abdulaziz |date=December 2010 |title=Foreign Direct Investment in Saudi Arabia: Joint Venture Equity Shares and Source Country Characteristics |url=https://theses.ncl.ac.uk/jspui/bitstream/10443/1128/1/Abdulaziz%20almahmood%2011.pdf |publisher=Newcastle University Business School |access-date=15 December 2022 |page=24-25 |archive-date=18 January 2023 |archive-url=https://web.archive.org/web/20230118135539/https://theses.ncl.ac.uk/jspui/bitstream/10443/1128/1/Abdulaziz%20almahmood%2011.pdf |url-status=live }}</ref>

However, in the mid-1990s, foreign ownership rules were relaxed, with investment sought in telecommunications, utilities, and financial services.<ref name="HT2009: 225">[[#HT2009|Tripp, ''Culture Shock'', 2009]]: p. 225</ref> The 2000 Foreign Direct Investment Act made substantial changes to the rules on foreign investment, including allowing projects to be run by 100% foreign-owned companies for the first time.<ref name="Almahmood" />

According to [[United Nations Conference on Trade and Development|UNCTAD's]] June 2018 report, Saudi Arabia's foreign direct investment was only $1.4&nbsp;billion in 2017, down from $7.5&nbsp;billion the year before and as much as $12.2&nbsp;billion in 2012. The fall in investment is attributed to negative intra-company loans by foreign multinationals and various divestments.<ref>{{cite magazine|url=https://www.forbes.com/sites/dominicdudley/2018/06/07/saudi-arabia-shock-collapse-investment/#7c41da966e60|title=Saudi Arabia Suffers Shock Collapse in Inward Investment|magazine=Forbes|access-date=7 June 2018|archive-date=7 February 2019|archive-url=https://web.archive.org/web/20190207002725/https://www.forbes.com/sites/dominicdudley/2018/06/07/saudi-arabia-shock-collapse-investment/#7c41da966e60|url-status=dead}}</ref> In the first quarter of 2018, [[net capital outflow]]s were running at approximately 5% of GDP, compared to less than 2% of GDP in late 2016.<ref>{{cite magazine|url=https://www.forbes.com/sites/dominicdudley/2018/09/21/is-saudi-arabia-unable-or-just-unwilling-to-stem-the-flow-of-money-leaving-the-country/#1b26ad026abb|title=Is Saudi Arabia Unable Or Just Unwilling To Stem The Flow of Money Leaving The Country?|magazine=Forbes|access-date=21 September 2018|archive-date=20 November 2018|archive-url=https://web.archive.org/web/20181120060351/https://www.forbes.com/sites/dominicdudley/2018/09/21/is-saudi-arabia-unable-or-just-unwilling-to-stem-the-flow-of-money-leaving-the-country/#1b26ad026abb|url-status=dead}}</ref> However, according to a report published in Trading Economics, in the second quarter of 2018, [[foreign direct investment]] in the country raised by $882&nbsp;million.<ref>{{Cite web|url=https://www.ceicdata.com/en/indicator/saudi-arabia/foreign-direct-investment|title=Saudi Arabia Foreign Direct Investment (FDI) [2006 – 2018] [Chart-Data-Forecast]|website=ceicdata.com|access-date=23 December 2018|archive-date=24 December 2018|archive-url=https://web.archive.org/web/20181224024046/https://www.ceicdata.com/en/indicator/saudi-arabia/foreign-direct-investment|url-status=live}}</ref> Moreover, [[Saudi Arabian General Investment Authority|SAGIA]]'s data indicate that licenses provided to foreign investment increased by 130% in the first quarter of 2018 as a result of reforms in the economy.<ref>{{Cite web|url=http://www.arabnews.com/node/1319606/business-economy|title=New Measures of foreign Investment in Saudi Arabia|date=11 June 2018|access-date=23 December 2018|archive-date=11 October 2018|archive-url=https://web.archive.org/web/20181011094814/http://www.arabnews.com/node/1319606/business-economy|url-status=live}}</ref>

As Saudi oil income declined in the late 2010s, the kingdom's international debt soared. In December 2018, Saudi Arabia announced it would be issuing [[Bond (finance)|bond]]s worth approximately 120&nbsp;billion riyals ($32&nbsp;billion) to cover its 4.2% GDP deficit of 131&nbsp;billion riyals.<ref>{{cite news|url=https://www.bloomberg.com/professional/blog/saudi-arabia-wants-sell-32-billion-bonds-2019/|title=Saudi Arabia wants to sell $32 billion of bonds in 2019|newspaper=Bloomberg Professional Services|date=20 December 2018|access-date=20 December 2018|publisher=Bloomberg|archive-date=25 January 2019|archive-url=https://web.archive.org/web/20190125183601/https://www.bloomberg.com/professional/blog/saudi-arabia-wants-sell-32-billion-bonds-2019/|url-status=live}}</ref> In January 2019, the kingdom sold bonds worth $7.5&nbsp;billion.<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2019-01-09/saudi-arabia-to-sell-7-5-billion-of-bonds-in-two-parts|title=Saudi Arabia to Sell $7.5 Billion of Bonds in Two Parts|newspaper=Bloomberg.com|date=9 January 2019|access-date=9 January 2019|publisher=Bloomberg|archive-date=25 January 2019|archive-url=https://web.archive.org/web/20190125183604/https://www.bloomberg.com/news/articles/2019-01-09/saudi-arabia-to-sell-7-5-billion-of-bonds-in-two-parts|url-status=live}}</ref> In almost two and a half years, bonds worth $60&nbsp;billion were sold by Saudi, which became one of the biggest borrowers globally.<ref>{{cite news|url=https://www.wsj.com/articles/saudi-arabia-is-raising-money-again-with-international-bonds-11547034391|title=Saudi Arabia Sells More Than $7 Billion in Bonds|access-date=9 January 2019|newspaper=The Wall Street Journal|archive-date=21 March 2019|archive-url=https://web.archive.org/web/20190321162720/https://www.wsj.com/articles/saudi-arabia-is-raising-money-again-with-international-bonds-11547034391|url-status=live}}</ref>

In September 2018, the Public Investment Fund completed a deal with a group of global lenders for a loan of $11 billion.<ref>{{cite web |last1=Martin |first1=Matthew |date=17 September 2018 |title=Saudi Arabia's Sovereign Wealth Fund Raises $11 Billion Loan |url=https://www.bloomberg.com/news/articles/2018-09-17/saudi-arabia-s-sovereign-wealth-fund-raises-11-billion-loan |publisher=Bloomberg}}</ref> The deal raised more than initially planned and was the first time the PIF had incorporated loans and debt instruments into its funding.<ref name="blooms">{{cite web |last1=Nereim |first1=Vivian |date=18 September 2018 |title=Saudi Businesses Are Struggling to Hire Saudi Workers |url=https://www.bloomberg.com/news/articles/2018-09-19/jobs-for-saudis-plan-tests-retailers-used-to-cheap-foreign-labor |publisher=Bloomberg}}</ref> According to data from Fitch Ratings, over two years starting from May 2016 Saudi Arabia went from having zero debt to raising $68 billion in dollar-denominated bonds and syndicated loans—one of the fastest rates among emerging economies.<ref>{{Cite news |last=Jones |first=Rory |date=17 October 2018 |title=Fate of Journalist Heightens Saudi Debt Worries |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/fate-of-journalist-heightens-saudi-debt-worries-1539774000 |access-date=18 October 2018 |issn=0099-9660}}</ref>

Foreign investments in the kingdom witnessed a rapid increase in the first quarter of 2019. The number of new licenses approved for foreign businesses grew 70% over 2018. Most licenses were approved for British and Chinese companies, which drove the increase.<ref>{{Cite news|url=https://www.bloomberg.com/news/articles/2019-04-28/saudis-issue-70-more-foreign-business-licenses-from-year-ago|title=Bloomberg – Britain, China Lead Way in New Saudi Business Licenses|newspaper=Bloomberg.com|date=28 April 2019|access-date=28 April 2019|archive-date=30 June 2019|archive-url=https://web.archive.org/web/20190630070014/https://www.bloomberg.com/news/articles/2019-04-28/saudis-issue-70-more-foreign-business-licenses-from-year-ago|url-status=live}}</ref> In the first quarter of 2019, foreign investment in Saudi Arabia jumped by 28%.<ref name="auto">{{Cite web |date=24 April 2019 |title=Saudi Arabia sees first budget surplus since 2014 |url=http://www.arabnews.com/node/1487371/business-economy |url-status=live |archive-url=https://web.archive.org/web/20190426232005/http://www.arabnews.com/node/1487371/business-economy |archive-date=26 April 2019 |access-date=1 May 2019 |website=Arab News |language=en}}</ref>

===Diversification and the development plans===
All the Saudi government's five-year plan since 1970 have called for diversifying the economy beyond oil, but with marginal success.<ref name="house-162">{{cite book |last1=House |first1=Karen Elliot |url=https://books.google.com/books?id=dIu0LSe8aVwC&q=every+five-year+plan+since+the+first+one+in+1970+has+called+for+diversifying+the+economy+beyond+oil&pg=PA163 |title=On Saudi Arabia: Its People, Past, Religion, Fault Lines and Future |date=2012 |publisher=Alfred A. Knopf |isbn=978-0307473288 |page=163 |quote=every five-year plan since the first one in 1970 has called for diversifying the economy beyond oil, but oil is still supreme |access-date=13 February 2015 |archive-url=https://web.archive.org/web/20210613081751/https://books.google.com/books?id=dIu0LSe8aVwC&q=every+five-year+plan+since+the+first+one+in+1970+has+called+for+diversifying+the+economy+beyond+oil&pg=PA163 |archive-date=13 June 2021 |url-status=live}}</ref>

The government has sought to allocate its petroleum income to transform its relatively undeveloped, oil-based economy into a modern industrial state, while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed rapidly. Oil wealth has increased the standard of living of most Saudis. However, significant [[population growth]] has strained the government's ability to finance further improvements in the country's standard of living. Heavy dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. The mismatch between the job skills of Saudi graduates and the needs of the private job market at all levels remains the principal obstacle to economic diversification and development; about 4.6&nbsp;million non-Saudis are employed in the economy.<ref name="usgov" />

Saudi Arabia first began to diversify its economy to reduce dependency on oil in the 1970s as part of its first five-year development plan. Basic petrochemical industries using petroleum byproducts as feedstock were developed.<ref name=PCPSKSA>{{cite web|title=The Petrochemicals and Plastics Sector in the Kingdom of Saudi Arabia|url=http://www.us-sabc.org/files/public/Petrochemicals_Brochure.pdf|publisher=U.S.–Saudi Arabian Business Council|access-date=12 February 2015|url-status=dead|archive-url=https://web.archive.org/web/20141212225752/http://www.us-sabc.org/files/public/Petrochemicals_Brochure.pdf|archive-date=12 December 2014}}</ref> The fishing villages of al-[[Jubail]] on the [[Persian Gulf]] and [[Yanbu]] on the [[Red Sea]] were developed. However, their effect on Saudi Arabia's economic fortunes has been small.<ref name="HT2009: 44">[[#HT2009|Tripp, ''Culture Shock'', 2009]]: p. 44</ref>

Saudi Arabia's first two development plans, covering the 1970s, emphasized infrastructure. The results were impressive—the total length of paved highways tripled, power generation increased by a factor of 28, and the capacity of the seaports grew by a factor of 10. For the third plan (1980–85), the emphasis changed. Spending on infrastructure declined, shifting instead to education, health, and social services. The share for diversifying and expanding productive sectors of the economy (primary industry) did not rise as planned, but the two industrial cities of [[Jubail]] and [[Yanbu]]—which were built around the use of the country's oil and gas to produce steel, [[petrochemicals]], fertilizer, and refined oil products—were largely completed.<ref name=usgov/>

In the fourth plan (1985–90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. The private sector became more important, rising to 70% of non-oil GDP by 1987. While still concentrated in trade and commerce, private investment increased in industry, agriculture, banking, and construction companies. These private investments were supported by generous government financing and incentive programs. The objective was for the private sector to have 70% to 90% ownership in most joint venture enterprises.<ref name=usgov/>

The fifth plan (1990–95) emphasized consolidation of the country's defences; improved and more efficient government social services; regional development; and, most importantly, creating greater private-sector employment opportunities for Saudis by reducing the number of foreign workers.<ref name=usgov/>

The sixth plan (1996–2000) focused on lowering the cost of government services without cutting them and sought to expand educational training programs. The plan called for reducing the kingdom's dependence on the petroleum sector by diversifying economic activity, particularly in the private sector, with special emphasis on industry and agriculture. It also continued the effort to "[[Saudization|Saudize]]" the labour force.<ref name=usgov/>

The seventh plan (2000–2004) focused more on economic diversification and a greater role of the private sector in the Saudi economy. For 2000–04, the government aimed at an average GDP growth rate of 3.16% each year, with projected growths of 5.04% for the private sector and 4.01% for the non-oil sector. The government also set a target of creating 817,300 new jobs for Saudi nationals.<ref name=usgov>{{cite web|title=Saudi Arabia. Profile|url=https://2009-2017.state.gov/outofdate/bgn/saudiarabia/26136.htm|work=11/2001|publisher=US government|access-date=12 May 2014|archive-date=25 January 2020|archive-url=https://web.archive.org/web/20200125122536/https://2009-2017.state.gov/outofdate/bgn/saudiarabia/26136.htm|url-status=live}}</ref> By 2007, advertising expenditures had reached new peaks due to emphasis on value-added manufacturing.<ref>{{cite web |url=http://www.warc.com/LandingPages/Data/NewspaperTrends/PDF/SaudiArabia.pdf |title=Archived copy |access-date=20 December 2007 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20090326211755/http://www.warc.com/LandingPages/Data/NewspaperTrends/PDF/SaudiArabia.pdf |archive-date=26 March 2009}}</ref>{{Failed verification|date=March 2023|reason=Source includes information on advertising, but not value-added manufacturing.}}

In 2016, the main investing countries in Saudi Arabia were the US, UAE, France, Singapore, Kuwait, and Malaysia. They mainly invested in chemical industry, real estate, tourism, fossil fuels, automobiles, and machinery.<ref name=":4">{{Cite web|url=https://en.portal.santandertrade.com/establish-overseas/saudi-arabia/foreign-investment|title=SAUDI ARABIA: FOREIGN INVESTMENT|date=2019|website=Santander, TradePortal|access-date=4 February 2019|archive-date=7 February 2019|archive-url=https://web.archive.org/web/20190207015550/https://en.portal.santandertrade.com/establish-overseas/saudi-arabia/foreign-investment|url-status=live}}</ref> As part of its diversification, Saudi Arabia arranged major refinery contracts with Chinese and other companies.<ref name="Bloomberg 17 January 2012">{{cite news |url=https://www.bloomberg.com/news/2012-01-16/saudi-aramco-to-invest-200-billion-in-refining-exploration.html |title=Saudi Aramco to Invest $200 Billion in Refining, Exploration |first=Wael |last=Mahdi |date=17 January 2012 |newspaper=Bloomberg |access-date=19 January 2012 |archive-date=21 October 2012 |archive-url=https://web.archive.org/web/20121021230714/http://www.bloomberg.com/news/2012-01-16/saudi-aramco-to-invest-200-billion-in-refining-exploration.html |url-status=live }}</ref>

After Saudi Arabia became a member of the World Trade Organization (WTO) in 2005, the overall foreign investment environment in Saudi Arabia improved thanks to the kingdom's stable economy, massive oil reserves, high power of expenditure, developed infrastructure, reinforced finance, and banking system. Since then, and pursuant to its commitment to the WTO, Saudi Arabia has been developing trade-related policies and legislations. Moreover, foreign investment has been highly encouraged by [[Saudi Vision 2030]] and its economic diversification.<ref name=":4" />

Since 2017, to boost the economy and decrease the country's dependency on oil, Crown Prince [[Mohammed bin Salman]] has introduced multiple changes, such as raising the prices of gasoline and electricity, levying new taxes, and prioritizing Saudi workers over foreign workers. However, some government officials claimed the policies were causing serious ill effects on the economy. Saudi businessmen reported a decline in sales for 2018, and a few blamed the government.<ref>{{cite news|url=https://www.wsj.com/articles/saudi-arabias-economic-overhaul-is-backfiring-11553338819|title=Saudi Arabia's Economic Overhaul Is Backfiring|newspaper=The Wall Street Journal|access-date=5 April 2019|archive-date=5 April 2019|archive-url=https://web.archive.org/web/20190405025846/https://www.wsj.com/articles/saudi-arabias-economic-overhaul-is-backfiring-11553338819|url-status=live}}</ref>

In 2019, the ''[[Financial Times]]'' reported that the plans to float state-owned oil beneficiary Saudi Aramco were stranded between the company's attachment to the oil ministry and the desire to meet international standards. However, Energy Minister [[Khalid A. Al-Falih|Khalid Al Falih]] has long maintained that Aramco's association with the state is a "win-win policy" for both parties.<ref>{{cite news|url=https://www.ft.com/content/96a6fc26-8b92-11e9-a24d-b42f641eca37|title=Saudi Aramco battles oil ministry overuse of company funds|newspaper=Financial Times|access-date=20 June 2019|archive-date=21 July 2019|archive-url=https://web.archive.org/web/20190721071536/https://www.ft.com/content/96a6fc26-8b92-11e9-a24d-b42f641eca37|url-status=live}}</ref>

Saudi Arabia made plans to launch six "economic cities" (e.g., [[King Abdullah Economic City]]) in an effort to diversify the economy and provide jobs.<ref>{{cite web |url=http://professional.tdctrade.com/content.aspx?data=Professional_content_en&contentid=917452&w_sid=194&w_pid=836&w_nid=10993&w_cid=917452&w_idt=1900-01-01&w_oid=181&w_jid= |title=Construction boom of Saudi Arabia and the UAE |access-date=7 December 2016 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20071011212725/http://professional.tdctrade.com/content.aspx?data=Professional_content_en&contentid=917452&w_sid=194&w_pid=836&w_nid=10993&w_cid=917452&w_idt=1900-01-01&w_oid=181&w_jid= |archive-date=11 October 2007}}. tdctrade.com. 2 August 2007</ref> At a total construction cost of $60&nbsp;billion (2013), they were "expected to contribute $150bn to the economy".<ref name=MEED>{{cite web|title=Saudi Arabia economic zones|url=http://www.meed.com/supplements/2013/meed-guide-to-economic-zones/saudi-arabia-economic-zones/3183419.article|website=MEED|access-date=16 March 2015|date=21 August 2013|url-status=dead|archive-url=https://web.archive.org/web/20150402105004/http://www.meed.com/supplements/2013/meed-guide-to-economic-zones/saudi-arabia-economic-zones/3183419.article|archive-date=2 April 2015}}</ref>
<ref name=MCC>{{cite web|title=Saudi Arabia's Four New Economic Cities|url=http://www.metrocorpcounsel.com/articles/22205/saudi-arabia%E2%80%99s-four-new-economic-cities|website=The Metropolitan Corporate Counsel|access-date=16 March 2015|date=6 February 2013|archive-date=10 October 2017|archive-url=https://web.archive.org/web/20171010082817/http://www.metrocorpcounsel.com/articles/22205/saudi-arabia%E2%80%99s-four-new-economic-cities|url-status=live}}</ref> However, these cities have failed to attract either the population or the financial investment that the government claimed they would.<ref>{{Cite web |date=2023-01-12 |title=Saudi Arabia is giving itself an extreme makeover with 'giga-projects.' Will it work? |url=https://www.latimes.com/world-nation/story/2023-01-12/saudi-arabia-development-megaprojects-jeddah-tower |access-date=2023-01-13 |website=Los Angeles Times |language=en-US |archive-date=18 January 2023 |archive-url=https://web.archive.org/web/20230118135541/https://www.latimes.com/world-nation/story/2023-01-12/saudi-arabia-development-megaprojects-jeddah-tower |url-status=live }}</ref>

The privatization program [[Saudi Vision 2030]] is running behind schedule. Oil prices have doubled since the government began to consider the program in 2015. Delay in Aramco's initial public offering further demonstrated a lack of urgency to privatize, even though in July 2018, the [[International Monetary Fund]] urged accelerating the process.<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2018-09-20/aramco-is-not-alone-as-saudi-arabia-s-privatization-push-slows|title=It's Not Just Aramco, Saudi's Privatization Push Is Slowing Down|newspaper=Bloomberg.com|date=20 September 2018|publisher=Bloomberg News|access-date=20 September 2018|archive-date=21 September 2018|archive-url=https://web.archive.org/web/20180921190935/https://www.bloomberg.com/news/articles/2018-09-20/aramco-is-not-alone-as-saudi-arabia-s-privatization-push-slows|url-status=live}}</ref>

According to many reports, the Saudi government is interested in granting more liberties to the foreign investment system and giving a 100% allowance to foreign investors to work in the wholesale and retail sector in certain cases.<ref name=":4" /> The Saudi [[Ministry of Commerce and Investment (Saudi Arabia)|Ministry of Commerce and Investment]] expected that the kingdom would see an increase in the GDP per capita from US$20,700 to $33,500 by 2020.<ref>{{Cite web|url=https://mci.gov.sa/en/AboutKingdom/Pages/InvestmentInKingdom.aspx|title=Kingdom of Saudi Arabia|website=mci.gov.sa|language=en-us|access-date=4 February 2019|archive-url=https://web.archive.org/web/20171106080038/http://mci.gov.sa/en/AboutKingdom/Pages/InvestmentInKingdom.aspx|archive-date=6 November 2017|url-status=dead}}</ref> However, the GDP per capita by 2020 had stagnated at $US20,000.<ref>{{Cite web |title=GDP per capita (current US$) - Saudi Arabia {{!}} Data |url=https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SA |access-date=2023-01-13 |website=data.worldbank.org |archive-date=18 January 2023 |archive-url=https://web.archive.org/web/20230118135541/https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SA |url-status=live }}</ref>