Saudi Arabia

Tied at 45th with Botswana, Saudi Arabia ranks 62nd and 30th in Economic Competitiveness and Comparative Liveability respectively. The country’s Comparative Liveability rank is boosted by high levels of social trust and satisfaction with personal health.

Saudi Arabia possesses approximately a quarter of the world’s oil reserves, and is the world’s leading oil producer and exporter. Oil revenues account for 90% of export earnings. Increased revenue from high oil prices has enhanced growth, raised government income, and fostered increasing capital investment, while enabling Riyadh to pay domestic debt and increase infrastructure expenditure. However, this dependence on oil harms the level of competitiveness in the economy as a whole, because it makes diversification difficult.

Much of the young population lack the education and technical skills the private sector needs. Mass education is weak, and on average Saudis have only 1.45 years of secondary education. At the elite level as well, a dearth of human capital severely limits levels of innovation, particularly in terms of the number of patents filed. The human capital weaknesses in turn create a reliance on foreign workers, particularly in the oil and service sectors.

The government exercises strong controls over major economic activities, which then suffer from the weaknesses in government effectiveness, as they use subsidies and other policies to distort domestic prices. However, accession to the World Trade Organization in 2005 has led to gradual economic reforms, and the Saudi government has sought to attract foreign investment to reduce dependence on oil revenues.

Saudis benefit from relatively good incomes and an extensive social welfare infrastructure. Contentment with personal health is high, with 92%^g of respondents to the Gallup World Poll reporting satisfaction with their health. However, few employment opportunities outside highly-specialised work sectors exist, and there are high levels of unemployment.

Although family life is strong, in particular the low levels of widowhood (2.3%^g of the population), Saudi Arabia suffers from a considerable inequality of opportunity, notably in restrictions on the political and economic role that can be played by women. Female earnings are only 16% of the level of male earnings.

As an absolute monarchy ruled by the same family since the inception of the state in 1932, Saudi Arabia has no elections. Freedom of choice is further constrained by a strict and conservative social infrastructure based around religious law. 98%^w of people report that God is important to them. This strong religious faith appears to increase wellbeing, but must be understood in the context of an exceptionally low degree of religious freedom. For example, the public practice of religions other than Islam is outlawed.