section_path: Economy
section_name: Economy
paragraph_text: Economy
  
  As of October 2018, Saudi Arabia is the largest economy in the Middle East and the 18th largest in the world. It has the world's second-largest proven petroleum reserves and is the largest exporter of petroleum. The country has the world's second-largest oil reserves and the sixth-largest proven natural gas reserves. Saudi Arabia is considered an " energy superpower," having the second highest total estimated value of natural resources, valued at US$34.4 trillion in 2016.
  
  The command economy is petroleum-based; roughly 63% of budget revenues and 67% of export earnings come from the oil industry. The oil industry constitutes about 45% of Saudi Arabia's nominal gross domestic product, compared with 40% from the private sector. It is strongly dependent on foreign workers with about 80% of those employed in the private sector being non-Saudi. Challenges to the economy include halting or reversing the decline in per-capita income, improving education to prepare youth for the workforce and providing them with employment, diversifying the economy, stimulating the private sector and housing construction, and diminishing corruption and inequality.
  
  OPEC (the Organization of Petroleum Exporting Countries) limits its members' oil production based on their "proven reserves." Saudi Arabia's published reserves have shown little change since 1980, with the main exception being an increase of about 100 billion barrels (1.6 × 10 m) between 1987 and 1988. Matthew Simmons has suggested that Saudi Arabia is greatly exaggerating its reserves and may soon show production declines (see peak oil).
  
  From 2003 to 2013, "several key services" were privatized—municipal water supply, electricity, telecommunications—and parts of education and health care, traffic control and car accident reporting were also privatized. According to Arab News columnist Abdel Aziz Aluwaisheg, "in almost every one of these areas, consumers have raised serious concerns about the performance of these privatized entities." In November 2005, Saudi Arabia was approved as a member of the World Trade Organization. Negotiations to join had focused on the degree to which Saudi Arabia is willing to increase market access to foreign goods and in 2000, the government established the Saudi Arabian General Investment Authority to encourage foreign direct investment in the kingdom. Saudi Arabia maintains a list of sectors in which foreign investment is prohibited, but the government plans to open some closed sectors such as telecommunications, insurance, and power transmission/distribution over time. The government has also made an attempt at " Saudizing " the economy, replacing foreign workers with Saudi nationals with limited success.
  
  In addition to petroleum and gas, Saudi has a significant gold mining sector in the Mahd adh Dhahab region and significant other mineral industries, an agricultural sector (especially in the southwest) based on vegetables, fruits, dates etc. and livestock, and large number of temporary jobs created by the roughly two million annual hajj pilgrims. Saudi Arabia has had five-year "Development Plans" since 1970. Among its plans were to launch "economic cities" (e.g. King Abdullah Economic City) in an effort to diversify the economy and provide jobs. The cities will be spread around Saudi Arabia to promote diversification for each region and their economy, and the cities are projected to contribute $150 billion to the GDP.
  
  Saudi Arabia is increasingly activating its ports in order to participate in trade between Europe and China in addition to oil transport. To this end, ports such as Jeddah Islamic Port or King Abdullah Economic City are being rapidly expanded, and investments are being made in logistics. The country is historically and currently part of the Maritime Silk Road.
  
  Statistics on poverty in the kingdom are not available through the UN resources because the Saudi government does not issue any. The Saudi state discourages calling attention to or complaining about poverty. In December 2011, the Saudi interior ministry arrested three reporters and held them for almost two weeks for questioning after they uploaded a video on the topic to YouTube. Authors of the video claim that 22% of Saudis may be considered poor. Observers researching the issue prefer to stay anonymous because of the risk of being arrested.
  
  The unexpected impact of the COVID-19 pandemic on the economy, along with Saudi Arabia's poor human rights records, laid unforeseen challenges before the development plans of the kingdom, where some of the programmes under ' Vision 2030 ' were also expected to be affected. In May 2020, the Finance Minister of Saudi Arabia admitted that the country's economy was facing a severe economical crisis for the first time in decades, because of the pandemic as well as declining global oil markets. Mohammed Al-Jadaan said that the country will take "painful" measures and keep all options open to deal with the impact.
  
  On July 2024 Saudi Arabia's Renewable Energy Localisation Company (RELC) has formed three joint ventures with Chinese companies to advance the kingdom's clean energy infrastructure. As part of Saudi Arabia's 2030 targets, the Public Investment Fund is actively promoting the localization of renewable energy components. RELC, a division of the sovereign fund, facilitates partnerships between global manufacturers and Saudi private sector firms to strengthen local supply chains. The joint ventures include partnerships with Envision Energy for wind turbine components, Jinko Solar for photovoltaic cells, and Lumetech for solar photovoltaic ingots and wafers. These initiatives aim to localize up to 75% of the components used in Saudi Arabia's renewable projects by 2030, positioning the country as a major global exporter of renewable technologies.
  
  Saudi Minister of Economy and Planning, Faisal Al Ibrahim, emphasized Saudi Arabia's progress in global climate goals at the 2024 High-Level Political Forum for Sustainable Development in New York, citing over 80 initiatives and investments exceeding $180 billion for the country's green economy, as reported by Saudi Gazette. He highlighted the alignment of these efforts with Vision 2030 objectives, focusing on local sustainability, sector integration, and societal advancement.