Toward a Knowledge Economy in Saudi Arabia
Nations that have sought to overcome the resource curse and other barriers to economic growth have for some time sought greater development through a number of strategies: from import substitution in the 1950s to current strategies based on microfinance and human-capabilities approaches. Needless to say, the international community is still searching for the elusive Holy Grail of the optimal development strategy. One strategy that is gaining greater attention and adherents is that of promoting a transition to a knowledge economy. This paper is about one such nation: Saudi Arabia. In analyzing the Kingdom’s quest for a knowledge economy, this article hopes to shed light on the anatomy of the strategy itself, as well as identify important preconditions for and barriers to the strategy’s success. The case study of Saudi Arabia’s quest for a knowledge economy carries important implications and lessons for other nations, especially those with resource economies, that are seeking effective economic plans of economic development and transition. As one of the richest countries in the world and G20 economies, the Kingdom of Saudi Arabia has, for more than a decade, been taking aggressive steps to break the long-established link between the fate of the Saudi economy and conditions in the global market for oil . But even within the few highpoints of the oil age, and with revenues abundant, the Kingdom has found life in the oil age anything but trouble free. Accordingly, the Kingdom has taken wide strides towards economic diversification. In fact, abundant revenues often found a way to cause political and economic problems. Many economies dependent on natural resources have also found oil to be a “curse” rather than a source of wealth that propels the country’s economy forward. The Kingdom has come to look beyond oil for the answers to a stable and vibrant economy, notwithstanding forecasts about the longevity of the oil age. The nation has firmly set its sights on transitioning to a knowledge economy, as reflected in the spending pattern of the Ninth Five-Year Development Plan that concludes by the end of 2014. The foundations of such a technological society are the benchmarks of the leading economies of the modern age. Saudi Arabia sees its economic future as unfolding squarely within such a development plan. It is this new age that the Saudi’s embrace as a means of escaping the instabilities of oil dependence, and arriving at a more prosperous and sustainable economic future. This article analyzes the prospects for success in Saudi Arabia’s quest for this objective. It describes the nature of a knowledge economy, identifies the conditions within Saudi Arabia that favor the development of a knowledge economy, and finally it identifies existing obstacles to such a development while proposing suggestions for overcoming these obstacles. In marshaling these analyses, the article hopes to generate important implications and lessons on the greater issue of economic development and transition.
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