Saudi Arabia & Bahrain Economy Essay Example | Topics and Well Written Essays - 1500 words

Saudi Arabia & Bahrain Economy - Essay Example Approximately 40% of the GDP originates from the private sector. On average, the basket oil price for OPEC was about $77.20 for every barrel during the first quarter of 2010 and $44.79 in 2009 in the same period. It recorded about 77.4 percent in global recovery based on revived demand for energy in the world and increased confidence in business (GulfBaseb, 2015). In April 2010, the basket oil price for OPEC was $82.33 for every barrel compared to $50.20 per barrel in 2009 and $105.16 in 2008. During the peak levels, the prices of oil were at $147.27 per barrel in the international market in 2008 because of a rise in energy demand and geo-political risks witnessed in the Middle East. The prices of oil plunged more due to the economic and financial crisis witnessed during the same period (Heritage, 2015). In an aim to diversify its economy and attract foreign investment, Saudi Arabia has started off with huge projects, such as establishing six economic cities in various parts around the Kingdom to facilitate balanced growth. From 2003 to 2008, Saudi Arabia has witnessed considerable growth in its economy regardless of the high production and oil prices. The other sectors, particularly real-estate and construction industries have contributed significantly to the economy. Both the public and private sectors have played a major role, since increased spending by the government and foreign direct investment (FDI) have supported a sustainable and effective non-oil economy. After realizing exceptional growth due to oil revenues fostered by external forces for six years, the demand for world energy declined considerably because of the economic and financial crisis, leading to a tremendous decline in prices of oil. All countries globally felt the influence including the Kingdom of Saudi Arabi a in 2009. Nonetheless, Saudi Arabia was slightly affected among GCC countries as a result of