Planning and determination are fundamental for change - Saudi Gazette

Planning and determination are fundamental for change

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The Kingdom of Saudi Arabia has transformed from a poor to a rich country. Today, it generates huge economic revenue through which it provides citizens with different public services such as education. However, this success relies heavily on one resource, which is oil exports. Economic experts are concerned that this success, which is neither strong nor sustainable, can hinder necessary reforms. Although the Saudi government has implemented a number of reforms and policies to diversify the economy, the results have not been as positive as expected.

Therefore, it is important that we support industrialization because it can help us adapt to the local and global economic changes that have been taking place since the slump in oil prices. Industrialization is indispensable for economic diversification and the creation of job opportunities for youth. Industrialization has not received a lot of attention over the past few years but today it is getting the attention that it deserves.

Southeast Asia countries remained underdeveloped for many years. However, through planning and serious effort, they succeeded in keeping up with advanced countries in terms of industrialization and have won the admiration of the world. Several advanced countries were amazed at the speed of the industrial transformation of these countries, which earned them the name Asian Tigers.

Unfortunately, Gulf countries have not until now explored and studied the reasons behind the successful East Asian industrial transformation. While many countries are keen to learn more about this transformation and how East Asian countries successfully implemented it, Gulf countries continue to import goods from these countries.

South Korea is a country that proves that planning and determination make a change. Both Koreas share the same culture, history and land; however, South Korea achieved an economic miracle in the full sense of the word while North Korea continues to lag behind. South Korea has mobilized its full resources and capabilities to launch a sweeping industrial transformation. It used to be an impoverished country three decades ago. Today, it is at the forefront of advanced countries and exports electronics and automobiles.

South Korea was colonized by Japan for 26 years and by the United States for four years. The country went through wars and periods of colonization and still managed to build a strong and healthy economy. Furthermore, South Korea does not have any mineral resources, including oil. Therefore, it focused on a knowledge-based economy in order to account for the absence of such resources. It focused on advanced industries that do not require much raw material, specifically on renewable energy.

The South Korean government enhanced partnerships with the private sector and offered the sector economic incentives and privileges, such as protection against bankruptcy, loan facilities and many other benefits, in order to allow the sector to help in achieving strong industrial and economic growth. South Korea has had some of the world’s highest production and development rates since the 1970s, while in North Korea the local production percentage is only 3 percent.

South Korea has benefited from the Gulf oil boom more than the Gulf countries have. When oil prices increased in the 1970s, South Korean companies and workers entered the Gulf markets. The money earned by the companies and workers was used to expedite the South Korean industrial transformation. Some economic experts say the oil boom was a blessing for South Korea.

The Kingdom leads Gulf oil exports to South Korea at 29 percent of the total exports amounting to $28 billion. The Kingdom’s imports from South Korea, which are mainly goods and electronics, have reached $37.2 billion. Saudi Arabia is the fifth most important strategic partner for South Korea, as indicated by 2015 official statistics.

There is a huge difference between the South Korean economy and the Kingdom’s economy in terms of performance. We should study the South Korean industrial transformation and benefit from it in order to enhance our own economic development. Economic diversification depends on manufacturing products that provide added value to the economy and create lucrative job opportunities for citizens. Industrialization will allow us to keep up with advanced countries.


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