KSA vs UAE economy by Abdulaziz Ali

Unemployment

The unemployment rate is Saudi Arabia in 2010 is 10%. KSA population is about 28 million so 280,000 Saudis are unemployed. The reasonable percentage of unemployment is less than 5% while KSA have 10% of unemployment which means that the government is not managing the nationalizing of the private sectors well. On the other hand, The United Arab Emirates have only 4.3% of unemployment. The UAE have rules and regulations on private sectors that require 20% of their employees to be Emiratis nationals. This policy helped to reduce the unemployment rate in the UAE and maintained it to be less than 5% which is considered to be somehow acceptable.

Stable prices

The inflation rate in             Saudi Arabia was 2.2% and during the financial crises in 2007 the inflation rate in Saudi Arabia was 4.2%. In 2008, the kingdom was affected from the financial crises with an inflation rate of 9.9%. In 2008 and 2009, the inflation rate was stable at about 5%. The kingdom has stable price history, from 1980 until 2010 the inflation rate did not exceeded 5% four times only, and three of them were during the financial crises. The main reason for high inflation rates in the kingdom is the fixed exchange rate. For example, when the US dollar depreciates in value against the Euro and when Saudi Arabia will import goods from the euro zone the price will be higher because of the difference in currency. Comparing this information to the UAE inflation rate in 2007 was 11.10%, 2008 was 12.30%. Those two years inflation rates were incredibly high. However, in the year 2009, 2010 and 2011 the inflation rates were under 2% which is considered to be normal increase. In fact, in 2011, the inflation rate in the UAE was just 1.05% which indicate how well the UAE have successfully accomplishes during the recovery from the financial crises.

Economic growth

Kingdom of Saudi Arabia is the largest oil producer which have one fifth in oil reserve in the world. KSA has the largest economy in the GCC with a GDP in 2012 by $676 billion. Saudi Arabia GDP in 3006 was $356 billion and that was before the financial crises. In 2007, the GDP was $384 billion. KSA were not affected at all from the financial crises but their GDP increased by 2%. In 2008, the GDP increased to $476 billion while in 2009 we can see a slight decrease in the GDP which was $379 billion we should not be pessimistic about that decrease in 2009 because the financial crises started in 2007 and GDP was not affected, however it fell in 2009 that is 2 years gap but in numbers the country was not doing so bad. In fact, If we looked at the GDP in 2006 which was $356 billion and 2009 which was $376 billion. In comparison from 2006 and 2009 it is considered an increase. In other worlds, KSA GDP increased within the financial crises. In 2010, the GDP was $450 billion while in 2011; the GDP is about $676 billion which is considered the highest in the history of the kingdom. Let us have a closer look at 2011; the GDP is divided into three main sectors which are agriculture by 2.1% of total GDP, industry by 67.6% of total GDP and services by 30.4%. Their labor force is about 7 million and 80% are non-national.

The UAE GDP in 2007 was 258 billion and in 2008 the GDP increased to 314 billion. This increase was during the financial crises. In 2009 the UAE was affected the economic growth was (-1.6%) with a GDP of 270 billion. In 2010 the economic growth increased by 1.4% and the GDP was 297 billion. In 2011, this is considered the beginning of the recovery the economic growth of 4.9% and a GDP of 360 billion.

Balance of trade

In 2009 the UAE had 28 billion while KSA had 20 billion. In 2010, KSA exports reached about 66 billion while the UAE have decreased to 26 billion. In 2011, KSA exports was about 158 billion and the UAE had also increased their exports to reach 112 billion which is considered a dramatically increase. In oil production KSA is ranked the first by about 10 million barrels per day while the UAE are ranked the 8^th by about 2.8 barrels per day. This is the main reason KSA have more exports than the UAE. Moreover, KSA have several of factories that are manufacturing daily use products for example, Ariel and Tide that is used in washing machines for cleaning clothes. Also, most of skin care products are manufactured is KSA. The UAE does not have this kind of manufacturing which is the main reason why KSA has more exports than the UAE.