Third World Development Strategies Research Paper

Third World Development Strategies - Research Paper Example The country is the largest global producer with a capacity of 10,500, 000 barrels per day. This accounts for nearly 10% of global fuel requirements. Following the Arab- Israeli war of the 1970s, global oil prices escalated making Saudi Arabia becomes the most prosperous nation in the Middle East. The country is among the few countries, which enjoy favorable international trade. In addition, Saudi Arabian economy has a considerable surplus compared to its trading partners. In the mid-1980s, global economies were struck by an element of uncertainty and planning which considerably reduced oil importations and oil budgets. Following the phenomenon, Saudi Arabia oil production dropped from about 10 million barrels per day to about 2 million barrels per day. This robbed Saudi its position as the key producer in OPEC and settled for the production quota system. Within this system, the country’s oil production was largely governed by a desire to maintain its market share. Saudi in the Lost Decade. The lost decade is the economic period between the 1980s and 1990s, which was characterized by severe economic hardships in Latin American countries. The lost decade was also characterized by a negative economic growth, increased poverty, and high debts. This made global creditors such as the IMF impose regressive actions and structural policy as an effort of controlling global credit crisis. The monetary policies made by the IMF and other global monetary organizations had a significant impact on Saudi Arabian economy.  ... Saudi in the Lost Decade (1980’s) The lost decade is the economic period between 1980s and 1990s, which was characterized by severe economic hardships in Latin American countries. The lost decade was also characterized by a negative economic growth, increased poverty and high debts. This made global creditors such as the IMF impose regressive actions and structural policy as an effort of controlling global credit crisis. The monetary policies made by the IMF and other global monetary organizations had a significant impact on Saudi Arabian economy. This was experienced as either a direct impact or an indirect impact resulting from global oil prices and fluctuating global energy demands. Similarly, other economies in the Middle East such as Qatar, UAE, and Kuwait were experiencing similar economic fluctuations. However, Qatar experienced a steady economic progress that was marked by an increase in the total gross domestic product from US $ 655 million in 1970s to $ 2000 million in 1978. Qatar is the only country in the Middle East that experienced a positive economic growth during the 1978-1979 oil shock. Other countries such as Kuwait and UAE also enjoyed considerable economic growth resulting from opening of new oil fields and increasing global oil prices. Economies in the South East Asia such as Vietnam and South Korea had a slightly different shift during the 1980s. The main difference between the two economies and Saudi Arabia is the exportation of oil and the influence of western economies. Saudi Arabia became a center of interest for global powers during the lost decade. The presence of oil and the escalating fuel demand made Saudi Arabia to become a close ally of America and