Economics Analysis of Australia & Saudi Arabia of last 20 years, since 1991

ECONOMIC of OUTLOOK
AUSTRALIA

&

SAUDI ARABIA

An economic analysis of last two decades

ECONOMIC OUTLOOK OF
AUSTRALIA & SAUDI ARABIA

Rehan Muhammad Nasir

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| ECONOMIC OUTLOOK of Australia & Saudi Arabia: An economic analysis of last two decades

Dedication
To those who once again made an enormous contribution to the writing
of this report

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ACKNOWLEDGEMENT
Alhumdullillah, first of all we would like to thank Allah Almighty as finally
we were able to finish our report that have been given by Development of
Economics lecturer to us. This task had been done with all effort by group
members even though problems were happened among us while doing this
assignment. Luckily all the problems could be settle down and we were able
to adapt properly and wisely

On the other hand, big thank we also address to our Development of
Economic lecturer Madam Ayesha that always teach us and guide us to
understand the things that we should know while studying Economics and
also in producing good project work. She always gives us supports and
guide to us how to do our assignment in purpose to produce a good outcome
from research that been studied.

Finally, thank to our beloved friends that always stick together and also
work hard to produce a good assignment with all effort and responsibility.
Hope that all the effort will give a lot of benefits to us and also to our group
project.

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PREFACE
The purpose of this report is to compare Australia and Saudi Arabia in all
sorts of economic levels to show what factors are responsible for and why
these countries are at different ranks in the world. We have taken the major
indicators to compare both the countries and figure out why both falls in
different categories that is developed and developing. The introduction and
history till conclusion is full of knowledge and discussion of both the
countries and the informative graphs and data of the two decades make it
easy to understand the factors that involve in the development of a country.

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TABLE OF CONTENTS
Section # 01 Brief Overview of Australia
History, Australia Today, Government………………………………………………..
States and Territories, Foreign Relation and Military……….……….……….……….
Geography, Health, Tourism, Economy……….……….……….……….……….……

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Section # 02 Economic Analysis of Australia
Real GDP, GDP per Capita, Population……….……….……….……….……….…...
Unemployment, Age Dependency, Inflation Rate……….……….……….…………..
Exchange Rate, Stock Market Capitalization, Government Revenue……….……….
Government Spending, Net Debts, Agriculture Share of GDP……….……….………
Industry Share of GDP, Service Share of GDP, Imports.……….… .……….……….
Exports, Reserve Assets, Trade Balance.……….… .……….… .……….… .………

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Section # 03 Brief Overview of Saudi Arabia
History, Administrative divisions, Geography & Population.……….… .……….…..
Political Overview.……….… .……….… .……….… .……….… .……….… .……
Economic Overview.……….… .……….… .……….… .……….… .……….………
Infrastructure Development, Foreign relations, Military, Education.……….… ……
Islamic Heritage Sites.……….… .……….… .……….… .……….… .……….…….

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Section # 04 Economic Analysis of Saudi Arabia
Real GDP, Inflation Rate.……….… .……….… .……….… .……….… .……….…
GDP per Capita, Population, Unemployment Rate.……….… .……….… .…………
Age Dependency Ratio, Exchange Rate, Stock Market Capitalization.……….…….
Government Revenues, Net Debts.……….… .……….… .……….… .……….……
Government Spending, Agri Share of GDP, Industry Share of GDP.……….… ……
Service Share of GDP, Imports, Exports.……….… .……….… .……….… .………
Reserve Assets, Balance of Trade.……….… .……….… .……….… .……….…….

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Section # 05 Similarities Between Australia And Saudi Arabia
Both Are Oceanic Countries And Have Ports For Shipping.……….… .……….……
Both Are Dependent In Some Factors.……….… .……….… .……….… .…………
Both do Import and Export.……….… .……….… .……….… .……….… .………..
Major Importers.……….… .……….… .……….… .……….… .……….… .………

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TABLE OF CONTENTS

Both have Well-built Infra-structure.……….… .……….… .……….… .……….…
Both Have Political Stability.……….… .……….… .……….… .……….… .……..
Both have free floating exchange rates.……….… .……….… .……….… .……….
Both Have Desert Areas.……….… .……….… .……….… .……….… .………….
Bilateral Relationship.……….… .……….… .……….… .……….… .……….……
Both Show Improvements and Variations in Indicators Since 1991 till 2011.……...

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Section # 06 Economic Comparison of Australia And Saudi Arabia
Real GDP, GDP per Capita.……….… .……….… .……….… .……….… .………
Population Unemployment.……….… .……….… .……….… .……….… .……….
Age Dependency, Inflation Rate.……….… .……….… .……….… .……….… .…
Exchange Rate, Stock Market Capitalization.……….… .……….… .……….… .…
Government Revenue.……….… .……….… .……….… .……….… .……….… ...
Government Spending, Net Debts.……….… .……….… .……….… .……….…….
Imports, Exports.……….… .……….… .……….… .……….… .……….… .………
Reserve Assets, Trade Balance.……….… .……….… .……….… .……….………..

Section # 07 Conclusion

Conclusion.……….… .……….… .……….… .……….… .……….… .……….……

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Brief Overview of Australia
History
In 1606, Dutch explorers were the first Europeans who discovered Australia, but they did not
settle there. Before this, for thousands of years, Australia was inhabited by the Aborigines. In
1770, the British claimed the eastern part of Australia. It was a useful place to send British
convicts, instead of keeping them in prison in England. Gradually, other immigrants moved to
Australia and the population grew. New South Wales was the first colony and five others New
South Wales was the first colony and five others were established in the 19th century. The six
colonies joined together on January 1st 1901, to form the Commonwealth of Australia.

Australia Today
The population today is just over 21.7 million. The nation's capital city is Canberra. The other
main cities are: Sydney, Melbourne, Brisbane, Perth and Adelaide. 60% of the population live in
and around these cities. Australia has a democratic political system and a high technology
industry.
Australia is a country in Oceania bordering the Indian Ocean and the Southern Pacific Ocean.
Australia is comprised of mainland Australia, the island of Tasmania and several small islands in
the Indian and Pacific Oceans. The terrain is mostly low plateau with deserts. The government
system is a federal parliamentary democracy and a Commonwealth realm. The chief of state is
the Queen and the head of government is the Prime Minister. Australia has a mixed economic
system in which the economy includes a variety of private freedom, combined with centralized
economic planning and government regulation. Australia is a member of Asian Pacific Economic
Cooperation (APEC).

Government
Australia is a constitutional monarchy with a federal division of powers. It uses a parliamentary
system of government with Queen Elizabeth II at its apex as the Queen of Australia, a role that is
distinct from her position as monarch of the other Commonwealth realms. The Queen resides in
the United Kingdom, and she is represented by her viceroys in Australia (the Governor-General
at the federal level and by the Governors at the state level), who by convention act on the advice
of her ministers. Supreme executive authority is vested by the Constitution of Australia in the
sovereign, but the power to exercise it is conferred by the Constitution specifically on the
Governor-General. The most notable exercise to date of the Governor-General's reserve powers
outside the Prime Minister's request was the dismissal of the Whitlam Government in the
constitutional crisis of 1975.

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The federal government is separated into three branches:
•

•
•

The legislature: the bicameral Parliament, defined in section 1 of the constitution as
comprising the Queen (represented by the Governor-General), the Senate, and the House of
Representatives;
The executive: the Federal Executive Council, in practice the Governor-General as advised
by the Prime Minister and Ministers of State
The judiciary: the High Court of Australia and other federal courts, whose judges are
appointed by the Governor-General on advice of the Council.

States and territories
Australia has six states—New South Wales (NSW), Queensland (QLD), South Australia (SA),
Tasmania (TAS), Victoria (VIC) and Western Australia (WA)—and two major mainland
territories—the Australian Capital Territory (ACT) and the Northern Territory (NT). In most
respects these two territories function as states, but the Commonwealth Parliament can override
any legislation of their parliaments. By contrast, federal legislation overrides state legislation
only in areas that are set out in Section 51 of the Australian Constitution; state parliaments retain
all residual legislative powers, including those over schools, state police, the state judiciary,
roads, public transport and local government, since these do not fall under the provisions listed in
Section 51.
Each state and major mainland territory has its own parliament—unicameral in the Northern
Territory, the ACT and Queensland—and bicameral in the other states. The states are sovereign
entities, although subject to certain powers of the Commonwealth as defined by the Constitution.
The lower houses are known as the Legislative Assembly (the House of Assembly in South
Australia and Tasmania); the upper houses are known as the Legislative Council. The head of the
government in each state is the Premier and in each territory the Chief Minister. The Queen is
represented in each state by a Governor; and in the Northern Territory, the Administrator. In the
Commonwealth, the Queen's representative is the Governor-General.

Foreign relations and military
Over recent decades, Australia's foreign relations have been driven by a close association with
the United States through the ANZUS pact, and by a desire to develop relationships with Asia
and the Pacific, particularly through ASEAN and the Pacific Islands Forum. In 2005 Australia
secured an inaugural seat at the East Asia Summit following its accession to the Treaty of Amity
and Cooperation in Southeast Asia, and in 2011 attended the Sixth East Asia Summit in
Indonesia. Australia is a member of the Commonwealth of Nations, in which the Commonwealth
Heads of Government meetings provide the main forum for co-operation.
In the 2010–11 budget, defense spending was A$25.7 billion, representing the 13th largest
defense budget. Australia has been involved in UN and regional peacekeeping, disaster relief and
armed conflict; it currently has deployed approximately 3,330 defense force personnel in varying
capacities to 12 international operations in areas including East Timor, Solomon Islands and
Afghanistan.

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Geography
Australia's landmass of 7,617,930 square kilometers (2,941,300 sq mi) is on the Indo-Australian
Plate. Surrounded by the Indian and Pacific oceans, it is separated from Asia by the Arafura and
Timor seas, with the Coral Sea lying off the Queensland coast, and the Tasman Sea lying
between Australia and New Zealand. The world's smallest continent and sixth largest country by
total area, Australia—owing to its size and isolation—is often dubbed the "island continent", and
is sometimes considered the world's largest island. Australia has 34,218 kilometers (21,262 mi)
of coastline (excluding all offshore islands), and claims an extensive Exclusive Economic Zone
of 8,148,250 square kilometers (3,146,060 sq mi). This exclusive economic zone does not
include the Australian Antarctic Territory. Excluding Macquarie Island, Australia lies between
latitudes 9° and 44°S, and longitudes 112° and 154°E.

Health
Total expenditure on health (including private sector spending) is around 9.8% of GDP.
Australia introduced universal health care in 1975. Known as Medicare, it is now nominally
funded by an income tax surcharge known as the Medicare levy, currently set at 1.5%. The states
manage hospitals and attached outpatient services, while the Commonwealth funds the
Pharmaceutical Benefits Scheme (subsidizing the costs of medicines) and general practice.

Tourism
Tourism is an important industry for the Australian economy. In the financial year 2010/11, the
tourism industry represented 2.5% of Australia's GDP at a value of approximately A$35 billion
to the national economy. This is equivalent to tourism contributing $94.8 million a day to the
Australian economy. Domestic tourism is a significant part of the tourism industry, and was
responsible for 73% of the total direct tourism GDP.
The 2010-11 financial year saw a record number of overseas arrivals in the financial year, with
5.9 million short-term visitor arrivals to Australia (or 588 extra visitors a day extra). Tourism
employed 513,700 people in Australia in 2010-11, or which 43.7% of total tourism employed
persons were part-time. Tourism also contributed 8.0% of Australia's total export earnings in
2010-11.

Economy
Most of the rich farmland and good ports are in the east and particularly the southeast, except for
the area around Perth in Western Australia. Melbourne, Sydney, Brisbane, and Adelaide are the
leading industrial and commercial cities. There was considerable industrial development in the
last two decades of the 20th cent. While the Australian economy fell into a severe recession in
the late 1980s, it experienced an extended period of growth beginning in the 1990s. It then
suffered somewhat from the Asian economic slump of the 1990s and from the "Big Dry" drought
of the early 21st cent., while also benefiting from increased mineral exports to China during the
same period.

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Australia is highly industrialized, and manufactured goods account for most of the gross
domestic product. Its chief industries include mining, food processing, and the manufacture of
industrial and transportation equipment, chemicals, iron and steel, textiles, machinery, and motor
vehicles. Australia has valuable mineral resources, including coal, iron, bauxite, copper, tin,
gold, silver, uranium, nickel, tungsten, mineral sands, lead, zinc, natural gas, and petroleum; the
country is an important producer of opals and diamonds.
The country is self-sufficient in food, and the raising of sheep and cattle and the production of
grain have long been staple occupations. Tropical and subtropical produce—citrus fruits,
sugarcane, and tropical fruits—are also important, and there are numerous vineyards and dairy
and tobacco farms.
Australia maintains a favorable balance of trade. Its chief export commodities are metals,
minerals, coal, wool, beef, mutton, cereals, and manufactured products. The leading imports are
machinery, transportation and telecommunications equipment, computers and office machines,
crude oil, and petroleum products. Australia's economic ties with Asia and the Pacific Rim have
become increasingly important, with China, Japan, and the United States being its main trading
partners.
In May 2012, there were 11,537,900 people employed (either full- or part-time), with an
unemployment rate of 5.1%. Youth unemployment (15–24) stood at 11.2%.
The Hawke Government floated the Australian dollar in 1983 and partially deregulated the
financial system. The Howard Government followed with a partial deregulation of the labor
market and the further privatization of state-owned businesses, most notably in the
telecommunications industry. The indirect tax system was substantially changed in July 2000
with the introduction of a 10% Goods and Services Tax (GST). In Australia's tax system,
personal and company income tax are the main sources of government revenue.
Ranked third in the Index of Economic Freedom (2010), Australia is the world's twelfth largest
economy and has the fifth highest per capita GDP (nominal) at $66,984. The country was ranked
second in the United Nations 2011 Human Development Index and first in Legatum's 2008
Prosperity Index. All of Australia's major cities fare well in global comparative livability
surveys; Melbourne reached first place on The Economist's 2011 and 2012 world's most livable
cities lists, followed by Sydney, Perth, and Adelaide in sixth, eighth, and ninth place
respectively. Total government debt in Australia is about $190 billion – 20% of GDP in 2010.
Australia has among the highest house prices and some of the highest household-debt levels in
the world.
An emphasis on exporting commodities rather than manufactured goods has underpinned a
significant increase in Australia's terms of trade since the start of the 21st century, due to rising
commodity prices. Australia has a balance of payments that is more than 7% of GDP negative,
and has had persistently large current account deficits for more than 50 years. Australia has
grown at an average annual rate of 3.6% for over 15 years, in comparison to the OECD annual
average of 2.5%. Australia was the only advanced economy not to experience a recession due to
the global financial downturn in 2008–2009. However, the economies of six of Australia's major
trading partners have been in recession, which in turn has affected Australia, significantly
hampering its economic growth in recent years. From 2012 to early 2013, Australia's national
economy grew, but some non-mining states and Australia's non-mining economy experienced a
recession.
Over the past decade, inflation has typically been 2–3% and the base interest rate 5–6%. The
service sector of the economy, including tourism, education, and financial services, accounts for

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about 70% of GDP. Rich in natural resources, Australia is a major exporter of agricultural
products, particularly wheat and wool, minerals such as iron-ore and gold, and energy in the
forms of liquefied natural gas and coal. Although agriculture and natural resources account for
only 3% and 5% of GDP respectively, they contribute substantially to export performance.
Australia's largest export markets are Japan, China, the US, South Korea, and New Zealand.
Australia is the world's fourth largest exporter of wine, and the wine industry contributes $5.5
billion per year to the nation's economy.

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Economic Analysis of Australia
Real GDP
Real Gross Domestic Product (real GDP) is
a macroeconomic measure of the value of
economic output adjusted for price changes
(i.e., inflation or deflation). This adjustment
transforms
the
money-value
measure, nominal GDP, into an index for
quantity of total output. The GDP of
Australia of 2012 is 1.521 trillion US$, with
3.4% growth rate and in 2011 was 1.3557
trillion US$.

GDP per Capita in USD
GDP per capita is a measurement of how
prosperous a country feels to each of its
citizens. GDP per capita takes a country's
production, as measured by GDP, and
divides it by the country's total population.
Hence, it is the output of a country's
economy per person. The GDP per capita in
Australia of 2012 is 67,035.57 US$ and in
2011 was 62,003 US$.

Population
The population of Australia till the end of
2012 is 22.68 million with the growth rate
of 1.6% of previous year, and in 2011 was
22.51 million.

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Unemployment Rate
On 12 September 2013 Australia's unemployment rate increased to 5.8 per cent in August 2013.
The ABS (Australia Bureau of Statistics)
reported the number of people employed
decreased by 10,800 to 11,637,100 in
August. The decrease in employment was
due to decreased part-time employment,
down 8,200 to 3,508,300 and full-time
employment, down 2,600 people to
8,128,800. The decrease in total
employment was mainly driven by a
decrease in male full-time employment and
a decrease in female part-time employment.
The number of people unemployed increased by 9,400 people to 714,100 in August, the ABS
reported.

Age Dependency Ratio
Age dependency ratio is the ratio of dependents--people younger than 15 or older than 64--to the
working-age population--those ages 15-64.
Data are shown as the proportion of
dependents
per
100
working-age
population.
The latest value for Age dependency ratio
(% of working-age population) in Australia
was 48.39 as of 2011. Over the past 51
years, the value for this indicator has
fluctuated between 63.33 in 1961 and 47.70
in 2009.

Inflation Rate
The inflation rate in Australia was recorded at 2.40 percent in the second quarter of 2013.
Inflation Rate in Australia is reported by
the Australian Bureau of Statistic. From
1951 until 2013, Australia Inflation Rate
averaged 5.3 Percent reaching an all-time
high of 23.9 Percent in December of 1951
and a record low of -1.3 Percent in June of
1962. In Australia, the inflation rate
measures a broad rise or fall in prices that
consumers pay for a standard basket of
goods.

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Exchange Rate
In most financial papers, currencies are
expressed in terms of U.S. dollars, while
the dollar is commonly compared to the
Other Currencies. The exchange rate of one
U.S. dollar for one Australian dollar was
about 0.94 on October 5, 2013, which
means that one dollar can be exchanged for
0.94 AUS $.

Stock Market Capitalization
Stocks in Australia had a positive
performance during the last month.
Australia Stock Market (S&P/ASX 200),
rallied 64 points or 1.31 percent during the
last 30 days. From 1992 until 2013,
Australia Stock Market (S&P/ASX 200)
averaged 3536 Index points reaching an alltime high of 6829 Index points in
November of 2007 and a record low of
1359 Index points in November of 1992.
The S&P/ASX 200 is the most important
stock market index which tracks the performance of 200 large companies based in Australia. It is
a market-capitalization weighted and float-adjusted index. The index has a base value of
AUD3133.3, equal to the value of the All Ordinary Shares as of March 31, 2000.

Government Revenues
A feature of the Australian federal system is
that the Commonwealth Government levies
and collects all income tax, from
individuals as well as from enterprises. It
also collects a portion of other taxes,
including taxes on the provision of goods
and services. The revenue base of state
governments consists of taxes on property,
on employers' payroll, and on the provision
and use of goods and services. The sole
source of taxation revenue for local
governments is taxes on property. Taxes on income increased $26,310m (13%) while taxes on

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property increased $286m (1%) and taxes on provisions of goods and services increased
$2,172m (2%). Taxes on income represented 59% of total taxation revenue for all levels of
government and taxes on provision of goods and services, including the goods and services tax
(GST) represented 24%.

Government Spending’s
The charts below summaries Australian
Government expenses for 1991-2011 on an
accrual basis. Total expenses for 20122013 are expected to be $376.3 billion, a
decrease of 1.0 per cent on estimated
expenses since the Mid-Year Economics
and Fiscal Outlook 2011-12.

Net Debts
Australia recorded a Government Debt to
GDP of 20.70 percent of the country's
Gross Domestic Product in 2012.
Government Debt To GDP in Australia
is reported by the AOFM, Australia.
From 1991 until 2011, Australia
Government Debt To GDP averaged
40.72 Percent reaching an all-time high
of 31.7 Percent in December of 1995 and
a record low of 9.7 Percent in December
of 2007. Generally, Government debt as
a percent of GDP is used by investors to
measure a country ability to make future payments on its debt, thus affecting the country
borrowing costs and government bond yields.

Agriculture Share of GDP
The Agriculture; value added (% of GDP) in
Australia was last reported at 4% of GDP as
on February 21, 2013, according to a CIA.

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Industry
GDP

Share

of

The Industry Share of GDP in Australia was
last reported at 26.6% as on February 21,
2013, according to a CIA.

Services Industry Share of GDP
The Services Industry Share of GDP in
Australia was last reported at 69.4% as on
February 21, 2013, according to a CIA.

Imports in Millions $
The imports of Australia according to the Department of Foreign Affairs and Trade of Australia
is 242,088 A$ millions in 2012.
Major Australian imports, 2012 (A$m) (e):
Crude petroleum
Passenger
motor
vehicles
Refined petroleum
Telecom equipment &
parts
Goods vehicles

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21,581
16,917
15,875
8,748
8,559


Exports in Millions $
The exports of Australia according to the Department of Foreign Affairs and Trade of Australia
is 248,150 A$ millions in 2012
Major Australian exports, 2012 (A$m) (e):
Iron
ores
concentrates
Coal
Gold
Natural gas
Crude petroleum

& 54,788
41,264
15,525
13,467
10,935

Reserve Assets in Billions USD
Australia’s case, reserve assets include
monetary gold, Special Drawing Rights,
reserve position in the IMF, and foreign
exchange (currency, deposits and debt
securities) held by the Reserve Bank as part
of Australia’s official reserve assets.

Trade Balance in Billions USD
Australia has an adverse trade balance
since the last decade of the 20th
century till 2010. It achieves the
positive trade balance in 2011. It has
adverse trade balance in the last year
in services but in goods it has positive
trade balance in 2012.

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Brief Overview of Saudi Arabia
History
Saudi Arabia is the largest Arab state in Western Asia by land area (approximately 2,150,000
km2 (830,000 sq mi), constituting the bulk of the Arabian Peninsula) and the second-largest in
the Arab world (after Algeria). It is bordered by Jordan and Iraq to the north, Kuwait to the
northeast, Qatar, Bahrain and the United Arab Emirates to the east, Oman to the southeast,
Yemen in the south, the Red Sea to the west and Persian Gulf to the east. Its population is
estimated to consist of 16 million citizens and an additional 9 million registered foreign
expatriates and 2 million illegal immigrants.
The Kingdom of Saudi Arabia was founded by Abdul-Aziz bin Saud (known for most of his
career as Ibn Saud) in 1932, although the conquests which eventually led to the creation of the
Kingdom began in 1902 when he captured Riyadh, the ancestral home of his family, the House
of Saud, referred to in Arabic as Al Saud. The regime has been an absolute monarchy since its
inception. It describes itself as being Islamic and is highly influenced by Wahhabism. Saudi
Arabia is sometimes called "the Land of the Two Holy Mosques" in reference to Al-Masjid alHaram (in Mecca), and Al-Masjid al-Nabawi (in Medina), the two holiest places in Islam.
Saudi Arabia has the world's 2nd largest oil reserves, which are concentrated largely in the
Eastern Province. Oil accounts for more than 95% of exports and 70% of government revenue,
although the share of the non-oil economy has been growing recently. This has facilitated the
transformation of an underdeveloped desert kingdom into one of the world's wealthiest nations.
Vast oil revenues have permitted rapid modernisation, such as the creation of a welfare state. It
has also the world's sixth largest natural gas reserves. Saudi Arabia is the only country in the
world which bans women from driving.

Administrative divisions
Saudi Arabia is divided into 13 provinces (manatiq idāriyya, – singular mintaqah idariyya). The
provinces are further divided into 118 governorates (Arabic: manatiq idāriyya,. This number
includes the 13 provincial capitals, which have a different status as municipalities (amanah)
headed by mayors (amin). The governorates are further sudivided into sub-governorates
(marakiz, sing. markaz).

Geography & Population
The Kingdom of Saudi Arabia lies between the Red Sea and the Arabian Gulf, and has a land
mass about the size of Western Europe. It contains the world's largest continuous sand desert,

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known as the Empty Quarter, and it is the biggest and most dominant country of the Arabian
Peninsula.
Saudi Arabia is bordered by Jordan to the north; Iraq and Kuwait to the northeast; Qatar and the
United Arab Emirates to the east; and Yemen and the Sultanate of Oman to the south.
Riyadh is the Kingdom's capital with an estimated population of over five million. All the main
Saudi government offices are here.
Other key cities are Jeddah, the commercial capital, located on the Red Sea coast, and Dammam
on the Arabian Gulf.

Political Overview
Saudi Arabia is named after the ruling Al Saud family. The Kingdom was established by King
Abdul Aziz bin Abdul Rahman Al Saud in 1932. Since his death in 1953, Saudi Arabia has been
ruled by several of his sons, although decisions are taken by consensus within a wide circle of
Princes and trusted advisors.
The Kingdom is an absolute monarchy and is currently ruled by King Abdullah bin Abdul Aziz
Al Saud, Custodian of the Two Holy Mosques. The King heads the government as Prime
Minister and is also Commander of the Armed Forces. Crown Prince Sultan bin Abdul Aziz Al
Saud is Deputy Prime Minister, Commander of the National Guard and Minister for Defense and
Aviation.
Executive power rests with the Council of Ministers, appointed by the King. All political parties
are banned.
A national Consultative Council, the Majlis Al Shura, was formed in 1993. The King appoints its
members, who have advisory powers to review and provide consultation on issues of public
interest.
Local government is administered through general municipal councils, district councils and tribal
and village councils. The country is divided into 13 provinces, with a governor and deputy
governor in each one. Each province has its own council that advises the governor and deals with
the development of the province.
These councils deliberate on the needs of their province, work on the development budget,
consider future development plans, and monitor ongoing projects.
The governor and deputy governor of each province serve as chairman and vice-chairman of
their respective provincial council.

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Demand for political reform has increased in recent years, and in 2005 the country held its first
elections, to elect half of the members of the municipal councils. These elections are scheduled
to happen again, in late 2011.
The Holy Koran is the constitution of the country and the government operates on the basis of
Islamic law (Sharia). Saudi Arabia has also introduced several secular codes including
Investment Fund Regulations, Tax Regulations, Insurance Regulations, and others. It is the
development of these laws and their regulations which show the Government's commitment to
economic diversification and private sector growth.

Economic Overview
With a population of over 27 million, the Kingdom of Saudi Arabia is the largest economy in the
Arab world. It accounts for 25% of the Arab world's GDP.
Saudi Arabia has an oil based economy with strong government controls over major economic
activities.
The Kingdom possesses around 25% of the world's petroleum reserves, ranks as the largest
exporter of petroleum, and plays a leading role in OPEC.
The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of
export earnings.
Saudi Arabia has witnessed a period of relatively high growth and economic progress over the
past few years. This has been based on a strong oil sector and record oil revenues, allowing the
Kingdom to increase public spending on infrastructure and welfare to match the increasing needs
of a fast growing Saudi population. In turn the non-oil private sector is feeding off this upturn in
public spending.
In more recent years, the Saudi government has realized the need to pursue a strategy of
economic diversification and reform.
Reforms are underway to:
Reduce reliance on gas and oil - The government is encouraging the growth of the private sector,
and foreign investment through new initiatives and the opening up of previously restricted
industries.
Increasing employment opportunities for Saudis - Efforts are particularly focused on employing
the large youth population, which generally lacks the education and technical skills the private
sector needs. Riyadh has seen a substantial boost in spending on job training and education, most
recently with the opening of the King Abdullah University of Science and Technology - Saudi
Arabia's first co-educational university, and a new campus for Princess Nora University - a
women only facility - which can take up to 50,000 students.

22


The government is also engaged in creating opportunities for young Saudis by getting foreign
companies to invest in vocational and technical training.
Attracting local and foreign private investment across all sectors - The government is focusing
on getting private and foreign investment in ten key industries, from petrochemicals to financial
services
All of the above has been made easier by the Foreign Investment Act of 2000, which led to the
establishment of the Saudi Arabian General Investment Agency (SAGIA). SAGIA is tasked with
increasing the country's competitiveness and providing a one-stop shop for inward investment.
You will find more information on their website: www.sagia.gov.sa
As part of its effort to attract foreign investment, Saudi Arabia joined the WTO in December
2005 after many years of negotiations. This committed the country to further liberalization of its
trading regime and the creation of a more transparent and predictable environment for trade and
foreign investment, in accordance with WTO rules.
The World Bank "Ease of Doing Business 2011" report saw Saudi Arabia move up to 11th in the
world rankings, ahead of all other Arab and Middle Eastern countries.
The Government's national budget for the 2011 fiscal year, is the largest to date, and came to a
total of SR580 billion (US$154 billion ). The budget dedicates 46% of total spending to
education and training, health and social development, and infrastructure.
Although up 7.4% on the 2010 budget, this increase in funds is among the slowest expansion
rates by the Saudi government in the past decade. It's thought that this signals an expectation
from the government that the private sector can assume a larger role in the public-private
investment partnership driving Saudi development as the global economy emerges from the
economic downturn.
It also demonstrates that the Kingdom is dedicated to continuing stimulatory spending to develop
the economy and persuade private investors to do the same as they gradually emerge from a
phase of deleveraging. A slowdown in the pace of budget growth, however, also signals the
state's goal to rein in overspending and employ more prudent and efficient fiscal policies in the
coming years.
Following the political unrest in several parts of the Middle East and North Africa Region, in
early 2011, King Abdullah unveiled social benefits worth US$91 billion, with decrees outlining a
boost in welfare benefits, a minimum wage of SR3000 (US$800) for state employees, bonuses
for public sector workers and students, and a drive to build new housing. SR250 billion
(US$66.7 billion) will be spent on creating half a million housing units, and SR16 billion
(US$4.3 billion) will be spent on medical facilities.

23


Infrastructure Development
The Saudi population is one of the fastest growing in the world, and it is expected that there will
be 29 million Saudis in 2020. 60% of Saudis are under 20 years old.
Massive investment will be required to meet the needs of this growing population, creating
extensive investment opportunities. Major projects in power, water, oil & gas, petrochemicals,
communications, transport, mining, construction and social infrastructure add up to an estimated
US$ 1,000 billion of investment opportunity over the next 20 years.

Foreign relations
Saudi Arabia joined the UN in 1945 and is a founder member of the Arab League, Gulf
Cooperation Council, Muslim World League, and the Organization of the Islamic Conference
(now the Organization of Islamic Cooperation). It plays a prominent role in the International
Monetary Fund and the World Bank, and in 2005 joined the World Trade Organization. Saudi
Arabia supports the intended formation of the Arab Customs Union in 2015 and an Arab
common market by 2020, as announced at the 2009 Arab League summit. As a founding
member of OPEC, its oil pricing policy has been generally to stabilize the world oil market and
try to moderate sharp price movements so as to not jeopardize the Western economies.

Military
The Saudi military consists of the Royal Saudi Land Forces, the Royal Saudi Air Force, the
Royal Saudi Navy, the Royal Saudi Air Defense, the Saudi Arabian National Guard (SANG, an
independent military force), and paramilitary forces, totaling nearly 200,000 active-duty
personnel. In 2005 the armed forces had the following personnel: the army, 75,000; the air force,
18,000; air defense, 16,000; the navy, 15,500 (including 3,000 marines); and the SANG had
75,000 active soldiers and 25,000 tribal levies. In addition, there is an Al Mukhabarat Al A
‘amah military intelligence service.

Education
The approach taken in the Saudi education system has been accused of encouraging Islamic
terrorism, leading to reform efforts. To tackle the twin problems of encouraging extremism and
the inadequacy of the country's university education for a modern economy, the government is
aiming to slowly modernize the education system through the "Tatweer" reform program. The
Tatweer program is reported to have a budget of approximately US$2 billion and focuses on
moving teaching away from the traditional Saudi methods of memorization and rote learning
towards encouraging students to analyze and problem-solve. It also aims to create an education
system which will provide a more secular and vocationally based training.

24


Islamic Heritage Sites
Saudi Arabia, and specifically the Hejaz, as the cradle of Islam, has many of the most significant
historic Muslim sites including the two holiest sites of Mecca and Medina. One of the King's
titles is Custodian of the Two Holy Mosques, the two mosques being Masjid al-Haram in Mecca,
which contains Islam's most sacred place, the Kaaba, and Al-Masjid al-Nabawi in Medina which
contains Muhammad's tomb.

25


Economic Analysis of Saudi Arabia
Real GDP
The GDP Growth Rate shows a percentage
change in the seasonally adjusted GDP
value in the certain quarter, compared to
the previous quarter. Because of climatic
conditions and holidays, the intensity of the
production varies throughout the year. This
makes a direct comparison of two
consecutive quarters difficult. In order to
adjust for these conditions, many countries
calculate the quarterly GDP using so called
seasonally adjusted method. The Gross
Domestic Product can be determined using three different approaches: the product, the income,
and the expenditure technique, which should give the same result. In sum, the product technique
sums the outputs of every class of enterprise. The expenditure technique works on the principle
that every product must be bought by somebody, therefore the value of the total product must be
equal to people's total expenditures in buying products and services. The income technique
works on the principle that the incomes of the productive factors must be equal to the value of
their product, and determines GDP by finding the sum of all producers' income

Inflation Rate
The data given on this page shows an
annual change in the Consumer Price
Index. The CPI measures changes in the
price level of consumer goods and
services purchased by households. The
CPI is calculated by taking price changes
for each item in the predetermined basket
of goods and services and averaging
them. The items weight according to their
importance. Depending on the country,
the highest weights are usually given to
the food, energy, housing, clothing, medical care, transportation and household equipment.

26


GDP Per Capita
The GDP per capita given on this page
shows the GDP at purchaser's prices in
constant 2000 U.S. dollars divided by
midyear population. GDP at purchaser's
prices is the sum of gross value added by
all resident producers in the economy plus
any product taxes and minus any subsidies
not included in the value of the products. It
is calculated without making deductions
for depreciation of fabricated assets or for
depletion and degradation of natural
resources. Dollar figures for GDP are converted from domestic currencies using 2000 official
exchange rates. The term Constant Prices refers to a metric for valuing the price of something
over time, without that metric changing due to inflation or deflation.

Population.
The Population; total in Saudi Arabia was
last reported at 28.37 M in 2011, according
to a World Bank report published in 2012.
Total population is based on the de facto
definition of population, which counts all
residents regardless of legal status or
citizenship--except for refugees not
permanently settled in the country of
asylum, who are generally considered part
of the population of their country of origin.

Unemployment Rate
The unemployment rate can be defined as
the number of people actively looking for a
job divided by the labour force. Changes in
unemployment depend mostly on inflows
made up of non-employed people starting
to look for jobs, of employed people who
lose their jobs and look for new ones and of
people who stop looking for employment.
Unemployment Rate in Saudi Arabia
increased to 5.80 percent in the first quarter
of 2013 from 5.40 percent in the fourth quarter of 2012. Unemployment Rate in Saudi Arabia is

27


reported by the Central Department of Statistics and Information. From 1999 until 2013, Saudi
Arabia Unemployment Rate averaged 5.4 Percent reaching an all time high of 12.40 Percent in
December of 2011 and a record low of 4.4 Percent in December of 1999.

Age Dependency Ratio
The Age dependency ratio in Saudi Arabia
was last reported at 49.51 in 2011,
according to a World Bank report
published in 2012. Age dependency ratio
is the ratio of dependents--people younger
than 15 or older than 64--to the workingage population--those ages 15-64. Data are
shown as the proportion of dependents per
100 working-age population.

Exchange Rate
The Official exchange rate (LCU per US
dollar; period average) in Saudi Arabia was
last reported at 3.75 in 2011, according to a
World Bank report published in 2012.
Official exchange rate refers to the
exchange rate determined by national
authorities or to the rate determined in the
legally sanctioned exchange market. It is
calculated as an annual average based on
monthly averages (local currency units relative to the U.S. dollar).

Stock Market Capitalization
The Market capitalization of listed companies (US dollar) in Saudi Arabia was last reported at
3.39E+11 in 2011, according to a World
Bank report published in 2012. Market
capitalization (also known as market value)
is the share price times the number of shares
outstanding. Listed domestic companies are
the domestically incorporated companies
listed on the country's stock exchanges at the
end of the year. Listed companies does not
include investment companies, mutual funds,
or other collective investment vehicles. Data
are in current U.S. dollars. Stocks in Saudi

28


Arabia had a positive performance during the last month. Saudi Arabia Stock Market (TASI),
rallied 147 points or 1.83 percent during the last 30 days. From 1994 until 2013, Saudi Arabia
Stock Market (TASI) averaged 4919 Index points reaching an all time high of 20635 Index
points in February of 2006 and a record low of 1141 Index points in May of 1995. The Tadawul
All Share Index (TASI) is a major stock market index which tracks the performance of all
companies listed on the Saudi Stock Exchange. The index has a base value of 1000 as of 1985
and it was reorganized on June 30, 2008.. The latest value for Market capitalization of listed
companies (current US$) in Saudi Arabia was $373,380,000,000 as of 2012.

Government Revenue
Saudi Arabia is the world's largest
petroleum producer and exporter; oil and
gas made up 90 percent of government
income and 88 percent of exports in
2010.Saudi Arabia received a "failing"
score of 34, ranking 48th of 58 countries.
As a highly-centralized monopoly, its
revenue management policies are opaque,
and it scored poorly on all components of
the index.

Net Debts
Government debt as a percent of GDP, also known as debt-to-GDP ratio, is the amount of
national debt a country has in percentage of
its Gross Domestic Product. Basically,
Government debt is the money owed by the
central government to its creditors. There
are two types of government debt: net and
gross. Gross debt is the accumulation of
outstanding government debt which may be
in the form of government bonds, credit
default swaps, currency swaps, special
drawing rights, loans, insurance and
pensions. Net debt is the difference between
gross debt and the financial assets that government holds. The higher the debt-to-GDP ratio, the
less likely the country will pay its debt back, and more likely the country is to default on its debt
obligations.

29


Government Spending
Government
spending
(also
called
government expenditure or consumption) is
the amount of money that federal, state, and
local governments spend on public services
provided to its citizens. Government
expenditure covers spending on goods and
services like defence, judicial and education
system. Yet, it excludes government
transfers
like
social
security and
unemployment benefits. Saudi Arabia has
the largest budget deficit among the gulf
countries. In 1991 the government deficit reached 27% of GDP. In recent years, the Saudi
government has made sizable efforts towards reducing its budget deficit by adopting important
cuts in government spending. However, despite these efforts the deficit remains substantially
high and accounts for about 10% of GDP over the last four years. The success in implementing
an effective fiscal policy targeting the control of the budget deficit in Saudi Arabia and, at the
mean time, the promotion of the private sector so that it can compete efficiently in the global
economy,

Agriculture Share Of GDP
The Agriculture; value added (% of GDP) in Saudi Arabia was last reported at 2.63 in 2011,
according to a World Bank report published
in 2012. Agriculture corresponds to ISIC
divisions 1-5 and includes forestry, hunting,
and fishing, as well as cultivation of crops
and livestock production. Value added is
the net output of a sector after adding up all
outputs and subtracting intermediate inputs.
It is calculated without making deductions
for depreciation of fabricated assets or
depletion and degradation of natural
resources.

Industry
GDP

Share

of

The Industry Share of GDP in Saudi Arabia
was last reported at 63.6% as on February
21, 2013, according to a CIA.

30


Services
Share of GDP

Industry

The Services Industry Share of GDP in Saudi
Arabia was last reported at 36.43% as on
February 21, 2013, according to a CIA.

IMPORTS
Imports in Saudi Arabia increased to
141168 Million SAR in the first quarter of
2013 from 135339 Million SAR in the
fourth quarter of 2012. Imports in Saudi
Arabia is reported by the Saudi Arabian
Monetary Agency. From 1968 until 2013,
Saudi Arabia Imports averaged 88941.5
Million SAR reaching an all-time high of
9.56E+10 B USD in December of 2009 and
a record low of 2578.0 Million SAR in
December of 1968. Saudi Arabia main
imports are: machinery, mechanical appliances and electrical equipment (27 percent of total
imports), transport equipment and parts thereof (16 percent), base metals (13 percent), chemicals
and related products (9 percent) and vegetables (6 percent). Main import partners are: China (13
percent of total imports), United States (12.6 percent), Germany (7 percent) and Japan (6
percent). Others include: South Korea, United Arab Emirates, France and Italy.

EXPORTS
Exports in Saudi Arabia decreased to 339632 Million SAR in the first quarter of 2013 from
355315 Million SAR in the fourth quarter
of 2012. Exports in Saudi Arabia is
reported by the Saudi Arabian Monetary
Agency. From 1968 until 2013, Saudi
Arabia Exports averaged 217628.3
Million SAR reaching an all-time high of
9.32E+10 B USD in December of 2003
and a record low of 9118.0 Million SAR
in December of 1968. Saudi Arabia's
economy is highly dependent on oil
exports (87 percent of total exports) and

31


the state-owned firm Aramco is the world's largest oil producing and exporting company. Main
export partners are: United States (14 percent of total exports), Japan (13 percent), China (12
percent), South Korea (10 percent) and India (8 percent). Others include: United Arab Emirates,
Bahrain, Singapore and Twain.

Reserve Assets
The Total reserves (includes gold; US dollar) in Saudi Arabia was last reported at
556570991484.13 in 2011, according to a
World Bank report published in 2012. Total
reserves comprise holdings of monetary
gold, special drawing rights, reserves of IMF
members held by the IMF, and holdings of
foreign exchange under the control of
monetary authorities. The gold component
of these reserves is valued at year-end
(December 31) London prices. Data are in
current U.S. dollars.

Balance Of Trade
Saudi Arabia recorded a trade surplus of
198463 million SAR in the first quarter of
2013. balance of trade in Saudi Arabia is
reported by the Saudi Arabian monetary
agency. from 1968 until 2013, Saudi
Arabia balance of trade averaged
128299.9 million SAR reaching an alltime high of 454159.0 million SAR in
December of 2005 and a record low of
3898.0 million SAR in December of
1986. Saudi Arabia has been recording
trade surpluses since 1968 due to shipments of oil (87 percent of total exports). main imports are:
machinery, mechanical appliances and electrical equipment; transport equipment and parts
thereof and base metals. main trading partners are: united states (14 percent of total exports and
12.6 percent of imports), china (12 percent of exports and 13 percent of imports) and japan (13
percent of exports and 6 percent of imports). others include: South Korea, United Arab Emirates,
India and Germany.

32


Similarities between Australia & Saudi Arabia
Both Are Oceanic Countries And Have Ports For
Shipping
The first similarities between the two countries are availability of seas which allows them to
import and export and give edge. Every country that has availability of this ports enjoy great
advantage and KSA and Australia both enjoy this advantage

Both Are Dependent In Some Factors
As we know that every country in this world is sufficient in one thing and insufficient in other,
so both Australia and KSA are dependent in some way or the other. Both needs to rely on other
countries which is essential for their survival just like KSA needs to rely on U.S for weapons and
Australian needs to rely on U.S and other countries also for weapons, petroleum products etc.

Both do Import and Export
As a result of above point both do import and export and form commercial relationships. As
Australia's second largest market in the Middle East, Saudi Arabia is an important trading partner
for Australia. In 2012, Australia's merchandise exports to Saudi Arabia totaled A$1.73 billion,
making it our 20th largest market. Saudi Arabia was Australia's biggest market for exports of
passenger motor vehicles worth A$774 million in 2012. Other major exports were barley, wheat
and meat products excluding beef.
Saudi Arabia is also a substantial market for dairy products, vehicle parts and accessories, as
well as a growing market for fresh vegetables, refined metals and information communications
technology products.
Australia-Saudi business ties have expanded. For instance, the then Australia Gulf Council (now
merged with the Australian Arab Chamber of Commerce and Industry) conducted a business
mission to Saudi Arabia in December 2012 led by former Deputy PM Mark Vaile, former
Queensland Premier, Anna Bligh and Australia Post CEO and then Chair of the Council for
Australian-Arab Relations, Ahmed Fahour. The March 2013 Joint Ministerial Commission
meeting saw the signing of an MOU between the Australia-Saudi Business Council and the
Council of Saudi Chambers of Commerce establishing the Saudi Australia Joint Business
Council. There are over 3,000 Australian citizens employed in Saudi Arabia, mainly in health,
education and other specialist areas.

33


Saudi Arabia's needs are well suited to Australian capabilities. Saudi Arabia has a sound
economy with a fast-growing and young population, a well-managed banking system, good
infrastructure, and generally low import duties and barriers. Its business community is
sophisticated and familiar with Western practices. Austrade is represented in both Riyadh and
Jeddah.

Major Importers
Both are major exporters. As we know that Australia is also the exporter of crude oil and also
save its reserves of crude oil for future use, and also the exporter of other techno goods and
service. Whereas, KSA exports large reservoirs of crude oil.

Both have Well-built Infra-structure
Both the countries have capital formation as well as positive capital formation that is the reason
they have both well built there infra-structure which helps them to achieve steady growth.

Both Have Political Stability
Both the countries have different administration system but they are stable as compare to the
world. The above points have proven this point that steady growth with variations is due to stable
political conditions.

Both have free floating exchange rates

Both the countries have free floating exchange rate that is they can change their exchange rates if
they adopt different strategies overtime. As we can see Australia has now stable rate of 100
dollars while KSA after years increase its currency because KSA is major crude oil exporter.

Both Have Desert Areas
In terms of areas both have deserted areas that is the reason they both enjoy hot summers. And
this may be the reason they both have crude oil.

Bilateral Relationship
Australia and Saudi Arabia enjoy a friendly and cooperative relationship, based on extensive
trade relations as well as people-to-people contacts. The two countries also cooperate through the
G20.
34


The most recent Australian Federal-level ministerial visit to Saudi Arabia was by then Minister
for Foreign Affairs, Senator Bob Carr, in June 2012. A number of other Ministers have also
visited Saudi Arabia in recent years.
The most recent senior Saudi visitor to Australia was the Minister of Agriculture, HE Dr Fahd
bin Abdul Rahman Balghunaim, in March 2013 who co-chaired with then Australian Minister
for Trade, Dr Craig Emerson, the 9th Australia-Saudi Joint Ministerial Commission
meeting. The Saudi Higher Education Minister HE Dr Khalid Al-Ankary visited in May 2010,
signing an MOU on Higher Education Cooperation with Australia.

Both Show Improvements
Indicators Since 1991 till 2010

and

Variations

in

Both the countries are growing and show variations and improvements in indicators. KSA is a
highly developing country and Australia is a high developed country. Major variations include in
agriculture share of GDP, industry of KSA, reserves assets, trade balance of KSA,
unemployment rate, inflation, and exchange rate of Australia, stock market capitalization, and
government revenues of KSA. Growth refers from all the indicators but Australia has attained
MOR growth than KSA that is the major reason that it counts in developed countries.

35


Economic Comparison b/w Australia & Saudi Arabia
Real GDP of Australia and Saudi Arabia
GDP Annual Growth Rate in Australia is
reported by the Australian Bureau of
Statistic. From 1991 until 2010, Australia
GDP Annual Growth Rate averaged 1004
USD B. Australia's economy is dominated
by the service sector (65 percent of total
GDP). Yet its economic success is based on
abundance of agricultural and mineral
resources. The most important and the
fastest growing sector of the economy is
industry with mining accounting for 13.5
percent of GDP, manufacturing for 11 percent and construction for 9.5 percent. Agriculture
accounts for the remaining 2 percent of the GDP.
The GDP value of Saudi Arabia represents 0.93 percent of the world economy. GDP in Saudi
Arabia is reported by the The World Bank Group. From 1991 until 2010, Saudi Arabia GDP
averaged 680 USD Billion. The gross domestic product (GDP) measures of national income and
output for a given country's economy.
NOTE: Australia form 1991 has more growth tha KSA as seen in the graph and reach very high
as compare to KSA, That is the reason Australia economy grow more consistent than KSA. They
are using their resources effectively and give opportunity cost correctly.

GDP per capita of Australia and Saudi Arabia
The GDP per Capita in Australia is
equivalent to 301 percent of the world's
average. GDP per capita in Australia is
reported by the World Bank. From 1991
until 2010, Australia GDP per capita
averaged 29651 per capita in USD.
The GDP per Capita in Saudi Arabia is
equivalent to 113 percent of the world's
average. GDP per capita in Saudi Arabia is
reported by the World Bank. From 1991
until 2010, Saudi Arabia GDP per capita
averaged 11845 USD. The GDP per capita is obtained by dividing the country’s gross domestic
product, adjusted by inflation, by the total population

36


NOTE
As seen in the graph both the countries have consistent GDP per capita but Australia has more
high GDP than KSA than Australia achieve more high GDP per capita than KSA.

Population of Australia and KSA
Population in Australia is reported by the
World Bank. From 1991 until 2010,
Australia Population averaged 16.2
Million. The population of Australia
represents 0.33 percent of the world´s total
population which arguably means that one
person in every 308 people on the planet is
a resident of Australia
Population in Saudi Arabia is reported by
the Central Department Of Statistics &
Information. From 1991 until 2012, Saudi
Arabia Population averaged 14.1 Million. The population of Saudi Arabia represents 0.41
percent of the world´s total population which arguably means that one person in every 248
people on the planet is a resident of Saudi Arabia
NOTE: As seen in graph Australia has less population than KSA because all developed countries
focus on less population and nuclear families because the more population increase the more
unemployment and per capita income decreases. KSA has high population as compare to
Australia according to statistics. KSA needs to slow its population growth because of its limited
size.

Unemployment Rate of Australia and Saudi Arabia
Unemployment Rate in Australia is reported
by the Australian Bureau of Statistic. From
1991 until 2010, Australia Unemployment
Rate averaged 6.9 Percent.

percentage of the labor force

37

Unemployment Rate in Saudi Arabia is
reported by the Central Department of
Statistics and Information. From 1991 until
2010, Saudi Arabia Unemployment Rate
averaged 10.25 Percent. In Saudi Arabia, the
unemployment rate measures the number of
people actively looking for a job as a


NOTE
As seen in the graph Australia unemployment rate decreases as compare to KSA but KSA has
some consistent unemployment rate than some variation comes according to statistics. As
discussed above unemployment rate depends upon the population.

Age Dependency Ratio of Australia and Saudi
Arabia
The average Australia age dependency
ratio is 49.14. Age dependency ratio of
Australia is reported by the Australian
Bureau of Statistic from 1991 until 2010
The avergae age dependency ratio of KSA
is 67.45. Age dependency ratio of Saudi
Arabia is reported by the Central
Department of Statistics and Information
from 1991 until 2010,
NOTE
As seen in the graph Australia has constant ratio since 1991 to 2010 but KSA here reduce its age
dependency ratio since 1991 to 2010 and reached to Australia’s ratio here.

Inflation of Australia and Saudi Arabia
The avergae Australia inflation is 2.48 since 1991 till 2010. In Australia, the inflation rate
measures a broad rise or fall in prices that
consumers pay for a standard basket of
goods.
The average inflation rate of Saudi
Arabia is 2.05 till 2010. In Saudi Arabia,
the most important categories in the
consumer price index are Foodstuffs and
beverages (26 percent of total weight);
Renovation, rent, fuel and water (18
percent of total weight) and Transport
and telecommunication (16 percent).
Others include Home furniture (11
percent); Fabrics, clothing and footwear (8 percent); Education and entertainment (6 percent);
Medical care (2 percent) and other expenses and services (13 percent)

38


NOTE
As seen in the graph there is major variations in both countries graph KSA has high inflation rate
as compare to Australia in the graph. Whereas, average shows that there is not so much major
variations in both countries inflation rate.

Exchange Rate of Australia and Saudi Arabia
The AUDUSD averaged 1.39267. The AUDUSD spot exchange rate specifies how much one
currency, the AUD, is currently worth in
terms of the other, the USD. While the
AUDUSD spot exchange rate is quoted
and exchanged in the same day, the
AUDUSD forward rate is quoted today
but for delivery and payment on a specific
future date.
The USDSAR averaged 3.7500. The
USDSAR spot exchange rate specifies
how much one currency, the USD, is
currently worth in terms of the other, the
SAR. While the USDSAR spot exchange rate is quoted and exchanged in the same day, the
USDSAR forward rate is quoted today but for delivery and payment on a specific future date.
NOTE: As seen in the graph KSA has consistent exchange rate as compare to Australia which
has some variations. These variations are due to some strategies that Australia adopted since
1991 to 2010.

Stock Market Capitalization of Australia and
Saudi Arabia
From 1991 until 2010, Australia Stock
Market (S&P/ASX 200) averaged 3549
Index points. The S&P/ASX 200 is the
most important stock market index
which tracks the performance of 200
large companies based in Australia. It is
a market-capitalization weighted and
float-adjusted index. The index has a
base value of AUD3133.3, equal to the
value of the All Ordinary Shares as of
March 31, 2000

39


From 1994 until 2013, Saudi Arabia Stock Market (TASI) averaged 4930 Index points. The
Tadawul All Share Index (TASI) is a major stock market index which tracks the performance of
all companies listed on the Saudi Stock Exchange. The index has a base value of 1000 as of 1985
and it was reorganized on June 30, 2008..
NOTE: As seen in the graph Australia has high stock market capitalization as compare to KSA.
After 2005 Australia and KSA both countries stock capitalization increases and some huge
variations can be seen in the graphs. After this KSA becomes consistent but Australia still on the
peak in comparison to KSA.

Government Revenues of Australia and Saudi
Arabia
Australia recorded a Government Budget deficit equal to 3 percent of the country's Gross
Domestic Product in 2011/12 fiscal year.
Government Budget in Australia is
reported by the Australian Government,
ADB. From 1991 until 2010, Australia
Government Budget averaged -0.9
Percent of GDP.
Government Budget in Saudi Arabia is
reported by the Saudi Arabian Monetary
Agency. From 1991 until 2010, Saudi
Arabia Government Budget averaged
13.1 Percent of GDP. Government
Budget is an itemized accounting of the
payments received by government (taxes and other fees) and the payments made by government
(purchases and transfer payments). A budget deficit occurs when an government spends more
money than it takes in. The opposite of a budget deficit is a budget surplus
NOTE
As seen in the graph Australia achieving growth in government revenue despite of deficit budget.
KSA on the other hand achieve growth but with some variations. In this section Australia is way
to far away than KSA.

40


Government Spending’s
Government Spending in Australia increased to 66363 AUD Million in the second quarter of
2013 from 65844 AUD Million in the first
quarter of 2013. Government Spending in
Australia is reported by the Australian
Bureau
of
Statistics.
Government
Spending in Australia averaged 31288.87
AUD Million from 1959 until 2013,
reaching an all-time high of 66363 AUD
Million in the second quarter of 2013 and
a record low of 8290 AUD Million in the
second quarter of 1960.
While Government Spending in Saudi
Arabia increased to 155108 SAR Million
in the second quarter of 2013 from 155024 SAR Million in the first quarter of 2013. Government
Spending in Saudi Arabia is reported by the Saudi Arabian Monetary Agency. From 2008 until
2013, Saudi Arabia Government Spending averaged 109519.7 SAR Million reaching an all-time
high of 171502.0 SAR Million in August of 2012 and a record low of 76217.0 SAR Million in
February of 2008.

Net Debts
Australia recorded a Government Debt
to GDP of 20.70 percent of the country's
Gross Domestic Product in 2012.
Government Debt To GDP in Australia
is reported by the AOFM, Australia.
From 1989 until 2012, Australia
Government Debt To GDP averaged
19.9 Percent reaching an all-time high of
31.7 Percent in December of 1994 and a
record low of 9.7 Percent in December
of 2007. Generally, Government debt as
a percent of GDP is used by investors to
measure a country ability to make future
payments on its debt, thus affecting the country borrowing costs and government bond yields.
While Saudi Arabia recorded a Government Debt to GDP of 3.60 percent of the country's Gross
Domestic Product in 2012. Government Debt To GDP in Saudi Arabia is reported by the
International Monetary Fund. From 1999 until 2012, Saudi Arabia Government Debt To GDP
averaged 47.3 Percent reaching an all-time high of 103.5 Percent in December of 1999 and a
record low of 3.6 Percent in December of 2012. Generally, Government debt as a percent of
GDP is used by investors to measure a country ability to make future payments on its debt, thus
affecting the country borrowing costs and government bond yields.
41


Imports
Imports in Australia increased to 27931
Million AUD in August of 2013 from
27680 Million AUD in July of 2013.
Imports in Australia is reported by the
Australian Bureau of Statistic. From 1971
until 2013, Australia Imports averaged
9045.8 Million AUD reaching an all time
high of 27931.0 Million AUD in August
of 2013 and a record low of 396.0 Million
AUD in May of 1972.
While Imports in Saudi Arabia increased
to 141168 Million SAR in the first quarter
of 2013 from 135339 Million SAR in the fourth quarter of 2012. Imports in Saudi Arabia is
reported by the Saudi Arabian Monetary Agency. From 1968 until 2013, Saudi Arabia Imports
averaged 88941.5 Million SAR reaching an all time high of 222985.0 Million SAR in December
of 2005 and a record low of 2578.0 Million SAR in December of 1968. Saudi Arabia main
imports are: machinery, mechanical appliances and electrical equipment (27 percent of total
imports), transport equipment and parts thereof (16 percent), base metals (13 percent), chemicals
and related products (9 percent) and vegetables (6 percent).

Exports
Exports in Australia increased to 27309
Million AUD in September of 2013 from
27185 Million AUD in August of 2013.
Exports in Australia is reported by the
Australian Bureau of Statistic. From 1971
until 2013, Australia Exports averaged
8686.6 Million AUD reaching an all time
high of 27963.0 Million AUD in August
of 2011 and a record low of 434.0 Million
AUD in October of 1971. Rich in natural
resources, Australia is a major exporter of
commodities. Metals like iron-ore and
gold account for 28 percent of total
exports, coal for 18 percent and oil and gas for 9 percent. Manufactured goods constitute 33
percent of the total exports with food and metal products and machinery and equipment
accounting for the biggest share. Agricultural products, particularly wheat and wool make up 5
percent of trade outflows.
While Exports in Saudi Arabia decreased to 339632 Million SAR in the first quarter of 2013
from 355315 Million SAR in the fourth quarter of 2012. Exports in Saudi Arabia is reported by
the Saudi Arabian Monetary Agency. From 1968 until 2013, Saudi Arabia Exports averaged
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217628.3 Million SAR reaching an all time high of 677144.0 Million SAR in December of 2005
and a record low of 9118.0 Million SAR in December of 1968. Saudi Arabia's economy is highly
dependent on oil exports (87 percent of total exports) and the state-owned firm Aramco is the
world's largest oil producing and exporting company.

Reserve Assets
Foreign Exchange Reserves in Australia increased to 57177 AUD Million in October of 2013
from 52971 AUD Million in September of
2013. Foreign Exchange Reserves in
Australia is reported by the Reserve Bank
of Australia. Foreign Exchange Reserves
in Australia averaged 22819.18 AUD
Million from 1969 until 2013, reaching an
all time high of 84610 AUD Million in
May of 2007 and a record low of 1126
AUD Million in December of 1969. In
Australia, Foreign Exchange Reserves are
the foreign assets held or controlled by
the country central bank. The reserves are
made of gold or a specific currency. They
can also be special drawing rights and marketable securities denominated in foreign currencies
like treasury bills, government bonds, corporate bonds and equities and foreign currency loans.
While Foreign Exchange Reserves in Saudi Arabia increased to 2623676 SAR Million in August
of 2013 from 2581618 SAR Million in July of 2013. Foreign Exchange Reserves in Saudi Arabia
is reported by the Saudi Arabian Monetary Agency. From 2010 until 2013, Saudi Arabia Foreign
Exchange Reserves averaged 2043247.9 SAR Million reaching an all time high of 2623676.0
SAR Million in August of 2013 and a record low of 1569145.0 SAR Million in April of 2010. In
Saudi Arabia, Foreign Exchange Reserves are the foreign assets held or controlled by the country
central bank. The reserves are made of gold or a specific currency. They can also be special
drawing rights and marketable securities denominated in foreign currencies like treasury bills,
government bonds, corporate bonds and equities and foreign currency loans.

Trade Balance
Australia recorded a trade deficit of 284
Million AUD in September of 2013.
Balance of Trade in Australia is reported by
the Australian Bureau of Statistic. From
1971 until 2013, Australia Balance of Trade
averaged -395.6 Million AUD reaching an
all-time high of 2717.0 Million AUD in June
of 2010 and a record low of -3429.0 Million
AUD in February of 2008. In 2010 and 2011
Australia reported consistent trade surpluses
43


due to high price of commodities. However in 2012, the trade balance is back in deficit due to
sharp in value of exports and rising capital imports. Metals, coal and oil and natural gas account
for 54 percent of total exports. Australia is a major importer of machinery and transport
equipment, computers and office machines and telecommunication lasers.
While Saudi Arabia recorded a trade surplus of 198463 Million SAR in the first quarter of 2013.
Balance of Trade in Saudi Arabia is reported by the Saudi Arabian Monetary Agency. From
1968 until 2013, Saudi Arabia Balance of Trade averaged 128299.9 Million SAR reaching an all
time high of 454159.0 Million SAR in December of 2005 and a record low of 3898.0 Million
SAR in December of 1986. Saudi Arabia has been recording trade surpluses since 1968 due to
shipments of oil (87 percent of total exports). Main imports are: machinery, mechanical
appliances and electrical equipment; transport equipment and parts thereof and base metals.

44


Conclusion
The reason why Australia be called the first world country is that Australia's economy is
consistently among the strongest of advanced economies in the Organization for Economic Cooperation and Development (OECD). As at 2011, it is the world's 13th-largest economy, with a
strong commitment to ongoing economic reform and global engagement that emphasizes free
trade and investment.
With low unemployment, low inflation and low government debt, a highly skilled workforce
produced by a world-class education system, and strong links with the fastest growing region in
the world, the Asia–Pacific, Australia's economy is set to prosper into the future.
Australia's foreign and trade policy is focused on promoting our security and long-term
prosperity. It seeks to protect and advance Australia's national interests in a rapidly changing
environment, while supporting a stable global order. A commitment to multilateralism, in
particular the United Nations, is a central tenet of Australian foreign policy. Australia has been
integrally involved in global efforts to build peace and security for decades, just as it has in
promoting global trade and investment liberalization.
Australia's spectacular natural environment, diversity and high quality of life make it a popular
international tourist destination, with nearly six million people visiting Australia in 2011.
On the other hand Saudi Arabia’s economic freedom score is 60.6, making its economy the 82nd
freest in the 2013 Index. Its score is 1.9 points worse than last year due to substantial declines in
business freedom, property rights, trade freedom, and freedom from corruption. Saudi Arabia is
ranked 8th out of 15 countries in the Middle East/North Africa region, and its overall score
remains above the world average.
Driven largely by high oil prices and expansionary public spending, Saudi Arabia’s economy has
expanded at an average growth rate of 3.5 percent over the past five years. However, there has
been little progress in structural and institutional reform. The kingdom has lost economic
freedom two years in a row, recording one of the 15 largest score declines in the 2013 Index. The
perceived level of corruption has increased, and the legal system remains susceptible to political
influence. Saudi Arabia’s property rights score is now lower than the world average.
Despite some progress in previous years, the competitiveness of regulatory efficiency and openmarket policies is also lagging behind other emerging economies. Dynamic gains from free flows
of trade and investment continue to be undermined by bureaucracy and a lack of transparency.

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There are 2Million people living illegally in KSA which is another reason their per capita
income decreases because there is a major rule that the more the denominator increases the more
the ratio decreases.
In KSA there are restriction in culture, women are not allowed to work, drive and cannot start a
business either sole or any other form because of this their most of the growth caters. Australia
has also strict fiscal policy and they have large taxations on companies and industries and as we
know that in company’s double taxation is charged.
Different disciplines of religion affects the growth, for instance KSA cannot import or export
liquor or pork but Australia can do and earn foreign exchange.
KSA and Australia stock exchange working days affects the market also because KSA’s stock
exchange works only in 3 and a half days while Australia’s stock works 6 days in a week.
Saudi Arab cannot overvalue its currency due to major export earnings and it can be seen as
advantage or disadvantage in the sense of import substitution and export promotion strategy.
Saudi Arab has balance growth they focus on competitive advantage but they are also making
forward and backward linkages due to which it is closer to the first world countries.

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Economics Analysis of Australia & Saudi Arabia of last 20 years, since 1991

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