| Abstrakt: |
The chapter examines the conduct of economic policy-making in Saudi Arabia. Economic openness implies greater transparency in decision-making and accountability to international organizations, which challenges traditional procedures of governance and has implications for government policy in states such as Saudi Arabia. It does not necessarily threaten the system of government, however, but rather it is a matter of conforming to international reporting requirements and of pursuing economic policies that may be opposed by those with a vested interest in state protection. As the economy of Saudi Arabia remains highly dependent on oil, the level of economic activity is largely determined by oil price and production developments. The link between oil pricing and production developments and gross domestic product changes is long term rather than short term in nature, as there are a number of lags in the revenue transmission process, and the government can draw on reserves or borrow to overcome temporary revenue shortfalls. However, as Saudi Arabia is not indebted to the International Monetary Fund, the deficit reductions are more a matter of maintaining credibility in international financial markets than of complying with the norms of a particular international organization. |
