Countries like Saudi Arabia, Kuwait, or Qatar are sometimes described as having a “cradle-to-grave welfare state” funded by oil profits, that supports their populations and gives them a high standard of living.
How exactly do these programs work? I’d imagine things like universal healthcare and free education are part of it. Are there also direct cash payments like the Alaskan system where every resident of Alaska receives an annual payment from the state government, generated by the profits from the state’s oil industry?
And how dependent is the average citizen of these countries on the welfare state? Since the oil sector is like 90% of the economy of these countries, I can’t imagine a lot of people are earning a living supporting themselves in agriculture or manufacturing or other industries, right?
In: Economics
Nearly 50% of Saudi Arabia’s population is on welfare and unemployment is pretty rampant.
100 years ago Saudi Arabia had no wealth and virtually no natural resources, so they didn’t build up their commercial center until the Oil was discovered. Even now most of the country is desert, and there’s very little in terms of natural resources to develop aside from Oil.
But you have to realize that their culture is very different from ours. Arabs are tribal, and help other members of the tribe. The leader of the nation is the leader of the tribe and spreads the wealth to his tribesmen and blood relatives the same way a CEO gives money to the shareholders.
Saudi Arabia has virtually no employment outside of the government. All jobs are done by foreigners, and everyone else lives off cash transfers based on oil.
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