Tag Archives: Saudi Arabia

08.16.2012 | A Female Friendly (Industrial) City?

Sometimes it is tough to make your economy more productive.

In Saudi Arabia, just one woman at the office means you have to have a thick barrier separating her from everyone else. She needs her own entrance, her own bathroom, and a security guard to be sure she and all other females have no contact with the men. Meanwhile, if she wants to work for you, a man has to be available, maybe her husband or father, to drive her to work each day. If she earns some money, a man has to open her bank account.

In a World Economic Forum gender gap report, Saudi Arabia scored zero for women’s political empowerment. Surpassing only Pakistan and Yemen, the Saudis were ranked 133 out of 135 countries for women’s economic participation and opportunity. Yes, they do have the world’s largest all female university but many graduates are unemployed.

With this huge underutilization of talent, what to do? The Saudi answer is a female friendly city.

MODON (the Saudi Industrial Property Authority) has announced that it has begun to plan and develop a prototype industrial city for approximately 50 business projects that will create 2000 to 5000 jobs for men and women. The project is unique because its women-only sections will preserve the religious rules “consistent with the privacy of women according to Islamic guidelines…” while its location will enable women to get to work more easily. Combining religion, women, investors and entrepreneurs, the model is designed to spread throughout the Kingdom.

Looking at the constraints on Saudi women, I keep returning to thoughts about human capital. Reflecting the skills, creativity and education that people bring to the workplace, human capital fuels economic growth. By limiting women’s access to jobs, to shopping, to financial services, the Saudi government is diminishing its human capital, its economic potential, and its productivity.

Researching this post I started with an article from the Guardian but soon discovered that it and other news outlets inaccurately stated that the Saudi industrial cities would be single sex/women only. I am basing my facts on the Saudi press release from MODON. Also, you might enjoy reading more about Saudi women here at econlife.

Posted by: adminEcon
Tags: Booz and Co., female friendly industrial cities, gender gap, human capital, MODOM, Saudi Arabia, woman's rights, women's rights, World Economic Forum
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06.17.2012 | Tricky Oil Questions

1. Asked to list the world’s biggest oil consumers, most of us would be correct if we started with the US and China. With the US at 20.5% and China, 11.4% for 2011, we are almost at one-third of world consumption.

2. But then, it gets a bit tricky. Ranking the other big oil users, in which order would you place Brazil, Canada, Germany, Japan, India, the Russian Federation, Saudi Arabia?

The answers:

Japan: 5%
India: 4%
Russian Federation: 3.4%
Saudi Arabia: 3.1%
Brazil: 3.0%
Germany: 2.6%
South Korea: 2.6%
Canada: 2.5%

Isn’t it surprising that Saudi Arabia ranks so high? And yet the reasons make sense. Because of subsidies, gas and electricity are very cheap, oil production uses a lot of energy and air conditioning. Yes, with a rapidly growing population, the demand for air conditioning is massive.

3. Finally, on a per capita basis, for 2010, who consumed the most oil: the US, China, Canada, Greece?

Answers: Canada is first and the US second. China was #9 and amazingly, Greece was #7 in the world (!!).

The trickiest question of all: Economists are still debating whether we have climbed Hubbert’s Peak–the point at which oil production is the highest it will ever go. Here, economist James Hamilton discusses the issue and here, econlife looks at it.

To read more about world oil consumption, this BP report has the most up-to-date information I could find while these Economist articles here and here also provide some insight.

Posted by: adminEcon
Tags: air conditioning, Canada, China, energy subsidies, Greece, Hubbert's Peak, Saudi Arabia, US, world oil consumption
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06.24.2011 | Saudi Women

It is tough for a Saudi Arabian woman to get a driver’s license. Only in rural areas might you see women behind the wheel. Even with recent protests, imagine, to get to work, to pick up groceries, to take a child to the doctor, you need a man. And, if that man is not a relative, you have to pay him.

A 2009 Time article tells about a female deputy minister of education who uses video conferencing to communicate with male colleagues. Among the lowest in the world, the labor force participation rate for Saudi women is 17%. And yet, literacy among Saudi women is high.

The Economic Lesson

For us, the key here is human capital. For an economy to grow and thrive optimally, the factors of production, land, labor, and capital, need to be appropriately allocated. When there is gender bias, women’s talents are underutilized. Consequently, economic growth is less than it might be.

An Economic Question: To illustrate underutilization, economists can use production possibilities graphs. On production possibilities graphs, with the X-axis labeled consumer goods and the Y-axis, capital goods, a bowed out curve is drawn which illustrates a country’s maximum production capability. How would you display current production in a nation that constrains female performance?

Posted by: adminEcon
Tags: Arab women, human capital, production possibilities, Saudi Arabia, underutilization
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