Saudi Arabia’s pursuit of economic diversification dates back to 1962 when Petromin, a state-owned enterprise for oil production and industrialization, was created. After over a half century, the Saudi economy remains oil-dependent and in need of new blueprints for development such as Vision 2030 and the National Transformation Program 2020. Why has economic diversification away from oil been so difficult? The classical assumption of the rentier state model--namely that an oil-dependent state does not engage in economic policy because it does not tax domestically—falls short because it oversimplifies. A better explanation for the slow non-oil growth in Gulf countries, thus, continues to be sought. This talk will shed light on the barriers facing Saudi Arabia’s development by focusing on human capital and institutions, and it will also compare the Kingdom’s experience with that of East Asian countries.
Makio Yamada is a Lecturer at Princeton University (Institute for Transregional Study). He is also a Senior Research Fellow at King Faisal Center for Research and Islamic Studies in the Kingdom of Saudi Arabia. He obtained his doctoral and master’s degrees from the University of Oxford (St. Antony’s College) and previously worked at SOAS University of London and the Oxford Institute for Energy Studies. His current research focuses on the political economy of Saudi Arabia and East Asia’s development experience from the perspective of the Arab Gulf countries.