RIYADH: This article tells the tale of two countries that took two, distinct paths towards reforming their economies and uplifting their people out of poverty. The two are Saudi Arabia and Iran, and the break-off year is 1979. Before I embark on comparing the different economic factors that shaped the country’s position, as well as elaborate on the economic scene in each, I would first like to point out a few commonalities. Both Saudi Arabia and Iran are oil producers and Organisation of Petroleum Exporting Countries (Opec) members oil was discovered in Iran in 1908 and in Saudi Arabia 30 years later he year 1979 was when Iran shifted its focus from internal economic reforms that would drive future growth, to using whatever US dollars it got access to towards destabilising the region around it.
In the past four decades, Saudi Arabia has spent more on education, culminating in higher literacy rates for its population among different age groups, providing in return better employment prospects. Saudi Arabia’s GDP today is 1.5 times that of Iran. Not only that, GDP per capita for each Saudi citizen, adjusted for purchasing power, is almost three times that of an Iranian citizen. (Purchasing power is a reflection of economic growth and a stable, strong currency.)
Saudi Arabia’s unemployment rate is today half that of Iran’s average 5.6 per cent and 12.4 per cent respectively. Unemployment rates in areas outside Tehran could be anywhere between 30 per cent and 60 per cent.
When looking at youth unemployment figures, the rate stands at 26.7 per cent for Iran and 36.2 per cent for Saudi Arabia, with the youth population being 23.7 per cent and 26.6 per cent in Iran and Saudi Arabia respectively.
