If talked about the Arabia in respect to COVID-19 pandemic, the full force of the viral transmission is yet to hit. However, on an unfortunate note, the economic contamination has by now arrived rapidly. Compared to their rates in the past two decades, the oil prices have currently hit their lowest. The bottom has fallen out of the tourism sector and industries are reeling from supply and demand shocks as trade pauses and lockdowns have brought consumers to their home. Despite diversification efforts, success has been eliminated most recently after the downfall of oil prices in 2014, when countries such as Oman, Kuwait, and Saudi Arabia began ambitious long-term reform plans. Almost every economy of the region is presently quite exposed to economic shocks that are echoing all around the globe. This is evident through the rapidly growing population, inequality, over reliance on gas and oil, coupled with the high unemployment rates.
Nevertheless, derailing the Saudi Arabian economy will not be that easy. As the fact could not be denied, the country is in a sovereignty fund that is almost 300 billion euros. But in the midst of this phase, the current economic crisis proves annoying. As per the International Monetary Fund, Saudi Arabia’s economic yield is expected to decline 2.3% for this year. The worldwide fest Hajj of the year may be canceled, although it has not been officially announced yet. The Mecca pilgrimage site has been closed for weeks. The yearly income of the pilgrimage and religious tourism accounts to nearly $20 billion, that is almost 20% of the national income apart from the oil sector. For example, there were plans in place to make a pilgrimage to Saudi Arabia’s new oil and develop more possibilities of revenue. For example, a luxury hotel in Mecca offers suites overlooking a cava over $5,000 overnight for wealthy pilgrims.
Policymakers should take steps to help industry and business avoid instantaneous storms, but they should also consider recovery ahead. This would mean skill building in order to fight against the threat of long-term unemployment especially in a scenario where even the skilled ones are losing their jobs! This should go hand in hand with fostering cooperation and multiplicity through industrial regeneration programs that address local powers and ties. The comprehensive effects of the crisis on the global economy can’t still be assessed. However, these effects are going to be profound and long-lasting, on a scale not seen since the Great Depression. Adding to this, it is also affirmed that the complex, stable, and diverse economies will better cope and handle the future shocks, as they are more adaptable and hence more robust.
