The comparison of the Macroeconomic State of Bahrain and Saudi Arabia Essay

The comparison of the Macroeconomic State of Bahrain and Saudi Arabia for the years 2005 and 2011 - Essay Example Services include offshore banking, Islamic banking, insurance and tourism (CIA, Bahrain). Saudi Arabia Saudi Arabia hosts one of the world’s largest oil and gas reserves with estimates ranging up to one fifth of all proven reserves on earth (EIA). The economy of Saudi Arabia depends in large part on oil processing and exports as well as goods derived from crude oil. Diversification is in the air but has yet to yield economically significant results. The major contributors to the GDP according to their value addition are listed in the table below (CIA, Saudi Arabia): 2005 2011 Agriculture 3.3% 2.1% Industry 74.7% 67.6% Services 21.9% 30.4% The major agricultural products of Saudi Arabia are wheat, dates, citrus fruits, barley, melons, dairy and poultry. The major industries in Saudi Arabia are crude oil production, oil refining, petrochemical industries such as fertilizers, ammonia production, caustic soda production, plastics, metal processing, aircraft and ship repair, constr uction etc. Comparison Bahrain’s GDP is markedly smaller than that of Saudi Arabia given the geographical size of both nations and the amount of oil and gas reserves. Saudi Arabia’s GDP displays more of agricultural input compared to Bahrain while it has a larger industrial sector. In comparison, Bahrain has a larger service sector when compared to Saudi Arabia. Services Bahrain’s service sector is composed primarily of financial organisations such as off shore banks, Islamic banks, insurance companies and the like. Oil production has supported the growth of such financial service sectors that link Bahrain to the rest of the region financially. In addition, Bahrain’s service sector displays public utility companies, telecommunications firms,...This paper seeks to compare the economies of Bahrain and Saudi Arabia on a macroeconomic scale and to identify recent trends by performing comparisons for the years 2005 and 2011. Bahrain exhibits one of the highest GDP growth rates around the world given its small population and rich revenue streams. Mainly the economy depends on the export of processed oil and aluminium. Also, Bahrain exports finance services as well as construction materials. Saudi Arabia hosts one of the world’s largest oil and gas reserves with estimates ranging up to one fifth of all proven reserves on earth.. The economy of Saudi Arabia depends in large part on oil processing and exports as well as goods derived from crude oil. Diversification is in the air but has yet to yield economically significant results. Saudi Arabia’s GDP displays more of agricultural input compared to Bahrain while it has a larger industrial sector. In comparison, Bahrain has a larger service sector when compared to Saudi Arabia. For both Bahrain and Saudi Arabia, the major export item is essentially mineral products (crude oil, refined and processed oil etc.) contributing to around 90% of all exports for both nations. In addition, it is noticeable that the next largest export for both nations is chemical products In terms of the import structure, Bahrain and Saudi Arabia are well differentiated since Bahrain imports crude oil in order to refine and process. Saudi Arabia major import items are machinery and transportation equipment. In terms of the larger picture, Bahrain shows greater GDP per capita compared to Saudi Arabia though its macroeconomic structure is more heavily government owned, regulated and controlled.