Expert answer:Module 14: Critical Thinking – MGT 521
Expert answer:SWOT AnalysisDirections:Choose a Middle Eastern organization with which you are familiar. Include the following in your analysis:A description of the organization.Identify a triggering event that might signal a need for change.Conduct a SWOT analysis of the organization.Identify a plan to implement the change.Identify three strategies to sustain the gain.Your well-written paper should meet the following requirements:Be 8-9 pages in length, which does not include the title page, abstract, or required reference page, which are never a part of the content minimum requirements.Use academic writing standards and APA style guidelines.Support your submission with course material concepts, principles and theories from the textbook, and at least six scholarly, peer-reviewed journal articles. (Attached Two Articles which MUST be used as references)
delivering_long_term_sustainable_growth_through_investment_in_young_people___saudi_arabia.pdf
factors_of_economic_growth_in_ksa_an_empirical_analysis_from_2000_2014.pdf
Unformatted Attachment Preview
International Journal of Business and Economic Development (IJBED)
Vol. 2 Number 3
November 2014
Delivering long-term sustainable growth
through investment in young people – Saudi Arabia
Nadia Yusuf
King Abdulaziz University, Jeddah, Kingdom of Saudi Arabia
Keywords
Saudi Arabia; investing; young people; education; economy
Abstract
Sustainable expansion in any nation depends on the presence of an energetic workforce. The Schultz model
indicates that national income is sum total of human capital and physical capital. Given that the national
income of Saudi Arabia is disproportionately largely derived from oil wealth rather than human resources,
the government has embarked on providing appropriate education to its young people. Funding for
education has increased over the years. Primary, secondary, and tertiary institutions have been receiving
fairly adequate funding to offer standard education to learners. Moreover, the government has
implemented focused programs, such as KASP to and Hafiz to circumvent some of the shortcomings in the
educational sector. In spite of the government’s efforts, the lack of the right curriculum to ensure
performance in the labor force, job discrimination among Saudis, lack of ICT infrastructure, and
reluctance of women to join the workforce alongside men hinder the development of a vibrant human
capital. Education of the young population is an invaluable investment in the realm of the Arab nation,
not only to ensure perpetuation of a strong economy after the end of the oil age, but also to supplement the
income that is generated from oil exports at the present.
1.
Background
The Kingdom of Saudi Arabia (KSA) is a fast growing economy due to the boom of oil
trade internationally. The population largely depends on the income obtained from oil exports.
According to the IMF (2013) Saudi Arabia is the leading oil exporter in the world as it produces
78 billion oil barrels annually, amounting to about 13% of the total global supply (Alfawaz, Hilal
& Alghannam, 2014, p. 24). The KSA has invested heavily in extraction, manufacture, marketing,
and shipping of petroleum products and natural gas through national companies such as Saudi
ARAMCO. The oil sector contributes to close to 40% of the total GDP and 90% of the total
exports (Corneo, 2011, p. 1). The voluminous oil reserves that are available for Saudi Arabia to
exploit are likely to last for a few more generations. The oil resources are delivering a type of
development that is unsustainable once the oil runs dry. Therefore, income from the oil
resources should be harnessed in the present to build a strong human and alternative physical
capital for prosperity.
The income from oil exports plays a critical role of sustaining the economy. For instance,
the money is used to pay salaries of civil servants. However, the country’s prospects for future
development are confounded by the bulging young population. By 2010, about half of the total
population was comprised of people aged between 15-24 years, with about 28.4% among them
being unemployed (Almobaireek & Manolova, 2012, p. 4029). The population is projected to
grow, meaning that the number of people who depend on the government is going to increase
over the years. According to researchers and demographers, the expanding youth populations
in Arab countries pose economic, political, and social challenges to their respective governments
(Murphy, 2011, p.1). The worst case scenarios were witnessed when youths from several
countries, who were frustrated by poor political, economic and social conditions participated in
the ouster of governments during the Arab Spring. The KSA government must therefore address
the challenge of possible overexploitation of the resources that is posed by the youths. It is
www.ijbed.org
A Journal of the Academy of Business and Retail Management (ABRM)
96
International Journal of Business and Economic Development (IJBED)
Vol. 2 Number 3
November 2014
certain that the revenues obtained from oil exports will be inadequate in the future, probably
tempting the government to accelerate the rate of extracting oil. In any case, with oil being
unsustainable natural resource in the long-run, the vast oil deposits that Saudi Arabia thrives on
presently are expected to wane gradually, leading to a complete slowdown in the economy. This
will certainly be the consequence if the country does not prudently invest on the young people
to deliver sustainable growth in the long-run. Saudi Arabia is bedeviled by various challenges
that derail the probability of having prosperity delivered by the young people. These challenges
are: high unemployment rates among the young people, overdependence on foreign workers,
and disparity between the Saudi curriculum and the needs of the global market (Alfawaz, et al.,
2014, p. 25). Understanding of how the dependence on natural resources and foreign workers
came to be in the nation is critical to the quest for a solution.
Apparently, when the oil boom occurred in the 1970’s and 1980’s, there was lack of well
educated workforce to take on jobs that came up in the expanding economy, forcing the
government to recruit highly qualified foreign workers (Alfawaz, et al., 2014, p. 25). Over the
years, in spite of high number of Saudi students graduating from institutions of higher learning,
the problem of reliance on foreign workers in the oil driven economy has remained highly
persistent. By 2000, a mismatch of the education of fresh graduates and the needs in the nation’s
workforce was cited as the cause of the continued recruitment of foreign workers (Alfawaz, et
al., 2014, p. 25). It follows that what delays the transition of the nation from dependence on oil is
not lack of education, but rather the unfocused nature of the education. To counter the
challenges associated with dependence on oil and the attendant inactivity of the Saudi
population in economic matters, well focused education is seen as the most appropriate
solution. This type of education is a critical factor to make the young Saudi population into a
dependable human resource in the future. Human resource, which is the basic component of
any enterprise, is considered as the most precious wealth as it is normally involved directly in
the process of nation building and in commercial and non-commercial activities (Qureshi, 2014,
p. 144). The role of an educated population in promoting faster economic growth is well known.
The link between education and national development has been clearly seen since the
beginning of mass schooling (Wiseman, Sadaawi & Alromi, 2008, p. 1). Indeed, the financial
reports and fiscal budget reports of the KSA indicate that education is the alternative which can
deliver a stable economy (Alfawaz, et al., 2014, p. 25). With education, the young generation will
be the backbone of the economy in the future. The part played by education in facilitating the
economical development of the KSA can be justified using the theoretical model developed by
Schultz in 1961 and which is accepted among members of the scholarly community up to the
present day. Under Schultz’s model Y=KHL, where national income Y, is a sum of physical
capital K, human capital H, and Labor L (Rizvi, 2014, p. 10). Figure 1 below illustrates the
relationship between education and growth.
Figure 1. Illustrates the relationship between education and growth
Source: Rizvi (2014)
www.ijbed.org
A Journal of the Academy of Business and Retail Management (ABRM)
97
International Journal of Business and Economic Development (IJBED)
Vol. 2 Number 3
November 2014
The desire to improve education is captured in the millennium development goals
(MDGs) that the Arab nation pledged to achieve in the year 2000. Two of the targets that the
country set to achieve under the MDGs were to achieve an all inclusive primary education,
where the target is to offer complete full course primary education to all boys and girls across
the nation by 2015, and to promote equality of the genders and empower women by eliminating
gender inconsistency in education at primary and secondary levels by 2005, and at all education
levels before 2015 (AlMunajjed, 2009, p. 2). To attain the targets of the MDGs, the country has
been including plans for educational expansion in its five year development plans. Trends of
development in highly educated societies have encouraged the KSA administrators to invest
more in the education sector. In the wider gulf region, investment in education and educated
workforce has resulted in direct increase on GDP growth (Rizvi, 2014, p. 14). The general
economy is bound to get better as the years go by.
2. Investment in the Educational Sector
Saudi Arabia’s government has recognized the need to educate the young generation
properly for the sake of future economic prosperity. In the fiscal year ended 2012, the
government allocated 24% of its total budget expenditure to education, with an aim of
increasing the number of highly educated citizens to support a future knowledge-based Saudi
economy and to support penetration in to the private sector through the Saudiasation
replacement program (Alfawaz, et al., 2014, p. 27). The government is fairly optimistic in its
quest to oversee the transformation from a laid back population to a highly active society. A
knowledge-based society is characterized by reliance on science and technology education,
technological innovation, and scientific research, in place of reliance on traditional drivers of
economic growth (Baqutayan, 2011, p. 166). The government relentlessly spent increased
amounts of money on education in the last decade. As per figure 2 below, the allocation to the
education sector rose consistently from12.5 billion in 2002 to 32.5 billion US dollars in 2009
(AlMunajjed, 2009, p. 3).
Figure 2. Government Expenditure on Education, 2002-2009.
Source: Ministry of Education
The contribution of oil in the establishment of education facilities to support stable
human capital hence the long-term prosperity of Saudi Arabia cannot be underestimated.
Between 1997 and 2007, every one dollar increase in oil revenue was accompanied by about 8
cents increase of the funds spent on education (Khatib, 2011, p. 75). The significant increment in
spending on education shows that the government clearly prioritizes education, especially since
2000. Prior to 2000, there were observations that the government concentrated on funding other
areas, such as reinvestment in oil production and defense, while obviously ignoring the
education sector (Khatib, 2011, p. 74). The government wishes to continue the trend by allocating
www.ijbed.org
A Journal of the Academy of Business and Retail Management (ABRM)
98
International Journal of Business and Economic Development (IJBED)
Vol. 2 Number 3
November 2014
more resources to the educational sector. In 2014, the US$ 56 billion was set aside for education
and training, representing 25% of the total budget (U.S.-Saudi Arabian Business Council, 2014).
The government undertakes to provide the Ministry of Education with the necessary
resources to provide quality education across the country. A lot of expansion of schools has
happened in country to provide universal education as per the MDGs. Caution must be
exercised not to sacrifice quality as the quantifiable expansion is made. Essentially, the ministry
has a responsibility of building new schools while maintaining old ones, developing and
providing curricula, introducing training programs to serving teachers, and offering special
education for students with disabilities (Alquraini, 2010, p. 140). Some of the pertinent areas
where interventions to improve quality can be made are curriculum development, teacher
training and special education. The system of education is meant to produce graduates who are
authentic citizens and as well capable to enhance the economy. In general, the education is
intended satisfy the society’s needs while also promoting its cultural values, ideology and beliefs
(Wiseman, Sadaawi & Alromi, 2008, p.3). As a result, the invaluable cultural heritage of the
Saudi people is not at all compromised in the course of the education provided.
The gradual improvements in the educational sector are suitable for realistic GDP
increase in the long-run. In a study on the growth of non-oil GDP in KSA, Joharji and Starr
discovered that recurrent expenditure in growth promoting projects, alongside provision of
managerial incentives, promotes returns on public investment (2010, p. 13). Better education
clearly increases the non-oil productive capacity in the country. Funds are allocated to
improving the existent educational facilities each fiscal year according to manageable growth
projections, meaning that the viability of the economy is not compromised at all.
In line with the need to promote prosperity through education, the government has
sponsored the King Abdulla overseas scholarship Program (KASP). The program, which was
started in 2005, is used to sponsor qualified Saudi students to study for a bachelor, master, or
PHD degrees and medical fellowships in the best universities in the world (Alfawaz, et al., 2014,
p. 27). Students are sponsored to pursue degree courses that fall in line with the current needs in
the Saudi Arabia workforce. Accordingly, some of the disciplines available under the
sponsorship programs are medicine, engineering, computer science, law, e-commerce, and pure
sciences. Under this program, beneficiaries are obligated to return to Saudi Arabia upon
completion of studies, but they are free to choose either to work in the public of the private
sector (Alfawaz, et al., 2014, p. 29). Effective engagement of well trained manpower in either
sector within the nation is beneficial to the economy. The government earns a lot of revenue
through taxation of private companies. Moreover, given its limited employment slots, the
government encourages the KASP students join the private firms. KASP basically produces
many graduates who can replace the foreign workers in the private and public sector.
The government has been facilitating students by funding other supplementary
programs such as Hafiz and the Nitaqat (Saudiasation) programs, which promote the
probability of employment of the graduates. Under the Hafiz program, young and unemployed
Saudis are given a monthly stipend of $600 on the condition that they are searching for work
and/or they are involved in training courses for a period of one year (Alfawaz, et al., 2014, p.
29). The training courses that are offered under this program are aimed at correcting the
mismatch between the Saudi courses and the job market. The training program comes in handy
in equipping the graduates with practical skills that are required by employers. Nonetheless, the
financial assistance while searching for a job encourages the graduates to intensively search for
work in the year it is offered. Another praiseworthy initiative by the Saudi government at the
university level has been the preparatory year before entrance to university. Students who enroll
www.ijbed.org
A Journal of the Academy of Business and Retail Management (ABRM)
99
International Journal of Business and Economic Development (IJBED)
Vol. 2 Number 3
November 2014
in this preparatory year undergo intensive training in courses such as mathematics, English,
communication and computer sciences (AlMunajjed, 2009, p. 20).
The reforms being introduced should cover all levels of education, beginning with the
lower ones, where the foundation of educational achievement is laid. Much emphasis seems to
have been made in institutions of higher learning, while assuming lower level education is
appropriate. A Trends in International Mathematics and Science Study (TIMSS) that was
conducted in 2003, among primary and secondary schools indicated that Saudi Arabia lags
behind compared to other nations, highlighting the need for political, financial, and policy
interventions as has happened in higher education (Wiseman, Sadaawi & Alromi, 2008, p.10).
3. Education that Fosters Employability
From an early age, the population should be prepared to take on jobs that are meaningful
to the Saudi society. By making appropriate changes in the educational system, students should
be able to pursue courses that are work-integrated in vocational centers, colleges and
universities. A work-integrated model, which focuses on individual and contextual factors that
are critical in developing experience and translating it to immediate results of work-based
knowledge, attitudes, skills, and motivation, as well as further outcomes like performance is
very effective (Alfawaz, et al., 2014, p. 33). Education that is guided by what is expected in the
job market can save the nation the costs it suffers while offering extra training to make graduates
suitable for the job market. For instance, with the right training, Saudi Arabia citizens can exploit
the tourism industry and aid in the nation’s development. There have been efforts to provide
training for young people intending to work in the tourism industry, especially through
university degree programs and vocational training courses (Tayeh & Mustafa, 2011, p. 80). Any
outdated courses should be scrapped from the curriculum of higher education institutions.
Higher education institutions are under pressure to operate within an updated system,
which is in line with contemporary changes and trends, to play a critical role in sustainable
creation of a knowledge society, and to achieve proper partnership with the society (Issa &
Siddiek, 2012, 146). The relevance of the educational institutions depends highly on offering
superior education to students. The students should also be encouraged to take science and
technology subjects to meet the increasing demand. In spite of increased enrolment in
universities in Saudi Arabia, there has been bias against science and technology subjects, with
only 9% of graduates in the country having specialized in these areas in 2004 (Corneo, 2011, p.
5). Training in the elite institutions should surely be demand driven.
Higher education institutions should take the initiative of researching on what they need
to produce graduates who can be directly employed. This should be seen as an exercise of
helping them gain the capacity required to build a robust economy. Educators probably know
what courses should be added to the curricula but they are reluctant to include them. In a study
conducted on the wider Arab world, it was discovered that 65% of graduates from public and
private universities who got employed had taken extra courses to learn specific skills in the
course of the final year or after completion to be able to get a suitable job (Issa & Siddiek, 2012,
p. 149). Clearly, the educators cannot be unaware of what extra courses these students had to
undertake to get employed. Policymakers in the institutions have a responsibility of ensuring
that the students are well prepared by the time they graduate, or alternatively offer
apprenticeship programs where appropriate. Some positive efforts to offer experience have been
undertaken for KASP students. In a program run by the Saudi embassy in the U.S., graduates
from the KASP program are trained in large American companies for two years (Alfawaz, et al.,
2014, p. 33). By doing this, the learning institutions shall effectively spent the money that
www.ijbed.org
A Journal of the Academy of Business and Retail Management (ABRM)
100
International Journal of Business and Economic Development (IJBED)
Vol. 2 Number 3
November 2014
government allocates to them on an annual basis. There is no need to produce out cohorts of illtrained graduates year after year, only to have them rejected by employers.
4. Investment in ICT
Across the globe, Information Communication and Technology (ICT) is a field which has
undergone rapid progress in keepi …
Purchase answer to see full
attachment
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assignment to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades