Saudi Arabian Oil Company (ARAMCO) Research Paper

Saudi Arabian Oil Company (ARAMCO) - Research Paper Example Oil currently represents approximately 86% of exports down from 88% in 2003 (Ministry of Economy and Planning 2010). It has led to an improvement in the standard of living of the Saudis and has contributed to every aspect of the Saudi Economy. It has impacted positively on education and training and on the development of the country’s infrastructure. Improvement in the standard of living and the Saudi economy Oil wealth has led to a transformation of Saudi Arabia, a country that was once dependent on agriculture. The standard of living as represented by gross domestic product (GDP) has improved and continues to do so. Saudi Arabia is now recognized as an upper middle income country with per capita GDP at US$15,711 in 2005 (nation master n.d.). The country’s human development index (HDI) which is a better indicator of the standard of living stood at 0.772 in 2006 and placed it at 75th out of 178 countries in 2005 (Nation Master n.d.). The company is now a welfare state w hich indicates that it provides unemployment and other benefits including retirement to its citizens. These improvements have been driven by oil, both directly and indirectly. The industry triggered the demand for various services and products to both drive the industry and as spinoffs. Jaffe and Elass (2007) states that the petroleum sector represents 40% of the Saudi Arabia’s GDP and is therefore the cornerstone of the economy. This sector is driven by Saudi Aramco which is described by Jaffe and Elass (2007) as the most influential oil company in the world. Saudi Aramco manages 98% of the oil reserves in Saudi Arabian which represents 25% of the world’s reserves (Jaffe and Elass 2007). Between 2003 and 2010 both nominal and real GDP has grown. Real GDP calculated at 1990 prices increased from SR686.8 billion in 2003 to SR869.0 billion in 2010. The only year that experienced a decline was 2008 when it fell by less than SR1 billion. Nominal GDP grew from SR804.6 billi on in 2003 to SR1, 630 billion in 2010. Since taking over from agriculture, oil continues to be the main contributor to GDP representing a significant portion of exports. Vitalis (2007) states that in addition to building up the oil industry Saudi Aramco has also provided the expertise and support required to move the Saudi Kingdom out of its backward state by developing and modernizing its agriculture, transportation, education, and health and welfare provision. Impact on education and training Saudi ARAMCO has contributed significantly to the development of education in Saudi Arabia. According to Al Dawood (2010; qtd. in Smith 2010) a major portion of Saudi Aramco’s investment in human resources is reflected in the number of the company’s employees, (including students who are expected to work with Saudi Aramco after graduation) to study at various universities and institutions across the globe. Simpson (2000) also indicates that Saudi Aramco’s pre-university College Preparatory Program (CPP) has made annual contributions to Saudi students studying in Europe and the United States. Although fluctuating from year to year this trend has been on the increase. Despite the fact that growth in oil production has declined (Ministry of Economy & Planning 2010) the company continues to play a positive role. According to VooDooDog (2009) Saudi ARAMCO has c