The Arabic gulf countries are well known for their mass production of oil products as its believed that they are rich in there trade of Oil products as there main natural resource, also known as the Persian Gulf, it is extended from the Indian Ocean location between the Iranian and the Arabian Peninsula, and that includes countries like Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates whoa are members of the Organization of the Petroleum Exporting Countries (OPEC) with its headquarters in Vienna Austria.
The countries overdependence on one natural resource as the main source of income has been a difficult task to the economy of the Arabian countries due to the control of the products prices by the western countries, and competition from other countries that also deal in the Oil production trade.
the Arabia countries dominance in the Oil trade has made the countries to be side lined as countries whose economy is majorly invested on Oil products as their natural resource, and it’s this products that most of us think is the only source of there economy.
the Arabian countries faced economical constrains when the world countries shifted there dependence on the cheap Arabian oil to alternative sources of fuel such as Coal and Natural gas this was after a major Oil crisis that took place in the 1970s that resulted to the countries try to find on the places to sell there products.
The use of the oil products was at its peak in the early 1960s a trend that has always increased all the way till the 1980s; today the use of the product is four times higher than in the 60s, and the Arab countries experience competition from other countries that produce Oil from 2001, setting aside the worlds largest Oil bank with an estimated percentage of 60% of the entire world content.
Arabian countries majorly depend on food imports, that is used to feed approximately 75% of there population a figure that is constantly growing, and they supplement the food imports in there country by the income they get from there trade in Oil to feed the growing figures of there population, and this results some of the growing population to migrate to other places in order to survive, as the income the countries make from this trade isn’t enough to feed the growing population.
In order for these countries to overcome these challenges, they had to venture into other methods that would increase there economy and also help in the feeding of there rapidly growing population, so they had to concentrate on agriculture and other products for export that will enable the countries feed their population (MercoPress, 2010).
Even though the Arabia countries has an estimated 60% Of The total remaining amount of the world Oil, while it only supplies 30% of the total used oil in the world, it is capable of expanding this with another 15%, there are certain factors that affects the oil production of these countries, they include Political, Economical and the Production consequences, where the people involved have their own interests in the way the products is handled and sold, a product that would be used to feed the growing population has led to the countries venturing on agricultural and industrial activities that are used to substitute the countries overdependence on the oil products, and also to conserve the remaining oil supply.
In this paper we highlight on the substitute goods the Arabian countries resorted to, in efforts to boost their economy and reduce the countries overdependence on Oil their main export and a source of income to their countries, the oil trade has been faced with a lot of difficulties that has made the countries unable to feed their growing population, issues such as sanctions imposed on them by the United States of America, their attempts of conserving the supply of Oil products, introduction of employment avenues and efforts of exploiting their natural resources, are some reasons that has enabled the countries to trade on non-petroleum products.
The Arabic countries had to improvise some measures that would enable them sustain the growing population and foster the economy of their countries, they had to trade in goods and services that are in the non-petroleum sectors such as electrical goods, metal products, machinery and industrial equipment, they had additional products such as construction materials, wood products, textiles and garments as well as food and beverages are growing in importance (Estelami, 1999).
Research that was done in Saudi Arabia said that the income that was received in Saudi Arabia as export of the non-petroleum produce alone has been on the rise since early 2000 $12.8 billion to $16 billion and to around $20 billion in late 2007, this was a research conducted by the Saudi Export Development centre, it also stated that the growth in the country’s economy is still going to be experienced, and the growth experienced was experienced because the country had found new markets and it had also increased the quality of its products.
The Arabian countries have also involved themselves in agriculture, which has proved to be another main source of income to the Arabic countries, according to a research that was undertaken in majority of the Arabic countries, involved their self in agriculture as a way of improving their food sufficiency, it is also estimated that they have exported around US $ 37 billion of Irrigational, Agricultural and Other farm inputs as they are determined to improve their economies and not only depending on the oil products.
These changed trend in the economical activities of these countries has realized the countries venturing into, farm activities and moving away from there old routine of crude oil trade, shifting there efforts to agricultural activities such as horticulture, livestock husbandry, fishery and crop cultivation the countries venture into agribusiness has changed the perception of the people as they have thoroughly embanked on agricultural activities as ways of reducing food insecurity in there respective countries.
In the industry sector the Arab countries have heavily invested, as ways of improving there economical activities and also to reduce the levels of unemployment that is rapidly being experienced the world over, the statistics states, the number of industries in Saudi Arabia are on the rise, this is a comparison that is directed from way back in the year 1970 where the exact number of factories that were operational were less than 500, and the number increased to about 3,792 in the year 2005, and the figure is believed to have increased further, this date.
Investment in the industrial sector, that is believed to offer lots of income to the country, has been recording an increase, and a more rapid one, that is from $ 2.6 billion to around $74 billion a very tremendous increase, and that it is an employment provider of 365,000people.
The report further states, the Saudi Arabia industries produces around 48 million tons of Intermediate and basic chemicals, plastics, Fertilizer, industrial gases and metal materials that are for export to other foreign countries in result raising the countries economy.
Arabic countries are also huge exporters of clothes and shoes to South America, Africa, Asian and other Europe continents, this is because they have opened up industries that are for manufacturing of clothes and shoe that are exported to there various markets, this is because they have the adequate supply of raw materials, and this is from their population practicing agriculture and the governments providing the farmers with the necessary support to improve their farm output (AmeInfo, 2010).
The rise in the numbers of the farmers in the region that were not initially practicing agriculture in the past has resulted to majority of people to indulged in agriculture, the participation of the majority of the citizens in this trade has resulted to the increase of raw materials that is needed by the industries for the manufacture of the products that are later exported to abroad markets.
The Arab countries are experiencing a great increase on there export products as they are increasingly selling there farm produce to overseas countries, a good example is the trade between Brazil and the Arab countries, this form of symbiotic relationship has fostered an increase of the countries economical income, statistics states particularly in the year 2008/09 suggested that the participation of Arabic countries in the Brazilian market had increased from 8.4 to 10.6%, and mainly in the trade of agricultural produce such as beef and poultry as the main exports, this alone generated $2.71 billion of income in that year alone.
The Arabic nations have significantly increased there in sales of corn, industrialized meats, tobacco, coffee, soy chaff and fruit they have also been the attempts to increase the export of several agricultural produce such as green vegetables, roasted coffee and the inclusion of fruits such as oranges, apples, bananas, pineapples and limes in the produce that they export to there outside markets.
The Arabic countries have also majored in the export of Fish and Pearls, as they are situated in harbors that are conducive for the breading of the fish, this results to mass harvesting of fish, and they market the readily available market, the fish they harvest is then exported to the market for consumption, countries like Australia, Fiji and New Zealand who are the major consumers of fish due to their large populations who are consumers of fish, this to some point has increased the income of the countries as they have to export large amounts of fish to these countries (Fisheries and Aquaculture Department, 2010).
In the export of Dates and Horticulture the Arabic countries are on the fore front in the export of these products, with Dates being their traditional crop, the crop adapts well to the desert environment of the Arab countries have as successfully exported this product, while they practiced Horticulture through the use of irrigation and this has result to a splendid performance that has resulted to the production of beautiful flowers that are exported successfully to oversea countries.
The Arab countries also practice Jewelry exportation as away of increasing their income and exploitation their natural resources and art skill, items such as Bracelets & Bangles Necklaces, Pocket Watches, Home Décor, Hair Claws and Shoe Decorations are traded by the Arabic countries, with countries like Dubai, Saudi Arabia and Syria recording excellent performance in the Jewelry trade, the jewelry products fetches a lot of money that helps the countries to gain a lot of income from this trade, and this has realized the countries to be wealthy just from the trade of the jewels.
The Arab countries are also practicing mining and exporting agricultural inputs, in this way the countries have ventured in the mining of the products such as liquefied natural gas (LNG), Diamonds, Gold, copper and Gem stones this is in countries like Dubai, Armenia, Saudi Arabia and Qatar this has in some way made these countries to exploit there natural resources as the mines will provide the country with the currency that will enable it feed and provide better health care for its growing population, in the case of agricultural inputs such as Fertilizers, countries like Qatar, Iran and Oman they sell there products to countries that practice agriculture as there economical activity (Janick, 2002).
Tiles and building materials are successfully exported by the Arabic countries, with ready Market through out the world; they market their quality goods to the many developing countries who are trying to adapt to the innovations, they are able to trade there products to these countries with an aim of spreading their innovativeness to these countries and also to improve the relationship between these countries, there products that are believed to be of high quality and are cheap are purchased by many countries through the business men and traders that purchase the products.
These Arab countries are also making electronic goods and materials; this includes Television sets, Radios, mobile phone amongst other products, they export these products to their available markets that use the products and make use of them this giving the manufacturers some credibility, and encourages them to manufacture more of the products.
These Arabic countries have ventured into the Tourism industries trade, these countries have attracted customers from all over the world especially the western countries, this is because of the region environmental atmosphere as many speculate that it is gifted with sand, souks, sun and sites that are these combination has provided the area with the environment that is very attractive for the tourists, the governments of this countries have directed all there efforts towards the promoting of there tourism states, and they have built high-class luxury hotels that are to accommodate the tourists that flock into these countries, an example is the construction of the 7 star hotel known as the (Burj Al Arab) and emirates palace all located in Dubai, these hotels costs the Dubai government lots of funds in there construction in order to be able to attract the tourists.
This introduction of tourism marketing to the overseas markets have proved to be of more advantage to the economy of these Arab countries that participate in this trade, reports states that the tourism sector has provided employment opportunity to approximately 2.3 million people which is about 23% of the entire population of the Arabic nations.
The exports that these countries make has enabled them to be able them to sustain the growing population of there citizens, as it has enabled the countries to improve on their infrastructures and public utilities such as schools, hospitals and habitats for their citizens, the use of substitutes exports other than dependence on Oil products has enabled the countries to feed the growing population without any strain as a majority of the population has ventured in agriculture instead of them heavily relying on oil for export.
These countries have also faced with problems from competitors apart from the sanctions from the developed world, countries that are emerging as new world economies, are the main threats to the export trade, countries such as China, Taiwan, South Korea, India and other Asian countries, that are also huge manufactures of products for export.
The problems that nave constantly affected the Persian gulf that are varied, and are mainly of negative impacts to the common citizen has pushed the governments of these Arabic countries to look for permanent solutions of these problems that affects them, issues such as sanctions that is said to be the most disturbing factor on the income of these countries has made it difficult for these countries to benefit from there natural product.
Research states that about 100 million people who are living in the Persian gulf will have to move to some other places by the year 2040 has been disturbing to the political and economical class of these countries, as its assumed that the people will be forced to move because there countries will not be able to sustain there growing numbers as the countries income from the trade of petroleum products will have gone down, this is because other regions will have improvised alternative sources of power such as solar power, wind power and hydroelectric power, this has to some extent enabled these countries to resort to others methods of getting income that will help the respective governments to feed the rapidly growing population apart from the dependence of Crude Oil trade, and that is why they have resorted to agriculture.
The Arab speaking countries that were commonly known for there trade in crude Oil products, and have tremendously overturned this perception to an imaginable extent; this is by them majoring on the trade of products that aren’t petroleum to the extent of receiving lots of credibility to their consumer’s in the overseas countries who provide the market for there exported products. To achieve there maximum national growth, these Arab countries have opted to maximize their exports in order to realize an increase in their national growth and also to strengthen there regional and international markets.
In order for these countries to participate successfully in the trade of there products they have decided to narrow down there expenditure on the purchasing of the imported products and have opted to increasing the countries income from the expressed product, this to some extent has improved the livelihood of there citizens as these countries have acquired enough funds that would enable them sustain there growing numbers of the people.
These countries have ventured to the mass production of special products that are especially for export, the products from these Arabic countries are sold at a cheaper price as compared to the products from the developed world, such as Britain, United States, Germany and other developed worlds whose products are believed to be genuine but very expensive, they have used this opportunity to get there customers, as they have ventured into producing these products just to enable them to capture the customers that cant afford the expensive products.
The Arabic countries have to some Expanded and strengthened their regional and overseas markets, this is experienced as these Arab countries have always been on the forefront to encourage their product use in the overseas countries were they export their products to, they have also been practicing the exchange of the products with there customer countries, they have done this in some cases these countries have decided to give services to the countries that are purchasing there products, this is when they supply these countries there products and then show them how to use these products, an example is when they export construction materials they also send expertise technicians that will initiate the use of these products and this in return have improved the relationship between the two countries.
The Arab countries have also encouraged high value added exports to their produce in that the rate of tax imposed on the exports has been reduced, this has encouraged the people to venture into manufacturing products that are for export, this has improved the produce of the products, the governments of these countries has imposed the high rates on products that are being imported as it wants to encourage and support its local products that are being sold inside and outside the countries.
This all have helped to improve the income rates that the Arabian countries receive from the trade of the products, the trade in this products have been or benefit to the countries as they are able to facilitate good measures that are of important to the citizens of the respective countries.