Delivering long-term sustainable growth through investment in young people - Saudi Arabia

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