There has been a lot of talk recently about the United States reducing its reliance on oil from the Middle East, and particularly Saudi Arabia, because America has rapidly developed natural gas and shale oil, which has produced a revolution in the biggest market in the world. The topic was re-energized recently by a letter by Prince Alwaleed bin Talal to the Saudi ministers of finance and oil, in which he asked them to accelerate the diversification of the Saudi economy and the reduction of its reliance on oil. Speeding up the development of natural gas and shale oil has certainly been a very important development in the US. However, 2012 saw increases in Saudi oil to the US, but American refineries continued to require Saudi crude. Over the long term, the shale oil revolution in the US might face opposition from environmentalists, as in France, when exploration for shale natural gas was prevented by environmental groups. In any event, the development of shale oil in the US has been fundamentally important in the global market, and this should be watched out for. But it does not mean that the world's requirements of oil from the Gulf, and particularly Saudi Arabia, are threatened. Today, the biggest market for this oil is Asia, led by China. A few years ago, a French industrialist asked what would happen if every person in China, whose population now numbers more than 1 billion, wanted his or her own car. Would there be enough oil in the world to meet this demand? China and other Asian countries that are experiencing rapid economic and demographic growth are quickly increasing their demand for oil, even though they produce various fuel sources, such as petroleum and coal, and are in the process of searching for and producing shale oil. But they rely heavily on Gulf oil, as in the case of Japan and Asia countries such as Thailand, Korea and India. Gulf oil will remain fundamentally important in global markets because it represents a factor of price stability. Producers of shale oil need an acceptable price level to sustain their investments; this is why the current level of $100 a barrel is acceptable. Prices also determine the production of alternative energies; if oil prices dip below $100 a barrel, investments in these sectors will not be lucrative for investors. Meanwhile, diversifying the Saudi economy remains an urgent need for a country of 20 million people, a third of whom are under the age of 30. There are 300,000 employees in the public sector and Saudi authorities are making huge efforts to diversify the economy; their goal is that the non-oil industrial sector rise from 10 percent of raw GDP to 20 percent over ten years, in various industrial sectors. In Saudi Arabia, there is a true domestic market, unlike other Gulf countries. Certainly, speeding up the diversification of Saudi Arabia's economy is needed in a country whose oil reserve is the biggest in the world, but this is not because the world no longer needs Saudi oil. Rather, Saudi Arabia needs to create job opportunities in the private sector, and must complete the "Saudization" of the economy, creating job opportunities for young people who enter the labor market every year. Revenues from oil can speed up this required diversification. The private sector in the Kingdom can greatly help this acceleration. Even though there is no threat to the future of Saudi oil, the call for accelerating the diversification of the economy is justified in a country with oil wealth that can spur the process of industrial diversification in areas related to oil derivatives, such as plastics and petrochemicals, as well as agricultural and transformative industries, with foreign participation in various sectors. When the economy is diversified and companies are established, job opportunities will be created for a growing number of Saudi job seekers. Diversifying the economy will allow the state to reduce the people's reliance on public sector employment. No country should continue to employ and fund its people. There is an urgent need for employment in a diversified economic sector, in areas ranging from hotels to religious tourism or other sub-sectors. Economic diversification is necessary for Saudi Arabia and its people, even though the country's oil will remain a prime source of supply for countries in the Far East.
