The Impact of Oil Revenue on Food Security in Saudi Arabia

Saudi Arabia economyEconomy is highly dependent on oil revenueOil revenue. Hence, all sectors including food sector have gains from the oilOils sector directly or indirectly. This chapter aimed at studying and analyzing the impact of oil revenueOil revenue on food securityFood security in Saudi Arabia. Emphasis was placed on availabilityAvailability and accessibilityAccessibility pillarsPillars of food securityFood security. Descriptive and quantitative analysis were employed using Microsoft excel and STAT statistical packages. Results indicated the prominence of food importsFood imports in importImports bill in Saudi Arabia which rank second in terms of importImports value after machinery, mechanical appliances, and electrical equipment importsImports. Quantitative analysis indicated long run relationship between food importsFood imports and oil revenueOil revenue, oil revenueOil revenue significantly affects food importsFood imports. The effect of pricePrices inflationInflation caused by correction of energy pricesPrices in 2016 and 2018 had led to increased energy pricesPrices reflected in increased pricesPrices of food and nonfood items. Based on results, higher levels of the general price indexGeneral price index were associated with increased food and beverages index with anticipated impact on accessibilityAccessibility to food. Moreover, a rise in transport price indexTransport price index is associated with an increase in pricePrices index of food and beverages. Further, results revealed high correlationCorrelation between oil revenueOil revenue and food securityFood security related sectors including human resource and development, economic resource development, health and social development, subsidies, transport, and communicationsCommunication sectors. The contribution of oil revenueOil revenue to expenditure in these sectors assured the priority given by policy makers to food securityFood security related sectors. Based on researchResearch results authors suggest more weightWeight on non-oilOils sector to bridge the gap in oilOils returns during cycles of slumps and low oilOils pricesPrices. In addition, adjustments of energy pricesPrices should be planned in the framework of the influence on local pricesPrices, consequently on food pricesPrices. Further researchResearch on the effect of oilOils pricesPrices on food pricesPrices conveyed through transport cost is recommended.