Socio-economic Challenges of Covid 19: A Review in Saudi Arabia Analysis 2022

Running head: SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI
ARABIA
Socio-economic Challenges of Covid 19: A Review in Saudi Arabia
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1SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
Table of Contents
Introduction......................................................................................................................................2
Background of Covid 19..................................................................................................................2
Situation Analysis............................................................................................................................4
Analysis and future predictions.......................................................................................................5
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8

2SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
Introduction
The outbreak of Coronavirus or Covid 19 this year all around the world taking huge toll
on the human civilization. Almost each and every country is fighting to contain the spread of
coronavirus and taking various measures. Countries are hurt both socially and economically.
Economists are estimating that along with adverse impact on the health of the people the
pandemic is going to affect the world economy more adversely than the recession occurred in
2008. The report however focuses on the case of Saudi Arabia only and discusses the impact of
Covid 19 outbreak in the country. The country is an emerging economy characterized with high
income. Thus, it is possible that the country can fund effectively to fight the adverse effects
caused by the Covid 19. Therefore, the report discusses the challenges Saudi Arabia might face
due to the outbreak of Covid 19. The challenges would be in both the social and economic front
and thus the report study in details the kind of challenges the country would be facing. Analysing
the challenges in both the fronts the report recommends polices that would help the country to
deal with the situation and the overcome the challenges.
Background of Covid 19
Covid 19 is pneumonia like disease caused by the severe acute respiratory syndrome
coronavirus 2 or SARS COV 2. The first case of Covid 19 was diagnosed in Wuhan, capital of
Hubei province in China in December 2019. It is contagious disease and it spreads from an
infected person to others if people come in close contact with the victim. It means that if a person
come in atleast 1 meter distance from the Covid 19 infected person then chance of getting
infected by the disease increased by manifolds. The primary symptoms of the disease are similar
to flu since the victims infected with the virus are found to have cough, fatigue, fever and
shortness breathing. However, these symptoms are prominent during the initial days after

3SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
infection. The condition get worse with passage of days. Under critical conditions, victims suffer
from persistent and severe chest pain, difficulty in moving from sleeping to sitting position and
blueness of lips and face. The common symptoms that are superficially visible are runny nose
and sneezing. The spread of the disease mainly occurs through sneezing as it disperse aerosols in
the environment. Touching month or nose is another source of spreading the disease. Diarrhea
and vomiting are also noticed in various cases (Heyman & Shindo, 2020). It has been found that
the infection from the disease takes six days to 14 days. Thus, it is the most critical part of eh
disease because the disease spread to others from the infected person much before it is being
diagnosed. It is been found that the virus can survive for hours on surfaces such as wooden
surfaces, metals, garments, papers, glass, plastics and many more. Therefore, these function of
fomites that carry the virus and coming in contact with fomites mentioned above a person get
infected (Cascella et al., 2020. Conversely, regular cleaning of hands and face with alcohol based
sanitizers, soaps and detergents would disinfect the potential fomites that are used in daily life.
The disease has spread all around the world infecting more than1.5 million people and caused
death of more than 0.1 million. The disease spread in Europe after China and then in American
countries and finally is other Asian countries. On 30th January 2020, World Health Organization
(WHO) declared the outbreak of Covid 19 as Public Health Emergency of International concern
(A-Tawfiq & Memish, 2020). Later on 11th March 2020, WHO declared it as pandemic. The
country of concern of the report that is Saudi Arabia has been hit by Covid 19 to and was
confirmed when the country reported its first case of infection on March 2, 2020. The disease hit
the royal family of the country first by infecting King Salman (Aljazeera.com, 2020). The
pandemic condition of the country has got worse after that. The first case of death of the country
was reported on March 24, 2020, when a 51 year old man died of Covid 19 infection (The

4SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
Economic Times, 2020). Currently, the number of Covid 19 cases in Saudi Arabia reached
around 4500 ad the number of deaths has crossed the mark of 50. It can be said with passage of
each day and increase in number of cases of the disease the challenges for the country is
increasing.
Situation Analysis
The outbreak of Covid 19 Saudi Arabia has forced the country prohibit entry of any
foreign visitor to the country. During this period every year pilgrims from different countries
visit Saudi Arabia to worship in the holy city of Mecca. However, due to outbreak of Covid 19
the country is not allowing any foreign pilgrims in the country to contain the spread of the
disease. For better safety, the government has closed down the Mosque of Mohammad in Medina
(Ebrahim & Memish, 2020). No travelers are allowed in the city. The outbreak is impacting each
and every aspect of life in Saudi Arabia as it is doing in the case of other countries. In case of
Saudi Arabia, it is somewhat different from other countries since it depends highly on imported
goods such as cars and food. The employment sector is also highly dependent on the migrant
workers. Therefore, due to coronavirus the country the workers are leaving to the country for
their homeland causing crisis in employment sector and the number of it is increasing. The
business sector in Saudi Arabia are mostly depend on the service sector among which most are
hotels. Therefore, due to closedown of the country and not allowing foreign visitors the country
is facing huge business loss. Being an OPEC country the large amount of revenue of Saudi
Arabia comes from oil export. The revenue from that sector has declined drastically due to two
reasons. One is outbreak of Covid 19 all over the world and the other is oil price war with Russia
have impacted the sector drastically. However, the price war was an induced effect of the Covid
19 outbreak in China because China reduced its import of oil from Saudi Arabia and that has

5SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
generated excess supply in the market. Saudi Arabia asked Russia to reduce to oil supply to keep
the price up but Russia disagreed and thereby oil price war initiated. Therefore, it can be said that
the economically hurt significantly. Saudi Arabia has sent back 0.7 million workers home (Al-
Monitar, 2020). Thus, the labour market is in deep crisis. In order to contain the spread of the
disease all the school and colleges have been suspended (Rand.org., 2020). Therefore, it can be
said the education system is also getting affected by the outbreak of the disease. The country had
declared countrywide lockdown for 21 days on 23rd March 2020. The first case of Covid 19 was
reported on 2nd March 2020 and after around one month, the count of infected person has
exceeded 4000. The country is taking various measures to contain the spread but with the gradual
increase in numbers of the infected persons posing threat to the future of the country.
Analysis and future predictions
Acknowledging the situation of the country, the government of Saudi Arabia several
measures to pull the country out of the difficult situation. The most affected are the households
and the small and medium enterprises. Due to lockdown, the people are not allowed to get
outside the house and thus they are struggling to buy foods and daily necessary goods. In
response to this, the government of the country encouraged people order every necessary goods
to order online. This measure proved to be successful there has been in a huge rise in e-
commerce app downloads which estimated to have risen by 400%. Sales through has also
increased by 200% and the order value increased by 50% (Oxford Business Group, 2020). The
government of Saudi Arabia has announced an economic stimulus package of $32 billion in
order to nullify the impact of Covid 19. Small and medium enterprises are hit adversely by the
adverse economic impact of Covid 19 outbreak and thus the government has announced stimulus
of $13.3 billion to support these enterprises. It should be noted that the stimulus announced for

6SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
the small and medium enterprises are included in the total economic stimulus package. Apart
from that, the government has cut tax rate and provided tax exemptions to provide relief to the
business sector and individuals. Additionally, the government has reduced the budget for 2020
by 5% (Turak, 2020). Therefore, the government is trying hard to keep the economic condition
of the country stable. Stimulus package has been also announced by the government for the
expats and private sector firms. Thus, it can be said that country is making effort to balance the
economy from all ends (Khaleej Times, 2020). However, it should be remembered that during
the last recession, that is the Great Recession of 2008 the Middle East countries are the ones who
faced massive slowdown in comparison to the world average. It is been argued that the recession
that might cause due to Covid 19 outbreak will hurt the global economy in a much greater way
than the Great Recession of 2008 (Mohammed Almezel, 2020). Hence, it can be said that Saudi
Arabia is going to take a big hit in coming future. The rising cases of the disease is getting worse
day by day and if not properly controlled with implementation of continuous lockdown and
supervision then the number of infected person in the country will surpass the 0.2million.
Therefore, the government need to take more robust measures than economic stimulus package
to overcome the current adverse situation and mitigate the chances of future issues.
Recommendations
The government of Saudi Arabia has taken the measures to boost the economy of the
country such as economic stimulus package. These measures are common in times of recession
like 2008. However, this time the conditions different than in the case of 2008. The outbreak of
Covid 19 not only impacting the economy of the country but primarily the health of the people of
the country. Hence, the government should take equal care of the health of the people. The
stimulus is needed for the further improvement of the health sector. More number of isolation

7SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
centers should be arranged and the must ensure screening test of people as much has possible for
Covid 19. By seeing condition of USA, Italy, Spain and Germany it can be said that the number
of cases take a sudden rise and at that time if the heath sector of eth country is not prepared
enough then the country will face severe impact both on the economic and social ground. Hence,
the country must increase the number of beds in hospitals and build more number of isolation
centers in advance to deal with any kind of sudden adverse situation. In addition to that, if the
economy get affected more than the period of Great Recession the government should increase
economic stimulus amount.
Conclusion
From the above discussion regarding impact of Covid 19 outbreak in Saudi Arabia it can
be inferred that the country is affected more than any other economy due to the outbreak of the
disease because of adverse effect on internal economy of the country and oil market. Economy of
the country is largely dependent on the oil exports. Thus, fall in oil price has reduced income of
the country. Education system has stopped functioning as all the colleges and universities have
been suspended. The Haj pilgrimage has been suspended too. The impact of this Covid 19
outbreak is going to be severe in coming future and hence the country need to take effective
measures to avoid the hit.

8SOCIO-ECONOMIC CHALLENGES OF COVID 19: A REVIEW IN SAUDI ARABIA
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