Sustainable development, climate change vulnerability, governance and oil rent: The case of Saudi Arabia
DOI:
https://doi.org/10.24191/jeeir.v10i3.19094Keywords:
Sustainable development, Climate change, Oil, Governance, Saudi Arabia Vision 2030Abstract
This empirical investigation has aimed at exploring the impact of climate change vulnerability, governance, and oil rent on sustainable development in Saudi Arabia, for the period 1998 to 2019. The econometric analysis uses OLS regressions, and various findings have emerged. Climate change vulnerability positively influences sustainable development, which can be attributed to the continuous adaptation and mitigation efforts to tackle the country's harrowing effects of climate change. Likewise, oil rents report a favourable impact on sustainable development, implying the Kingdom’s efforts to balance the adverse consequences of fossil fuel dependency on environmental quality. In contrast, the governance score is negative; hence, the composite effect on sustainable development is nefarious, although the result is statistically not significant. Furthermore, health expenditure per capita positively influences sustainable development, but the result is statistically insignificant. Moreover, the analyses also show tgrowth development, proxied by GDP, has been negatively impacting sustainable development. Lastly, FDI is found to be harmful to sustainable development in the case of Saudi Arabia. The study recommends ongoing investments towards climate change policymaking and development, and triggers strident calls for economic diversification of moving assets towards “greener” sectors. Similarly, the health care sector requires a revamp in quality and delivery s to contribute more effectively towards sustainable development. Most importantly, the governance structure and quality of institutions in Saudi Arabia require a profound transformation, so that good governance and efficient public administration become key players in the advancement of the Saudi Vision 2030 agenda, otherwise, the ambitions of the Kingdom might reach to a standstill.
References
Abdulahi, M. E., Shu, Y., & Khan, M. A. (2019). Resource rents, economic growth, and the role of institutional quality: A panel threshold analysis. Resources Policy, 61, 293-303. https://doi.org/10.1016/j.resourpol.2019.02.011
Aisha Al-Sarihi, A. (2018). Prospects for climate change integration into the GCC economic diversification strategies (LSE Middle East Centre Paper Series No. 20). The Kuwait Programme. http://eprints.lse.ac.uk/86873/1/Al-Sarihi_Prospects%20for%20climate%20change_2018.pdf
Akbar, M., & Ahsan, A. (2015). An empirical analysis of foreign direct investment in Pakistan. Studies in Business and Economics, 10(1), 5-15. https://doi.org/10.1515/sbe-2015-0001
Al-Atawneh, M. (2009). Is Saudi Arabia a theocracy? Religion and governance in contemporary Saudi Arabia. Middle Eastern Studies, 45(5), 721-737. https://doi.org/10.1080/00263200802586105
Alkhathlan, K., & Javid, M. (2015). Carbon emissions and oil consumption in Saudi Arabia. Renewable and Sustainable Energy Reviews, 48, 105-111. https://doi.org/10.1016/j.rser.2015.03.072
Apergis, N., & Payne, J. E. (2014). The oil curse, institutional quality, and growth in MENA countries: Evidence from time-varying cointegration. Energy Economics, 46, 1-9. https://doi.org/10.1016/j.eneco.2014.08.026
Arezki, R., & Brückner, M. (2011). Oil rents, corruption, and state stability: Evidence from panel data regressions. European Economic Review, 55(7), 955-963. https://doi.org/10.1016/j.euroecorev.2011.03.004
Armanios, F. (2003). CRS Report for Congress: The Islamic traditions of wahhabism and salafiyya. Congressional Information Service, The Library of Congress. https://www.everycrsreport.com/files/20031222_RS21695_80891a05a29339be09abda97096e0db2ea033a7c.pdf
Azam, M., & Lukman, L. (2010). Determinants of foreign direct investment in India, Indonesia and Pakistan: A quantitative approach. Journal of Managerial Sciences, 4(1), 31-44. https://qurtuba.edu.pk/jms/default_files/JMS/4_1/02_azam.pdf
Azam, M., Hunjra, A. I., Bouri, E., Tan, Y., & Al-Faryan, M. A. S. (2021). Impact of institutional quality on sustainable development: Evidence from developing countries. Journal of Environmental Management, 298, 113465. https://doi.org/10.1016/j.jenvman.2021.113465
Boateng, E., Agbola, F. W., & Mahmood, A. (2021). Foreign aid volatility and economic growth in Sub-Saharan Africa: Does institutional quality matter? Economic Modelling, 96, 111-127. https://doi.org/10.1016/j.econmod.2020.12.032
Bochańczyk-Kupka, D., & Pęciak, R. (2015). Institutions in the context of sustainable development. The Macrotheme Review, 4(5), 29-41. https://macrotheme.com/yahoo_site_admin/assets/docs/4MR45Pe.14833422.pdf
Bouzahzah, M. (2022). Pollution haven hypothesis in Africa: Does the quality of institutions matter?. International Journal of Energy Economics and Policy, 12(1), 101-109. https://doi.org/10.32479/ijeep.11856
Bukhari, N., Shahzadi, K., & Ahmad, M. S. (2014). Consequence of FDI on CO2 emissions in case of Pakistan. Middle-East Journal of Scientific Research, 20(9), 1183-1189. https://www.researchgate.net/publication/286006404_Consequence_of_FDI_on_CO2_emissions_in_case_of_Pakistan
Caselli, F., & Tesei, A. (2014). Resource windfalls, political regimes, and political stability (NBER Working Paper No. 17601). National Bureau of Economic Research. https://www.nber.org/papers/w17601
Chygryn, O., Lyulyov, O., Pimonenko, T., & Mlaabdal, S. (2020). Efficiency of oil-production: The role of institutional factors. Engineering Management in Production and Services, 12(4), 92-104. https://doi.org/10.2478/emj-2020-0030
Ciegis, R., & Zeleniute, R. (2008). Ekonomikos plėtra darnaus vystymosi aspektu. Taikomoji Ekonomika: Sisteminiai Tyrimai, 2(1), 35-52. https://www.lituanistika.lt/content/16623
Danish, R. Q., & Akram, A. (2014). Determinants of FDI in Pakistan: An empirical analysis. Journal of International Business and Economics, 2(2), 61-70. http://jibe-net.com/journals/jibe/Vol_2_No_2_June_2014/4.pdf
De Soysa, I., Bailey, J., & Neumayer, E. (2012). Free to squander? Democracy and sustainable development, 1975–2000. In Matthew, R.A. (Ed.), Global environmental change and human security (pp. 261-290). Cambridge.
DeNicola, E., Aburizaiza, O. S., Siddique, A., Khwaja, H., & Carpenter, D. O. (2015). Climate change and water scarcity: The case of Saudi Arabia. Annals of Global Health, 81(3), 342-353. http://doi.org/10.1016/j.aogh.2015.08.005
Dwumfour, R. A., & Ntow-Gyamfi, M. (2018). Natural resources, financial development and institutional quality in Africa: is there a resource curse?. Resources Policy, 59, 411-426. https://doi.org/10.1016/j.resourpol.2018.08.012
Fauzel, S., & Tandrayen-Ragoobur, V. (2021). Sustainable development and tourism growth in an island economy: A dynamic investigation. Journal of Policy Research in Tourism, Leisure and Events, 1-11. https://doi.org/10.1080/19407963.2021.1958825
Ghanim, A. A. (2019). Water resources crisis in Saudi Arabia, challenges and possible management options: An analytic review. International Journal of Environmental and Ecological Engineering, 13(2), 51-56. https://zenodo.org/record/2571928
Güney, T. (2017). Governance and sustainable development: How effective is governance? The Journal of International Trade & Economic Development, 26(3), 316-335. https://doi.org/10.1080/09638199.2016.1249391
Hakimi, A., & Hamdi, H. (2016). Trade liberalization, FDI inflows, environmental quality and economic growth: a comparative analysis between Tunisia and Morocco. Renewable and Sustainable Energy Reviews, 58, 1445-1456. https://doi.org/10.1016/j.rser.2015.12.280
Haque, M. I., & Khan, M. R. (2019). Role of oil production and government expenditure in improving human development index: Evidence from Saudi Arabia. International Journal of Energy Economics and Policy, 9(2), 251-256. https://doi.org/10.32479/ijeep.7404
Hasan, S. (2012). Al-salafiyyun fi masr. Dar Awraq li al-Nashr.
Hegghammer, T. (2008). Islamist violence and regime stability in Saudi Arabia. International Affairs, 84(4), 701-715. http://www.jstor.org/stable/25144872
Hoinaru, R., Buda, D., Borlea, S. N., Văidean, V. L., & Achim, M. V. (2020). The impact of corruption and shadow economy on the economic and sustainable development. Do they “sand the wheels” or “grease the wheels”? Sustainability, 12(2), 481. https://doi.org/10.3390/su12020481
Huynh, C. M., & Ho, T. X. (2020). Institutional quality, shadow economy and air pollution: empirical insights from developing countries. The Empirical Economics Letters, 19(1), 75-82.
Internal Displacement Monitoring Centre (IDMC). (2022). Global Internal Displacement Database. Norwegian Refugee Council. https://www.internal-displacement.org/database/displacement-data
International Petroleum Industry Environmental Conservation Association, United Nations Development Programme, & International Finance Corporation. (2017). Mapping the oil and gas industry to the sustainable development goals: An atlas. https://www.ipieca.org/resources/awareness-briefing/mapping-the-oil-and-gas-industry-to-the-sustainable-development-goals-an-atlas/
Islam, S. N., & Winkel, J. (2017). Climate change and social inequality (DESA Working Paper No. 152). Department of Economics & Social Affairs, United Nations. https://www.un.org/esa/desa/papers/2017/wp152_2017.pdf
Kardos, M. (2014). The relevance of foreign direct investment for sustainable development. Empirical evidence from European Union. Procedia Economics and Finance, 15, 1349-1354. https://doi.org/10.1016/S2212-5671(14)00598-X
Khan, R. E. A., & Farooq, S. (2019). Corruption, political instability and sustainable development: The interlinkages. Journal of Quantitative Methods, 3(1), 57-84. https://doi.org/10.29145/2019/jqm/030104
Khan, R. E. A., & Nawaz, M. A. (2010). Economic determinants of foreign direct investment in Pakistan. Journal of Economics, 1(2), 99-104. https://doi.org/10.1080/09765239.2010.11884929
Kingdom of Saudi Arabia. (n.d.). Vision 2030. https://www.vision2030.gov.sa/media/rc0b5oy1/saudi_vision203.pdf
Kosárová, D. (2020). Saudi Arabia’s Vision 2030. In J. Usiak & D. Kollar (Eds.), Security forum 2020 (pp. 124-134). Interpolis. https://www.researchgate.net/publication/346531524_SAUDI_ARABIA%27S_VISION_2030
Koubi, V. (2019). Climate change and conflict. Annual Review of Political Science, 22, 343-360. https://doi.org/10.1146/annurev-polisci-050317-070830
Lucas, P., & Wilting, H. (2018). Using planetary boundaries to support national implementation of environment-related sustainable development goals: Background report. PBL Netherlands Environmental Assessment Agency. https://www.pbl.nl/sites/default/files/downloads/Using_planetary_boundaries_to_support_national_implementation_of_environment-related_Sustainable_Development_Goals_-_2748.pdf
Maghrabi, A., Alyamani, A., & Addas, A. (2021). Exploring pattern of green spaces (GSs) and their impact on climatic change mitigation and adaptation strategies: Evidence from a Saudi Arabian city. Forests, 12(5), 629. https://doi.org/10.3390/f12050629
Mahmood, H., Alkhateeb, T. T. Y., Al-Qahtani, M. M. Z., Allam, Z. A., Ahmad, N., & Furqan, M. (2019). Energy consumption, economic growth and pollution in Saudi Arabia (MPRA Paper No. 109143). Munich Personal RePEc Archieve. https://mpra.ub.uni-muenchen.de/109143/1/MPRA_paper_109143.pdf
Mehlum, H., Moene K, & Torvik R. (2006). Institutions and the resource curse. The Economic Journal, 116(508), 1–20. https://doi.org/10.1111/j.1468-0297.2006.01045.x
Méon, P. G., & Sekkat, K. (2005). Does corruption grease or sand the wheels of growth? Public choice, 122(1), 69-97. https://doi.org/10.1007/s11127-005-3988-0
Mombeuil, C., & Diunugala, H. P. (2021). UN sustainable development goals, good governance, and corruption: The paradox of the world's poorest economies. Business and Society Review, 126(3), 311-338. https://doi.org/10.1111/basr.12241
Mousavi, A., Ardalan, A., Takian, A., Ostadtaghizadeh, A., Naddafi, K., & Bavani, A. M. (2020). Climate change and health in Iran: A narrative review. Journal of Environmental Health Science and Engineering, 18(1), 367-378. https://doi.org/10.1007/s40201-020-00462-3
Mustun, Z. K. (2022). Climate change, institutional quality and SDGs: A narrative review with a focus on Yemen. Journal of Emerging Economies and Islamic Research, 10(1), 1-23. https://www.researchgate.net/publication/358233867_Climate_change_institutional_quality_and_SDGs_A_narrative_review_with_a_focus_on_Yemen
Nawaz, A., Majeed, M. T., & Siddique, H. M. A. (2020). Institutional governance and climate change nexus: A panel data analysis. Pakistan Journal of Applied Economics, 30(2), 203-233. https://www.aerc.edu.pk/pjae/pjae-vol-30-2020/volume-30-no-2/institutional-governance-and-climate-change-nexus-a-panel-data-analysis/
Nguyen, C. P., & Su, T. D. (2021). Tourism, institutional quality, and environmental sustainability. Sustainable Production and Consumption, 28, 786-801. https://doi.org/10.1016/j.spc.2021.07.005
Niestroy, I. (2021). Managing the implementation of the SDGs. European Commission. Publications Office of the European Union. https://ec.europa.eu/info/sites/default/files/ht0521234enn.en_.pdf
Povitkina, M. (2018). The limits of democracy in tackling climate change. Environmental Politics, 27(3), 411-432. https://doi.org/10.1080/09644016.2018.1444723
Qur’an (Pustaka Darul Iman Sdn. Bhd., Trans.). (2007). Percetakan Zafir Sdn. Bhd.
Radu, M. (2015). Political stability-A condition for sustainable growth in Romania? Procedia Economics and Finance, 30, 751-757. https://doi.org/10.1016/S2212-5671(15)01324-6
Razmi, M. J., Abbasian, E., & Mohammadi, S. (2012). Investigating the effect of government health expenditure on HDI in Iran. Journal of Knowledge Management, Economics and Information Technology, 2(5), 1-13. https://profdoc.um.ac.ir/articles/a/1030501.pdf
Riyad as-salihin 666 - The book of miscellany. (n.d.). Sunnah.Com. https://sunnah.com/riyadussalihin:666
Robinson, J. A., Torvik, R., & Verdier, T. (2006). Political foundations of the resource curse. Journal of development Economics, 79(2), 447-468. https://doi.org/10.1016/j.jdeveco.2006.01.008
Sachs, J., Lafortune, G., Kroll, C., Fuller, G., Woelm, F. (2022). Sustainable Development Report 2022, from crisis to sustainable development: The SDGs as roadmap to 2030 and beyond. Cambridge University Press. https://doi.org/10.1017/9781009210058
Salari, M., & Noghanibehambari, H. (2021). Natural resources, women and corruption. Resources Policy, 74, 102412. https://doi.org/10.1016/j.resourpol.2021.102412
Saleem, A., & Shabbir, S. (2020). Trade liberalization and environmental issues in Pakistan. Applied Economic Review, 1(1), 1-11. https://doi.org/10.5281/zenodo.4105669
Sarkodie, S.A., & Strezov, V., 2019. Effect of foreign direct investments, economic development and energy consumption on greenhouse gas emissions in developing countries. Science of the Total Environment, 646, 862-871. https://doi.org/10.1016/j.scitotenv.2018.07.365
Shabbir, M. S. (2019). Human prosperity measurement within the gloom of maqasid al-shariah. Global Review of Islamic Economics and Business, 7(2), 105-111. https://www.researchgate.net/publication/338434815_Human_Prosperity_Measurement_within_The_Gloom_of_Maqasid_Al-Shariah
Stenslie, S. (2018). The end of elite unity and the stability of Saudi Arabia. The Washington Quarterly, 41(1), 61-82. https://doi.org/10.1080/0163660X.2018.1445360
Sultan, Z. A., & Haque, M. I. (2018). Oil exports and economic growth: An empirical evidence from Saudi Arabia. International Journal of Energy Economics and Policy, 8(5), 281-287. https://www.econjournals.com/index.php/ijeep/article/view/6688
Sustainable Development Report. (2022). Overall score. https://dashboards.sdgindex.org/explorer?metric=overall
Tandrayen-Ragoobur, V., & Fauzel, S. (2021). Climate change, governance and economic growth: The case of small island developing states. Small States & Territories, 4(2), 245-258. https://www.researchgate.net/publication/356029357_Climate_change_governance_and_economic_growth_The_case_of_small_island_developing_states
The White House Washington. (2021). Report on the impact of climate change on migration. https://www.whitehouse.gov/wp-content/uploads/2021/10/Report-on-the-Impact-of-Climate-Change-on-Migration.pdf
The World Bank. (2022). Databank: World development indicators. https://databank.worldbank.org/source/world-development-indicators
The World Bank. (2022). Databank: Worldwide governance indicators. https://databank.worldbank.org/source/worldwide-governance-indicators
Thomas, K., Hardy, R. D., Lazrus, H., Mendez, M., Orlove, B., Rivera‐Collazo, I., Roberts, J. T., Rockman, M., Warner, B. P., & Winthrop, R. (2019). Explaining differential vulnerability to climate change: A social science review. Wiley Interdisciplinary Reviews: Climate Change, 10(2), e565. https://doi.org/10.1002/wcc.565
United Nations (UN). (2017). The Sustainable Development Goals Report 2017. https://unstats.un.org/sdgs/files/report/2017/thesustainabledevelopmentgoalsreport2017.pdf
University of Notre Dame. (2022). Notre Dame Global Adaptation Initiative: Country Index. https://gain.nd.edu/our-work/country-index/
Williams, J. B., Shobrak, M., Wilms, T. M., Arif, I. A., & Khan, H. A. (2012). Climate change and animals in Saudi Arabia. Saudi Journal of Biological Sciences, 19(2), 121-130. https://doi.org/10.1016/j.sjbs.2011.12.004
Xiaoman, W., Majeed, A., Vasbieva, D. G., Yameogo, C. E. W., & Hussain, N. (2021). Natural resources abundance, economic globalization, and carbon emissions: Advancing sustainable development agenda. Sustainable Development, 29(5), 1037-1048. https://doi.org/10.1002/sd.2192
Yameogo, C. E., Omojolaibi, J. A., & Dauda, R. O. (2021). Economic globalisation, institutions and environmental quality in Sub-Saharan Africa. Research in Globalization, 3, 100035. https://doi.org/10.1016/j.resglo.2020.100035
Zaid, H. A. H., Jamaluddin, T. A., & Arifin, M. H. (2021). Overview of slope stability, earthquakes, flash floods and expansive soil hazards in the Republic of Yemen. Bulletin of the Geological Society of Malaysia, 71, 71-78. https://doi.org/10.7186/bgsm71202106
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Zuhayr Khan Mustun
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
