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This paper analyses the short-term, demand-side effects of a large natural gas investment programme currently being implemented in Saudi Arabia using input-output analysis. Saudi Arabia opened gas exploration and production projects to national and international companies in order to attract substantial new investment in the exploration and production of gas non-associated with oil output. The expected additional gas production is intended for domestic use, thus freeing for export some of the oil that is currently being used to supply domestic energy. Increased oil exports would generate additional foreign exchange income to help fund further diversification of the Saudi economy. The primary outcome of the input-output analysis shows that the strongest positive impact would be realised by the Saudi construction and manufacturing sectors and that a great deal of the equipment needed for increased gas production would have to be imported. A shortage of educated Saudis may curtail success or require use of more foreign skilled expatriates. So far, Saudi Arabia is having significant difficulties finding and expanding the output of non-associated gas. [ABSTRACT FROM AUTHOR]

I use panel unit root tests and panel error correction models to examine the effects of oil windfall shocks and types of public spending on economic performance in 16 oil-producing countries over the period 1972-2008. Higher oil prices seem to reduce non-oil growth in the long run, but stimulate it in the short run. However, oil abundance may or may not become a 'curse' conditional on how the windfalls are managed. I find that the large windfalls of the 1970s and the 2000s have contributed to the slow long-run growth performance, after controlling for the composition of public spending. Public sector wages stimulated long-run non-oil growth in more oil-abundant economies; but had a negative effect in less oil-endowed countries. The large public investment programs were not effective in stimulating non-oil long-run growth; and the higher the dependency on oil, the lesser the contribution of new infrastructure investments to the non-oil sector's growth. [ABSTRACT FROM AUTHOR]