Benefits of Market Impacts in the Kingdom of Saudi Arabia

Benefits of Market Impacts in the Kingdom of Saudi Arabia
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Market impacts denote the effects that a market participant gets after selling or buying a product or service in the market. There are several benefits that accrue from the impacts, and they align with social, economic, and environmental elements (TradeArabia News Service, 2016). However, there are other benefits that are nonmarket. In the Kingdom of Saudi Arabia, there are several examples that represent the benefits of market impacts.
The Kingdom of Saudi Arabia experiences increased sales quantities due to increased market demand in travel and tourism. There are several areas that benefits from increased activities in the industry. The kingdom experienced an estimated 6.2 percent rise in the GDP from travel and tourism, which contributed SAR68.4 billion in 2004 and SAR72 in 2015 (World Travel and Tourism Council, 2015). Travel agents, hotels and airlines are some of the platforms that contributed to the improvement of the kingdom's GDP. Employment estimates also envisioned a 7.8 percent growth in employment with the industry managing to employ 603,000 people in 2014 and expected to employ 650,000 people in 2015. Saudi travel and tourism was expected to impact positively on visitor investment and export. A growth of 6.1 percent was the 2015 estimate since the country expected 15,613,000 tourists in 2015.
On the benefit of increased prices due to quality and reputation, the best example to use is the initial public offer of Saudi Aramco. This is one of the largest companies in the world, and its IPO will bring a transformation in the kingdom (Bloomberg, 2017). To begin with, the sale will open up the Saudi's market to foreign capital inflow. Crown Prince Muhammad had estimated the sale to hit a $2 trillion mark, but a consultant, Wood Mackenzie, had estimated the sale to garner $400 million (Bloomberg, 2017). Nevertheless, the gain stands out as a significant contribution to the Saudi's economy. In the Saudi's Tadawul (stocks market), a 5 percent sale of Aramco will bring in over $100 billion. It shows that the market will become one of the highly traded markets in the Middle East and raise the market's mean absorption. The Kingdom also expects its oil price to rise in tandem with the prices of the IPO. The oil production will also remain at the third position among the global producers of oil. Lastly, the IPO will lower the foreign reserves that the Kingdom holds from $528 Billion to $200 Billion.
The benefit that entails reductions in costs due to increased efficiencies reflects on the Saudi's changes in bank interest rates in 2014 (Aljazira Capital, 2014). Saudi holds that the changes took place due to the hike that the US undertook on its bank rates. The kingdom holds that the Dollar changes that happen in the US have a ripple effect on the value of Saudi Arabia Riyal. Therefore the kingdom had to raise its bank interest rates in order to march with the rise that took place in the US. One of the impacts of the bank rate ch...