Iran Israel Saudi Arabia

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1 Name Date Period Directions: Read the statements provided for each of the Factors of Trade and Economic Growth categories and identify whether the factor has an impact on the countries listed. If the factor is present in the country, put a + in the column and provide an example. If the factor is weak or missing, put a in the column and explain why. Use the completed table to answer questions. Factors of Trade and Economic Growth Iran Israel Saudi Arabia Specializes to increase trade Effected by Trade Barriers Makes Investments in Human Capital Makes Investments in Capital Presence of natural resources Encourages Entrepreneurship GDP Per Capita and GDP Growth Rate

2 Name Date Period 1. Which country do you think has the strongest economy? Why? 2. Which country do you think has the weakest economy? Why? 3. What could Iran do to increase its GDP Per Capita and GDP Growth Rate? Why? 4. Which factor of trade and economic growth do you think is the most important? Why?

3 Teachers: You may want to cut out the factors and give groups one factor at a time to consider. Factor Group 1 Israel has a modern, well developed infrastructure and continues to upgrade it by investing in services like mass transit systems and new highways. Saudi Arabia is planning a massive, multi-billion-dollar investment in a railway project that will move shipments to and from its ports faster. While Iran has generous oil reserves, it does not produce as much oil as it could because the country invests only a small percentage of its oil profits into improving oil facilities and the country s infrastructure. Saudi Arabia has built factories and increased spending on the development of infrastructure. Iran has started to invest in its telecommunications networks, roads, and machinery. Factor Group 2 In the past two decades, the United States has had several embargoes against Iran because of Iran s involvement with terrorism. When Saudi Arabia wanted to join the World Trade Organization (WTO), it lifted its long-standing embargo against all trade with Israel. The Free Trade Agreement (FTA) signed by the United States and Israel eliminated all duties and other restrictions on trade in goods between the two countries. Factor Group 3 Saudi Arabia, Iran, Iraq, and Kuwait export millions of barrels of oil every day. The U.S. exports food, medicine, and raw materials to Middle Eastern countries. Israel imports rough diamonds and exports the finished product: cut and polished diamonds. The United States imports oil from the Middle East because it does not have enough oil for the country s needs. In the past, Iran has made some efforts to export goods other than oil, but its prices were too high to be competitive

4 Factor Group 4 Israel has highly educated workers and a large number of scientists and engineers. Iran has high unemployment because young Iranians have not been trained to do jobs. Saudi Arabia is in the early stages of revising its entire education system. The educational system in Iran is weak and many educated Iranians are seeking work in other countries. Israel invests in its schools and has a literacy rate of 97%, the highest in the Middle East. For the past several decades, Saudi Arabia has sent university students abroad for education. Iran has begun to raise the priority of education and adult literacy by building new schools and expanding public colleges. Factor Group 5 Israel s policies, including its tax structure, encourage the growth of small businesses. To start a new business or develop a new product, people in Iran have to overcome many obstacles like getting credit from a bank. Saudi Arabia has cut down the government requirements to start a business. Israel has a Technological Incubator Program for people in order to promote the development of innovative technology. Israel has programs to train immigrants, Arab-Israelis, and people over 55 to start their own business. Since there is little training available in Iran, new business owners have a difficult time hiring good managers. International investors have started an institute in Saudi Arabia to support new business owners and give them a place to start a business. Factor Group 6 The average Israeli citizen makes $33,400 The average Iranian citizen makes $16,500 The average Saudi citizen makes $52,800 The real growth rate for Israel in 2014 was 2.5% The real growth rate for Iran in 2014 was 1.5% The real growth rate for Saudi Arabia in 2014 was 3.6%

5 Factor Group 7 Saudi Arabia s economy is anchored in oil. Money from oil transformed Saudi Arabia from a poor society to a very wealthy society. Oil is what keeps the economy and GDP of Iran growing, providing the majority of government revenues. Despite being in the otherwise oil-rich Middle East, Israel is low on natural resources. The country's economic stability is largely due to its advanced high-tech region and agriculture, rather than its production of raw materials.