This article addresses the questions of why the Saudi government decided to pursue the five‑year development plans strategy, and what the priorities, objectives and domestic implications of these development plans are. It analyses the concepts of capitalism and Islam as ideologies and as political value‑systems in the development plans and as a source of legitimacy for the royal family now in power.
King Faisal was quoted in 1973 as saying: 'Revolutions can come from thrones as well as from conspirators' cellars. We need everything in this country, but stability is the first priority'.1 By the end of the 1960s the Saudi family became concerned about internal security almost to the point of obsession. Realizing that the society was divided between two major elements, the conservatives and the modernizers, the Saudi government decided to please both by giving the latter what they wanted, modernization, in the name of what the former valued most, Islam.
Before the discovery of oil, concepts of economic and social development were meaningless to the traditional communities of Arabia. The ecology and the environment were a great limitation on development. Any attempt to change the inherent old ways of survival was considered as a threat to the community. The Saudis who were not positively affected by the oil exploitation wanted things to stay as they were. The ulema and the other religious groups comprised the conservative force. In their arguments with the government, they used solely what they knew, the Quran and Islamic principles, as a base for explanation and justification.
The modernizers, in general, were those who were favourably affected by the oil exploration. They were mostly new classes which developed new interests, not necessarily compatible with each other but as a whole, they stood in opposition to the traditionalists and they called for change and reform.
Loyalty to Islam is indisputable among all the Saudis. This loyalty means the acceptance of the indivisibility and the oneness of God and the belief that Muhammad is the seal of the Prophets. Being aware of this, Faisal decided to convince the traditionalists of the necessity for progress by using their own logic. Our religion . . . requires us to progress and advance and to bear the burden of the highest tradition and best manners. What is called progressiveness in the world today, and what reformers are calling for, be it social, human, or economic progress is all embodied in the Islamic religion and laws.2
The threat to stability in the 1960s came from the modernizers. Faisal felt obliged to announce the ten‑point programme. This programme provided the first elements of infrastructure, expanded communications which helped to create a sense of national identity and reduced regionalism and consequently made the people more demanding of the benefits accruing from the oil revenues. It also provided for the development of education, created some social services, and enlarged the government administration, thereby creating more employment. To please the conservatives, Faisal ensured the continuing activity of the Public Morality Committees which he considered to be a stabilizing force asserting the dominance of traditional values.
Social unrest and political threats to stability have always forced the royal family to think seriously about economic planning. The first step in the creation of a planning apparatus was taken in 1958, when the International Monetary Fund (IMF) mission prepared a plan for the restoration of the budget and suggested the establishment of an economic development committee. Faisal, following this recommendation, established the Committee for Economic Development in 1959. That committee was replaced in 1961 by the Supreme Planning Board. Both the Committee and the Board were unsuccessful, because they became involved in the problems of the business community rather than projecting future plans and solutions. The Board was replaced in 1965 by the Central Planning Organization (CPO).
The first comprehensive document developed by the CPO was entitled 'Planning for Growth'.
It was a joint effort by the CPO and the Public Administration delegation sent by the Ford Foundation of the United States. Most of the proposals made in the plan were ignored in the 1966‑67 budget year.3 There are three reasons for the failure of the CPO and the rest of the planning apparatus during the years 1960‑68. First, there was very little support among the top policy‑makers, especially Faisal who had always undermined planning the minute he felt secure politically.
Second, Faisal never appointed strong leaders to head the planning organization and who would be able to sell their plans to the government.
Third, there were very few individuals in the ministeries and agencies who could perceive the importance of long‑range future planning, and they had as yet little power.
In the year 1967‑68 there was a deficit in the budget after seven years of surplus. This fact brought the memory of the crisis of the late 1950s to Faisal's mind. He became aware that, with the political and economic situation as it was, the royal family could destroy itself in less than five years if it did not lay the foundations for the years to come. By 1968 it was evident that experience had proved the inadequacy of the existing planning structure. Faisal began to take the matter more seriously. He appointed Hisham Nazer, a capable figure, as president of the CPO, and gave him full power to organize a staff of economists. Under the leadership of Nazer and the support of Faisal, the CPO became an active and aggressive planning body. In 1968 the CPO invited foreign advisory groups to assist Saudi Arabia in the fields of planning and development. one of these groups was the Stanford Research Institute (SRI) of California, which did not function as an independent body within the CPO but rather became a part of the CPO staff.4 Another foreign advisory group working within the CPO was SCET International, a French group engaged in making a study of the reasons behind economic impediments in Saudi Arabia.5
The deficit in the budget throughout the second half of the 1960s was caused by the financial commitment of Saudi Arabia to the Arab States after the 1967 war. This commitment was a two‑edged sword. on the one hand, it elevated the status of the Saudi government in the Arab world and pleased the local Arab nationalists; on the other, that commitment caused the Saudi government embarrassment internally because it failed to meet its obligations to fulfill promised social projects and keep up with increasing expenditure.
THE FIRST FIVE‑YEAR PLAN
In August 1970 the CPO submitted to Faisal the first five-year plan covering the period from 1970‑71 to 1974‑75. It included guidelines for systematic action in every field of the Saudi economy. Being planned in a time of financial shortage, the plan could not predict the revolution in the oil market which was to take place after 1973. (Crude oil prices ceased to be fixed by agreement among the major international oil companies and were instead fixed by OPEC.) The price of light oil jumped from $1.80 a barrel in 1969 to $12.38 in 1973‑74. In that plan 41.2 billion Saudi Riyals (SR) were allocated for expenditure.
In any global strategy of economic and social development major political choices have to be made. While the five‑year plans became a programme adopted mostly by Third World countries to overcome their economic backwardness and move on the road to modernization, almost all of these countries took a socialist or semi‑socialist approach in implementing their plans.6 However, in the case of Saudi Arabia it was different to in the sense that the five‑year plans were totally based on pure capitalist concepts. The plan, devised with the assistance of the American consultants, could not have been different. These capitalist concepts were justified by Islamic laws. Faisal was very direct in this respect when he was quoted as saying:
We are going ahead with extensive planning, guided by our Islamic laws and beliefs . . . we have chosen an economic system based on free enterprise because it is our conviction that it fits perfectly with our Islamic laws and suits our country…7
The general objectives of the first five‑year plan according to a report prepared by the CPO were: to institute an economic and social development policy for Saudi society, in which Islamic and religious virtues could be maintained, a rise in the living standard and welfare of the people achieved, and which would provide for material security and economic and social stability.8 Those objectives were to be achieved by: increasing GDP by 10 per cent a year; developing human resources so that the Saudis would be able to replace the foreign skilled manpower required in the initial stages of development; diversifying sources of national income and reducing dependence on oil; and bringing scientific rationality into public‑sector programmes and integrating activities to ensure coordination.9
During the first three years of implementation, 60 per cent of the funds were spent. The government felt the error in the way the funds were allocated. It realized that diversifying the sources of national income and the reduction of dependence on oil could not be achieved by a 3.6 per cent allocation to agriculture and a 2.7 per cent allocation to industry. As a result a public investment fund was established during the 1971‑72 fiscal year with an initial budget of SR350 million, with further additions of SR250 million in 1972‑73 and SR600 million in 1973‑74. The funds were planned to be increased every fiscal year until they reached SR 2,000 million. The basic intention behind the establishment of this fund was to provide financial inducements with government backing in a capitalist economy in order to encourage the reluctant private sector to invest in industrial and agricultural projects required for development. Financial inducements and the backing of the government did have an impact on the private sector, but not in the direction intended by the plan.
During the period of the plan, the agricultural labour force was decreasing by 1 per cent per year. This was the result of the inflation which caused poverty among the farmers, and the demand for labour in the new construction activities. According to the CPO, which probably overstated the actual rate of growth, agricultural production increased by 3.6 per cent, which was less than what the plan had aimed for.
In the industrial field investments by the private sector followed the same course they would have taken if the five‑year plan and the inducement policy had not existed (i.e. long‑term investments, like factories, were insignificant). only short‑term investments were made, such as real estate, construction, and trade activities such as exports. Thus, the first five‑year plan produced only a class of wealthy merchants who were dependent on government expenditure for their continuing prosperity.
The first five‑year plan created a boom in the construction sector. Cities and towns witnessed a phenomenal growth in size and density. The decline in rural employment forced Saudis to move to the cities. This, in addition to the massive importation of foreign skilled manpower, created a market for housing. The growing demand for dwellings meant short-term investments which could bring quick profits for private capital. Cement production which reached the capacity of 1,150,000 tons in 1974 was not enough. Investors had to rely heavily on imported cement. The gigantic growth of construction created a supplementary demand in the market for items like furniture, glass, utilities, textiles, electrical equipment and steel. This supplementary demand was only partially satisfied by establishing small local factories. It was largely imports which coped with the demand. Nevertheless, this demand created employment on which a substantial proportion of the population in urban areas became dependent for earning their livelihood. This meant that any future decline in the construction business was going to affect a whole line of other businesses as well.
According to The Financial Times,10 in 1974, industries that were not related to oil production numbered 9,360 firms, employing 36,012 people, an average of less than four employees per establishment. Of the total number, 3,563 firms were involved in textiles (curtains, shades, sheets, mattresses and so on), 1,474 firms were in furniture products, 864 firms were in metal products (equipment, household appliances), and 793 firms were in non‑metallic mineral products. All of these small import‑substitute industries were extremely dependent upon imports of equipment and finished goods.
In brief, the first five‑year plan by the manner in which it was implemented, indirectly accelerated the growth of urban areas, creating a massive concentration of population in less than ten big cities. At the same time, it enlarged the size of the middle class and created a new type of lower class. By the end of 1975, Saudi social structure was remarkably changed. It was easy to distinguish classes according to their social status, profession and the way they earned their living.11
One of the objectives of the first five‑year plan was fulfilled easily, namely an increase in the GDP by 10 per cent cumulative per year. This, however, was not achieved by the implementation of the plan itself. The increase in GDP cannot give a real indication of the development of the productive economy in Saudi Arabia. It was almost entirely dependent upon the increase in the production and export after 1973.
The proportions devoted to training (17.8 per cent), communications (18.1 per cent) and social service (44.7+0.3 per cent) indicated the serious ness of the commitment to these aims. Members of the government, having been educated by the American consultants, realized the importance of providing the Saudi people with these services in order to defuse the social unrest that characterized the late 1960s. The achievement in that respect, by the end of the first five‑year plan, was satisfactory. Improvements were made in vocational training, student enrolment and school facilities. Telecommunications networks were expanded, automatic telephones were installed, postal services began to show improvement in 1972‑73. Progress was made in social services, which included the institutional care (government hospitals), social security, community development, and social welfare programme (orphanages).
In the area of transportation, the plan's target was largely met ahead of schedule. This was due to the nature of business involved. At the same time, transportation expenditures gave more work to contractors. Over 500 kilometres of main and secondary roads were completed in 1971 and an equivalent number in 1972. 12 In the 1972‑73 budget, 20 new projects, with a total of over 900 kilometres of new roads, were authorized. The port of Jedda was finished in 1972. Airports were completed in Medina, Taif Tabuk and Khomus Mouslouf.
With respect to the objectives of the first five‑year plan, it is safe to say that by the end of 1974 the plan had raised the standard of living and welfare of the urban people by providing material security, creating new jobs, and maintaining economic and social stability. But these objectives were not achieved by the means the plan had hoped for: diversifying the sources of national income and reducing dependence on oil. on the contrary, national income became more dependent on government spending out of oil revenues. The reason for this was the way in which the first plan was utilizing its additional funds. It contributed to the creation of the huge job market involving a large proportion of the population, all dependent on the construction business and its supporting industries. The construction business was thus completely dependent, both directly and indirectly, on government spending and oil revenues. If in 1974 Saudi Arabia had had to face a substantial cutback in its oil revenue, instead of the huge income that it was making, this would have caused a depression in the economy. The construction business and its supporting industries would have gone bankrupt, resulting in massive unemployment and rebellion against the government and the royal family. A likely social upheaval would have destabilized the regime. Under those circumstances the first five‑year plan would have been a failure because it would have defeated its own purpose; economic and social stability. This was especially the case since it was composed in 1969‑70, when there was no indication that there would be a future rise in oil prices and when the Saudi government had had a budget deficit in two consecutive years.
THE SECOND FIVE‑YEAR PLAN
On 25 March 1975 King Faisal was assassinated. Two months later the second five‑year plan for the period 1975‑80 was announced. The state's increased wealth from higher oil revenues, permitted the second plan to make a much bolder approach. At that time there were reasonable doubts as to whether even a proportion of the $142 billion allocated in the plan would ever be spent.13 Economists expressed concern about the absorptive capacity of the Saudi economy.
The most important characteristic about the second plan was the introduction of a framework of ten‑year and twenty‑year planning to provide a long‑range perspective for the five‑year plans.14 This approach is considered by economists as a more appropriate method than the first five‑year plan which was essentially five one‑year 'budgets'. Naturally, the second plan implemented a series of political decisions. The government decided to increase its reliance on free enterprise even though the private sector had failed to achieve the goals set out in the first five‑year plan. Before 1974, the international oil market was under the influence of the consumer industrial states and the big oil companies. In the first plan, even though the money was a real constraint, the Saudis had followed an ambitious industrial plan 'designed to create a miniature United States'.15 Politically, this ambition was justified as a way to avoid vulnerability to foreign manipulation of oil, the only export product of the Saudi economy.
In the second five‑year plan the CPO perceived that OPEC was gaining the upper hand imposing its prices in the oil markets. Saudi Arabia, being the most powerful in OPEC, with a third of the world's proven oil supplies, made the CPO secure enough to narrow its plan for industrial diversification. It adopted a strategy of specialization in resource development designed to maximize natural resources in oil and minerals.
Awareness of the fact that the government surplus would exceed the absorptive capacity of the Saudi economy,16 led to two decisions: to limit oil production and to invest enough of the surplus abroad. This was to ensure that income from these investments would subsidize Saudi economic growth after the revenues from oil declined or disappeared. Both of these decisions were politically and economically intertwined. More than 90 per cent of the Saudi surplus was invested abroad in the West (United States, Europe, and Japan).17 This meant a Saudi self interest in preserving the success of Western industrial societies. This interest could hinder the Saudi ability to increase oil prices lest their investments abroad would be negatively affected.
The Saudi government indicated that with a production level in the order of 5‑6 million bpd, it could satisfy its own demand for energy, its development needs, and provide sufficient surplus for investment abroad. But for political reasons the government emphasized that no specific level of production had been set. As a matter of fact, owing to supply shortages, since 1973 average Saudi production has never dropped below 7 million bpd. Since early 1979 and the Iranian revolution production has exceeded 9 million bpd.
Another major political decision, implied in the second plan, was to import massive numbers of foreign workers. Importing foreign labour is an extremely sensitive issue in Saudi Arabia. The ulema, and the senior religious advisory body to the government,18 which represents the conservative alliance, strongly disapprove of these large numbers of aliens in Saudi society. The second plan clearly stated that 'the policy option of rapid progress under‑pinned by foreign labour poses the threat of undermining religious values, weakening the social structure and turning the Saudis into second‑class citizens in their own land.19
Nevertheless, the government approved the policy. However, in order to silence the ulema and the traditionalists, the guidelines for the second plan made a perfunctory promise to achieve economic growth within the Islamic system of values. The plan included a vast number of ambivalent courses of action, claiming the implementation of those courses would insure that economic growth would not destroy Islam, but rather would contribute to a new Islamic renaissance. The plan gave another assurance by asserting that the government intended to increase the efficiency of the Saudi workforce at all levels, but temporarily because of necessity, it had to rely on non‑Saudi labour. According to the plan, the Saudi workforce could be increased from 1,236,000 to 1,518,000 while non Saudis would more than double from 314,000 to 812,000 by the end of 1975.20 The figure of 314,000 for foreign labour was not correct. It probably excluded the Yemenis who presumably were added to the 1,236,000 Saudi workforce.
he need for non‑Saudi manpower stemmed from the determination of the Saudi government to change Saudi Arabia from one of the world's most underdeveloped countries to one which was fairly modernized, within a single generation. The shortage of manpower, be it skilled or unskilled, was caused by cultural and historical‑ecological factors.
T
The second five‑year plan was more successful than the first plan. However, the goals set up in the second plan were not totally achieved. The $142 billion was overspent in current value terms. The 15 per cent annual inflation rate anticipated in the second plan was an underestimate, since according to Saudi official figures the rate of inflation has exceeded 30 per cent since 1977, while in actuality the rate of inflation was well in excess of 45 per cent.21 That factor of domestic inflation, when combined with the effect of international inflation, gives us a clear picture of the difficulties that the second five‑year guidelines were facing.
Contrary to what was expected of the first and second development plans, the government of Saudi Arabia proved to be the dominant moving force in the ceremony. The private sector became more dependent than ever on government spending, both directly through expenditures allocated for infrastructure and industrial projects, and indirectly through loans and subsidies. Revenues from crude oil export were still what held the state economy and policy together. This means that the implementation of the first and second five‑year development plans brought Saudi Arabia to the point where any reduction in the country's oil production (such as sabotage in the oil fields, oil saturation in the international market, or a discovery of alternatives to oil as a source of energy) meant a catastrophe for the Saudi economy and government.
This fact made the Saudi government extremely cautious about investments in external markets. The basic concern is that the money invested outside is likely to be needed sooner than was expected. Hence, it should be kept as liquid as possible. The government's assets are held either as deposits or as trust funds in foreign banks and in foreign‑government securities. Approximately half of the total assets are in the United States, and approximately three‑quarters of those assets are in US dollars.22
As Robert D. Crane has noted:
The Saudi five‑year plans ... are remarkable documents in the history of the free enterprise system . . . Despite the enormous difficulties in creating a replica of the American economy in a feudal society, the Saudi leaders are the most committed national leaders on earth to free enterprise as the key to all their material goals.23
As it has been the case in the first and second plans, the third plan emphasized the will to maintain the religious and moral values of Islam. one of the means of doing that, according to the plan, was by promoting the role of individual initiative throughout the society, and particularly in the economic life of the nation. The plan even linked the promotion of social values to free enterprise and private ownership. The five objectives which compromise free enterprise as a goal in support of spiritual well being are: (a) consolidating internal stability; (b) achieving means for distributing wealth to individuals; (c) achieving capital diffusion, which means the process of widening the base of private ownership. Plan II expressed this as follows: 'As in many developing societies, the traders are traditionally in the wealthy class and as they gradually emerge as industrialists the concentration of wealth in the hands of the few will continue unless methods are devised, within the context of a free economy, for a wider distribution of capital ownership’;24 (d) decentralization of governmental decision‑making to reduce the rapidly growing role of the Saudi government in the Saudi economy (which means the spreading of political power, just as capital diffusion means the spreading of economic power); and (e) privatization ‑ which means, the process of returning to private ownership those means of production and services that the government developed or socialized.
Those objectives devised in the plan are supposed to 'maintain the religious and moral values of Islam'. However, the plan does not explain the relationship between a society pursuing a capitalistic model of development and the teachings of Islam, nor does it explain how this relationship was derived. All it does is make a superficial linkage between the two: 'The distinguishing mark of the Saudi approach to development is that its material and social objectives are derived from the ethical principles of Islam and the cultural values of Saudi Society.25
As is well known, the societal and cultural values of Saudi society before the implementation of the development plans, were basically those of a tribal community with a static traditional mode of production. That raises the following question: how is the Saudi ruling class going to maintain all their previous values in a society that is changing so rapidly on the road to modernization?
Nevertheless, the principles of the third plan, ironically, are that:
· The government will uphold Islam and will maintain its associated cultural values, by applying, propagating, and fostering God's sharia.
· The defence of the religion and the country should be assured as well as the internal security and the social stability of the kingdom.
· Government support for free enterprise should continue.
· Economic growth should be balanced by developing the country's resources, by increasing the income from oil over the long term, and by conserving depletable resource.
· The social well‑being of all citizens should be improved and economic strength to attain all the other fundamental goals of development should be provided.
· Dependence on the production of crude oil as the primary source of national income should be reduced.
· Human resources through education training, and the rising of health standards should be developed.
· The basic infrastructure required for the attainment of those other goals should be completed.26
Through the third plan, the Saudi government had an overall goal, which was to consolidate rather than expand the foreign labour force. This was to be achieved by emphasizing capital-intensive development in hydrocarbon and other manufacturing industries, in agriculture and in mining. The government, under severe pressure from the traditionalists, decided that its growth targets in the third plan were to be constrained by a policy requiring new employment to correspond as closely as possible to the domestic availability of new Saudi manpower. To be consistent with the general plan of development, the third plan included an increased level of expenditure on human‑resource development, 18 per cent of total spending compared to 16 per cent of the total spending in the second plan. Considering the rate of growth projected in the third plan, the employment estimates were inadequate for three reasons:27
· The projected rates of productivity were extremely high, taking into consideration the limited manpower provided, especially in agriculture, utilities, and commerce.
· The growth of construction, considering the funds allocated to this sector, was unrealistically low.
· The Saudi labour force has only recently been educated and trained. This means that it lacks experience. Labour in Saudi Arabia is not homogeneous because of cultural and historical constraints. (The rapid acceleration of development has not yet made the Saudi labour force as mobile as conditions require.)
According to official statistics, the foreign workforce fell to under 1 million workers by 1985. This figure is unrealistic by all accounts. Business International conducted its own research and came up with the conclusion that the foreign workforce rose to over 1.2 million in 1985, an annual increase of 3.8 per cent, which is higher than the growth of the Saudi population.28
The implication of this situation is political since it compels a decision between stability and development. The Saudi government had to decide which is more important, meeting the needs for accelerating development merit which implies importation of more foreign labour (which in turn would undermine the first two objectives of the development plans which of are Islamic culture and stability) or stop the foreign workers from entering the country, then affecting the other objectives of the development plans in the process.
The controversy above is well described by a Saudi Arabian businessman:
If the first two priorities on the list are obeyed, then they defeat all the other. Flow can a nation, determined to preserve Islam and its own national security at the same time, throw open its doors to foreign technology, manpower, and all other kinds of influences Who is going to run these industries and services . . .? Look at it this way, there are a maximum of 4 million Saudis . . . discount half of them because they are women, another 25 per cent children, which leaves a potential workforce of 1.5 million. After manning the armed forces, the National Guard, and the police, how many Saudis are there left to run the government and private sectors?29
Apparently, almost all of the foreign labour force is concentrated in large urban areas. For example, Jeddah, the commercial centre of the country, as was the case with Kuwait, has 60 per cent of its inhabitants as foreigners. That fact is of enormous importance; the departure of immigrant workers from Saudi Arabia in case of an emergency could paralyze the nation's economy.
On the other hand, the Westerner in Saudi Arabia constitute a socially disruptive community. Thanks to them, signs of westernization are everywhere in large urban areas. Videocassette recorders have become common, and exposes the Saudis to Western habits and culture without any effective censorship from the authorities. The consumption of alcohol, though it is forbidden by law, is high and widespread in private. More and more the young Saudis regard their rulers as a bunch of hypocrites who preach one kind of life but practise another.30
The side effects of the presence of foreigners in Saudi Arabia are felt by the native Saudi who is beginning to consider that they are essential for certain jobs that are beneath him. He expects to receive a much better deal in his own country than the foreigners are getting. As Peter Hobday observes,
One can see them [the Saudis] sitting around the doors of the ministries, waiting with their cars to chauffeur the ministers and the civil servants from place to place. They are well‑paid, and looked after in the benevolent way that every paternalist has with its workers. Yet they are disdainful of the Yemenis, the Palestinians, and the Pakistanis or Indian workers, who have the backbreaking jobs in the heat of the sun, and who are segregated from them in their work campus.31
The question which poses itself is; when the foreigners leave, are the Saudis prepared to substitute for them in their jobs? on the other hand, these foreigners might feel in future that they should share more of the Saudi wealth and that they should get better treatment. This could lead to a potentially disaffected people who could be mobilized by any political trend, domestically or regionally.
However, one would agree with Eric Wolf's statement that contact between foreign labourers of different nationalities and ethnic groups is limited owing to language barriers and cultural differences. Thus the possibility for different foreign labourers to unite and organize is much lower than in homogeneous populations. This reduces the Saudis political fear of the foreigners and leaves them with the problem of devising policies to appease Islamic values and the traditionalist faction in Saudi Arabia who are the primary opposing force to the cultural effects of the foreign labour which is needed to carry the burden of implementing the development plans according to capitalist values.
NOTES
1‘The Life and Times of the Cautious King of Arabia', Time (19 Nov. 1973). Quoted from Fouad Abdul Salam Al‑Farsy, 'King Faisal and the First Five‑Year Plan', in Williard A. Belling, King Faisal and the Modernization of Saudi Arabia, p.58.
2 Ministry of Information, King of Saudi Arabia: Faisal Speaks, p.38. Quoted from Belling, op. cit., p.60.
3 Roman Knuauerhase, The Saudi Arabian Economy (New York: Praeger, 1975), p.319.
4 Fuad Al‑Farsy, Saudi Arabia: A Case Study in Development (London: Stacy International, 1978), p.74.
6A socialist approach means that the government will be solely responsible for investing state funds and capital in the different sectors of the economy. A semi‑socialist approach means that the government invites private business to share in the investments in part of or all sectors of the economy. Usually that is feasible only after full or partial nationalization of the means of production.
7 Business International, Saudi Arabia, Issues for Growth, An Inside View of an Economic Power in the Making (Business International S.A.), p.27.
8 Fouad Al‑Farsy, op. cit., p. 141.
9 Central Planning Organization, Report, Kingdom of Saudi Arabia (Saudi Arabia: Jeddah, Banawi Printers, 1974), p. 17.
10'Saudi Arabia Supplement', Financial Times (I Dec. 1976)
11 It is important to note that the distinction between classes in the mind-1970s was structural and not necessarily cultural
12 Report by the CPO, Fuad Al‑Farsy, op. cit., p.143.
14 Robert D. Crane, Planning the Future of Saudi Arabia: A Model for Achieving National Priorities (New York: Praeger, 1978), p. 6.
16 In one year after the price rise Saudi Arabia had $30 billion more surplus than the year before. In the years that followed revenues from oil even doubled and tripled. The Economist commented that an income of over $100 million a day is enough to buy up all the companies in the world's major stock exchanges in 25 years. Seven months to buy IBM, four months for Exxon, and three weeks for BP.
7 The surplus invested is separated from the funds allocated to the development plans.
1
18 The supreme political power in Saudi Arabia is embodied structurally in two groups: the royal family and the ulema, a small group of senior respected Islamic scholars. This group is consulted by the Al‑Saud on all matters of national importance.
19 Robert D. Crane, op. cit., p.8.
20 Those actions are summarized in four pursuits: increasing religious influence by teaching Islam in schools; promoting the role of the individual initiative; strengthening old institutions which help to preserve Saudi culture; and creating programmes which reduce foreign cultural influence.
21 Financial Times (Aug. 1977) and Fuad Al‑Farsy, op. cit., p. 193.
22 Business International, Saudi Arabia, op. cit., p.38.
23 Robert D. Crane, op. cit., p. 145.
26 Published in the Third Five Year Plan, Saudi Arabia Ministry of Planning.
27 Business International, Saudi Arabia, p. 194.
29 Helen Lackner, A House Built on Sand (London: Ithaca Press, 1978), p. 15 1.
30 A statement made by a group of Saudi students who prefer to remain anonymous. The statement was made during a social meeting at RutgersUniversity.
31 Peter Hobday, Saudi Arobia Today, An Introduction to the Richest Oil Power (London: MacMillan, 1978), pp. 105‑6.