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WEEKLY NEWSLETTER
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Saudi Arabia
Index
During the 1980s, Saudi Arabia's outlays on national security
were among the highest in the world in spite of its relatively
small population. In 1989 its expenditures of US$14.7 billion
ranked eleventh among countries of the world. Nonetheless, this
level of spending reflected a declining trend from a peak of
US$24.8 billion reached in 1983. Budgeted defense expenditures
maintained this gradual decline between 1988 and 1990. Actual
defense expenditures rose dramatically in 1990, however, to
almost US$31.9 billion to meet the costs of additional arms and
the contributions to United States and British military
expenditures necessitated by the Iraqi aggression against Kuwait.
The defense budget of US$26.8 billion in 1991 included more than
US$13.7 billion in contributions to the United States, French,
and British war efforts, but did not include projected heavy
additional arms purchases. Saudi Arabia also contributed to the
costs of other non-Western members of the coalition forces acing
Iraq.
In early 1991, Saudi officials estimated that during the
first five months of the gulf crisis the country had earned
roughly US$15 billion in windfall oil profits arising from
increased production and higher market prices, while assuming an
additional US$30 billion in commitments related to the crisis.
The latter figure included US$13.6 billion in new arms and
equipment, US$2.7 billion in extra mobilization and deployment
costs and civil defense, with the remainder consisting of grants
and loans to other governments to offset the economic effects of
the crisis.
During 1983, when defense spending reached a peak, military
expenditures per capita were at an annual level of nearly
US$2,500. This amount was more than twice the per capita defense
spending in the United States, and was not approached by any
other country except Israel, Iraq, and the other oil-exporting
states of the Persian Gulf. As a consequence of the reduced rate
of defense spending after 1983, military expenditures per capita
had declined to US$897 by 1989.
The share of gross national product
(GNP--see Glossary)
originally earmarked for defense in 1990 was 16.9 percent,
materially below the peak of 22 percent reached in 1983 but still
about twice as high as the Middle East as a whole. Defense
outlays constituted 35.5 percent of central government
expenditures in 1989, which was also higher than the Middle East
average of 32 percent.
The declining rate of defense spending between 1984 and 1990
resulted largely from reductions in oil revenues that produced a
negative growth rate for the entire economy. A secondary factor
may have been the completion of several large-scale
infrastructure projects. Arms imports, which accounted for 16
percent of the defense budget in 1983, had risen to 25 percent by
1988. The major contracts for weaponry placed with Britain, the
United States, and France since 1988, the extraordinary expenses
of the Persian Gulf War, and plans for expansion of the armed
forces during the 1990s seemed certain to impose pressure on the
defense budget for years to come.
Data as of December 1992
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