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WEEKLY NEWSLETTER
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Saudi Arabia
Index
The economic philosophy of the Saudi Arabian royal family has
not changed since the reign of Abd al Aziz, but the economic role
of the government has grown tremendously. The stated goal of
Saudi rulers has been to improve the economic conditions of the
country's citizens while retaining the society's Islamic values.
Imbedded in this social contract, however, is the issue of
political control. The Al Saud recognized that the key to
political power in the kingdom lay in replacing the old economy
with lucrative new economic opportunities for the country's
citizenry.
In the early stages of the kingdom, the only nontraditional
economic opportunities for Saudi citizens were linked to
employment in the military, distribution of land, and some modest
contracts and commissions. Abd al Aziz had limited means. His
revenue was adequate to allow only minimal government functions,
not, to undertake economic and social projects. Development of
the country's oil resources resulted in some wage payments to
Saudis and local purchases of goods and services by foreign oil
companies, but the impact on the Saudi economy was initially
minor. The main beneficiary of oil exports was the ruling family
and its tribal allies. Until the 1970s, oil income increased
slowly, and the government usually operated under financial
constraint. The government's economic decisions were largely
those of determining priorities among alternative uses of limited
resources. Government structure and subsidiary economic
organizations also evolved slowly. In 1952 the Saudi Arabian
Monetary Agency (SAMA) was created to serve as the central bank,
and in 1962 the General Petroleum and Mineral Organization
(Petromin) was formed.
Data as of December 1992
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