Home » Saudi Arabia

Saudi Arabia

Facts About Saudi Arabia

Background: In 1902 Abdul al-Aziz Ibn SAUD captured Riyadh and set out on a 30-year campaign to unify the Arabian peninsula. In the 1930s, the discovery of oil transformed the country. Following Iraq’s invasion of Kuwait in 1990, Saudi Arabia accepted the Kuwaiti royal family and 400,000 refugees while allowing Western and Arab troops to deploy on its soil for the liberation of Kuwait the following year. A burgeoning population, aquifer depletion, and an economy largely dependent on petroleum output and prices are all major governmental concerns.
Government type: monarchy
Capital: Riyadh
Currency: 1 Saudi riyal (SAR) = 100 halalah

Geography of Saudi Arabia

Location: Middle East, bordering the Persian Gulf and the Red Sea, north of Yemen
Geographic coordinates: 25 00 N, 45 00 E
total: 1,960,582 sq km
land: 1,960,582 sq km
water: 0 sq km
Land boundaries:
total: 4,415 km
border countries: Iraq 814 km, Jordan 728 km, Kuwait 222 km, Oman 676 km, Qatar 60 km, UAE 457 km, Yemen 1,458 km
Coastline: 2,640 km
Maritime claims:
contiguous zone: 18 nm
continental shelf: not specified
territorial sea: 12 nm
Climate: harsh, dry desert with great extremes of temperature
Terrain: mostly uninhabited, sandy desert
Elevation extremes:
lowest point: Persian Gulf 0 m
highest point: Jabal Sawda’ 3,133 m
Natural resources: petroleum, natural gas, iron ore, gold, copper
Land use:
arable land: 2%
permanent crops: 0%
permanent pastures: 56%
forests and woodland: 1%
other: 41% (1993 est.)
Irrigated land: 4,350 sq km (1993 est.)
Natural hazards: frequent sand and dust storms
Environment – current issues: desertification; depletion of underground water resources; the lack of perennial rivers or permanent water bodies has prompted the development of extensive seawater desalination facilities; coastal pollution from oil spills.
Environment – international agreements:
party to:  Climate Change, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Ozone Layer Protection
signed, but not ratified: none of the selected agreements
Geography – note: extensive coastlines on Persian Gulf and Red Sea provide great leverage on shipping (especially crude oil) through Persian Gulf and Suez Canal

People of Saudi Arabia

Saudi Arabia’s 2001 population is estimated to be about 22.7 million, including about 6.4 million resident foreigners. Until the 1960s, most of the population was nomadic or seminomadic; due to rapid economic and urban growth, more than 95% of the population now is settled. Some cities and oases have densities of more than 1,000 people per square kilometer (2,600 per sq. mi).

Saudi Arabia is known as the birthplace of Islam, which in the century following Muhammad’s death in 632 A.D. spread west to Spain and east to India. Islam obliges all Muslims to make the Hajj, or pilgrimage to Makkah, at least once during their lifetime if they are able to do so. The cultural environment in Saudi Arabia is highly conservative; the country adheres to a strict interpretation of Islamic religious law (Shari’a). Cultural presentations must conform to narrowly defined standards of ethics. Men and women are not permitted to attend public events together and are segregated in the work place.

Most Saudis are ethnically Arab. Some are of mixed ethnic origin and are descended from Turks, Iranians, Indonesians, Indians, Africans, and others, most of whom immigrated as pilgrims and reside in the Hijaz region along the Red Sea coast. Many Arabs from nearby countries are employed in the kingdom. There also are significant numbers of Asian expatriates mostly from India, Pakistan, Bangladesh, Indonesia, and the Philippines. There are less than 100,000 Westerners in Saudi Arabia.

Population: 26,417,599
note: includes 5,576,076 non-nationals (July 2005 est.)
Age structure:
0-14 years:  42.52% 
15-64 years:  54.8% 
65 years and over:  2.68%
Population growth rate: 3.27% 
Birth rate: 37.34 births/1,000 population 
Death rate: 5.94 deaths/1,000 population 
Net migration rate: 1.32 migrant(s)/1,000 population 
Infant mortality rate: 51.25 deaths/1,000 live births 
Life expectancy at birth:
total population:  68.09 years
male:  66.4 years
female:  69.85 years 
Total fertility rate: 6.25 children born/woman 
noun: Saudi(s)
adjective: Saudi or Saudi Arabian
Ethnic groups: Arab 90%, Afro-Asian 10%
Religions: Muslim 100%
Languages: Arabic
definition: age 15 and over can read and write
total population: 62.8%
male: 71.5%
female: 50.2% (1995 est.)

History of Saudi Arabia

ABD AL AZIZ ibn Abd ar Rahman Al Saud rose to prominence in the Arabian Peninsula in the early twentieth century. He belonged to the Saud family (the Al Saud), who had controlled most of Arabia during the nineteenth century. By the time of Abd al Aziz, however, the rival Al Rashid family forced the Al Saud into exile in Kuwait. Thus, it was from Kuwait that Abd al Aziz began the campaign to restore his family to political power. First, he recaptured Najd, a mostly desert region in the approximate center of the peninsula and the traditional homeland of the Al Saud. During the mid-1920s, Abd al Aziz’s armies had captured the Islamic shrine cities of Mecca and Medina. In 1932, he declared that the area under his control would be known as the Kingdom of Saudi Arabia.

At first Abd al Aziz’s realm was a very poor one. It was a desert kingdom with few known natural resources and a largely uneducated population. There were few cities and virtually no industry. Although the shrines at Mecca and Medina earned income from the Muslim pilgrims who visited them every year, this revenue was insufficient to lift the rest of the kingdom out of its near subsistence level.

All this changed, however, when United States geologists discovered oil in the kingdom during the 1930s. Saudi Arabia’s exploitation of its oil resources transformed the country into a nation synonymous with great wealth. Wealth brought with it enormous material and social change–so much change that Saudi Arabia became an exaggerated paradigm of possibilities for development in the Third World. The transformation was staggering: in a few years the Saudis had gone from herding camels to moving billions of dollars around the world with electronic transfers.

Perhaps because of the great upheaval of the last half century, history and origins were very important to Saudi Arabia. Although the country owed its prominence to modern economic realities, Saudis tended to view life in more traditional terms. The state in 1992 remained organized largely along tribal lines. The Muslim religion continued to be a vital element in Saudi statecraft. Moreover, many Muslims considered the form of Islam practiced most widely in Saudi Arabia, Wahhabi Islam, to be reactionary because it sought its inspiration from the past.

The tendency to draw inspiration from the past was an essential part of the Saudi state. The historical parallels between the Kingdom of Saudi Arabia and its Arab and Islamic past were striking. In conquering Arabia, for instance, Abd al Aziz brought together the region’s nomadic tribes in much the same way that his great-grandfather, Muhammad ibn Saud, had done a century earlier.

SAUDI ARABIA OBSERVED in 1992 the sixtieth anniversary of its existence as a state and the tenth anniversary of King Fahd ibn Abd al Aziz Al Saud’s accession to the throne. Rather than adopting the title of king, Fahd was styled in Arabic Khadim al Haramayn, or “custodian of the two holy mosques,” thereby stressing the Islamic aspect of his governance. In this regard, he echoed the partnership between the religious and political elements of society established in 1744 by Muhammad ibn Saud, the amir in Ad Diriyah near Riyadh, and Muhammad ibn Abd al Wahhab, the shaykh who had come to the area to promote the doctrine of the oneness of God in true Islam. As a result of this cooperation and based on the strict Hanbali interpretation of Islamic law, political rule was the province of the House of Saud (Al Saud), whose leader was also given the title of imam, and religious authority was in the hands of the Al ash Shaykh (the family of the shaykh, Muhammad ibn Abd al Wahhab). This arrangement, however, did not give unchecked political power to the ruler because in accordance with the precepts of Abd al Wahhab, based on the political theory of Taqi ad Din ibn Taimiya, secular authority must conform to divine law and produce civil order in order to be legitimate.

Historically, the collaboration of the Al Saud and the Al ash Shaykh resulted in the Al Saud dominion in Najd, the central region of the Arabian Peninsula, for more than two centuries, except for the brief period from 1891 to 1902 when the Al Rashid exiled the Al Saud to Kuwait. Because it has never been subjected to foreign rule and the consequent dissolution of its homogeneity, Najd has exerted an unusually strong influence on the jurisdiction of the Al Saud. In addition, because the region lacked large cities and the strong leadership they could provide, an interdependent relationship developed among Najdi towns, which paid tribute, and tribes, which provided protection. Traditionally, Najdi political power lay with the tribal shaykhs, who, when they became amirs, or governors of a wider area, endeavored to dissociate themselves from their tribal roles because they were ruling a more diverse population.

The prominence of the Al Saud is reflected in the name Saudi Arabia; the country is the only one to be named for the ruling family. The present kingdom of Saudi Arabia derives its existence from the campaigns of its founder, Abd al Aziz ibn Abd ar Rahman Al Saud, who initially captured Riyadh with his beduin followers in 1902. Thereafter, with the aid of the Ikhwan, or brotherhood, a fervent group of Wahhabi beduin warriors, he retook the rest of Najd, defeating the Al Rashid forces at Hail in the north in 1921, and in 1924 conquering the Hijaz, including Mecca and Medina. Chosen as king of the Hijaz and Najd in 1927, Abd al Aziz was obliged to defeat the Ikhwan militarily in 1929 because in their zeal the Ikhwan had encroached on the borders of neighboring states, thereby arousing the concern of Britain, in particular. In 1932 Abd al Aziz proclaimed the Kingdom of Saudi Arabia, which covered an area approximating to the territory of the present state. The discovery of oil in 1938 ultimately transformed the kingdom and the lives of its inhabitants. During his reign, however, Abd al Aziz sought to obtain “the iron of the West without its ideas,” as the king phrased it; he sought to make use of Western technology but at the same time to maintain the traditional institutions associated with Islamic and Arab life.

Upon Abd al Aziz’s death in 1953, his son Saud ibn Abd al Aziz Al Saud succeeded to the throne. Saud proved to be an ineffective ruler and a spendthrift, whose luxurious life-style, together with that of the advisers with whom he surrounded himself, rapidly led to the depletion of the kingdom’s treasury. As a result, the Al Saud obliged Saud in 1958, and again in 1962, to give his brother, Crown Prince Faisal ibn Abd al Aziz Al Saud, executive power to conduct foreign and domestic affairs. In 1964 the royal family, with the consent of the ulama, or religious leaders, deposed Saud and made Faisal king, appointing Khalid ibn Abd al Aziz Al Saud, another brother, as crown prince.

Faisal, a devout Muslim, sought to modernize the kingdom, especially in regard to economic development, education, and defense, while simultaneously playing a key role in foreign policy. For instance, during the October 1973 War between Israel and the Arab states of Syria, Jordan, and Egypt, Faisal helped to initiate an oil embargo against those countries that supported Israel; the embargo led to the tripling of oil prices. He supported the education of girls and the opening of government television stations to promote education. Tragically, Faisal was assassinated in 1975 by a deranged nephew.

Crown Prince Khalid ibn Abd al Aziz became king (and de facto prime minister) immediately; his brother, Fahd ibn Abd al Aziz Al Saud, served as deputy prime minister and another brother, Abd Allah ibn Abd al Aziz Al Saud, as second deputy prime minister. Khalid dealt primarily with domestic affairs, stressing agricultural development. He also visited all the gulf states, and took a keen interest in settling Saudi Arabia’s outstanding boundary disputes, including that of the Al Buraymi Oasis with the United Arab Emirates (UAE) in 1975. (The area near Al Buraymi disputed with Oman had been resolved in 1971.) Fahd became the principal spokesman on foreign affairs and oil policy. Khalid’s reign was an eventful one; it saw the attempt by strict Islamists (also known as fundamentalists) who criticized the corrupting influence of Western culture on the royal family to take over the Grand Mosque in Mecca in 1979, riots by Eastern Province Shia also in 1979 and 1980, and the formation of the Gulf Cooperation Council (GCC) in 1981.

Upon Khalid’s death in 1982, Fahd assumed the throne, with Abd Allah becoming crown prince. Fahd soon faced the impact on the kingdom of the fall in oil revenues, which ended in the 1986 oil price crash. Recognizing the need for a more united Arab front, particularly in view of the deteriorating economic situation, he reestablished diplomatic relations with Egypt in 1987; relations had been broken in 1978 as a result of Anwar as Sadat’s signing of the Camp David Accords creating a separate peace between Egypt and Israel. Fahd also played a mediating role in the Lebanese civil war in 1989, bringing most of the members of the Lebanese National Assembly to At Taif to settle their differences.

To understand the forces that have shaped Saudi Arabia in the early 1990s, one must consider the roles of geographic factors, tribal allegiance and beduin life, Islam, the Al Saud, and the discovery of oil. Tribal affiliation has been the focus of identity in the Arabian Peninsula, approximately 80 percent of which is occupied by Saudi Arabia. Well into the present century, several great deserts, including the Rub al Khali, one of the largest in the world, cut tribal groups off from one another and isolated Najd, particularly, from other areas of the country. As a result, a high degree of cultural homogeneity developed among the inhabitants; the majority follow Sunni Wahhabi Islam and a patriarchal family system. Only about 5 percent of the Saudi population adheres to the Shia sect. The Shia, in general, represent the lowest socioeconomic group in the country, and their grievances over their status have led to protest demonstrations in the 1970s and again in 1979-80, that have resulted in government actions designed to better their lot.

Saudi tribal allegiance and the beduin heritage have been weakened, however, since the mid-twentieth century by the increased role of a centralized state, by the growth of urbanization, and by the industrialization that has accompanied the finding of oil. At the same time, the impact of Islam on different elements of the population has varied. Many of the educated younger technocrats have felt a need to adapt Islamic institutions to fit the demands of modern technology. Other young people, more conservatively inclined, as well as a number of their elders and those with a more traditional beduin life-style, have deplored the alienation from Muslim values and the corruption that they believe Western ways and the presence, according to 1992 census figures, of some 4.6 million foreigners (in contrast to an indigenous population of 12.3 million) have brought into the kingdom. Their activist Islamism was reflected in the 1979 attempt by extremists to take over the Grand Mosque in Mecca and by other aspects of the Islamic revival, such as the prominent wearing of the hijab, or long black cloak and veil by women, and the more active role of the Committees for the Propagation of Virtue and Prevention of Vice (mutawwiin) in enforcing standards of public morality. The government found itself caught between these two trends. On the one hand, it feared the extremism of some of the traditionalists, which could well undermine the economic, education, and social development programs that the government had been implementing and which also constituted a threat to internal security. On the other hand, as guardian of the holy places of Islam, the sites of the annual pilgrimage for Muslims the world over, the government needed to legitimate itself as an “Islamic government.”

The government therefore has sought to achieve political and social compromises. Repeated announcements have been made regarding the royal family’s intention to create a consultative council, first proposed by King Faisal in 1964, as a means of giving a greater voice to the people. On August 20, 1993, Fahd announced the appointment of sixty men to the Consultative Council. Members of the council were primarily religious and tribal leaders; government officials, businessmen, and retired military and police officers were also included. An additional small step was King Fahd’s decree of March 1992 establishing a main, or basic, code of laws that regularizes succession to the throne (the king chooses the heir apparent from among the sons and grandsons of Abd al Aziz) and sets forth various administrative procedures concerning the state. Fahd also issued a decree concerning the provinces, or regions, of the kingdom. Each region is to have an amir, a deputy, and a consultative council composed of at least ten persons appointed by the amir for a four-year term. The code does not, however, protect individual rights in the Western sense, as many professionals and technocrats had desired. Rather, it says that “the state protects human rights in accordance with the Islamic sharia.”

The Saudi concept of legitimacy is akin to the beduin concept of tribal democracy in which the individual exchanges views with the tribal shaykh. Saudi rulers and most traditionalists reject Western participatory democracy, because the latter establishes the people as the source of decision rather than the will of God as found in the sharia and as interpreted by the ulama. Moreover, in their view, democracy lacks the stability that a Muslim form of government provides. For these reasons, the government has tended to repress dissent and jail dissidents. Such repression applied to students and religious figures who belonged to such organizations as the Organization of Islamic Revolution in the Arabian Peninsula, active in January and February 1992 in criticizing the ruling family and the government.

Socially, the education of girls, although placed under the supervision of the religious authorities, has led over the four decades that girls’ schools have existed to a considerable number of women graduates who were seeking employment in various sectors and who increasingly were making their presence felt. This trend occurred at a time of rising unemployment for Saudi males, particularly for graduates in the field of religious studies, and posed a further potential source of dissidence. In addition, growing urbanization was tending to increase the number of nuclear as opposed to extended families, thereby breaking down traditional social structures. There were also indications that drug smuggling and drug use were rising; twenty of the forty executions that occurred between January 1 and May 1, 1993, were drug related.

The Al Saud played the central role in achieving the needed compromises in the political, social, and foreign affairs fields, as well as in directing the economy with the support of the technocrats and the merchants. The control exercised by the Al Saud is demonstrated by the fact that as of 1993 the amirs, or governors, of all fourteen of Saudi Arabia’s regions were members of the royal family. Some members of the family, such as King Fahd and his full brothers Sultan, Nayif, and Salman, were considered to be, however, more aligned with the modernizers; King Fahd’s half brother Crown Prince Abd Allah, was more of a traditionalist. Specifically, the crown prince enjoyed the support of the tribal elements and headed the Saudi Arabian National Guard, a paramilitary body composed largely of beduin soldiers that served as a counterbalance to the regular armed forces, which were headed by Minister of Defense and Aviation Amir Sultan ibn Abd al Aziz Al Saud. The nation’s police force reported to Minister of Interior Amir Nayif ibn Abd al Aziz Al Saud.

The crown prince was also considered closer than the king to the religious establishment, or the ulama. Thirty to forty of the most influential ulama, mainly members of the Al ash Shaykh, constituted the Council of Senior Ulama, seven of whose members were dismissed by the king in December 1992 on the pretext of “poor health.” The actual reason for their dismissal was their failure to condemn July criticisms (published in September) of the government by a group of religious scholars who called themselves the Committee for the Defense of Rights under the Sharia. The king named ten younger and more progressive ulama to replace them.

In a further move, in July 1993 the king named Shaykh Abd al Aziz ibn Baz general mufti of the kingdom with the rank of minister and president of the Administration of Scientific Research and Fatwa. Abd al Aziz ibn Baz was also appointed to preside over the new eighteen-member Higher Ulama Council. Based on Abd al Aziz ibn Baz’s advice, instead of the Ministry of Pilgrimage Affairs and Religious Trusts, the king created two new ministries: the Ministry of Islamic Affairs, Endowments, Call, and Guidance and the Ministry of Pilgrimage; this action gave the religious sector an additional voice in the Council of Ministers.

In addition to holding conservative domestic views, the crown prince was more oriented than Fahd toward the Arab world. After the Iraqi invasion of Kuwait in 1990, however, he joined the king and other more pro-Western members of the royal family in asking the United States to send forces to the kingdom.

In the foreign policy arena, Saudi Arabia historically has sought to walk a narrow line between East and West. Because of its strong commitment to Islam, the kingdom abhorred the atheist policy of the former Soviet Union and therefore tended to be somewhat pro-Western concerning defense matters. However, Saudi Arabia also strongly opposed what it considered to be the pro- Zionist policy of the United States with regard to Israel and the rights of the Palestinians. At one time, the kingdom had relatively close relations with Jordan, a fellow monarchy, but Jordan’s failure to support Saudi Arabia in the 1991 Persian Gulf War soured those relations and resulted in the expulsion from the kingdom of thousands of Palestinians and Jordanians. In the war, Saudi Arabia also experienced a lack of support by Sudan and Yemen, both of which countries it had aided substantially. In 1993 relations with Yemen were somewhat tense because the kingdom expelled about 1 million Yemenis, as well, during the Persian Gulf War. In addition, as of late 1992, Saudi Arabia had revived a dispute with Yemen over an oil-rich border area.

Initially, Saudi Arabia saw both Iran and Iraq as neighbors posing potential threats. After the Persian Gulf War, however, Saudi Arabia’s concern over containing Iraq increased, and the kingdom set aside some of its reservations about Iran’s form of Shia Islam and began to normalize relations. Despite some border disagreements with its Persian Gulf neighbors, for example, Qatar in 1992 and early 1993, the kingdom’s concern for regional security caused its closest relations to be with other members of the GCC; certain tensions existed in the organization, nevertheless, because of Saudi Arabia’s position as the “big brother.”

Saudi Arabia had taken the lead in 1970 in establishing the Organization of the Islamic Conference to bring together all Muslim countries. In addition, the kingdom followed a policy of supporting Islamic countries in Africa and Asia and providing military aid to Muslim groups opposing secular governments in Afghanistan, Ethiopia, and, formerly, in the People’s Democratic Republic of Yemen (now part of Yemen).

Saudi Arabia’s concern for regional security and its active role in supporting the GCC were understandable in view of its relatively small population and the resultant constraint on the size of its armed forces. To compensate for these limitations, the kingdom consistently has endeavored to buy the most up-to- date military matériel and especially to concentrate on developing its air force and air defense system. For more than twenty-five years, Saudi Arabia has had the highest ratio of military expenditures in relation to military personnel of any developing country. Following the Persian Gulf War, the kingdom increased its 1993 defense expenditures 14 percent over those of 1992. Defense purchases included at least 315 United States M1A2 main battle tanks to upgrade matériel of the ground forces as well as seventy-two United States F-15C Eagles and forty-eight British Tornadoes for the air force. Furthermore, the Saudi navy was considered of good quality in relation to naval forces of the region, and the navy’s facilities were excellent. In spite of these policies, Saudi Arabia recognized its vulnerability because it has the world’s largest oil reserves and extensive oil- processing facilities.

The discovery of oil in commercial quantities in 1938 was the major catalyst that transformed various aspects of the kingdom. The huge revenues from the sale of oil and the payments received from foreign companies involved in developing concessions in the country enabled the government to launch large-scale development programs by the early 1970s. Such programs initially focused on creation of infrastructure in the areas of transportation, telecommunications, electric power, and water. The programs also addressed the fields of education, health, and social welfare; the expansion and equipping of the armed forces; and the creation of petroleum-based industries. From this beginning, the government expanded its programs to drill more deep wells to tap underground aquifers and to construct desalination plants. These water sources, in turn, enabled ventures to make the country more nearly self-sufficient agriculturally; in many instances, however, such undertakings seriously depleted groundwater.

In pursuit of industrial diversification, the government created the industrial cities of Al Jubayl in the Eastern Province and Yanbu al Bahr (known as Yanbu) on the Red Sea. The government also encouraged the establishment of nonoil-related industries, anticipating the day when Saudi Arabia’s oil and gas resources would be depleted. Furthermore, the kingdom also has some promising copper, lead, zinc, silver, and gold deposits that have received little exploitation.

The kingdom’s economic plans, including the Fifth Development Plan (1990-95), continued to emphasize training the indigenous labor force to handle technologically advanced processes and hence to enable Saudi Arabia to reduce the number of its foreign workers. The fifth plan also encouraged the creation of joint industrial enterprises with GCC member states and other Arab and Islamic countries and the development of industrial relations with foreign countries in order to attract foreign capital and transfer technology.

Saudi Arabia’s economic goals were reflected in the national budget announced for 1993, which set expenditures at US$52.6 billion and revenues at US$45.1 billion, thereby reducing the deficit from US$8.0 billion in 1992 to US$7.5 billion in 1993. The continued existence of a deficit, which has characterized the Saudi economy since 1983, was a source of concern to some observers. Major budgetary expenditure items were US$9.1 billion for education (including funds to establish six new colleges and 800 new schools), US$8.2 billion for public organizations (not further identified), and more than US$3.7 billion for health and social development (including funds for setting up 500 new clinics). Another major expenditure announced in March 1993 was that substantial funds, most of which would be obtained from private borrowing, would be invested in oil facilities in order to raise the kingdom’s oil production capacity to between 10.5 and 11 million barrels per day by 1995 and its total refining capacity to 210,000 barrels per day.

The major event affecting Saudi Arabia and other gulf states in the early 1990s was clearly the Persian Gulf War. The effect of that war on the kingdom has yet to be assessed. Financially, the cost of the war for the area as a whole has been estimated by the Arab Monetary Fund at US$676 billion for 1990 and 1991. This figure does not, however, take account of such factors as the ecological impact of the war, the loss of jobs and income for thousands of foreign workers employed in Saudi Arabia and elsewhere in the gulf, and the slowdown effect on the growth of the economies of Saudi Arabia and the gulf states. In most instances, these economies had been growing at a good rate before the war, which tended to deplete or eliminate any accumulated financial reserves.

More difficult to measure, however, was the social impact of the war. Many foreign observers had speculated that the arrival in the kingdom of more than 600,000 foreign military personnel, including women in uniform, would bring about significant changes in Saudi society. However, military personnel tended to be assigned to remote border areas of the country and were little seen by the population as a whole. The net effect of their presence was therefore minimal in the opinion of a number of knowledgeable Saudis.

As Saudi Arabia entered the final years of the twentieth century, there were signs, however, that the expression of public dissent, once unthinkable, was becoming more commonplace. Such dissent was usually couched within an Islamic framework, but nonetheless it represented a force with which the Al Saud had to reckon. King Fahd, now seventy-two, had succeeded thus far in balancing the demands of modernists and traditionalists domestically and in pursuing a policy of moderation internationally. Some observers wondered, however, how much longer Fahd would be able to rule and how adaptable the more conservative Crown Prince Abd Allah would be as Fahd’s successor.

Saudi Arabia Economy

Economy – overview: This is an oil-based economy with strong government controls over major economic activities. Saudi Arabia has the largest reserves of petroleum in the world (26% of the proved reserves), ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 75% of budget revenues, 40% of GDP, and 90% of export earnings. About 35% of GDP comes from the private sector. Roughly 5 million foreign workers play an important role in the Saudi economy, for example, in the oil and service sectors. Saudi Arabia was a key player in the successful efforts of OPEC and other oil producing countries to raise the price of oil in 1999-2000 to its highest level since the Gulf war by reducing production. Riyadh expects to have a moderate budget deficit in 2001, in part because of increased spending for education and other social programs. The government in 1999 announced plans to begin privatizing the electricity companies, which follows the ongoing privatization of the telecommunications company. The government is expected to continue calling for private sector growth to lessen the kingdom’s dependence on oil and increase employment opportunities for the swelling Saudi population. Shortages of water and rapid population growth will constrain government efforts to increase self-sufficiency in agricultural products.

GDP: purchasing power parity – $232 billion (2000 est.)
GDP – real growth rate: 4% (2000 est.)
GDP – per capita: purchasing power parity – $10,500 (2000 est.)
GDP – composition by sector:
agriculture: 6%
industry: 47%
services: 47% (1998 est.)
Inflation rate (consumer prices): 0.5% (2000)
Labor force: 7 million
note: 35% of the population in the 15-64 age group is non-national (July 1998 est.)
Labor force – by occupation: agriculture 12%, industry 25%, services 63% (1999 est.)
revenues:  $66 billion
expenditures:  $66 billion (2000 est.) 
Industries: crude oil production, petroleum refining, basic petrochemicals, cement, construction, fertilizer, plastics
Industrial production growth rate: 1% (1997 est.)
Electricity – production: 120 billion kWh (1999)
Electricity – production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1999)
Electricity – consumption: 111.6 billion kWh (1999)
Agriculture – products: wheat, barley, tomatoes, melons, dates, citrus; mutton, chickens, eggs, milk
Exports: $81.2 billion (f.o.b., 2000)
Exports – commodities: petroleum and petroleum products 90%
Exports – partners: Japan 18%, US 18%, France 4%, South Korea, Singapore, India (1999)
Imports: $30.1 billion (f.o.b., 2000)
Imports – commodities: machinery and equipment, foodstuffs, chemicals, motor vehicles, textiles
Imports – partners: US 25%, Japan 10%, Germany 7%, Italy 5%, France, UK (1999)
Debt – external: $26.3 billion (2000 est.)
Economic aid – donor: pledged $100 million in 1993 to fund reconstruction of Lebanon; since 1993, Saudi Arabia has committed $208 million for assistance to the Palestinians
Currency: 1 Saudi riyal (SAR) = 100 halalah

Map of Saudi Arabia