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Saudi Arabia
Economic Policy Making
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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