Saudi Arabia: Enigmas of a Rentier Economy
Although petroleum revenue has been pouring into the desert kingdom of Saudi Arabia for almost forty years, the country remains underdeveloped. Few linkages exist between the modern oil sector and the rest of the economy, which is based largely on subsistence farming and nomadic animal husbandry. Dualistic economies are admittedly characteristic of most of the developing countries of the Third World, but the absence of economic integration merits explanation in a country which has long had the financial means to pursue a more balanced policy. The ease with which Saudi Arabia has obtained its income may paradoxically explain its lack of development, since most of this income has been of a rentier nature, accruing from the possession of one scarce resource—petroleum. Today the country presents an almost perfect example of a rentier economy, a state with high consumption but little production, large incomes but no necessity to work for these earnings.
KeywordsSaudi Arabia Middle East Foreign Asset Trade Surplus Demand Deposit
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- 1.The most comprehensive account of the Saudi Arabian economy to date is Ramon Knaverhase, The Saudi Arabian Economy (New York: Praeger, 1975).Google Scholar
- 3.For information on oil pricing see Raki Rifai, The Pricing of Crude Oil (New York: Praeger, 1974).Google Scholar
- 4.A highly critical account of recent developments in Saudi Arabia is presented by Fred Halliday, Arabia Without Sultans (Harmondsworth: Penguin, 1974).Google Scholar
- 8.Rodney Wilson, ‘Big Importer’, Financial Times Survey of Saudi Arabia (12 January 1975) p. 20 For details of recent construction work see Saudi Arabian Monetary Agency, Annual Reports, issued in Riyadh. Information on foreign companies operating in Saudi Arabia is given by Anthony Purdy (ed.), The Businessmans Guide to Saudi Arabia (Arlington, 1976) p. 77 ff.Google Scholar
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