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Volume 33, Number 6November/December 1982

In This Issue

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The Introduction

On its 50th anniversary as a united country, the Kingdom of Saudi Arabia stands poised for the final phases of what must be one of the most ambitious national development programs ever undertaken.

Inconceivable 50 years ago - when 'Abd al-'Aziz ibn Sa'ud finally united the nomadic peoples and townsmen of the Arabian Peninsula into the kingdom called Saudi Arabia - this program has already laced the peninsula with highways and pipelines, sprinkled the country with airports and harbors, and reshaped its horizons with power plants and pylons - the foundations for industrialization.

Behind this growth, of course, was the world's soaring demand for oil and increased oil prices that swiftly boosted Saudi Arabia's earnings from $2.7 billion in 1972 to $27.8 billion in 1974, enabling the kingdom to embark on an extraordinary program of progress that, in effect, will cram a century of development into a decade.

"In Europe," says Muhammad Sa'id Farsi, the mayor of Jiddah, the country's largest port, "contemporary economic and social systems evolved gradually over more than a century. In Saudi Arabia, this was accomplished in a fraction of a century."

For the mayor of Jiddah, this is not rhetoric since his city is a microcosm of the dramatic change that has taken place in the kingdom in recent years. A medieval, walled town as recently as the 1940s, with 50,000 inhabitants crowded into a maze of narrow, twisting streets, Jiddah today is a modern metropolis with wide boulevards, high rise apartments and plazas decorated with abstract sculpture; with a population of more than a million, one of the most sophisticated harbors anywhere, the world's largest airport, and, underway, what will be the tallest building in the Middle East: the 44-story National Commercial Bank.

For the kingdom as a whole, the Saudi government's aim has been equally dramatic: the transformation of what was once a predominantly pastoral society into a modern state with a diversified industrial economy in which the export of crude oil will not be the sole source of great wealth.

The kingdom, of course, could not even begin to do this until it first provided the social and physical infrastructure on which industrial societies are founded; the first phase of the government's development plan, therefore, was devoted to laying the, foundations.

Some progress had been made during the kingdom's first Five Year Development Plan (1970-1975), when several projects, such as the King Faisal Specialist Hospital (KFSH) in Riyadh, were completed(Aramco World, July-August, 1979) and others, like Jiddah's new jetport (Aramco World, July-August, 1981) and the Jizan Dam (Aramco World, May-June, 1978; March-April, 1974) were begun. But it was not until the kingdom's second-plan period -1975-1980 - that Saudi Arabia's programs began to reach today's size and pace.

Because these programs have broken so many records, and established new dimensions, early press coverage leaned heavily on superlatives to tell the story -the biggest in the world, first in the Middle East, etc. But now even at a distance of some years, the construction still comes across as, quite simply, massive. Saudi projects, for instance, needed - and got - the largest number of planners, technicians and workmen ever assembled in a developing country, and millions of tons of materials, equipment and supplies almost literally poured into Saudi Arabia from all over the world. Simultaneously, battalions of earthmovers dug, scraped, moved and smoothed acres of land, building cranes bristled across the skyline, and the clamor of construction echoed from coast to coast.

Though it sounds like a cliche, new factory buildings actually did "sprout from the desert" in a few months' time, cities and towns did spread dramatically in a few weeks, and new neighborhoods did spring up virtually overnight. To visitors the growth was tangible, visible and measurable: 344 billion riyals worth of development ($100 billion), including four ports, 28 dams, 24,000 kilometers of roadway (14,913 miles), more than 175,000 new homes, the world's first nationwide computer-controlled telephone network - and an airport as big as Manhattan Island. Today, as a result, thousands of miles of modern transportation routes - air, road and rail - link the far-flung provinces of Saudi Arabia and in the main population centers the physical foundations for industrial development have been laid, along with efficient public utilities.

In addition, the industrial base of the kingdom is being rapidly expanded by encouraging the private sector to set up industries through numerous incentives, including exemption from customs duties on imported machinery and raw materials, nominal rents for industrial sites and interest-free loans. Foreign capital and technical know-how, also needed for the kingdom's development, are encouraged by the same incentives enjoyed by local investors plus tempting tax advantages.

The response has been good. Over the period of the second plan, the private sector achieved an 18 per cent growth rate - 4.6 per cent above target, and already many items, such as fertilizers and cement - previously imported - are being manufactured locally.

Development, in fact, is moving so fast that even the planners themselves sometimes have difficulty keeping up with it. "We are running," says Omar Abdullah Khadi, deputy minister for Town Planning Affairs, "to provide facilities."

The need for urgency is real. For although Saudi Arabia possesses the world's largest known reserves of crude oil - about 170 billion barrels - this supply is limited and irreplaceable and national planners are acutely aware that one day it will run low.

Recognizing this, the Saudi government has adopted a strategy aimed at husbanding its resources while maximizing its earnings from them, by building hydrocarbon-based industries in the kingdom and exporting finished products too.

In 1982, it completed construction of the key elements in a massive new system to collect and process gas: the Master Gas System under which most of the once-burned gas will henceforth be used as fuel and raw material for the new industries. Saudi Arabia is presently building two new industrial cities that by the mid-1980's could be refining nearly three quarters of a million barrels of oil a day and manufacturing 3.2 million tons of petrochemicals a year. It is also developing other hydrocarbon-based and energy-intensive industries, such as methanol and steel plants, that will help Saudi Arabia attain self-sufficiency and continued self-generated growth.

It is a staggering task. But the foundations are largely in place - the Master Gas System, for example, is already operational - and the beginning of an industrial society is already being built upon them - a fitting milestone to mark the country's 50th year.

This article appeared on pages 4-5 of the November/December 1982 print edition of Saudi Aramco World.


Check the Public Affairs Digital Image Archive for November/December 1982 images.