Discussion On Oil-resources-driven Economic Modernization In Saudi Arabia (1932—1990)

The Al Saud Family was the nucleus of the kingdom of Saudi Arabia, which went through many military tribe wars to build a modern state in the spirit of Islam. At the outset of the modern state, its main economic activity outside Hejaz (where the holy cities are located) was dominated by pastoral nomadism and primitive agriculture. The state was poverty-stricken and under-developed. The first king of Saudi Arabia, Abu al-aziz, was not only a outstanding military head but also a enlightened and smart politician. After the unification, He immediately steered his country on the way of modernization. In the process of developing economy, Saudi Arabia confronted many difficulties because of bad natural conditions and weak economic base. In 1938, Standard Oil of California announced the discovery of oil in commercial quantities on its concession, which brought Standard Oil of California a huge business opportunity and gave Saudi Arabian Gospels.After the end of World War II, the output of oil increased quickly. But most of oil revenues were possessed by the American oil company; Saudi Arabia only had broken victuals. At that time, a few oil countries started to reclaim their oil resources rights, under their influence, Saudi Arabia struggled to nationalize its oil resources. With its effort, Saudi Arabia got more oil rights and interests, its oil revenues increased little by little, at the same time; it quickened its pace on the way to economic modernization. The ruler realized that the economic modernization of the state had better depend on oil resources because the exploitation of oil resources could drive the whole economy, the pattern of oil-resources-driven economic modernization brought into being. The main characteristic of the pattern was to depend on the oil resources, to make full use of oil revenues to develop the whole economy, to lay emphasis on developing oil downstream industry, which could drive the other industry, to make progress in economic diversification step by step.This dissertation centred on the role of oil resources in Saudi Arabia's economic modernization, regarded the development of economic modernization as the main thread, studied the achievement of economic modernization, its characteristics, unsolved problems etc..The whole dissertation is divided into three parts. The preface elaborates Saudi Arabia's natural conditions, the progression of economic development, oil and gas reserves. This part also introduces the importance of studying the pattern of oil-resources-driven economic modernization and the research at present on this problem.