The Kingdom of Saudi Arabia (Arabic: المملكة العربية السعودية, al-Mamlaka al-ʻArabiyya as-Saʻūdiyya) is the largest country on the Arabian Peninsula.

The Kingdom is sometimes called "The Land of The Two Holy Mosques" in reference to Mecca and Medina, considered by Islam's to be the world's two holiest cities.

Saudi Arabia is the world's leading petroleum producer and exporter, and petroleum exports fuel the Saudi economy. Oil accounts for more than 90 percent of exports and nearly 75 percent of government revenues, facilitating the creation of a welfare state, which the government has found difficult to fund during periods of low oil prices.

The Saudi government requires all citizens to be Muslim, and most of the population adheres to a fundamentalist theological interpretation within Islam most commonly known as Wahhabism. Vast oil revenues gave an immense impetus to the spread of this austere variety of Islamic theology around the world.


Map of Saudi Arabia

Referred to as “Saudi Arabia” by many English-speaking expatriates, citizens use the Arabic short form of as-Saʻūdiyya (السعودية), but often just refer to the nation as al-Mamlaka (the Kingdom).

Saudi Arabia is bounded by seven countries and three bodies of water. It is bordered by Jordan on the northwest, Iraq on the north and northeast, Kuwait, Qatar, and the United Arab Emirates on the east, Oman on the southeast, and Yemen on the south, with the Persian Gulf to its northeast and the Red Sea and Gulf of Aqaba to its west. Bahrain is an island off the east coast.

The kingdom occupies about 80 percent of the Arabian Peninsula. A significant length of the country's southern borders with the United Arab Emirates, Oman, and Yemen are not precisely defined or marked, so the exact size of the country remains unknown. The Saudi government's estimate is 829,996 square miles (2,149,690 square kilometers). The kingdom is commonly listed as the world's 14th largest nation, or slightly more than one-fifth the size of the United States.

Saudi Arabia's geography is varied. From the western coastal region (Tihamah), the land rises from sea level to a peninsula-long mountain range (Jabal al-Hejaz) beyond which lies the plateau of Nejd in the center. The southwestern 'Asir region has mountains as high as 9840 feet (3000 meters) and is known for having the greenest and freshest climate that attracts many Saudis to resorts such as Abha in the summer months. The east is primarily rocky or sandy lowland continuing to the shores of the Persian Gulf. The geographically hostile Rub' al Khali ("Empty Quarter") desert along the country's imprecisely defined southern borders contains almost no life.

The highest point is claimed to be Jabal Sawda at 10,278 feet (3133 meters), but this elevation is disputed by space shuttle radar data, which also questions the high-point location.

Desert view in middle/western Saudi Arabia.

Mostly uninhabited, much of the nation's landmass consists of desert and semi-arid regions, with a dwindling traditional Bedouin population. Desert vegetation is limited to weeds, xerophytic herbs and shrubs. Less than two percent of the kingdom is arable land.

Saudi Arabia has no permanent year-round rivers or lakes. Its coastline extends for 1640 miles (2640km) and, on the Red Sea side, offers world-class coral reefs, including those in the Gulf of Aqaba.

Native animals include the ibex, wildcats, baboons, wolves, and hyenas in the mountainous highlands. Small birds are found in the oases. The coastal area on the Red Sea with its coral reefs has a rich marine life.

Extreme heat and aridity are characteristic of most of Saudi Arabia. Summer temperatures above 120°F (50°C) are common, while in winter frost or snow can fall in the interior and the higher mountains. The average winter temperature range is 47°F to 68°F in January in interior cities such as Riyadh (8°C to 20°C), and 66°F to 83°F (19°C to 29°C) in Jeddah on the Red Sea coast. The average summer range in July is 81°F to 109°F (27°C to 43°C) in Riyadh and 80°F to 100°F (27°C to 38°C) in Jeddah. Night-time temperatures in the mid desert can be famously chilly even in summer, as sand gives up daytime heat rapidly once the sun has set.

Annual precipitation is usually sparse (up to four inches or 100mm or in most regions) between January and May, although sudden downpours can lead to violent flash floods in wadis. Plants can still survive in Saudi Arabia, mostly in the south-east mountains and lowlands. They bloom mid-March through mid-May. The plants provide food for birds and insects. Rainfall is adequate for the nomadic herding of sheep, goats, and camels, but crop production depends on irrigation from underground aquifers.

Downtown Riyadh.

Natural hazards include frequent sand and dust storms. Environmental issues include coastal pollution from oil spills, desertification, and the depletion of underground water resources. The lack of perennial rivers or permanent water bodies has prompted the development of extensive seawater desalination plants.

Population centers are mainly located along the eastern and western coasts and densely populated interior oases such as Hofuf and Buraidah. In some extended areas, primarily the Rub' al-Khali and the Arabian Desert and East Sahero-Arabian xeric shrub lands, there is no population whatsoever, although the petroleum industry is constructing a few planned communities there.

Riyadh is the capital; Jeddah, is the second largest city, is the main Red Sea port, and is a pilgrimage gateway to Mecca; Dammam is the eastern province capital, and third largest metropolitan area; Mecca is the holiest city in Islam; Medina is the second holiest city; and Ta'if is a mountain resort above Mecca.


People of various cultures have lived in the peninsula over a span of more than 5000 years. The Dilmun culture, along the Persian Gulf coast (c. 3000 - 1600 B.C.E.), was contemporaneous with the Sumerians and ancient Egyptians, and the empires of the ancient world traded with peninsula states. Except for a few cities and oasis, the harsh climate prevented much settlement on the Arabian Peninsula.

The earliest known events in Arabian history are migrations from the peninsula into neighboring areas. About 3500 B.C.E., semitic-speaking peoples of Arabian origin migrated into the valley of the Tigris and Euphrates rivers in Mesopotamia and became the Assyro-Babylonians. Some archaeologists argue that another group of Semites left Arabia about 2500 B.C.E., during the Early Bronze Age, and settled along the Levant. Mixing with the local populations there, some of these migrants became the Amorites and Canaanites. Some archaeologists argue that the migration, instead, came from the northern Levant.

Significant between 3000 and 2500 B.C.E. was the domestication of the one-humped camel, or dromedary, in the southern part of the Arabian Peninsula. By 1000 B.C.E., such camels were important in the caravan trade. The camel saddle was invented between about 500 and 100 B.C.E.


Did you know?Saudi Arabia is sometimes called "The Land of The Two Holy Mosques" in reference to Mecca and Medina

Present day Saudi Arabia is the location of the birth of the Prophet Muhammad (c. 570 C.E.) in Mecca, and of the religion of Islam. Muslims believe that God (Allah) sent His final revelation "in clear Arabic," in the form of the holy Koran, through His Messenger, Muhammad. This occurred first in and around Mecca and then in Medina beginning in 622 C.E., which marks the first year of the Islamic era (1 A.H.). By the time Muhammad died (in Medina in 632 C.E.), almost all communities in Arabia had declared loyalty to him as a political leader and to Islam. Muslims view Muhammad not as the creator of a new religion, but as the restorer of the original, uncorrupted monotheistic faith of Adam, Abraham, Moses and Jesus. Islam's first caliph Abu Bakr completed the process of conversion. Arabian converts carried the religion throughout the Middle East and north Africa. The rise of Islam and the subsequent religious importance of the Arabian cities of Mecca and Medina (two of the holiest places in Islam), have given the rulers of this territory significant influence beyond the peninsula.

First Saudi State

First Saudi State

The first Saudi state was established in 1744, when leader Sheikh Mohammed ibn Abd al Wahhab settled in Diriyah and Prince Mohammed Ibn Saud agreed to support and espouse his cause. After studying in the Hijaz and Iraq, Sheikh Muhammad Al Abd al-Wahab (who died in 1792), returned to Najd and preached and wrote against practices that deviated from Islam. He urged his followers, who became known as muwahidun ("unitarians"), to end polytheistic practices and adhere strictly to the Koran and the Hadith (the sayings and doings of the Prophet). A new leadership structure placed Al Saud in the position of umara (princes, rulers) and Al Abd al-Wahab (also known as Al Sheikh) in the position of ulama (learned in religion).

The movement involved military struggle, preaching, the establishment of Koranic schools, the setting up of new communities, and the creation of a bureaucratic state that ruled in Najd. The House of Saud, with other allies, rose to become the dominant state in Arabia controlling most of the Nejd, but not either coast. This Saudi state lasted for about 75 years. Rulers of the first Saudi state were: Imam Mohammed Ibn Saud (1726 -1765), Imam Abdul Aziz Ibn Mohammed Ibn Saud (1765 - 1803), Imam Saud Ibn Abdul Aziz Ibn Mohammed Ibn Saud (1803 - 1814) and Imam Abdullah bin Saud (1814 - 1818).

Concerned at the growing power of the Saudis the Ottoman Sultan instructed Mohammed Ali Pasha to reconquer the area. Ali sent his sons Tusun Pasha and Ibrahim Pasha who were successful in routing the Saudi forces in 1818.

Second and third Saudi states

The House of Saud returned to power in the second Saudi state in 1824. The state lasted until 1891 when it succumbed to the Al Rashid dynasty of Ha'il. In 1902, Abdul Aziz Ibn Saud captured Riyadh, the Al-Saud dynasty's ancestral capital, from the rival Al-Rashid family. Continuing his conquests, Abdul Aziz subdued Al-Hasa, the rest of Nejd, and the Hejaz between 1913 and 1926. On January 8, 1926, Abdul Aziz Ibn Saud became the King of Hejaz. On January 29, 1927, he took the title King of Nejd (his previous Nejdi title was sultan). By the Treaty of Jeddah, signed on May 20, 1927, the United Kingdom recognized the independence of Abdul Aziz's realm (then known as the Kingdom of Hejaz and Nejd). In 1932, these regions were unified as the Kingdom of Saudi Arabia.

Oil discovered

The discovery of oil on March 3, 1938, transformed the country. Development programs, which were delayed due to the onset of the Second World War in 1939, began in earnest in 1946 and by 1949 production was in full swing. Oil has provided Saudi Arabia with economic prosperity and a great deal of leverage in the international community. Boundaries with Jordan, Iraq, and Kuwait were established by a series of treaties negotiated in the 1920s, with two neutral zones created, one with Iraq and the other with Kuwait.

Isolationist policy

The founder of modern Saudi Arabia, King Abdul Aziz, converses with President Franklin Delano Roosevelt on board a ship returning from the Yalta Conference in 1945.

Internationally Abdul Aziz initially chose to follow an isolationist policy. He refused to allow Saudi Arabia to join the League of Nations, and he chose to leave his kingdom on only three occasions from 1916 until his death in 1953. Eventually however Abdul Aziz acceded to the realities of world politics and in 1945 Saudi Arabia became a founding member of the Arab League and joined the United Nations.

Aware of the difficulties facing other regional absolute rulers reliant on extended family networks, Abdul Aziz took steps to provide that his eldest living son, Saud, would become king, but that he would be required to work closely with his more financially and diplomatically astute brother, Faisal.

Saud and Faisal

Saud ascended to the throne on his father's death in 1953, and reigned for 11 years. But by the early 1960s, the kingdom was in jeopardy due to Saud's economic mismanagement and his failure to deal with a regional challenge from Egyptian president Gamal Abdel Nasser. Because of fiscal difficulties, King Saud had been persuaded in 1958 to delegate direct conduct of Saudi Government affairs to his half-brother Faisal as prime minister. In October 1962, Faisal outlined a broad reform program, stressing economic development. In 1964 Saud was forced to abdicate in favor of Faisal, who continued to serve as prime minister. Subsequent kings followed this practice.

Neighboring wars

The mid-1960s saw external pressures generated by Saudi-Egyptian differences over Yemen. When civil war broke out in 1962 between Yemeni royalists and republicans, Egyptian forces entered Yemen to support the new republican government, while Saudi Arabia backed the royalists. Tensions subsided only after 1967, when Egypt withdrew its troops from Yemen.

In 1965, there was an exchange of territories between Saudi Arabia and Jordan in which Jordan gave up a relatively large area of inland desert in return for a small piece of sea-shore near Aqaba.

Saudi forces did not participate in the Six-Day (Arab-Israeli) War of June 1967, but the government later provided annual subsidies to Egypt, Jordan, and Syria to support their economies. During the Yom Kippur War in 1973, Saudi Arabia participated in the Arab oil boycott of the United States and the Netherlands. A member of the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia had joined other member countries in moderate oil price increases beginning in 1971. After the 1973 war, the price of oil rose substantially, dramatically increasing Saudi Arabia's wealth and political influence.

King Fahd period

In 1975, King Faisal was assassinated by a nephew, and was succeeded by his half-brother Khalid as king and prime minister. Their half-brother, Prince Fahd, was named crown prince and first deputy prime minister. King Khalid empowered Crown Prince Fahd to oversee many aspects of the government's affairs. Economic development continued rapidly under King Khalid, and the kingdom assumed a more influential role in regional politics and international economic and financial matters.

In June 1982, King Khalid died, and Fahd became king and prime minister in a smooth transition. Another half-brother, Prince Abdullah, Commander of the Saudi National Guard, was named crown prince and first deputy prime minister. King Fahd's brother, Prince Sultan, the minister of defense and aviation, became second deputy prime minister. Under King Fahd, the Saudi economy adjusted to sharply lower oil revenues resulting from declining global oil prices. Saudi Arabia supported neutral shipping in the Gulf during periods of the Iran-Iraq war and aided Iraq's war-strained economy. King Fahd played a key role in bringing about the August 1988 cease-fire between Iraq and Iran and in organizing and strengthening the Gulf Cooperation Council.

Gulf War

Herbert Norman Schwarzkopf, Jr. and President Bush Sr. visit U.S. troops in Saudi Arabia on Thanksgiving Day, 1990.

In August 1990, Saddam Hussein's forces invaded Kuwait. Iraqi troops began massing on the border of Kuwait and some feared that they were about to invade Saudi Arabia. King Fahd allowed American and coalition soldiers to be stationed in Saudi Arabia to counter the Iraqi threat. Many Muslims were angered by this move, because it allowed foreign armies to be stationed in their holiest land.

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. King Fahd's action also consolidated the coalition of forces against Iraq and helped define the tone of the operation as a multilateral effort to re-establish the sovereignty and territorial integrity of Kuwait. Acting as a rallying point and personal spokesman for the coalition, King Fahd helped bring together his nation's Gulf Cooperation Council allies, Western allies, and Arab allies, as well as non-aligned nations from Africa and the emerging democracies of eastern Europe. He used his influence as custodian of the two holy mosques to persuade other Arab and Islamic nations to join the coalition.

During the Gulf War, Iraq fired Scud missiles into Saudi Arabia and penetrated its northern border. These attacks were repelled, and Iraqi forces were expelled from Kuwait. American forces as well as some multinational contingents continued to occupy bases in the kingdom.


Building #131 after the Khobar Towers bombing, the second major terrorist attack against Western troops in Saudi Arabia, 1996

The stationing of Western troops on Saudi territory angered many Muslims, and led radicals to declare a religious war against the United States. One of these was Osama bin Laden, a wealthy Saudi expelled in 1991 after he voiced opposition to the monarchy, and a key ally of the United States in the early Soviet war in Afghanistan.

In November 1995, a Saudi National Guard base was bombed, killing seven people. In June 1996, a truck bomb killed 19 American servicemen in Al-Khobar. These bombings caused the monarchy to focus on militancy inside the kingdom, yet they denied there was much of a problem.

After the September 11, 2001 attacks on the New York City World Trade towers, it became known that 15 of the 19 suspected hijackers were Saudi, the kingdom became the focus of worldwide attention once again, as it was questioned whether the government was indeed cracking down on radicals. The Saudi government pledged their support to the “war on terror,” and vowed to try to eliminate militant elements.

However, in May 2003, an insurgency in Saudi Arabia began, believed to be conducted by al-Qaeda affiliates. This consisted mainly of attacks on foreigners in an attempt to expel them from the country and hurt the Saudi government. While the number of attacks dropped significantly in 2005, they exposed the vulnerability of the country.

Concern was also voiced over the large numbers of Saudis fighting American soldiers in Iraq following the 2003 invasion. It was suspected that these fighters, many of them young, had become radicalized in Saudi mosques and were traveling to Syria and then into Iraq.

King Fahd suffered a stroke in November 1995, and died in July 2005. He was succeeded by his brother Crown Prince Abdullah, who had handled most of the day-to-day operations of the government.

Government and politics

King Abdullah of Saudi Arabia.King Salman of Saudi Arabia.

Saudi Arabia has never been a colony of a foreign power or a province of the Ottoman Empire. The nation of Saudi Arabia evolved from tribal origins, with financial assistance from merchants, knowledge imparted by imams and teachers, and bureaucratic work done by jurists and bureaucrats.

The politics of Saudi Arabia take place in a framework of an absolute monarchy whereby the king of Saudi Arabia is not only head of state, but also the head of government. The Basic Law adopted in 1992 declared that Saudi Arabia is a monarchy ruled by the sons and grandsons of King Abd Al Aziz Al Saud, and that the Qur'an is the constitution of the country, which is governed on the basis of Islamic (Shari'a) law. The state's ideology is Wahhabism, which the Saudi government spreads around the world by funding the construction of mosques and Qur'an schools.

A council of ministers (cabinet) is appointed by the monarch every four years and includes the king and royal family members among its 20 ministers. There are no elections since the monarch is hereditary. Abdullah bin Abdulaziz Al Saud was king and prime minister from August 2005 until his death in January 2015. He was succeeded by King Salman, full brother of King Fahd who was king from 1982 to 2005, and half-brother to King Abdallah, after two Crown Princes (Prince Sultan and Prince Nayef) predeceased him. The king's powers are theoretically limited within the bounds of Shari'a and other Saudi traditions. He must retain a consensus of the Saudi royal family, religious leaders, and other important elements in Saudi society.

The royal family, which consists of more than 20,000 people and has several clans, has significant political influence. The family's vast numbers allow it to control most of the kingdom's important posts and to have an involvement and presence at all levels of government. The ulama, which consists of members of the royal family and several thousand religious scholars, judges, lawyers, seminary teachers, and imams, plays an important leadership role. Business and merchant families often exert political influence. There are no labor unions or syndicates for professional groups.

As the main executive organ, the Council of Ministers heads 20 ministries, the national guard, several provincial governors, the monetary agency, as well as the petroleum and mineral organization. The kingdom has a large civil service that employed about 400,000 people in the early 1990s. Saudi Arabia has 14 provinces, each governed by an emir, usually from the royal family, who reports to the minister of the interior.

The legislature comprises a consultative council or Majlis al-Shura of 150 members and a chairman appointed by the monarch for a four-year term. The consultative assembly has limited legislative rights. Legislation is by resolution of the Council of Ministers, ratified by royal decree, and must be compatible with the Shari'a. There are no recognized political parties or national elections, except the local elections, which were held in the year 2005.

Shari'a justice

Justice is administered according to the Shari'a by a system of religious courts whose judges are appointed by the king on the recommendation of the Supreme Judicial Council, composed of 12 senior jurists. The independence of the judiciary is protected by law. A court of cassation, or appeals court, also exists, and a final appeal may be made to the king. Access to high officials (usually at a majlis; a public audience) and the right to petition them directly are well-established traditions.

Saudi Arabia does not have much of a formal criminal code, and thus much of its law is derived from its ultra-conservative Wahhabism. Judges are free to impose capital punishment or corporal punishment, including amputations of hands and feet for certain crimes such as murder, robbery, rape, drug smuggling and for various forms of sexual behavior such as homosexuality and adultery. The courts may impose less severe punishments, such as floggings, for less serious crimes against public morality such as drunkenness.

A powerful deterrent is that deviant behavior brings shame to one's family and kin and is considered sinful. Any physical punishment is carried out in a public place, usually outside a main mosque on Friday. The criminal's name and ancestral names are called out loudly; the shame is more painful than the physical blow. Judges are generally given a tremendous amount of discretion in deciding how to punish a particular individual, and will make such decisions based on the particular school of Islam that they follow. For example:

  • Theft is punishable by the amputation of the right hand, unless the thief is poor and the stolen money is from public sources or a company. Saudi authorities are at pains to point out that this punishment is for repeat offenders only. (An anesthetic is used to deaden the pain.)
  • Drinking, selling, or buying alcohol and sniffing or injecting drugs is punished by a sentence of 80 lashes. Smuggling heroin or cocaine into the country is punished by death (beheading with a sword).
  • Fornication is normally punished with 40 lashes. During flogging, the face, head and vital organs of the person are protected.
  • Adultery can only be proven by the testimony of four reliable witnesses. Death by stoning is the punishment. (The convicted adulterer is drugged before stoning begins.)
  • Murder, accidental death and bodily harm are open to punishment from the victim's family. Retribution may be sought in kind or through blood money. The blood money payable for a woman's accidental death is half as much as that for a man.

The crime rate in Saudi Arabia is low compared to more industrialized countries. A comparison was for the year 2000 using Interpol data for Saudi Arabia, Japan (a country with a low crime rate) and the U.S. (a high crime rate) drawn for the seven offenses used to compute the U.S. Federal Bureau of Investigation's index of crime-murder, forcible rape, robbery, aggravated assault, burglary, larceny, and motor vehicle theft. The rate for all offenses combined was 157.12 for Saudi Arabia, compared with 1709.88 for Japan and 4123.97 for the U.S.

Human rights

Human Rights Watch, Amnesty International and the United Nations Human Rights Committee have issued reports critical of the Saudi legal system and its human rights record in various political, legal, and social areas. The Saudi government dismisses such reports as being outright lies or asserts that its actions are based on its adherence to Islamic law. In 2002, the United Nations Committee against Torture criticized Saudi Arabia over the amputations and floggings it carries out. The Saudi delegation responded, defending its legal traditions held since the inception of Islam in the region 1400 years ago and rejected "interference" in its legal system.

Opposition movements

There have been two serious attempts to overthrow the Saudi royal family. The first was on November 20, 1979, when heavily armed and provisioned Sunni Islamic fundamentalists, consisting of Saudis and Egyptians enrolled in Islamic studies at the Islamic University of Medina, took over and besieged Al-Masjid al-Haram in Mecca. The other was in the year 1980 by Shia Muslims in the eastern part of the country, a movement allegedly supported by the Iranian government.

The main opponents of the government in 2007 were the Movement for Islamic Reform in Arabia and al-Qaeda. The Movement for Islamic Reform is a United Kingdom-based Saudi opposition organization headed by Dr. Sa'ad Al-Faqih, who has been a key figure in the reform movement in Saudi Arabia since the gulf war. According to a 2005 United States Department of State report on human rights in Saudi Arabia, MIRA was founded in 1996 as a splinter of the Committee for the Defense of Legitimate Rights, both of which "continued to advocate overthrowing the Saudi monarchy by force."

Al-Qaeda (a name that means "the base," referring to a base camp in Afghanistan) is an international alliance of militant jihadist organizations established by Saudi-born Osama bin Laden and others around the time of the Soviet withdrawal from Afghanistan in 1989. Al-Qaeda's objectives include the elimination of foreign influence in Muslim countries, eradication of those deemed to be "infidels," elimination of Israel, and the creation of a new Islamic caliphate. The United Nations Security Council has labeled al-Qaeda a terrorist organization. Its affiliates have executed attacks against targets in various countries, the most prominent being the September 11, 2001, attacks in New York City and Washington, DC. Following those attacks, the United States government launched a broad military and intelligence campaign known as the War on Terrorism, with the stated aim of dismantling al-Qaeda and killing or capturing its operatives.


The Saudi military was founded as the Ikhwan army, the tribal army of Ibn Saud. The Ikhwan had helped King Ibn Saud conquer the Arabian Peninsula during World War I. By expanding the military forces years later, Saudi Arabia today has many military branches. Those branches include the army, air force, and navy. Independent military branches include the National Guard, and the Royal Guard. The Ministry of Interior has the police, border guard, coast guard, Al-Mujahidoon, and the Saudi Emergency Force.


Aramco, the Saudi national oil company, whose main offices are in Dhahran.

Saudi Arabia has an oil-based economy with strong government controls. The nation possesses oil reserves of 262.7-billion barrels, or 25 percent of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in the Organization of Oil Producing and Exporting Countries (OPEC). The petroleum sector accounts for roughly 75 percent of budget revenues, 45 percent of Gross Domestic Product (GDP), and 90 percent of export earnings. About 40 percent of GDP comes from the private sector.

The government is encouraging private sector growth to lessen the kingdom's dependence on oil and to increase employment opportunities for the swelling Saudi population. The government is promoting private sector and foreign participation in power generation, telecom, natural gas, and petrochemical industries. Saudi Arabia acceded to the World Trade Organization in December 2005 after many years of negotiations. With high oil revenues enabling the government to post large budget surpluses, Riyadh has substantially boosted spending on job training and education, infrastructure development, and government salaries.

The government has announced plans to establish six "economic cities" in different regions to promote development and diversification. One new city is a $26.6-billion King Abdullah Economic City, to be built near al-Rabegh industrial city north of Jeddah. Construction work began in December 2005 on the new city, which includes the largest port of the kingdom, petrochemical, pharmaceutical, tourism, finance and education and research areas.


The combination of relatively high oil prices and exports led to a revenue windfall for Saudi Arabia during 2004 and early 2005. But Saudi Arabia's per capita oil export revenues remain far below high levels reached during the 1970s and early 1980s. In 2004, Saudi Arabia earned around $4564 per person, versus $22,589 in 1980. This 80 percent decline in real per capita oil export revenues since 1980 is in large part due to the fact that the nation's young population has nearly tripled since 1980, while oil export revenues in real terms have fallen by over 40 percent. Meanwhile, Saudi Arabia has faced nearly two decades of heavy budget and trade deficits, the expensive 1990-1991 war with Iraq, and total public debt of around $175 billion. Saudi Arabia's extensive foreign assets (around $110-billion) provide a substantial fiscal "cushion."

Over the past 15 years, Saudi Arabia's claimed reserves have been flat, with the exception of an increase of about 100 billion barrels between 1987 and 1988. Many experts believe that Saudi Arabia is exagg