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Business Policy in an Era of New Prosperity: Strategic Investment Planning from 1970 to 1985

In: Business and Economic Development in Saudi Arabia

Author

Listed:
  • J. W. Wright
  • Muhktar M. Ballool

Abstract

This chapter is mainly concerned with the investment strategy problems that faced Saudi Arabia in recycling the petrodollar surpluses that accrued to the Kingdom in the 1970s as a result of price hikes following the OPEC embargo. The embargo happened in the midst of the country’s first Five Year Development Plan, drastically altering the implementation of that plan and setting up completely new dynamics for writing investment objectives into the next two plans. Several issues complicated the investment planning process, not least of which was the fact that until then, and indeed until the late-1980s, the economy of Saudi Arabia had depended on a single, exhaustible natural resource as its sole source of income. In 1970, 80 per cent of Saudi GDP and 99.83 per cent of the government’s revenues were earned through the sale of oil and related gas by products.2 The government’s dependency on oil sales forced planning officials to question whether the exhaustible resources were being depleted too rapidly.3

Suggested Citation

  • J. W. Wright & Muhktar M. Ballool, 1996. "Business Policy in an Era of New Prosperity: Strategic Investment Planning from 1970 to 1985," Palgrave Macmillan Books, in: J. W. Wright (ed.), Business and Economic Development in Saudi Arabia, chapter 2, pages 33-52, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-25096-7_3
    DOI: 10.1007/978-1-349-25096-7_3
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