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Business and Entrepreneurship in Saudi Arabia by Edward Burton

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Chapter 1The Kingdom's Modern Economy and Economic Might

THE MODERN SAUDI ECONOMY AND THE NATIONAL DEVELOPMENT PLANS

From the moment Standard Oil of California (SoCal), through its subsidiary California-Arabian Standard Oil Company (CASCO), struck oil from famous well Dammam No. 7 in Dhahran in 1938, the trajectory of the Kingdom's development and fortunes has never strayed far from the flow of the black liquid gold. Throughout its modern history, oil revenues have allowed Saudi Arabia to achieve an unimaginable level of economic development within a seemingly fleeting period of time.

In 1945, before mass-generated and distributed electricity came to the Kingdom, before Saudi Arabia had a national monetary regulator and the country's official currency had been minted (just 10 years before), and before the nation's road systems were built, its finances were in disarray and the world's powers expected it to slide into bankruptcy. Through direct subsidies and revenues from oil production, the United States and the United Kingdom kept the Saudi Kingdom from economic ruin. It was the exceptional leadership of His Majesty, Ibn Saud, and that of his sons and a cadre of able advisors that formed the masonry substructure upon which all future national gains would be built. The careful, methodical, and prescient approach to managing the Kingdom's state and economic affairs is what helped transform the nation from a primarily agrarian and trading nation into the nineteenth-largest economy ...

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