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That fabled ship of the desert, the dromedary, is a rare sight in Saudi cities now, except at camel races; the automobile has become almost as essential to Riyadh as it is to Los Angeles. There is approximately one car for every five Saudis —and this in a nation where only men are permitted to drive. Few Bedouins still live in desert tents; out of the urban areas, many of them have Toyotas, Datsuns or Chevrolets parked among their camels. Remote fishing villages are becoming modern towns. From the rocky hill near the Persian Gulf where the first Saudi oil well was drilled a scant 40 years ago, a visitor can gaze out toward the cities of Dammam, Al Kho bar and Dhahran, which are fast merging into one great metropolis that might well accommodate a million people by the year 2000.
With almost stupefying speed, the Saudis are making the desert boom, and their instrument for accomplishing this transformation is oil. Beneath an arid land of 874,000 sq. mi. (of which only 3% is covered by farms and forests) lies almost 25% of the world's known petroleum reserves—the greatest single energy treasure on earth. The Saudis want to diversify their one-source economy, and about 80% of their $142 billion development program is going into infrastructure—electric power, raw materials, housing, transport, roads. In addition, this acquisitively capitalist nation has created the elements of a welfare state for its citizens, with free education, free medical care and subsidized prices for food, most of which has to be imported.
Despite these expenditures, and despite the dollar's decline, the Saudis nonetheless are making money far faster than they can spend it. As of February, their international monetary reserves amounted to $28.8 billion—second only to West Germany's ($41.9 billion) and well ahead of those of Britain ($21.4 billion) and the U.S. ($19.6 billion). Their total foreign assets as of Jan. 1 were estimated by monetary experts at somewhere between $60 billion and $70 billion and climbing at the rate of $1 billion per month.
This awesome economic power is managed by ailing King Khalid, 65, who became ruler in 1975 after the assassination of King Faisal, and Crown Prince Fahd, 58, the man who really runs the country today. In the hands of a hostile government, Saudi Arabia would constitute a grave threat to the U.S., its allies and indeed all of Western industrialized society. But under Khalid and Fahd, both militant anti-Communists and enemies of Soviet expansion, Saudi Arabia has reinforced a friendship with the U.S. that has endured for more than four decades. It has exerted a strong influence on other oil-producing nations to hold down price increases. It has also agreed to U.S. requests to expand its oil-producing capacity in order to head off a worldwide energy shortage predicted for the early 1980s, even though some Saudis argue strongly that such a production increase is not in their country's long-term interest.
Only last week Saudi representatives spoke out against a proposed midyear increase in oil prices and reinforced the U.S. dollar by asserting that the oil producers should continue to use the weakening dollar as their medium of exchange.