Released November 1, 1999 The Wisdom Fund, P. O. Box 2723, Arlington, VA 22202 Web site: http://www.twf.org -- Press Contact: Enver Masud Saudis Squandered Income, May Sell It's Source WASHINGTON, D.C. -- The Saudi government having squandered its oil wealth is considering selling off its source. "When Saudi Arabia's ailing King Fahd went on holiday to Spain in July," writes David Hirst of Britain's Guardian Weekly, "eight aircraft, including five Boeing 747s and a giant Antonov cargo plane, bore him to Malaga from the royal terminal at Jeddah. With him went more than 400 retainers, ministers, 200 tonnes of luggage, 25 Rolls-Royces and limousines." The king's favorite son, Abdul Aziz, has a $2.7 billion home. Royal retreats line the north coast of Jeddah mile after mile. The king has a peninsula for himself. The 20,000 princes and princesses get a monthly stipend of $4,000 to $128,000. The monthly "expenses" of Prince Sultan may be as much as $20 million. Some estimate that 40 percent of national revenues flow to the royal family. But the average Saudi hasn't done as well as the royals. Per capita income has plunged from $15,700 in 1980, to $5700 today. While Saudi Arabia employs 6 million foreigners, 16 million Saudi males, and 95 percent of Saudi females are unemployed. In 1982 Saudi Arabia had reserves of $170 billion. Today the national debt is almost that amount, and about 12 percent of the budget goes to servicing this debt. Now it appears that Saudi Arabia is considering selling off its source of income by permitting foreign investment in exploration and production. A Stratfor analyst writes, "Foreign oil investment in Saudi Arabia is nothing new. The kingdom nationalized its oil industry 20 years ago and has periodically turned to foreign investments to compensate for its lack of funds and expertise. However, the country had never allowed foreign investment in the upstream oil sector. Upstream refers to exploration and production, while downstream includes refining and distribution." Foreign oil companies prefer the exploration and production deals. U.S. oil firms Arco, Chevron, Conoco, Exxon, Mobil, Phillips Petroleum and Texaco have all submitted proposals to Saudi Arabia. Foreign companies including France's Elf Aquitaine and Total, Royal Dutch Shell and Italy's ENI group have also expressed interest. Says the Stratfor analyst, "Saudi Arabia first hinted at bringing in foreign upstream investment in September 1998 during a secret meeting attended by Crown Prince Abdullah, former President George Bush and CEOs from seven major oil companies." Permitting foreign investment in exploration and production raises the possibility that one day Saudi Arabia itself may be buying oil from a foreign company. For the long term this is not likely to improve the condition of the average Saudi who has little voice in the affairs of government. Reducing the royal family's spending, unnecessary arms purchases and dependence on foreign workers, coupled with increasing job opportunities for Saudis may. Copyright © 1999 The Wisdom Fund - All Rights Reserved. Provided that it is not edited, and author name, organization, and URL are included, this article may be printed in newspapers and magazines, and e-mailed to others. ---------------------------------------------------------------------------- To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html ----------------------------------------------------------------------------