Saudi Gazette report
RIYADH — When Saudi Arabia was unified 95 years ago, the new state faced daunting economic challenges across its vast geography, from the Red Sea coast to the Arabian Gulf.
The first national budget, issued a year after unification, barely reached 14 million riyals.
Today, the Kingdom marks its National Day as the Middle East’s largest economy and among the world’s top 20, with an annual budget surpassing one trillion riyals and an influential role in the G20.
The young nation’s difficulties grew sharper during World War II, as global inflation and declining revenues from customs and trade strained its finances.
Abdullah bin Suleiman Al-Hamdan, the Kingdom’s first finance minister, rejected an American offer of an in-kind loan worth $25 million in food and equipment.
After protracted negotiations, he instead secured a $10 million cash loan, which funded vital projects including a power plant in Riyadh, hospitals in Riyadh and Taif, and improvements to Jeddah Port.
According to British explorer John Philby, who chronicled these years in Forty Years in the Wilderness, Al-Hamdan’s determination reflected the vision of King Abdulaziz, who even before the arrival of steady oil revenues was absorbed in advancing projects of development and modernization.
In 1933, Saudi Arabia signed an oil concession with Standard Oil of California, marking the beginning of exploration in its deserts.
After years of surveying and drilling, the breakthrough came in 1938, when Dammam Well No. 7 — later known as the “Well of Good Fortune” — produced oil in commercial quantities.
The discovery would change the course of the Kingdom and the global energy industry.
The following year, King Abdulaziz personally traveled to Dhahran to inaugurate the new era.
In the spring of 1939, he opened the valve at Ras Tanura to fill the first tanker of Saudi crude for export, marking the country’s debut on world oil markets.
Over the next decade, further discoveries transformed Saudi Arabia into an oil powerhouse.
In 1948, the Ghawar field was identified in Al-Ahsa, later confirmed as the world’s largest conventional oil field.
In 1951, the offshore Safaniya field was found in the Gulf, the largest of its kind in the world.
Production from both fields soon reached millions of barrels a day, cementing Saudi Arabia’s role in global energy.
At the same time, oil revenues remained modest compared to the challenges of postwar recovery.
The Kingdom’s 1945 budget amounted to 173 million riyals, but the end of the war opened new opportunities for onshore and offshore exploration.
With Europe devastated by war and hungry for energy, Saudi Arabia and Aramco launched an ambitious plan to speed exports.
The Trans-Arabian Pipeline, or Tapline, stretched 1,648 kilometers from the Eastern Province to the Mediterranean, crossing Jordan, Syria, and Lebanon.
Completed in 1950 at a cost of $230 million, it became the longest pipeline in the world at the time.
Tapline not only cut shipping times to Europe but also spurred development along its route.
Northern towns such as Arar, Rafha, Turaif, and Al-Nu‘ayriyah grew around its pumping stations, linking remote regions to the national economy.
The real transformation began in the 1970s, when soaring oil revenues enabled the Kingdom to launch its first five-year development plans under King Faisal.
The “decade of prosperity” that followed reshaped Saudi Arabia.
Infrastructure spread rapidly, airports, ports, highways, schools, universities, and hospitals.
Millions of workers arrived to support the expansion, while new housing and loans fueled urban growth.
Cities such as Riyadh, Jeddah, and Dammam became magnets for rural migration.
The second development plan, from 1975 to 1980, brought record investments in industrial cities, power generation, and transport.
By then, a modern state apparatus was taking shape, underpinned by a growing middle class and an expanding workforce.
Education spread widely, illiteracy rates fell, and health indicators improved with nationwide vaccination campaigns.
In more recent decades, Saudi Arabia’s fiscal capacity has surged.
In 2019, King Salman announced the largest budget in the Kingdom’s history, exceeding 1.1 trillion riyals, with revenues of 975 billion riyals.
The budget emphasized reform, transparency, and private sector empowerment, reflecting the leadership’s focus on comprehensive development.
Crown Prince Mohammed bin Salman has carried that momentum forward through Vision 2030, launched in 2016.
The plan aims to diversify the economy, increase sustainability, and improve quality of life.
Non-oil revenues have risen sharply, reaching 502 billion riyals in 2024, compared with 127 billion riyals in 2014.
Women’s participation in the workforce has more than doubled, reaching 35.3 percent in 2023, while their presence in leadership roles has expanded across sectors including tourism, technology, and entertainment.
Education has been central to the Kingdom’s development story.
From just 2,300 students in 1930, enrollment surged to 20,000 by 1949 and into the millions in later decades.
By 2024, Saudi schools had more than 6.3 million students, while over 1.3 million were enrolled in universities.
The expansion of education paralleled efforts to empower women, whose workforce participation has climbed steadily in recent years.
By December 2023, more than 1.28 million women were employed in the private sector, representing over 40 percent of Saudi citizens working in that segment.
Today, Saudi Arabia’s GDP exceeds 4 trillion riyals, or about $1 trillion, making it the largest economy in the Arab world.
Sovereign wealth assets managed by the Public Investment Fund reached 3.7 trillion riyals in 2023, reinforcing the country’s financial strength.
With G20 membership, trillion-riyal budgets, and ambitious reforms, the Kingdom enters its 95th National Day as a symbol of resilience, transformation, and vision for the future.
