Dissertation_Dr Faisal Almubarak

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subsidies which have resulted in the creation of government employment, improvement of
services and living conditions in rural areas.
The 1970s construction boom resulted in the importation of large numbers of foreign
expatriates, which resulted in a shortage of food stuffs. The state had to rely on foreign
food production to import between seventy-five to eighty percent of its food needs from
abroad. 50
In 1971, the bill for foodstuffs accounted for 31.6 percent of imports totaling
SR 3,197 million (in 1971 four Saudi Riyal (SR) equaled $1.00 in U.S. currency). This
shortage in local agricultural production prompted substantial inducements by the
government to help farmers improve their agricultural techniques and bedouins to practice
settled farming on a larger scale. Investments in modern agriculture, specifically in poultry
and dairy farms multiplied. The Third Development Plan of 1980-85 earmarked
considerable incentives to attain "self sufficiency" in some food productions deemed
strategic for national security such as wheat. By 1987, foodstuff imports were reduced to
17.1 percent, though in nominal terms the value rose to SR 12.9 billion (1987 the
$1.00=SR 3.75). 51
This commitment has conditioned the restructuring of the country's national spatial
network. The allocation of agricultural subsidies, housing loans and other cash benefits in
rural areas constituted strong economic incentives to farmers to retain their rural life.
Consequently, the high demand for laborers for the modern sector of the economy was met
by importing foreign laborers. Commenting on the effects of the government agricultural
programs, Clive A. Sinclair and J.S. Birks wrote
Paradoxically, the government's recent attempts to transform farming in Saudi
Arabia (other than by instigating major large-scale projects) through the
extension of loans and grants to small fanners with the object of aiding their
mechanization and modernization have been instrumental in the preservation
of a subsistence-based traditional rural sector. Loans and grants taken by
farmers are not always used for investment purposes and are often spent on
consumption. If invested, then the capital so provided remains underutilized,
either because of poor management or for want of sufficient labor inputs.
Thus grants and loans to farmers, directed toward investment in small-scale
agriculture, are taken as income by the fanners. 52
In many Developing countries, economic disparities between regions result in
massive city-ward movement leaving the rural areas in its historical penury. In these
countries, the concentration of industrial development in growth centers is rationalized on