Dissertation_Dr Faisal Almubarak

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electricity, transportation and communications, and banking and finance. Farouk Akhdar,
Secretary General of the Royal Commission for Jubail and Yanbu, summarized the thrust
which underlies the Saudi developmental activities in the industrial sector. He wrote:
The fundamental goal of Saudi industrialization is to foster the diversification
of the economic base in order to reduce the Kingdom's overwhelming
dependence on the oil sector, to achieve greater economic sufficiency and
protection from external supply disruptions, and to gain the cost advantages
from domestic manufacturing activity. 59
To achieve these objectives, the government has followed a strategy of promoting
investment in the manufacturing industry by offering a wide range of financial, tariff, and
other incentives to qualified Saudi investors. For large-scale industrial projects beyond the
capabilities of the private sector, the state has entered into joint-venture partnerships with
foreign firms who are assigned managerial, technical and marketing tasks. Under the first
two approaches, or "conventional paths," the state provides incentives and subsidies under
the industrial promotion programs. By 1990, there were 2,160 working factories and 400
new factories to be added in the period 1990-1995. But with improved state assets in the
1970s, the government espoused a radical approach aimed at the construction of two
"large, completely new hydrocarbon-oriented industrial cities." Akhdar continued "the
urban industrial complexes at Jubail and Yanbu constitute the centerpieces of the
Kingdom's heavy industrialization program. They reflect the government's commitment to
develop a large-scale, hydrocarbon-based and energy-intensive industries such as
petrochemicals, fertilizers, and iron and steel". 60 In short, the industrialization of the
Kingdom owes its character and direction to the state's vision, initiative and cosponsorship,
and not to an established private sector.
E. The Emergence of the Middle Class
The combined effects of the creation of the nation-state, the connecting of the local
economy to that of the international economy, and the political framework of the state, all
set in motion the process for social stratification. One manifestation of this transformation
is the emergence of the middle class. As noted earlier, the massive financial allocation for
state-sponsored education and modern technology, among other things, have weakened the
previously strong influence of the clan. Upward mobility in the new economic order has
increasingly been based on ascription and educational background, rather than family