Dissertation_Dr Faisal Almubarak

development of crude oil, creating a dependency relationship at the world level. This
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situation resembles that of the "enclave economy" which tends to produce two effects that
greatly condition the spatial structure of the dependent economy. 66
First, it triggers a process of concentration of population and activities around the
enclave resource, that is oil. Second, a process of urbanization occurs connected more to
the indirect effects of the enclave economy, than to the economic activity itself. For
example, in Chile, the main economic resource of the government was royalties on copper
production collected from foreign companies. These royalties accounted for 80% of the
Chilean government foreign currency and 60% of its resources between the 1950s and
1980s. Following the nationalization of the copper industries, the Chilean government
received revenues from mine extracting directly. According to Manuel C as tells,
This created a huge government sector that actually redistributed the money
through the entire economy. The milk cow of the Chilean economy is the '
copper sector. With the demand generated by state expenditures and salaries,
you have the rest of the weak manufacturing sector [sic]. All of this produces
centralization of resources in the hands of the public sector, therefore totally
centered in the capital city. This is also the case in Venezuela where Caracas
grows on the basis of the oil money given to the government, then uses it to
expand the construction sector in the capital. 67
The utilization of oil has been the catalyst for much of Saudi Arabia's urbanization
and the mainstay of a strong economy, raising the standard of living and stimulating urban
development. For example, Riyadh, the seat of the national government where oil
revenues allocated, grew from a pre-industrial settlement of five thousand at the turn of the
century to a small city of thirty-six thousand inhabitants in 1950, and into a bustling
metropolis of 2 million by 1992. 68
Dammam, located at the locus of oil activity, was
transformed from a sleepy fishing hamlet, on the Arabian Gulf shores, into a prominent
city of four hundred thousand people.
Parallel with the growth of the oil industrial activity, the government has recognized
the vitality of strengthening its defense capabilities. Militarization has become a powerful
stimulus for Saudi urban settlements. In April, 1948, the government granted a five-year
lease to the U.S. Navy for its use of an air base in Dhaharan. Dhahran was a growing
town situated at the locus of oil activities to guard the oil installations. The lease was
renewed for another five years in 1951. Another large scale army base was constructed in
1950 in the agricultural town of Kharj, fifty miles south of Riyadh. The base included a