Dissertation_Dr Faisal Almubarak

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land, reflected the Saudi economy. Although predicated on religious rationale, the
government does not impose property or income taxes. The collection of Islamic taxes,
zakat, has not been attempted on an organized and comprehensive level. This can be
attributed to the fact that the state relies on oil revenues for the majority of its income. As
such, land owners felt no pressure to liquidate their properties or invest in the development
of their vacant lots to cover taxes. This tendency to hoard un-taxed land for future
speculation, has immensely contributed to the spreading of the city's area (Figure 6.6).
Thus, land owners filed for land subdivision at the municipality only to have it on the
market waiting for a lucrative cycle of real estate speculation. The boom of the 1970s
ended in a painful bust that caused substantial loss to many citizens.
Fourth, religious factors contributed to land speculation which led to the platting of
more land than the actual need. The Kingdom's population is largely composed of
conservative, practicing Muslims. The lack of Islamically-sanctioned, competing
investment opportunities for citizens to invest their savings led many individuals to invest
in the high, quick-yielding land market. Islam's teachings, as defined by the leading
religious scholars, prohibits interest-bearing investment practices that are risk-free,
predetermined returns. Those who seek such approaches are considered sinners and,
unless they cease such investment, are promised retribution by Allah. 21
Finally, by the 1960s, the land market had become an easy access to riches. For
example, land prices rose especially at the business central district CBD area, where they
were reported to range between SR 1,000 and SR 3,000 per square meter in the core, and
dropped to SR 100-500 for residential land immediately adjacent to the core, while, at the
periphery, land prices varied between SR 50 and SR 150. Increasingly, economic forces
concentrated opportunities within the core while at the same time making that core
increasingly expensive and unfavorable to the rising ranks of the population. The flight to
the periphery, where affluent members of the society lived in palatial compounds, was
inevitable. Yet, it was during the 1970s that land prices skyrocketed, reaching as high as
SR 1,000 per square meter at the periphery.
The combined effects of government allotting large tracts of public land to just a few
tycoons and of government implementation of vigorous modernization programs, and the
society's stem religious convictions, all forged the modern land tenure. Under salubrious
socioeconomic circumstances, rapid urbanization ensued and with it came a capitalist