1 KINGDOM OF SAUDI ARABIA THE SAUDI DEVELOPMENT MARCH (EXCERPTS) MINISTRY OF ECONOMY AND PLANNING
2 Preface The Kingdom s National Day anniversary comes this year at a time when the comprehensive development renaissance, the foundations of which were laid by the Founder King, is continuing apace. Building on the intellectual, institutional and management foundations laid by the Founder King, and guided by his ideas and practices in development planning and economic management, his sons and successors have continued the efforts that have resulted in remarkable achievements and successes, reflected in the continued rise of living standards, improvement in quality of life, comprehensive construction and industrial renaissance, and advanced economic and social services throughout the country. These achievements are eloquent testimony to the effectiveness of the developmental approach that has been adopted by the Kingdom; an approach that combines scientific planning, targeted rationalization, and continued support for private sector within the framework of economic freedom and individual initiative. Over more than three decades, structural, socioeconomic advances have been achieved, at both the macro and sectoral levels. The Saudi economy has gained enormous strength, increasing its ability to adapt to changes and developments and withstand global economic fluctuations. At the macroeconomic level, the value of the GDP has increased (at constant prices) nearly five-fold during the period The steady growth has been accompanied by expanded use of advanced production technologies in many of the activities of the national economy, as well as by diversification of the economic structure and maximization of the role of private sector. Successive development plans have created a climate conducive to the Saudi private sector contributing increasingly to production, investment, export, and provision of employment opportunities for citizens. In this positive environment, a private sector, characterised by vitality and institutions having advanced technical and organizational abilities, has grown. Employing these capabilities efficiently, the private sector has made praiseworthy achievements. Its contribution to the non-oil GDP has reached about 76.3% in 2008, and the volume of its annual investment has increased from 1.2 thousand million Riyals
3 ii in 1970 to about thousand million Riyals in 2008; thus accounting, in current prices, for about 60% of the total fixed capital formation in the non-oil sectors. Moreover, total employment in private-sector activities reached in the same year 6.8 million workers, i.e., about 85.4% of the total labour force. Over the past years, the Kingdom has taken several important institutional and administrative development measures. These have included creating new economic entities and restructuring others; accelerating the pace of privatization; and adopting of several sets of regulations aimed at the controlling various aspects of economic activities, improving their efficiency, providing more incentives and guarantees to foreign investors, and simplifying and speeding up the administrative procedures relating to their activities. Institutional and administrative modernisation, development of regulations and facilitation of procedures have led to a significant improvement of the business environment and of the attractiveness of the Kingdom to foreign direct investments. The volume of foreign direct investment increased markedly, so much so that the Kingdom has come to be at the forefront in the Middle East in this regard. Moreover, the Doing Business 2008 report, issued by the International Finance Corporation (IFC) of the World Bank Group, put the Kingdom in sixteenth place, among 181 countries. Considering the Saudi citizen to be the focus and the ultimate goal of development, human resource development has been accorded special importance. As a result, education grew to high, unprecedented levels. During the period , elementary schools were opened, at a rate of one school a day; 7692 intermediate schools were opened, at a rate of one school every two days; and 4731 secondary schools were opened, at a rate of one every 3 days. Similarly, higher education has achieved remarkable quantitative and qualitative progress. By the end of 2008, the number of universities reached 21, and the number of community colleges 35, while the number of students enrolled in higher education increased more than 94 times during the period Concurrently, efforts continued to develop programs, raise quality, and intensify scientific and technological research in the universities.
4 iii Equally important were the advances made in training. In 2008, the number of technical colleges in the government sector was around 36, distributed among the various regions of the country; attended by about 63000, of whom around graduated; and plans are afoot to increase the number of these colleges to 74. In the same year, the number of vocational training institutes was 99, attended by about thousand trainees, of whom about graduated. Similar achievements have been made by the private sector. Interest in healthcare has also been keen. Hospitals, primary healthcare centres and supportive healthcare services expanded significantly, resulting in availability of preventive and curative health services throughout the country. In 2008, healthcare services were provided by an extensive network of facilities, consisting of 393 hospitals with 53,817 beds. In the same year, the number of doctors was and nurses 93,735, and the number of primary healthcare centres run by the Ministry of Health 1986, in addition to 1152 government clinics and 1326 clinics ran by the private sector. Advances were also made in providing housing for citizens. By the end of 2008, the Real-estate Development Fund had provided about billion Riyals of soft financing for the construction of housing. Likewise, through social welfare programs, the State provided various types of benefits to citizens, such as social security and social affairs benefits. Laudable in this context is the special concern accorded by the Custodian of the Two Holy Mosques, may Allah protect him, to needy families, the disabled and those with special needs. In Ramadan of the last year (August), he issued an order to grant one billion and fifty million Riyals to social security beneficiaries, and another to double the subsidy to all disabled persons registered with the Ministry of Social Affairs, at an additional cost of one billion and forty one million Riyals. Remarkably, when the development process of the Kingdom is examined, similarities in some important aspects between its beginnings, in the reign of the Founder King, and the realities of the moment become evident. The Founder King adopted modern methods for developing agriculture and water resources, as well as for the management of oil exploration, building transportation and
5 iv communication networks, provision of educational services and healthcare, and building the institutions of the State; using in all this both national and foreign expertise. Following in the footsteps of the Founder King, the Kingdom seeks to expand the use of science and technology in all productive and service fields. It is also keen on transfer of knowledge and advanced technology, through foreign trade and foreign direct investment, as well as on seeking the help of experts and specialists from various advanced countries, and on increasing the numbers of people sent on scholarships abroad to acquire modern knowledge and expertise. In furtherance of this trend, the Kingdom has made great strides and has begun to move towards carrying out mega-projects, in its quest to lay the foundations of a knowledge economy and an information society. Thus, following a tradition of looking to the future set by the Founder King, his worthy sons are using development planning as an effective means for building the socioeconomic future of the Kingdom on sound, scientific bases. This publication by the Ministry of Economy and Planning seeks to identify the milestones of the development march of the Kingdom, recording some of the remarkable achievements in various areas, and seeking to put before the whole world the pioneering socioeconomic development that King Abdulaziz Al-Saud (may Allah bless his soul) had laid the foundations of, and which his worthy sons have been assiduously pursuing. Finally, we ask God Almighty to bless the efforts of the Custodian of the Two Holy Mosques and his Crown Prince to raise the status of the Kingdom and ensure the happiness of its people. Ministry of Economy and Planning
6 Table of Contents Subject Page Introduction 3 Summary 5 Chapter I: King Abdulaziz Al-Saud and the Foundations of Development 9 Chapter II: Economic Development 17 Chapter III: Industrial Development 27 Chapter IV: Economic and Regulatory Reforms 37 Chapter V: Human Resources Development 53 Chapter VI: Addressing Poverty 69 Chapter VII: Achieving the Millennium Development Goals 77 Chapter VIII: Women and Development 81 Chapter IX: Towards a Knowledge-Based Economy 91 Conclusion 103
8 3 Introduction Since it was founded by King Abdulaziz bin Abdulrahman Al-Saud (may Allah bless his soul), the Kingdom of Saudi Arabia has made remarkable achievements in all areas of development; economic, social, political and cultural. The robust and consistent base provided by his Majesty served as a starting point for the development process and ensured continuity for more than a century, leading to a comprehensive development renaissance that has contributed to upgrading economic growth, raising living standards, improving quality of life, and providing work opportunities for citizens. These advances have been based on quantitative expansion and qualitative enhancement of educational services, training, healthcare, social services, infrastructure, communications, and municipal services; all within the framework of a genuine partnership between the public and private sectors working together for the delivery of programs and plans, designed to effect balanced and sustainable development across the regions. This book consists of excerpts from a review of the development process until 2008, covering the bases of development established by the Founder King, in addition to brief analyses of the advances made in eight areas: the economy, industrial development, economic and regulatory reforms, human resources development, addressing poverty, achieving the Millennium Development Goals, women and development, and the knowledge-based economy.
10 5 Summary This book reviews the basic foundations of socioeconomic development laid by the founder of the Kingdom, King Abdulaziz bin Abdulrahman Al-Saud and provides brief analyses in relation to the following most important areas: the economy, industrial development, economic and regulatory reforms, human resources development, addressing poverty, achieving the Millennium Development Goals, women and development, and the knowledge-based economy. A separate chapter, other than first, is allotted for each of these eight areas. Chapter I dwells on the thoughts and practices of the Founder King, which have since guided development planning and policy making: unification of the Kingdom, enforcement of Islamic Law (Sharia), careful study of reality, and looking forward to the future. The Founder King made great efforts and overcame many challenges, succeeding in uniting the country and laying the foundations of a modern state. One of the major concerns of the Founder King was the development of agriculture and the water sector, to ensure provision of food and water. He also devoted great efforts to developing transport and communications, in order to consolidate the unity of the country. Showing great concern for the health, he laid the foundations of the primary health services; established the Department of Public Health, and built a number of hospitals and clinics, for which he recruited specialised doctors. His government also sent Saudi doctors abroad to specialise in various medical fields, and issued a set of regulations aimed at organising and developing the health sector. With equal determination, the Founder King tirelessly worked to found the education system and plant the seeds of the free education policy. Moreover, he sent Saudi students abroad to specialise in teaching, jurisprudence, technical education, agriculture, medicine, aviation and communications. On the economic front, he managed oil exploration operations with skill and acumen, aiming at upgrading the economic capabilities of the country and placing it on the map of the modern world. Moreover, the King underscored the importance of sustainable development, using oil revenues for development and for raising living standards. Successive national development plans have since built on, and been inspired by, these massive achievements.
11 6 Building on the foundations laid by the founder father, the sons and successors of King Abdelaziz have continued the process of construction and comprehensive development. Their efforts have resulted in remarkable achievements and successes. Chapter II identifies the most important development outcomes, in relation to the basic economic performance indicators, including: GDP; investment and final consumption by the government and private sectors, exports and imports, balance of current account, and external government assets. Evolution of the economic structure and its diversity, and the contributions of the private sector and its growing role in furthering economic growth are highlighted. In addition, national employment and the role of government and the private sector in the provision of job opportunities are reviewed; as are liquidity, inflation, and performance of the stock market. Chapter III is devoted to highlighting the success of the efforts to build a solid industrial base, which enabled many Saudi companies to hold prominently high ranks in global classifications. Successive development plans have emphasised the importance of intensification of manufacturing, as an effective means for reinforcing the industrial base of the national economy, diversifying its structure, and multiplying exports, as well as the positive effects of industrialisation on the development of nonoil sectors. The chapter reviews the progress made by the manufacturing sector; dwelling on how the plans and strategies developed, in particular, the National Industrial Strategy Towards a Competitive Industry and a Knowledge-Based Economy effect and enhance that progress. This latter strategy is based on an ambitious vision for the year 2020, aimed at strengthening the competitive capabilities and diversifying exports and the productive base. Chapter IV reviews the efforts of the Kingdom in the quest for restructuring, modernisation and development of regulations, as well as for privatisation. These efforts have had a positive impact on all areas of socioeconomic development; with a massive influx of foreign direct investment, and the launch of several mega development projects, including establishment of economic cities and several universities in various regions. The Kingdom has taken numerous important measures aimed at restructuring, modernisation and development, such as the establishment of the Supreme Economic Council, the Supreme Council of Petroleum and Minerals, the General Authority for Investment, the General Authority for Tourism and Antiquities, the Financial Market Authority, the Saudi Organization for Industrial Estates and Technology Zones. It has
12 7 also adopted a number of regulations governing various aspects of economic activity and development, including: the foreign investment law, the law governing ownership of and investment in real estate by non-saudis, the communications law, the capital market law, the control of the cooperative insurance companies law, the gas supply and pricing law, the new labour law, and the law controlling electronic transactions. Privatisation has made remarkable strides in the sectors of electricity, communications, mineral resources, air transport, and insurance, leading to wider participation of the private sector, through sale of shares of ownership, operatemanage contracts, leasing assets, and build-operate-transfer (BOT) contracts. Chapter V addresses human resources development, highlighting the achievements made in improving the quality of life of Saudi citizens and the development of their productive and creative capabilities. The evolution of public expenditure investment allocations to the human resource development sector (education, training, health) in the successive development plans is reviewed. This expenditure testifies to the paramount importance attached by the successive plans to this vitally important sector. In addition, achievements, and future visions and strategies in education (public and higher) and technical and vocational training are discussed. Moreover, the main thrusts of the healthcare strategy, the development of health services over the past decades and the significant achievements made are discussed. Chapter VI deals with the new phenomenon in Saudi society of emergence of pockets of poverty. It explains how the Kingdom has risen to the challenge by preparing a comprehensive national strategy to address poverty; aimed at eradicating extreme poverty, minimising absolute poverty rates, and preventing re-emergence of poverty in the long term. The strategy has five prongs: macroeconomics, economic empowerment of the poor, public services, the social protection network, and family property. The chapter throws light on the practical steps that have been taken to implement the strategy, notably: the annual support to the National Charity Fund, introducing a Supplementary Support Program to bridge the gap between the income of extremely poor families and individuals and the line of extreme poverty, instituting an Emergency Assistance Program, allocating 10 thousand million Riyals to development housing, and more than doubling the upper limit for social security benefits. The Kingdom has also played an active role in addressing poverty worldwide. Chapter VI highlights its contributions to global efforts to eradicate poverty, by providing
13 8 development assistance and concessional loans to developing countries and by supporting international efforts to assist them. In addition, it reviews the efforts of the Kingdom in debt relief for poor countries and in providing humanitarian assistance in cases of famine and disaster. Chapter VII reviews the successes of the Kingdom in achieving the Millennium Development Goals (MDGs). It has already managed to exceed the targets assigned for a number of objectives, and is on its way to achieving other objectives before the time limit. The most striking features of the Saudi experience in the pursuit of these MDGs are two: integration of these goals into the objectives of the eighth development plan, and the extensive efforts to achieve them before the time limit. Chapter VIII reviews the continued quest for developing the conditions of Saudi women, improving and enhancing their capacities, and expanding their participation in the community; all while preserving Arab and Islamic values. The State has adopted various mechanisms for the advancement and empowerment of women to enable them to participate actively in building a modern Saudi society. Indeed, the chapter indicates numerous concrete achievements and successes in health and education of Saudi women, and in their increased participation in the labour market, investment and business management. To illustrate the growing attention paid by the state to expanding employment opportunities for Saudi women, the chapter presents in some detail the Council of Ministers Resolution No. 120 of 31/5/2004, which stipulated several measures to increase work opportunities for Saudi women. Chapter IX reviews the policies, programs and projects adopted to lay the foundations of the knowledge-based economy. Developing manpower and raising its efficiency through education and training; building a national advanced base of science and technology, capable of innovation; promoting scientific research and technological development to enhance economic efficiency and competitiveness; supporting applications of information technology and telecommunications; and developing databases in support of the national economy are among the most important drives designed to propel the Kingdom towards becoming a knowledge-based economy. The chapter points out that the efforts will be intensified and reviews the major projects being implemented.
14 9 Chapter I KING ABDULAZIZ AL-SAUD AND THE FOUNDATIONS OF DEVELOPMENT Every step taken by King Abdulaziz combined practicality with human and social concern. Indeed, with their intellectual and economic dimensions, the foundations he laid have served future sustainable development of the Kingdom remarkably. In this sense, current development efforts are part of a process started by the Founder King. 1. Foundations of development The ideas and work of King Abdulaziz constitute a world pioneering development experiment. His strategic thinking was based on recognising existing problems and the urgent needs of citizens, while taking into account the needs of future generations, responding by major projects that paved the way for the future and for continued, lasting development. His work during his reign may be classified under four major themes. 1.1 Unification of the Kingdom Unification of the Kingdom was the foremost goal of King Abdulaziz. He strove to eliminate divisions, consolidate security, and develop a sense of belonging among the Bedouin tribes, through initiating agricultural and educational development plans, and building roads to connect all parts of the country together. The resulting social stability provided the vital framework for the development processes, which, in turn, helped consolidate feelings of loyalty and belonging. 1.2 Enforcement of Islamic Sharia In all he did, King Abdulaziz was motivated by his Islamic faith. His essential purpose was to enforce Islamic Sharia. His adherence to justice and equality; implementation of Islamic sentences; service to the Muslim Holy places, which was reflected in expanding the Grand Mosque and the Mosque of the Prophet, as well as in organising teaching in the Holy Mosque; organisation of the schools of jurisprudence; and his principled interest in developing a comprehensive judicial system satisfied people that their rights are protected and needs guaranteed, under the rule of legitimacy and
15 10 principles of Islam. The interest of the Founder in establishing Islamic law was fundamentally and primarily to emphasise Islamic values and high moral principles, which call for good work, prosperity, brotherhood and peace; all of which form a good, solid basis for the development of both the individual and society. 1.3 Study of reality King Abdulaziz had great faith in the importance of studying in detail the reality of the country; its geography, linguistic variations and tribes. He began this study in his early youth, and continued it over the years of his reign, becoming expert in the needs for physical and human change in the country. His knowledge became the benchmark against which the projects and proposals presented to him by the experts and advisers he gathered to work for him were judged. Importantly, in him, knowledge was allied to uniquely delicate diplomacy and statesmanship. He thus established the methodology of basing development planning on scientific study; a methodology adopted, to great effect, by successive development plans. 1.4 Future outlook King Abdulaziz s vision extended to the far future of the nation. He attempted to ensure sustainability, by planning not only to deal with the challenges of the present, but also to build for the future. This outlook has become the cornerstone of planning in the Kingdom. In this sense, the work of the great Founder was the basis for subsequent achievements of modernisation and urbanisation. 2. Projects for building the modern state The challenges faced by King Abdulaziz were enormous. He was intensely engaged in the struggle for the unification of the country. Yet, he was also preoccupied with building a modern state. His main concern was to ensure water and food. He also paid great attention to agriculture, insisting on achieving tangible development of the then common primitive methods of agriculture, which depended rain or surface water wells. His Majesty took numerous important measures, such as inviting, in 1934, an agricultural mission from Iraq to study agricultural areas in Kharj; another mission during the period ; an Arab mission during the period ; and an American mission in In 1948, the Directorate of Agriculture and Water was established, which continued to be responsible for the development of the agricultural sector until the establishment of the Ministry of Agriculture.
16 11 His Majesty was equally interested in the development of water sector. In view of the reliance then on rain water, wells and springs, he initiated a number of practical measures, such as: the use of air pumps in 1931 to test for underground water east of Jeddah, a dam to store rainwater on the heights of Mecca in 1943, and delivery of fresh water from Alkendasa in 1948 in Jeddah. In 1950, water was drawn by pipes from Wadi Fatima springs, named Aziziyah springs after King Abdulaziz, and a reservoir was built east of the city of Jeddah, with a capacity of 4 million gallons of water. In 1952, 60 wells were drilled on the path of the Aziziyah spring, and the Zarka spring in Medina was tiled and several channels built. The King also ordered Riyadh to be supplied with water from Wadi Al Batin, Swedei and Ha'ir, and by drilling artesian wells. His Majesty was also careful to establish the necessary administrative systems for the management of water resources. In 1940, the Kendasa Department was established and entrusted with sea-water desalination, and in 1928, he ordered the formation of a committee to manage the Zarka spring in Medina. In 1934, the Aziziyah spring was established to feed the city of Jeddah, and a body to manage the Zubaidah spring was established in Mecca. In 1947, more than 100 wells were drilled and repaired in the area of Najd, and canals and dams were built across the desert, as well as a network of groundwater wells, providing 400 thousand people with drinking water. Another top priority for the Founder King was the consolidation of the unity of the country, which led him to attach a great deal of importance to the development of transport and communications. In 1936, his Majesty ordered the establishment of the department of public works, which continued to function until the establishment of the Ministry of Transport in He also sought the help of engineers from outside the country, who supervised the construction of a variety of roads; such as Jeddah-Mecca road, the Riyadh-Taif-Mecca road, and the Riyadh-Hofuf-Dhahran-Qatif-Al-Jubail road. In addition, bypass roads on the coast and internally were constructed, such as the road between Mecca and Wadi Fatima, the road between Sebia and Jizan, the road between Abu Arish and Samta, the road between Alwajh and Tabuk, the road between Riyadh and Al-Kharj, and the road between Riyadh and Sudair. The roads effected a fundamental change in the movement of traffic and transportation, particularly with the increasing numbers of cars. To put the value of these efforts in perspective, it is sufficient to note that at the beginning of the forties of the twentieth century, the total length of paved roads in the Kingdom was about 300km; after eleven years only, it reached 3500km.
17 12 The Founder King was equally interested in developing sea lines. He expanded and opened several ports: Dammam on the Arabian Gulf, Ras Tannura for oil transport, Jeddah on the Red Sea, and Yanbu, Jizan, and Jubail. He also launched a number of the sea lanes linking Saudi Arabian ports on the Red Sea coast with other countries. The railways also received royal attention; in 1953, a railway line between Dammam and Riyadh was completed. The nucleus of civil aviation was formed in 1945, when the American President, Franklin Roosevelt, gave King Abdulaziz a civilian aircraft, and his Majesty ordered the purchase of two additional Dakota aircrafts. The King had earlier, in 1934, sent a mission of ten young men to learn aviation in Italy and they returned a year later. To continue aviation development, the King established an aviation school in Jeddah and commissioned teachers from Europe. He also established near the school at Alkandarah Port a technical modern yard capable of accommodating 25 aircrafts, and built a spacious airport. The interest of his Majesty in radio, telegraph, and mail started before accomplishing the feat of unifying the Kingdom. In his movements, he was accompanied by a vehicle carrying wireless radio to help him run the affairs of the country. Subsequently, staring in 1925/1926, he conducted negotiations with international companies for the purchase of wireless radio sets. These achievements were extended in 1929/1930 with the establishment of a network of wireless radio stations to link the major cities to a command centre, and between 1930 and 1931 with the establishment of a wireless network linking together Mecca, Riyadh, Al-Taif, Tabuk, Hail, Buraidah, Ahsa, Qatif and Qurayat. The Directorate for Telegraph and Mail was established in Before then in 1926/1927, the Kingdom had acceded to the International Postal Union in Bonn and to the Postal conventions signed in Madrid. At the same time, the Government signed a special agreement pertaining to the ownership of the sea cable between Jeddah and the Port Sudan, and developed marine cable services. In 1933, Lebanon was connected through the station in Riyadh, and in 1934 the station in Riyadh was linked to Baghdad, and then to Sana a. The first contact with Tangier across the continents to connect with New York came in Subsequently, a wire and wireless telecommunications project was launched; a modern multi-channel telephone and telegraph network linking Riyadh, Mecca, Medina, Dammam, Jeddah, Taif was established; and it became possible to communicate with the Arab countries through Jeddah.
18 13 Until the entry of the King Abdulaziz into Riyadh in 1901, there was not a regular postal service; messages were sent by primitive ways and means. His Majesty started sending mail by car trips between Mecca and Riyadh in The establishment of the railway line between Riyadh and the Eastern Region in 1950 had a significant positive impact on the regularity and speed of mail. Air mail between the major cities started when the aircrafts purchased by the King arrived in The efforts of His Majesty culminated with the establishment of the General Department of Post. The telephone service was started primarily to support the security service. However, King Abdulaziz wished to extend this service to the cities. The Mecca Telephone Exchange was expanded from 100 lines in 1927 to 250 in 1931, and the Jeddah Telephone Exchange was expanded to 154. A 50-lines automatic exchange was established in the Government Palace in Riyadh. Until 1934, the total capacity of the telephone network in all cities reached 584 lines. In their totality, these measures set in motion a dynamic that resulted in a substantial increase in commercial activity, which had been suffering from serious difficulties, such as frequent attacks on and looting of convoys of trade, and protection rackets. Unification of the country and the advances made in building a modern state, created an environment of trust, and laid the foundation of a flourishing economy. Individual initiatives and small businesses prospered; and financial capacity, goods, and movement of ships and transportation to and from the Kingdom increased. These developments were accompanied with the establishment in 1927of the Traders Council to settle disputes among traders and the establishment of courts. In 1931, the system of registration of commercial companies was set up, and regulations governing commercial courts, maritime trade and land trade were issued. In 1939, regulations governing trademarks were issued; a progressive system that demonstrates clearly the forward looking attitudes of King Abdulaziz. In 1946, the Chamber of Commerce regulations were issued, opening the door for the establishment of companies and the conclusion of trade agreements with the Arab and other countries to organise movement of goods and customs. In 1948, the Office of Exchange Control, which later became the Division of Economic Affairs, was established to assess the needs of the Kingdom of imported goods and organise the granting of import and export licenses. These systems and regulations transformed trade completely, paving the way to Council of Ministers Resolution No. 66 of 1955 establishing a Ministry of Commerce.
19 14 3. Acts of Civilisation Health was at the forefront of the concerns of the Founder King, who, in fact, laid the foundations of modern health services. He entrusted overseeing the reorganisation of health departments to his private physician, Dr. Mahmoud Hamdi Hamoodah. Medical doctors were appointed to run health affairs. Ajyad hospital in Mecca and the government hospital in Jeddah were established. The Department of Public Health was founded in Mecca, and with the establishment of a number of hospitals and dispensaries in Mecca, Medina, Riyadh, Hail, Jizan, Unaizah, Hofuf, Dammam, Amlaj, Alwajeh, Yanbu, and Qatif, health services were broadened to cover regions of the Kingdom. In its first year, the Government participated in the International Health Conference held in Paris, and in 1931, joined the International Health Office. In addition, the Government brought in specialist doctors and sent Saudi doctors to study in local health institutes, granting them generous allowances. The health measures were accompanied by a series of regulations, such as the regulations governing: the department public health, licensing medical and pharmaceutical practice, hairdressing and cupping, vaccination against smallpox, municipal health services, prevention of infectious diseases, and pharmaceutical practice. The tremendous efforts of the Founder King resulted in the founding of 11 general hospital, 30 health centres, and 25 clinics; in addition to numerous health facilities, quarantines, and mobile medical teams serving the desert and rural areas. The Founder King was equally resolute in his determination to promote education. Immediately after his entry into Mecca in 1925, he held the first meeting on education in the history of the Kingdom, at which he asked the Ulema to spread education. He, then, started to work on the standardisation of the teaching system in the Grand Mosque. In addition, he paid particular attention to private schools, visiting in 1926 the Falah School and Fakhria School and donating money to each. In the same year, the Directorate of Education was established by royal decree and tasked with disseminating education and establishing an integrated education system. The King thus sowed the first seeds of an education policy based on free primary education, and on spreading science, knowledge, and the trades; all while adhering to the principles of Islam.
20 15 In 1927, his Majesty founded the Saudi Scientific Institute to run day and evening classes to train teachers for the new primary schools. In addition, scholarships to study abroad were offered in support of training teachers for preparatory and secondary schools. A royal order was issued to send 14 students abroad to specialise in teaching, Islamic jurisprudence, technical education (mechanics), agriculture and medicine. The first batch of scholarship holders returned to the Kingdom between 1935 and 1939, and the second was sent in Indeed, the concept of scholarships was close to the heart of King Abdulaziz. Whenever the need for qualified personnel to work on reforms or development projects arose, he would, in an attempt to meet the need, hasten to send people to train abroad. In 1930, subsequent to a conference in Riyadh, which discussed wireless radio, the King sent three students to be trained by Marconi in Chelmsford, England, on wireless telecommunications, and, in 1935, ten students were sent to study aviation in Italy. When it became apparent that Saudi students did not have secondary school certificates; were not proficient in foreign languages; and did not study science, chemistry and physics; his Majesty founded in 1936 a school to prepare students for scholarships abroad. Meanwhile, he continued to foster the Directorate of Education. A year after the Directorate was founded; the Council of Education was established by royal decree, tasked with developing a comprehensive, modern educational system, through unified curricula and a well-defined school structure. 4. Perspicacious management of oil resources The story of oil in Saudi Arabia is truly interesting. In a sense, all the major transformations engineered by King Abdulaziz were made possible by his skilful conduct of oil exploration, for there is no doubt that oil has brought about fundamental changes to all aspects of life in the Kingdom; economic, political, social, cultural, educational, and physical. His Majesty focused his endeavour on sustainable development, putting oil in its service; thereby paving the road for the later spectacular development fostered by successive national development plans. In 1924, the first concession to explore for oil was signed with the Eastern General Syndicate. When that company failed to carry out serious exploration, the Standard Oil Company of California made a proposal to King Abdulaziz. In 1933, he signed an oil agreement with that company, covering the eastern part of the Kingdom. In 1936,