77-32,849 ALOHALY, Mansoor Nasser, 1940- THE SPATIAL IMPACT OF GOVERNMENT FUNDING IN SAUDI ARABIA: A SUJDY IN RAPID ECONCMC GROWIH WITH SPECIAL REFERENCE TO THE MYRDAL DEVELOPMENT MODEL. The University o£ Oklahoma, Ph.D., 1977 Economics, general University Microfilms International, Ann Arbor. Michigan^ THE UNIVERSITY OF OKLAHOMA GRADUATE COLLEGE THE SPATIAL IMPACT OF GOVERNMENT FUNDING IN SAUDI ARABIA; A STUDY IN RAPID ECONOMIC GROWTH WITH SPECIAL REFERENCE TO THE MYRDAL DEVELOPMENT MODEL A DISSERTATION SUBMITTED TO THE GRADUATE FACULTY in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY by MANSOOR NASSER ALOHALY Norman, Oklahoma 1977 The Spatial Impact of Government Funding In Saudi Arabia: A Study in Rapid Economic Growth with Special Reference to the Myrdal Development Model APPROVED BY DISSERTATION COMMITTEE ACKNOWLEDGMENTS Many people have helped me greatly during the various stages of this project. Special gratitude must go to my major advisor. Dr. Ralph E. Olson, for his advice, encouragement, and inspiration, without which the project could not have succeeded. I also wish to thank Dr. Thomas J. Wilbank and Dr. Richard L. Nostrand for their comments and sugges­ tions on the first draft, and Dr. Rufus Hall who also served as a member of my dissertation committee. Dr. Gary L. Thompson, who was not available to participate in the final examination, also contributed a number of useful ideas which were incorporated in the dissertation. I am most grateful to the Government of Saudi Arabia for providing the scholarship which made possible my graduate studies at the University of Oklahoma, and to the many individuals in various ministries of the Saudi Arabian Government who compiled and presented the data on ^ which the study is based. Many American friends have helped to make our stay in the United States enjoyable, and have aided my intellectual development in various ways. Finally, I wish to thank my parents, brothers, and sisters for their support over the years, and to recognize the special support and aid of my wife Balsam, and the patience of ray daughter Raneyah who allowed me to leave home and spend many hundreds of evenings in the library. TABLE OF CONTENTS Page ACKNOWLEDGMENTS ...................................... LIST OF T A B L E S ..................................... iv LIST OF FIGURES...................................... v Chapter I INTRODUCTION ................................ 1 GENERAL INTRODUCTION TO THE REGION AND THE P R O B L E M ........................ 1 REVIEW OF THE LITERATURE................... 13 DEFINITIONS.............................. 48 HYPOTHESES................................ 49 DESIGN AND METHODOLOGY OF THE STUDY .... 50 II MODELS OF SPATIAL AND ECONOMIC DEVELOPMENT . 56 THE NATURE OF M ODE L S ...................... 58 SOCIAL AND ECONOMIC MODELS ................ 60 REGIONAL GROWTH MODELS IN GENERAL ........ 61 EXPORT BASE MODELS........................ 64 NEOCLASSICAL MODELS ...................... 65 ECONOMETRIC MODELS ........................ 67 INPUT-OUTPUT MODELS ...................... 68 CUMULATIVE CAUSATION MODELS .............. 68 Page III THE SAUDI ARABIAN CASE: A GENERAL DESCRIPTION.................................. 76 PHYSICAL ENVIROM'IENT........................ 76 HISTORICAL BACKGROUND ...................... 77 GROWTH AND DEVELOPMENT .................... 84 TRANSPORTATION AND COMMUNICATIONS .......... 88 EDUCATION, HEALTH, AND HOUSING . .......... 91 POPULATION TRENDS AND URBAN GROWTH ........ 96 AGRICULTURE AND THE GREAT WATER PROJECTS . .100 PETROLEUM AND OTHER MINERAL RESOURCES .... 102 INDUSTRY..................................... 107 NOMADISM IN SAUDI ARABIA .................. 109 GENERAL OBSERVATIONS ...................... 113 IV SAUDI ARABIAN PLANNING AND DEVELOPMENT: PHILOSOPHY AND STRUCTURE .................. 114 THE DEVELOPMENT OF FORMAL PLANNING IN SAUDI A R A B I A ............................. 115 PETROMIN AND S A M A ........................... 126 EVALUATION OF THE SAUDI ARABIAN PLANNING OPERATION................................. 130 THE 1975-1980 P L A N ......................... 132 SOCIAL BARRIERS TO DEVELOPMENT ............ 135 THE ROLE OF W O M E N ........................... 137 RESISTANCE TO SECULARIZATION .............. 139 11 Page V RECENT TRENDS IN REGIONAL DEVELOPMENT C1964-1975)................................ 142 POPULATION AND HOUSING .................... 142 EDUCATION..................................146 HEALTH .................... ............... 154 TRANSPORTATIONAND COMMUNICATIONS ........... 164 AGRICULTURE................................175 INDUSTRY ......... ........................ 176 VI THE MYRDAL MODEL IN RELATION TO REGIONAL GROWTH TRENDS .................... 192 REGIONAL TRENDS IN THE SOCIO-ECONOMIC VARIABLES................................193 THE WILLIAMSnM INFOlïALITY IN^FX ............ 2 24 STATISTICAL ANALYSES................. - - - -233 BACKWASH AND SPREAD EFFECTS ................ 238 THE APPLICATION OF EXISTING MODELS TO THE SAUDI ARABIAN C A S E ...................... 243 VII CONCLUSION: A PROPOSED MODEL FOR SAUDI ARABIA .................................... 245 APPENDIX A ............................................ 264 APPENDIX B ............................................ 269 BIBLIOGRAPHY .......................................... 274 111 LIST OF TABLES Table Page 1. Government Budget .... ................... 6 2. Major Cities in Saudi Arabia Which Have A Population of More Than 30,000 Arranged by Their S i z e ................... 99 3. Oil Revenues and Crude Oil Production, 1938-1972 . .............................. 105 4. Regional Population Data for Saudi Arabia: 1963-1974 144 5. General Summary of Road Development Programs, 1964 to 1973 (Kilometers)......... 166 6. Government Appropriations in Saudi Arabia for Transport and Communications, 1963/64 to 1973/74 (Millions of Saudi Riyals)..................................... 171 7. Annual Budget Estimates and the Allocation for each M i n i s t r y ............... 183 8. Gross National Product at Factor Cost, 1962/63 to 1970/71 (Million Riyals) ........ 189 9. Estimated Revenue Receipts of the Kingdom of Saudi Arabia by Major Categories, 1963/64 to 1972/73 (Million Saudi Riyals) . 190 10. The Williamson Inequality TnHpv for Five Variables in 1964 and 1973.................. 232 11. Results from the A.nalysis of Variance......... 234 IV LIST OF FIGURES Figure Page 1. A Typology of Economic Growth Models ....... 62 2. The Myrdal Model of the Cumulative Causation Process ........................ 72 3. Arabian Peninsular-Physical Features ....... 78 4. Saudi Arabia--Administrative Regions ..... 82 5. Saudi Arabia--Major Roads Built, 1950-1960. 90 6. Saudi Arabia--Location of Elementary Schools, 1926 and 1938 93 7. Saudi Arabia--Cities with Population Over 30,000, 1974 .............................. 98 8. Saudi Arabia--Regional Population, 1963 and 1974 .................................. 145 9. Saudi Arabia--Educational Districts, 1973 . 148 10. Saudi Arabia -- Growth of Elementary Education, 1964-1973 ...................... 149 11. Saudi Arabia -- Number of Elementary Level Teachers by Educational District, 1964 and 1973 ................................. 150 12. Saudi Arabia--Number of Intermediate Level Teachers by Educational District, 1964 and 1973 .................................. 151 13a. Saudi Arabia--Students in Institutions of Higher Education, 1964-1973 155 13b. Saudi Arabia--Faculty Members in Institutes of Higher Education, 1964-1973 ............ 156 V Figure Page 14. Saudi Arabia--Health Administration Districts . 158 15. Saudi Arabia--Government Appropriations for Health, Social Services, and Education, 1964-1973 .................................. 160 16. Saudi Arabia--Number of Health Personnel in Major Cities, 1964 and 1973 .............. 161 17. Saudi Arabia--Health Institute Graduates, 1965-1974 .................................. 162 18. The Graduating Class of 1976 in Medicine, University of Riyadh, Saudi Arabia ......... 163 19. Saudi Arabia--Road Network, 1964 165 20. Saudi Arabia--Road Network, 1969 168 21. Saudi Arabia--Road Network, 1973 169 22. Saudi Arabia--Total Number of Licensed Manufacturing Firms, 1964 and 1973 181 23. Saudi Arabia--Number of Licensed Manufacturing Firms by Type, 1973 ........................ 182 24. Saudi Arabia--Number of Workers Employed by Region, 1964-1973 .......................... 194 25. Saudi Arabia--Number of Establishments Licensed by the Chamber of Commerce by Region, 1964-1973 .......................... 197 26. Saudi Arabia--Number of Co-operative Societies by Region, 1964-1973 200 27. Saudi Arabia--Number of Schools, All Types^ by Region, 1964-1973 . 203 28. Saudi Arabia--Total Number of Teachers by Region, 1964-1973 .......................... 206 29. Saudi Arabia--Total Number of Students by Region, 1964-1973 .......................... 208 vi Figure Page 30. Saudi Arabia--Number of Hospitals by Region, 1964-1973 .......................... 211 31. Saudi Arabia--Number of Beds in Government Hospitals by Region, 1964-1973 214 32. Saudi Arabia--Number of Physicians in Government Hospitals by Region, 1964-1973 . 216 33. Saudi Arabia--Number of Pharmacies by Region, 1964-1973 .......................... 219 34. Saudi Arabia--Number of Road Projects Completed by Region, 1964-1973 222 35. Saudi Arabia--Total Road Length (Kilometers) by Region, 1964-1973 .......... 225 36. Saudi Arabia--Number of Workers Employed per Million Population by Region 1964, 1968, 1973 195 37. Saudi Arabia--Number