The Foundation of the Modern State

of Saudi Arabia

Dr. Muhammad ‘Abdul Jabbar Beg

Ancient Arabia made two great contributions to mankind: the Arabic language, and the Semitic revealed religion of Islam. Today there are nearly two hundred million speakers of the Arabic language and one billion followers of Islam all over the world. Arabic has contributed thousands of loan words to the languages of mankind and Islam has influenced the theologies of other religions. Al-Ka’ba, the pivot of Islamic cosmology and the direction of prayer (qibla) of the global Islamic community (umma) is located in the Arabian city of Makkah. Every year since the 1970s more than a million Muslims of all races have travelled to Makkah to perform the sacred rites of the Islamic pilgrimage (Hajj). The holy cities of Islam – Makkah, the honoured habitat (Al-Mukarramah), and Madinah, the radiant (Al-Munawwarah) – are inseparable parts of the Kingdom of Saudi Arabia.

The founder of the modern state of Saudi Arabia was King ‘Abd al-‘Aziz bin ‘Abd al-Rahman al-Faisal al-Sa‘ud. He is known to the West as ‘Ibn Saud’ or ‘Abd al-‘Aziz Ibn Saud. King ‘Abd al-‘Aziz was a member of the family of al-Saud. His ancestors had been among the rulers of Arabia since the eighteenth century CE. The ruler of the Saudi dynasty was Muhammad Ibn Saud (1744–65), who ruled from the town of Dir’iyah near Riyadh.

During the eighteenth century there arose in Nejd a Muslim religious thinker and reformer named Sheikh Muhammad Ibn ‘Abd al-Wahhab (1703–92), who was born into a family of Hanbali scholars. Following the traditional Islamic thought of Imam Ahmad Ibn Hanbal (d. 855) and Ibn Taymiyah (d. 1328), Ibn ‘Abd al-Wahhab invited the Muslims to adhere to the strict dogma of tawhid (monotheism) and abandon all forms of deviationist ideas of ‘divine associationism’ (shirk). He urged Muslims to destroy all manifestations of ‘animism’ in the forms of sacred trees and the tombs of saints. His iconoclastic ideas aroused the hostility of many Arabs, who tried to persecute him. He found a powerful protector in the Amir Muhammad Ibn Saud, the ruler of the town of Dir’iyah. Sheikh Muhammad Ibn ‘Abd al-Wahhab and Muhammad Ibn Saud formed a pact of mutual support in 1744, and vowed to work to establish a state based on the doctrine of pure monotheism. This event marked the dawn of the Saudi state, which was buttressed by the reformist ideas of Ibn ‘Abd al-Wahhab.

During the nineteenth century the Saudi Kingdom of Dir’iyah suffered major political misfortune as a result of the invasion of Muhammad Ali Pasha of Egypt in 1818. The Egyptian army, acting under the direction of the Ottoman (Osmanli) Sultan Mahmud II of Constantinople, destroyed the Saudi capital (Dir’iyah) and created an interregnum in Saudi history. The Saudi dynasty was revived in 1824 CE, but was driven into exile in Kuwait by the invasion of Ibn Rashid in 1891. After a decade of exile, ‘Abd al-‘Aziz Ibn ‘Abd al-Rahman, the son of the exiled Saudi ruler, captured Riyadh in 1902.

History now repeated itself for the Saudi family. The young prince ‘Abd al-‘Aziz reclaimed his family’s heritage by conquering Riyadh. Between 1902 and 1904 the Ibn Rashid were isolated in the area of Jebel Shammar in the north. The Saudi leader planned to establish new settlements of nomadic Arabs in the oases of Nejd, and named these settlements hujar (sing. hijrah). The settlers, known as Ikhwan (literally, ‘brethren’), went through a programme of Islamic indoctrination and military training as well as learning new skills in handicrafts and agriculture. There were some 11,000 Ikhwan warriors in the service of ‘Abd al-‘Aziz al-Saud in 1912. Great Britain recognized the Amir ‘Abd al-‘Aziz’s authority over Nejd and al-Hasa by signing a treaty in 1915 with the rising political star of Arabia. Britain also agreed to pay a monthly subsidy of £5,000 to ‘Abd al-‘Aziz to secure his neutrality in the First World War. The subsidy agreement came into effect in 1917, and the British promised to defend the Saudi ruler in case the Ottomans invaded his territory. ‘Abd al-‘Aziz outmanoeuvred his political rivals in Arabia and captured Asir in 1920. Ha’il, the stronghold of the pro-Ottoman Ibn Rashid, was conquered in 1921. The Saudis expressed a desire to perform the Hajj (pilgrimage); this pious wish also became a political necessity when Sharif Husain of Makkah proclaimed himself Khalifa of the Muslims and King of all the Arabs in 1924, following the abolition of the institution of the former Ottoman Khilafa by the Turkish Parliament led by Mustafa Kemal Pasha. By the end of 1924, Ta’if and Makkah had been overrun by the Saudis, and Madinah and Jeddah were conquered by the army of ‘Abd al-‘Aziz in 1925. The Saudi ruler proclaimed himself the King of the Hejaz and Sultan of Nejd and its Dependencies in 1926. The new kingdom thus created by ‘Abd al-‘Aziz was named the Kingdom of Saudi Arabia in 1932 (1351 AH), and it extended from the Red Sea to the Arabian Gulf. ‘Abd al-‘Aziz assumed the title of Malik, or King, of Saudi Arabia.

King ‘Abd al-‘Aziz, a charismatic Arab leader, united most of the Arabian peninsula under his powerful leadership. He adopted the method of contracting fresh matrimonial alliances with the powerful families among the Arab tribes in order to unify them and gain their loyalty. According to modern research, there are 88 tribes inhabiting the Saudi Kingdom today, including the Thaqif, the Banu Tamim, Banu Hilal, Banu Harb, Banu Marwan, and Banu Zayd, the Juhaynah, the Rabi‘ah, the Qahtan, Shammar, Dawasir, Baqum, Khath’am, Shamran, Dhafir and Yam.

In 1929 King ‘Abd al-‘Aziz founded the Committee for the Enforcement of Virtue and the Discouragement of Vice in conformity with the Qur’anic dictum al-Amr bi’l-Ma‘ruf wa’l-Nahy ‘an al-Munkar. This was intended to promote Islamic values and eradicate the vices of smoking, singing and alcoholic drinking. Shari’ah forms the core and basis of Sa‘udi law. Nevertheless, an important principle was enacted in 1926 that new measures of ‘secular law’ could supplement and complement the Islamic law. The Saudi Kingdom has been variously described as an ‘absolute monarchy’, a ‘theocratic monarchy’, and so on. But a Saudi source disputes both these labels: it is not an absolute monarchy, because the monarch is subject to the law of Islam or Shari’ah; by the same token it is not a theocratic monarchy, since the monarchy derives its power from the people of the country. As a result of this, some scholars have preferred to describe the Saudi monarchy as a ‘nomocracy’ (a state ruled by law); in this case, it is a monarchy ruled by divine law (Shari’ah).

When the so-called ‘Organic Instructions of the Hejaz’ were formulated (c.1926) the survival of the existing governmental institutions was assured. In the context of Saudi Arabia, the King exercises the secular power, while the ulama exercise the religious authority. King ‘Abd al-‘Aziz introduced various new ministries to run his new kingdom. These new ministries came into existence gradually. Thus the Ministry of Foreign Affairs was founded in 1930, with Prince Faisal as the Foreign Minister; similarly, the Ministry of Finance was founded in 1932, with Sheikh ‘Abdullah Sulayman performing the function of Finance Minister. The King also appointed a Minister of Defence in 1946 and a Minister of the Interior in 1951. As the state apparatus expanded, the King formed a Council of Ministers (Majlis Al-Wuzara’) under Crown Prince Saud in 1953, shortly before his own death. This so-called Council of Ministers had neither executive authority nor legislative function. It only made specific recommendations to the King, who had both the executive and the legislative power.

During his rule King ‘Abd al-‘Aziz used to hold tribal councils at which his subjects could approach him with their complaints and the King could redress their grievances. This concept of tribal councils in Saudi Arabia is reminiscent of the Dar al-Mazalim (the Appeal Court) that was in existence during the ‘Abbasid Khilafa (750–1258). In this way the King was seen as a dispenser of justice (‘adl).

King ‘Abd al-‘Aziz ruled over a very poor country for most of his life, until oil was discovered in his kingdom in 1938. He used the utmost tact and persuasion to get the consent of his subjects to the introduction of some technical devices to improve the communications system in his kingdom. He had to win arguments to introduce the telephone, the radio, motorized vehicles and aircraft into his desert kingdom. The king was far-sighted enough to grant oil concessions to foreign companies, which attracted an immense fortune to his poor kingdom. Some Saudi ulama (theologians) opposed the presence of non-Muslim foreigners in the kingdom; but the King disarmed the conservative opposition by citing the example of the unbelievers who were employed by the Prophet of Islam.

The oil concession was granted in 1923 to a British company known as Eastern and General Syndicate, but it could not find oil. Hence the concession lapsed in 1928. But fortune favoured the King when in 1933 he granted an oil concession to the Standard Oil Company of California (SOCAL). SOCAL, in its turn, assigned its concession to its operating subsidiary, known as the California Arabian Standard Oil Company (CASOC). It was a fortunate event when CASOC began oil drilling on 30 April 1935 at the appropriately named Dammam Dome at Dhahran. Oil was discovered on 17 February 1938 at Well Number 1, with an initial production capacity of 82 barrels per day (bpd). By October 1938 oil had been discovered in commercial quantities, and Well Number 7 was producing 5,832 barrels of oil per day. At the beginning 700 tons of crude oil a day was being sent to the Bahrain Oil Refinery; but by May 1939 an American tanker was carrying Saudi crude oil to a new refinery at Ra’s Tanura. Soon thereafter the outbreak of the Second World War interrupted oil production, which was only resumed in 1944. And so the oil era in Saudi Arabian history had begun.

In 1938 oil revenue was only worth US$340,000, but the following year it increased to US$ 3.2 million; in 1940 it further increased to US$ 4,790,000. Thereafter oil revenue declined for four consecutive years, but in 1945 oil revenues again rose to US$ 4.3 million. Thereafter the oil bonanza was in full career. In 1946 oil revenues for Saudi Arabia exceeded 10 million dollars; they reached more than 18 million dollars in 1947. The older the king grew, the higher rose his oil revenues. King ‘Abd al-‘Aziz had the good fortune to earn US$ 32.5 million in 1948; he also earned more than US$ 39 million in 1949; US$ 56 million in 1950; US$ 110 million in 1951, and US$ 212.2 million in 1952; only in the final year of his life did oil revenue decline to US$ 169.8 million.

While Saudi Arabia was experiencing unprecedented monetary revenues as a result of the discovery of oil, its finances were in a chaotic state. The supply of money was controlled by a number of foreign banks, located principally in Jeddah. There were two main kinds of coin in circulation, gold sovereigns and silver riyals. The sudden increase in money supply created an unprecedented situation in the Saudi economy. Exchange rates between gold sovereigns and silver riyals fluctuated wildly from year to year. In consequence, some measure of financial reform had to be introduced to stabilize the monetary situation.

A financial mission from the United States to Saudi Arabia arrived to devise ways of reorganizing the Saudi monetary system. The US Mission was headed by Arthur N. Young, who founded the Saudi Arabian Monetary Agency (SAMA) in October 1952. This new institution became something like a Central Bank. It had to operate without charging any interest (riba), in conformity with Islamic Law. The Saudi Arabian Monetary Agency (SAMA), according to Arthur Young, had to deal with many highly specialized technical problems, such as the ‘issuance of coinage and maintenance of its internal and external value; operation of monetary reserve funds; handling Foreign Exchange transactions so as not to disturb the local market; regulation of commercial banks, foreign exchange dealers, and money-changers as might be found appropriate; and research to aid the government in determining and carrying out its economic and financial policies’.

The multi-purpose Saudi Arabian Monetary Agency helped Saudi Arabia’s transition from a pre-industrial economy to a modern financial system. Thus the two crowning achievements of King ‘Abd al-‘Aziz in the twilight years of his life were:

(1) the establishment of the Sa‘udi Arabian Monetary Agency in 1952; and

(2) the appointment of the Council of Ministers in 1953.

Both of these measures had great significance for the financial and political development of Saudi Arabia.

Oil exploration and the tremendous increase in Saudi revenues also coincided with and assisted the continued success of the career of King ‘Abd al-‘Aziz Ibn ‘Abd al-Rahman al-Faisal al-Saud. Increased oil revenues helped the Saudi monarch to be extremely generous to his former Ikhwan supporters and the tribal political allies who had made his political career a success against all the odds. In 1952 the aged King abolished the pilgrimage fee (equivalent to US$ 78.00 per head) for Muslims from foreign countries. At the same time the King introduced an annual budget to regulate government expenditure in order to develop an orderly economy for his desert kingdom. Foreign financial experts advised the king’s Finance Minister Sheikh ‘Abdullah Sulayman in implementing the budgetary policy.

There were also other major developments in Saudi Arabia’s economic infrastructure during the later years of the first modern Saudi monarch. For instance, ARAMCO (the Arabian American Oil Company) constructed a 345-mile railway linking the Saudi capital of Riyadh to the oil port of Dammam in eastern Arabia. The railway project cost ARAMCO some US$52.5 million. Furthermore, a Tapline (Trans-Arabian Pipeline) from al-Sharqiyah (the Eastern Province) of Saudi Arabia to Sidon in Lebanon began to be constructed in 1947 and was completed in 1950. This Tapline was 1,068 miles in length and cost US$ 240 million to build. These and other developments were related to the progress of the oil industry in Saudi Arabia, and were intended to build an oil-based economy. By the mid-twentieth century Saudi Arabia was heading for a prosperous economic future.

King ‘Abd al-‘Aziz the Great died after an eventful reign in November 1953. During his reign many public works, such as the airport, roads, telephones, radios, electricity, hospitals and schools, were introduced into Saudi Arabia. He was indeed not only the founder of the modern state of Saudi Arabia, but also laid the essential foundations for the modernization of his desert kingdom. It has been aptly said that King ‘Abd al-‘Aziz was one of ‘the greatest leaders to arise in the Arabian Peninsula’.

Despite his tribal background, King ‘Abd al-‘Aziz was a far-sighted statesman. His diplomacy secured good relations with Great Britain during the early years of his political career prior to the proclamation of the Kingdom of Saudi Arabia in 1932. His foreign policy also succeeded in gaining valuable co-operation from the United States of America. He met President Roosevelt on the American cruiser Quincy in the Suez canal in February 1945. At that time the American President was returning from the Yalta conference with Sir Winston Churchill and Stalin. The two heads of state formed a very friendly relationship during their meeting. They discussed a wide range of subjects, including the problem of Palestine. Later, the King spoke of his meeting with President Roosevelt as the high point of his entire career.

After returning to Washington, DC, President Roosevelt wrote the following letter to His Majesty ‘Abd al-‘Aziz Ibn ‘Abd al-Rahman al-Faisal al-Saud, King of Saudi Arabia:

His Majest

‘Abd al-‘Aziz Ibn ‘Abd al-Rahman al-Faisal al-Sa‘ud,

King of Sa‘udi Arabia,

Riyadh.April 5, 1945

Great and Good Friend:

I have received the communication, which Your Majesty sent me under date of March 10, 1945 in which you refer to the question of Palestine and to the continuing interest of the Arabs in current developments affecting that country.

I am gratified that Your Majesty took this occasion to bring your views on this question to my attention and I have given the most careful attention to the statements which you make in your letter. I am also mindful of the memorable conversation, which we had not so long ago and in the course of which I had an opportunity to obtain so vivid an impression of Your Majesty’s views on this question.

You will recall that on previous occasions I communicated to you the attitude of the American Government towards Palestine and made clear our desire that no decision be taken with respect to the basic situation in that country without full consultation with both Arabs and Jews. You will also doubtless recall that during our recent conversation I assured you that I would take no action, in my capacity as Chief of the Executive Branch of this Government, which might prove hostile to the Arab people.

It gives me pleasure to renew to Your Majesty the assurances which you have previously received regarding the attitude of my Government and my own, as Chief Executive, with regard to the question of Palestine and to inform you that the policy of this Government in this respect is unchanged.

I desire also at this time to send you my best wishes for Your Majesty’s continued good health and for the welfare of your people.

(signed) Franklin D. Roosevelt

The friendly relationship of King ‘Abd al-‘Aziz with the US President had a significant impact on the subsequent course of Saudi Arabian foreign policy.

The Kingdom of Saudi Arabia founded by King ‘Abd al-‘Aziz in 1932 occupied 80 per cent of the Arabian peninsula, measuring, according to an official estimate, 2,217,949 square kilometres (according to a later unofficial estimate, Sa‘udi Arabia’s size is 2,149,690 kilometres). The foundation of this vast kingdom, with a population that by 1956 had already reached 6,034,400, was the achievement of King ‘Abd al-‘Aziz Ibn Saud.

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