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Published online by Cambridge University Press: 24 July 2012
What happens when a major modern enterprise is abruptly superimposed on a country where business patterns have been fixed for centuries? One of the most interesting reactions is that by entrepreneurs in the national population. Adaptation, imitation, and eagerness are characteristic responses, and these go remarkably far in solving the problems of carrying on a twentieth-century business in a fifteenth-century economy.
1 Lebkicher, Roy, Handbook for American Employees, Vol. II (New York [?]; Aramco, 1952), p. 64.Google Scholar
2 No census has ever been taken in Saudi Arabia, and all population figures are estimates. This estimate was made in 1947, taken by Twitchell, K. S., Saudi Arabia (Princeton, 1953), p. 67.Google Scholar It is unlikely that the population was significantly different in 1920.
3 There are a few Horatio Alger stories in government during this period, most notably that of Abdulla Sulaiman Al Hamdan, the ex-finance minister, who attained this post in 1925, after being a slave. But the importance given to family lineage on the male side in Saudi Arabia made it almost impossible for men of ability without regal family backgrounds to get ahead.
4 King Saud himself knew a great deal about the British, as his expansion plans were beginning to run into British opposition in the late 1920's in Transjordan and Kuwait. But the face of the West he saw was that of Great Britain as an imperial power, and virtually nothing was known in Saudi Arabia at that time about the other facets of Western economies.
5 The story of King Saud's struggle to develop an independent Saudi nation, together with the political and religious issues involved, is excellently covered in Lebkicher, op. cit., pp. 44–;47.
6 In a society with high death rates and no concept of life insurance, tribal and family relationships become extremely important in this type of situation. It is the duty of such relatives to look after their nephews in Saudi Arabia. Suleiman, incidentally, now has an agency in Saudi Arabia which sells life insurance quite successfully – the majority of policies being written for foreigners, although a few are written for Saudis. Perhaps this is in indication of the weakening of such family responsibilities.
7 See Lebkicher, op. cit., Vol. I, pp. 23–29, for a complete story of this concession.
8 Ibid., p. 41.
9 Twitchell, op. cit., p. 197. Two thousand Americans and 14,600 Arabs took part in this construction work.
10 Coon, Carleton S., “Operation Bultiste,” in Hands Across Frontiers, eds. Teal, Howard M., Jr, and Frank, Peter G. (Ithaca, 1955), p. 313.Google Scholar
11 Ibid., p. 323.
12 Ibid., p. 341.
13 One of the major reasons that Aramco and Tapline relied on native contractors was the ability of those contractors to obtain scarce labor. Many of Olayan's contracts during the Tapline construction period were in effect labor contracts, with Olayan receiving a fee for providing the proper quantity and quality of labor. In other cases, he was also responsible for the job, as well as his own labor supply.
14 Turaif is the last Tapline station before the Jordanian border, and was only supplied by General Contracting for a short period. Later this station was supplied by Lebanese refineries; General Contracting now carries the fuel as far as Badaneh, in the center of the line and desert.
15 A classic story of mechanization in Saudi Arabia is that of the Bedouin, who, on seeing his first airplane land, asked, “Is it male or female?” By now the same man might well be a CAA certified mechanic.
16 Note that this was a classical capital goods depression – when Aramco's and Tapline's major investments were complete, there were no investment expenditures available to take their place. It was the first business fluctuation in Saudi Arabia in 2,000 years.
17 Movies are shown to Americans only; there is a military TV station now in operation at Dhahran, but recreational activities are extremely limited.
18 Coon, op. cit., p. 324. Occasionally the company has lent sums in special situations, but normally it makes no loans.
19 Operating in an underdeveloped country does have some advantages. Saudi Arabia has not yet passed a transport law; there are no entry, rate, or financial restrictions on carriers. Aramco itself acts as a sort of private Interstate Commerce Commission vis à vis the truckers with which it works, but the trucking companies have freedom of action which would seem unbelievable to American trucking managers.
