“A Businessman’s Perspective: U.S.-Saudi Relationship in Transition” 

Hugh Renfro has had a 50-year relationship with Saudi Arabia.  He lived in Saudi Arabia for 23 years, working for ARAMCO & Chevron, where he interacted with all levels of society.  Currently retired and living in Arizona, Renfro has maintained relationships with his contacts in the Saudi business and government communities. He recently visited the Kingdom with a small group sponsored by the National Council for U.S. Arab Relations. Hugh talked about his views of Saudi Arabia, its people, and the current impact of events on Saudi’s relationship with the U.S.   

The Saudis are faced with problems of unemployment and economics. In earlier boom times, the mid 80s, the average personal income was $28,000...by the mid 90s it had fallen to $17,000...now it has fallen to $7,800. Unemployed youth are well educated and dissatisfied which makes them targets for extremist recruiters. The Saudi Government has established a program to replace current foreign employees with Saudi employees. This program has been in force 11 months and is beginning to take effect.   

The government passed a recent law to allow foreign companies to own businesses outright. They are looking for foreign investors to exploit their world class Bauxite deposits, establish Aluminum smelting operations and the large associated power generating plants, and new industries requiring oil and gas feed stock. 

The Saudis have had a close relationship with the U.S. for 70 years. In the war against the Soviets in Afghanistan, the U.S. and Saudi Governments worked together to defeat the Soviets. Thousands of young Saudis went to Afghanistan to fight. The Saudi veterans returned and were heroes; Osama bin Laden was a big hero to the Saudi people. Hugh has known the Bin Laden family for more than 40 years and says that Osama doesn't fit the Bin Laden family mold. The family is very pro U.S., have businesses in the U.S. and many of the brothers have been educated in the U.S. 

The Saudi and U.S. Governments established an anti-terrorism committee in 1996 which tracks Al Qaeda cells and their financial networks. Since 9/11 the Saudis have rolled up Al Qaeda cells, shut down their financial networks, and jailed many Al Qaeda members. Immoderate imams, preaching hate of the Americans and Jews, have been fired and some jailed. The Government has audited text books and has removed 85% of their objectionable material and is working to eliminate the remaining 15%. 

For 20 years the four American oil companies in ARAMCO, plus Shell and British Petroleum, controlled the world oil price and kept it between $1.35 and $2.00 per barrel. This allowed the West to build an unheard of high standard of living based upon cheap oil. In 1961 Saudi Arabia established that a nation had the right to control its own natural resources. ARAMCO began returning sections of their concession area and the Saudis began paying the ARAMCO partners for the associated capital improvements. In 1961 they formed OPEC with Venezuela. 

The Saudis new wealth was used to industrialize and build an entire national infrastructure; schools, colleges and universities, hospitals, water desalination plants, super highway systems, and new social programs. Today Saudi Arabia is the largest exporter in the Middle East and oil is only 35% of their GDP. They have been moderates in OPEC, consistently trying to keep other member countries from establishing price increases which would damage customer nations' economies. At times of U.S. economic problems, they have made major purchases of U.S. Government bonds. They buy our commercial aircraft and our military hardware. Private Saudi investment in the U.S. tops $500 billion.  

The Saudis are making some progress on democratic reforms.  This year additional members for the Government's central and provincial government advisory committees will be chosen by local elections...and women are likely to vote in these elections.