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Institutions, Globalisation and Empowerment

Institutions, Globalisation and Empowerment

Edited by Kartik Roy and Jörn Sideras

This book argues that the capacity of a country to develop, and the levels of economic and social development achieved, depend more on the institutional parameters within which the development policies are implemented than on the policies themselves. It contends that forces of globalisation influence individual countries’ economic and social institutions.

Chapter 10: WTO and the Dangers of Privatisation: An Analysis of the Saudi Case

Jean-François Seznec

Subjects: economics and finance, institutional economics, international economics


* Jean-François Seznec INTRODUCTION Economic structures in the Persian Gulf have evolved as a response to societal needs, not market needs. Attempts to modify, or liberalise, these structures by merely changing the rules of the market, such as is being tried through the WTO negotiations, will fail unless the causes that created these economic patterns are understood and addressed. The economic structure of the Kingdom of Saudi Arabia is somewhat different than those of any other place. This chapter will present in some detail a view of the structural form of the Saudi system as of late 1998, analyse how it has evolved the way it has and review the changes to this structure presently taking place. The evolution of the Saudi economic structure over the past 25 years seem to have reflected the need of the leadership, especially that of King Fahad, to solve societal problems through economic structures. In order to maintain stability in the kingdom, while maintaining the absolute control of the state by and for the royal family, Saudi Arabia developed an economic model that fostered a total separation of the royal family from the commoners. This separation which has been fully in place until late 1998 and which, by and large, is still the norm, provided for the complete control of industry, finance and oil by the commoners, while leaving all matters of internal security, military matters and land to the royal family. The realm of the royal family was not designed merely...

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