STAY AHEAD
STAY AHEAD

A WALK THROUGH HISTORY

 

Saudi Arabia's identity is, above all, defined by Islam. It was in Mecca that the prophet Muhammed received the first revelations from God in 610 CE and it was to Medina that he undertook the hijra in 622 CE. The presence of these two holy places in the country means that the history of Islam and that of Saudi Arabia cannot be separated. Likewise, the Kingdom of Saudi Arabia cannot be separated from the house of Saud, the current rulers of Saudi Arabia who struggled for 200 years to create the country, finally succeeding in 1930, after two earlier attempts in 1756 and 1824. Six years after the proclamation of the third Saudi state in 1932, oil was discovered in the kingdom. As the oil started pouring out, foreign companies and western influence poured into Saudi Arabia, marking the beginning end of the long isolated Bedouin nature of the country.

 

 

THE ORIGINS

 

Over 5,000 years ago, caravans were already plying the ancient trade routes crossing the Arabian Peninsula. Passing through and occasionally settling in the area, they have left behind a rich heritage that speaks of many cultures and civilisations. In the south, Yemen - or Arabia Felix as the Romans called it - was a fertile agricultural area where various empires succeeded each other. The north east of the peninsula and the island of Bahrain were extensions of the Mesopotamian civilisation. By the seventh century CE, Mecca, the cradle of Islam and the annual hajj destination of Muslims, was a prosperous trading hub and a centre of pagan worship. Mohammed had to flee the wrath of the traders to Medina, but later returned triumphantly, establishing the worship of Allah as the only God in Mecca and forging the Arab Bedouin tribes into a formidable united fighting force which was to spread Islam from the Atlantic to the Indian ocean in little more than two hundred years. Mohammed's successor as the leader of the faithful or caliph was his companion Abu Bakr, who in his turn was succeeded by Umar, Uthman and finally Ali. Together they are known as the four rightly guided caliphs. They were followed by the Umayyad caliphate and later the Abbasid caliphate.

 

The original unified Muslim empire progressively fragmented into smaller entities, which were consecutively overrun by the Huns and Seljuks (who themselves converted to Islam after conquering parts of the empire) and finally conquered by the Ottoman Empire. Most of the peninsula however, and specifically the central Nejd desert area, remained under independent tribal rule for much of this period. By the time the Sauds made their first efforts to conquer the territory and establish a unified state of Saudi Arabia, only the Hijaz in the west, with Mecca, Medina and Jeddah, and the area of Hassa, which is now the eastern province, were under the rule of the Ottomans. The British, meanwhile, had established treaties with the coastal emirates (Bahrain, Kuwait, Qatar, UAE, Oman) that were consequently known as the Trucial States.

 

THE RULE OF THE SAUDS

 

Muhammad ibn Saud founded the first Saudi State in 1744. Starting from his stronghold in Ad-Diriyyah on the Nejd plateau of central Arabia, he joined forces with Imam Muhammad ibn-Abd-al-Wahhab, a reformist Islamic scholar, to unify the Arabian Peninsula under the rule of Islam. From the very beginning, then, the support of the clerics and the maintenance of a conservative interpretation of Sunni Islam (often unofficially known as wahhabism) are the traditional cornerstones of the Al Saud family's legitimacy. This first effort was thwarted by the Ottoman Empire, which did not wish to have a powerful independent ruler on its southern flank and sent in the armies of the semi-independent Egyptian ruler Mohammed Ali. In 1825, the Saud Family seized power again and declared the second Saudi State, only to be defeated by their local rivals, the Rashid clan. Finally, in 1902 King Abdul-Aziz bin Abdulrahman Al-Saud, the founder of the current Saudi State, returned from the family's exile in Kuwait and re-conquered Riyadh after eleven years of domination by the Rashids. He continued to fight for the unification of what would become the kingdom of Saudi Arabia and finally met with success in 1932. Six years after king Abdul-Aziz’s achievement, the discovery of oil in the soil of Saudi Arabia changed everything, transforming a poor Bedouin state into a rich rentier economy almost overnight. The country's political and social make-up, however, remained firmly conservative.

 

King Abdul Aziz died in 1953 and was succeeded by his eldest son Saud and later by Saud's younger brother Faisal, the former foreign minister and a man known both for his religious devotion and audacious reforms. Faisal's assassination in 1975 brought his brother Khalid to power, who was in turn succeeded by Fahd and finally, in 2005, by Abdullah, who had been the de facto ruler since 1995 already due to Fahd's health problems. Abdullah's accession to full power has allowed him to boost his already on-going reform and development program to its current dimensions. Up until now, the succession tradition has seen different sons of ibn Saud succeeding each other at the head of the family and the helm of the kingdom, but in 2007 king Abdullah created a succession council, consisting of senior members of the Saud family, to elect the future rulers of the country.

 

Over the years, under the rule of the house of Saud, the kingdom has gone through many crises and periods of prosperity, usually determined by fluctuations of the Brent price. During the 1973 Arab-Israeli War, Saudi Arabia participated in the OPEC oil embargo that led to a dramatic increase of the oil price and to the kingdom acquiring control of its own resources, culminating in the full nationalisation of the Arab-American Petroleum Company (Aramco) in 1980. However, this was soon followed by a period of instability and war in the region, starting with the 1979 Iranian revolution that deposed the shah, almost immediately followed by Saddam Hussein's attack on Iran. The Iran-Iraq War ended only in 1989. In 1991, Saddam's invasion of Kuwait led to the first Gulf War followed by twelve years of crippling sanctions on Iraq. Meanwhile, smouldering border conflicts between KSA and Yemen and civil war inside that country, as well as the ever-festering Israeli conflict maintained a culture of insecurity and instability. These factors taken together have led to KSA spending much of its newly increased revenues on armaments while maintaining a generous welfare state domestically. Then came the eighties and nineties that saw a dramatic and sustained drop in the oil price. Consequently, much needed renovation and expansion of the infrastructure kept being delayed and the project to diversify the Saudi economy away from its oil dependency failed to take off properly.

 

On September 11th, 2001, the attacks on the twin towers led to the 'war on terror' and ultimately to the 2003 invasion of Iraq. Oil prices immediately rose to unprecedented limits and have remained at high levels until this day, facilitating king Abdullah's massive modernisation and reform project, which has transformed the country beginning in 2005. The long-term development strategy, most recently formulated in the five-year development investment plan for 2009-2014, focuses on the diversification of the Saudi economy. This is badly needed as oil exports still account for more than 90% of export earnings and nearly 75% of government revenues. Much attention and heavy investments also go to health care, education and job creation. The latter is part of an effort to replace the previously existing – but ultimately unsustainable - welfare state with a regular economy offering employment and career opportunities at home for a young and quickly expanding population.

Kuwait in Spain

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Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies, ABC.  FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.

 

Stay tuned - Stay Ahead

GGC launches FMS and FMB mobile apps

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GGC concludes FindMe in Bahrain

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Global Gulf Consulting has concluded its latest production on Bahrain, FindMe in Bahrain giving the country a fresh approach after a couple of difficult years of local demonstrations that matched the global recession.  Bahrain is a small island in the Arabian Gulf with an incredible potential for logistics, industries and tourism. FindMe in Bahrain was supported by both the public and private sector of Bahrain.  Banagas, Nass Corporation, BBK and DHL were GGC strategic partners in the development of the series among others.  

FindMe in Bahrain is available at the local bookstores Jashamal and online as well as in the Apple Store. It is a full business leisure and business guide for any investor or visitor interested in traveling to Bahrain or for those that already live there.

 

New release: FindMe in Saudi 2013 Edition

FindMe in Saudi offers a multi-faceted overview combining business and leisure, economy and heritage. The book aims to capture the current development of Saudi Arabia in the words of the people who live and work there. It is an authoritative source of information for investors, businessmen and travellers produced to firmly position KSA as an attractive investment destination.

In contains general information about the country´ economic performance and who is who as a sectorial overview and a leisure guide.    

FindMe in Saudi 2013
FMS 2012 A4 v15 web.pdf
Documento Adobe Acrobat [45.4 MB]

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