Wealth & Finance
Business, philanthropy & economics
The sharing of family wealth has been a critical component in maintaining the semblance of a united front within the royal family. An essential part of family wealth is the Kingdom in its physical entirety, which the Al Saud view as a totally owned family asset. During the reign of Fahd, the financial impact may have exceeded 40% of the Kingdom’s annual budget, through co-mingling of personal and state funds from lucrative government positions, huge land allocations, direct allotments of crude oil to sell in the open market, segmental controls in the economy, preferences for award of major contracts, cash handouts, and astronomical monthly allowances, all billed to the national exchequer. Over decades of oil revenue-generated expansion, estimates of royal net worth is at well over $1.4 trillion. This wealth distribution has allowed many senior princes and princesses to accumulate largely unauditable wealth and, in turn, pay out, in cash or kind, to lesser royals and commoners, and so gain political influence.
During periods of high oil prices, such as the late 1970s, the early 1980s, and immediately after the 2003 US invasion of Iraq, national income outpaced the developmental needs and social obligations of the Saudi government, and the effects of royal skimming were diminished. According to well-publicized but unsubstantiated reports, King Abdullah intends to reduce the Al Saud share of the budget. This may sow discontent within the royal family, but would be popular with the Kingdom’s citizenry.