Oil and Water Do Mix: The Case of Saudi Arabia

Attaining economic development and social wellbeing through national development planning constitutes complementary goals. Such a complementary link between the two goals is shown in this paper to be established by the interaction between the economic need to maintain healthy oil revenues and the social necessity to use a part of the oil revenue to sustain subsidy of a most central life-fulfilling need, the water resource in Saudi Arabia. The paper brings out how this linkage between the two goals, that is between the economic and social balance using oil to support water resource pricing and availability in Saudi Arabia are established. The approach of the paper is both normative in regard to the social perspective and is positive in terms of empirical evidence to support our argument that oil has been made a social instrument besides being an economic one to sustain the supply and pricing of water resource in Saudi Arabia.