ABSTRACT
King Khalid died in June 1982 and Fahd was declared King. Abdallah became Crown Prince and first Deputy Prime Minister, and Sultan second in line of succession and second Deputy Prime Minister. Although the prearranged succession went through smoothly, the struggle for power within the royal family soon reemerged. The Saudi government's budget was largely dependent on its oil revenue because the regime was unable, and unwilling, due to religious and political factors to tax the population. Subsequently the kingdom's economic activity, largely dependent on government spending, totally stagnated. Economic activity further declined — tens of thousands of villas and numerous office buildings in the kingdom's main towns stand empty; rents which provided many Saudis with a handsome income were halved, and in some cases reduced to about a third of their 1982 level. The modernisation and expansion of the Saudi armed forces since the 1960s made the House of Saud even less dependent on the traditional power brokers.
