ABSTRACT
Unlike the First Development Plan, the Second Development Plan for the period 1975-80 embodies efforts by Saudi Arabia to develop in a manner unconstrained by finance, specifically foreign exchange.l Since the increase in oil prices in 1973 raised the foreign exchange resources of Saudi Arabia, the major economic problem has been that of finding domestic avenues for absorbing the so called 'surplus funds'. Even when compared with other wealthy OPEC countries, Saudi Arabia is considered to be the one with the lowest absorptive capacity.2
