Saudi Arabia, a monarchy ruled by the Saudi dynasty, enjoys special importance in the international community because of its unique association with the Islamic religion and its oil wealth. Since the establishment of the modern Saudi kingdom in 1932, it has benefited from a stable political system based on a smooth process of succession to the throne and an increasingly prosperous economy dominated by the oil sector. The upsurge in oil prices that began in 1999 has relieved pressure on Saudi budgets but has created concern in the U.S. Administration and Congress. In March 2000, Members of Congress introduced legislation to reduce or end U.S. assistance or arms sales to countries engaged in oil price fixing. The United States and Saudi Arabia have long-standing economic and defense ties. Between World War II and 1975, the United States provided a total of $328.4 million in economic and military aid to Saudi Arabia, reducing and ultimately terminating these programs as Saudi oil-derived income burgeoned in the 1960s and 1970s. A series of informal agreements and military deployments have demonstrated a strong U.S. security commitment to Saudi Arabia. Saudi Arabia was a key member of the allied coalition that expelled Iraqi forces from Kuwait in 1991, and approximately 5, 000 U.S. troops remain in the country. Saudi Arabia continues to host U.S. aircraft enforcing the no-fly zone over southern Iraq; however, Saudi Arabia has not offered the use of its territory for major air strikes against Iraq. Bombing attacks against a U.S. operated training facility and a U.S. military apartment in 1995 and 1996 have raised concerns about the security of U.S. personnel there. Principal issues of bilateral interest include the Saudi position on the Arab-Israeli conflict, security in the post-war Gulf region, arms transfers to Saudi Arabia, Saudi external aid programs, bilateral trade relationships, and Saudi policies involving human rights and democracy.


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