Fahd's attitude for modernization has been seen most clearly in his political reforms. Beginning in March 1992, Fahd issued several decrees outlining the basic statutes of government, and codifying for the first time, procedures concerning the royal succession. He provided for the establishment of the Majilis al-Shura, a national consultative council, with appointed members having advisory powers to review and give advice on issues of public interest. In September 1993, he issued additional reform decrees, appointing the members of the Majilis al-Shura and spelling out procedures for the new council's operations. He announced reforms regarding the Council of Ministers, including term limitations of four years and regulations to prohibit conflict of interest for ministers and other high-level officials. These reforms have been established as the "Basic System" of government. In July 1997, the membership of the Majilis al-Shura was expanded from 60 to 90 members, and again in May 2001 from 90 to 120 members. The role of the council is gradually expanding as it gains experience. Critics have seen the Basic System as an unwanted move toward Western-style democracy. Fahd and his government have called the developments a simple evolution of a more open relationship between the leader and his people.
The government is currently working through its seventh five-year development plan designed to allocate petroleum income toward transforming a relatively undeveloped, oilbased economy into that of a modern industrial state, while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed somewhat rapidly. Oil wealth has increased the standard of living of most Saudis. Significant population growth, however, has strained the government's ability to finance further improvements in the country's standard of living. Heavy dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. The mismatch between the job skills of Saudi graduates and the needs of the private job market at all levels remains the principal obstacle to economic diversification and development. The seventh plan (2000-2004) focuses more on economic diversification and a greater role for the private sector in the Saudi economy. The government also has set a target of creating 817,300 new jobs for Saudi nationals.