Meanwhile, it has built a huge welfare state at home, where Saudis grow up with free education, healthcare - and an incredible aversion to manual labor. The result is that Saudi Arabia has some seven million foreign workers in a total population of 27 million - roughly one quarter of all residents. Roughly 12% of Saudi nationals are unemployed, nearly a half-million, compared to essentially no unemployed foreign workers. Roughly a half million Saudi workers are Palestinian Arabs.
The unemployed Saudis are ripe pickings for radical Islam; as they enjoy a cushion of benefits and rewards for laziness. And the people who do real work are penalized, even after living there for generations.
An interesting illustration of how Saudi Arabia treats its Palestinian Arab residents can be seen in this lawsuit for US asylum submitted by a Palestinian Arab in 2003:
The IJ [immigration judge] recognized, based on Ahmed’s testimony, that Palestinians in Saudi Arabia are relegated to officially sanctioned second-class status incorporated into the legal and social structure of Saudi Arabia. Ahmed sought to portray this treatment as persecution providing grounds for asylum. He testified that although his parents have lived in Saudi Arabia for 50 years and Ahmed was born in the country, neither he nor his parents have been able to obtain Saudi citizenship because Saudi Arabia reserves citizenship for people of Saudi descent. To remain in the country, Palestinians must renew their residence permits every two years for a fee of 2,000 Riyals (about $530). Palestinians must also be "sponsored" by a Saudi Arabian citizen to own real property, work, or own a business. To illustrate the harsh effects of this requirement, Ahmed related that his father had successfully operated and expanded a grocery store for 15 years, only to see his Saudi sponsor - the de jure owner of the store - take the business away once it became profitable. Each time a Palestinian wishes to change jobs, he must change sponsors for a fee of 6,000 Riyals (about $1,600).(The application for asylum was thrown out because although the US judge recognized that he was discriminated against, it didn't rise to the level of "persecution.")
Ahmed testified about his experience while growing up in Saudi Arabia. He was barred from certain activities during high school and initially was not allowed to attend a university because he was an alien. Although he was able to gain admission to King Saud University in Riyadh because of his talent for soccer and the connections of a family friend, he was forced to study political and administrative science at the university because aliens could not choose their own topic of study. After graduating from the university and searching for a job for more than a year, Ahmed was hired in 1993 to sell cars. He testified that he was paid one-third as much as his Saudi counterparts and had to work significantly longer hours.
We see that Saudi Arabia coddles its lazy natives and heavily penalizes the real workers, the backbone of its society. In fact, Saudi Arabia literally gives land away free for native Saudis - every Saudi is entitled to a free plot of land and an $80,000 interest-free loan to build a house - a benefit that has been there for twenty years, when oil was closer to $30 a barrel.
Imagine how much benefit Saudi society would reap if it invited Palestinian Arabs to become citizens? Its unemployment rate would plummet, its standard of living would rise, it would not be so dependent on workers from Africa and the Far East, and it would actually do something concrete to help Palestinian Arabs.
Of course, it has no real desire to do that. Like other Arab countries, the Kingdom wants to keep their Palestinian brethren in squalor, and most importantly to keep them angry.
Because their entire purpose, by Arab sights, is to hurt Israel.