As a political matter, the death yesterday of Saudi Arabia's King Fahd is probably of little consequence: His successor, Crown Prince Abdullah, has been the kingdom's de facto ruler since Fahd was debilitated by a stroke in 1995, so there aren't likely to be any abrupt policy changes. As a historical matter, however, the King's death offers a timely occasion to trace the arc of Saudi Arabia's decline -- a decline that's been as precipitous as was its previous rise from a bedouin backwater to an oil superpower.

In 1975, when King Fahd effectively took the reins from his ailing brother King Khaled, Saudi Arabia was among the richest countries in the world. Since then, per-capita GDP has fallen by about two-thirds, even as the population has tripled.

Partly, this has to do with fluctuations in the oil market. But that just underscores the larger problem, which is that (unlike other oil giants such as Mexico) Saudi Arabia failed to diversify its economy beyond oil, leaving itself at the mercy of its price. Then, too, King Fahd built one of the largest welfare states in the world, importing workers from abroad while maintaining his own population in comfortable idleness. There's a Ph.D. thesis to be written tracing the connections between Saudi welfarism and the Saudi jihadists blowing themselves up daily in Iraq.

Also notable about the King's reign was the financial support he gave to radical Islamists and assorted terrorist movements. That meant, among other things, funding the Palestinian terrorist apparatus that's done so much to destabilize the region. It also meant support for the madrassas, or religious schools, that have served as the chief conduits for Wahabist militancy around the world. Saudi money was supposed to have guaranteed the kingdom's safety, yet today the House of Fahd is one of the jihadists' principal targets. Nor did it help that King Fahd made only cosmetic attempts to democratize the kingdom's political institutions, which also accounts for the rise of Saudi militancy.

In many of the obituaries being written of him, the King is often described as a friend of the U.S., chiefly because of his 1990 decision to allow the stationing of U.S. troops on Saudi soil for the Gulf War. Yet that was only under the threat of an Iraqi invasion. The U.S. has been a better friend to the kingdom than it has been to us. As both countries move beyond King Fahd's shadow, the key task will be to ensure that Saudi Arabia seriously addresses the full range of American concerns, not just oil. Therein lies the kingdom's salvation as well.