The United States and other major powers of the International Monetary Fund have reached an informal agreement under which Saudi Arabia will have its own seat and its own Executive Director on an enlarged IMF executive Board.
It will be a temporary 21st seat, for at least the next two years, making the Arab nation a member of a new "Big Six" of the IMF, along with the U.S., Great Britain, West Germany, France, and Japan.
The changeover will be made official when executive directors are selected in a biennial vote during the annual meeting of the IMF in Washington late in September.
It had been decided about a year ago, the Saudis, as the second largest lender of funds to the IMF, were entitled to their own seat on the IMF Board.
But until now, the United States had opposed enlarging the 20-man board, setting up a potentially difficult political decision in deciding which one of the other 15 executive directors - representing smaller countries - would be forced off the board.
A Saudi seat is one more certification of growing economic power in the Arab world, and a status symbol known to be welcomed by King Khalid. If the Saudis continue as the second largest creditor, they will continue to hold the 21st seat. An assessment of creditor rankings is made every two years.
Under the present system, there are 20 executive directors of the IMF, of whom five are appointed by countries that make the largest quota deposits into the IMF. They are the five nations, along with Saudi Arabia that will make up the "Big Six."
The remaining 15 executive directors represent "clusters" from the remaining 134 member countries. In some, the largest country of the group nominates the director. In others, the honor is rotated.
The Saudis have been a member of a group of 14 Arab or Moslem states whose executive director at the moment is Muhammed Al-Atrash of the Syrian Arab Republic.
The Saudi's acquisition of a seat of their own derives from an IMF rule providing that if the two largest creditors of the IMF are not among the five major quota countries, they are entitled to their own executive directors.
Saudi Arabia has passed West Germany as the IMF's second largest creditor - the U.S. is first - by virtue of its participation in the oil facility, and the still inactivated "Witteveen facility" - special accumulations of money created intitially in 1974.
Had the U.S. stuck to its determination to maintain the board at no more than 20, an executive director representing low quota countries in either West Africa or Latin America would probably have been squeezed out.