Saudi Arabia King Khalid Ibn Abdul Aziz has been in the desert this week hunting with his fierce falcons. He was also collecting from the tribal chiefs new pledges of affection and, in turn, was offering largesse from the royal purse.

Here in the desert capital, the Saudi princes and sheikhs engage in similar transactions with the world, holding court for neighboring monarchs, for presidents and prime ministers. These past few months the procession to Riyadh has been unending - Jimmy Carter, Valery Giscard d'Estaing, James Callaghan, Takeo Fukuda, Houari Boumediene, Mohammad Reza Pahlavi.

The less exalted pilgrims number in the thousands - foreign ministers, congressmen, senators, generals, bankers and brokers, lawyears, corporation presidents, journalists, lobbyists, Ivy League professors and, now and again unsung revolutionaries with open palms.

They are drawn by the two great honey pots, Saudi oil and Saudi cash, which have given this serene and ancient land the instant status of a great power. With barely 5 million people, according to estimates, and 80 per cent of them illiterate, it has very little industrial capacity; 99 per cent of its land is unfit for cultivation, and its military force is less formidable than, say, the Texas National Guard. For all this, it has demonstrated to God and man that mice can roar.

A few years ago this was a pauper kingdom fixed, it at all, in the Western consciousness as a wasteland inhabited by camels and strange men in flowing headdress who kept harems and goats. Today, it is these men who grant audience to the President of the United States and who, for the moment, at least, have it in their power to profoundly affect, as the American Congress has warned, "the continued economic, political and military well-being of the industrialized countries."

In this decade, Saudi Arabia and its lesser neighbors on the Persian Gulf have supplied Japan, Italy and Britain with 85 per cent of their oil imports. West Germany, France, Spain and the Netherlands import 60 to 80 per cent of their requirements from the Gulf. Before the end of the century the United States may be in the same state of dependency.

That is one reason for the frantic traffic to Riyadh.

THE OTHER is that for the entrepre-neur, the hustler and the carpet-bagger there are fortunes to be made. This place is drowning in cash, so much cash that a planning minister lamented the other day that business was far too good to suit him.

"We owe it to humanity," he said, "to keep lights burning and your cars running. But it would be better for us if the production were not so high. We cannot use all these funds now."

Saudi Arabia is producing about a million barrels a day under its self-imposed ceiling of 8.5 million barrels. Still, the national income has risen from about $10 million in 1945 to more than $50 billion last year. The surplus for 1977 is estimated at $15 billion or more, which comes on top of government cash reserves and foreign assets of $50 billion.

This is not the result of public or private frugality. The lavish spending habits of the Saudi princes and sheiks are part of the contemporary folklore - multiple places, fleets of Cadillacs, Rolls Royces, yachts and jet aircraft, impulsive sprees that clean out the stocks of high-priced stores in London aris and New York. Even if all the tales of this conspicuous consumption were true, the spending of the ruling class would be like a glass of water in the ocean of Saudi wealth.

The government embarked in 1975 on a $142 billion, five-year plan of development to create new cities, to rebuild old ones, to make the desert bloom, to lay down highways, build housing, airport, schools, hospitals and factories all over this vast land, which equals in size the whole of the United States east of the Mississippi.

It envisions a system of free and universal education in which the young are paid to go to college, free health care for all, food subsidies to consumers and farm subsidies to producers.

It is all going forward at breakneck speed and represents in substance, the domestic "Marshall Plan" that American liberals have urged for decades with little success in the United States.

BUT THERE IS another side to it that accounts for the 747s and 727s and DC-10s that descend like locusts on the Saudi airports, disgorging hordes of pin-striped and blue collared Americans, Frenchmen, Japanese, Germans, Koreans, Italians and Englishmen.

They are after the billions involved in this social reformation and those billions are there for the asking. The reason is that the Saudis cannot plan or build schools or hospitals or airports without the skills and technology and equipment that the industrialized nations can supply. They must buy it all and they are buying on a grand scale.

Just this week contracts are being negotiated with the Ralph Parsons Co. of Los Angeles for a $7 billion petrochemical and fertilizer complex at Yanbu on the Red Sea. Mobil Oil is negotiating for a $700 million trans-Arabian pipeline. U.S. Shell is wraping up a $1.8 billion petrochemical deal.

Mobil, Dow Chemical, Exxom and a Japanese firm are looking for billion-dollar petrochemical deals.

Skilled construction workers from the U.S. Europe and the Far East are drawn by the $40,000 to $50,000 wage scales that come on top of the big fringe benefits. Planners, architects, lawyers and geologists are drawn by the cost-plus contracts.

The whole country, in many ways, has become an international bazaar. Or as an American entreperneur put it: "Its like the Klondike, only it may last for 100 years."

For such Americans the rewards are obvious. But for the Saudis, the ultimate rewards are less certain. The materialism of the West has arrived. The question debated here is whether Saudi culture will survive that blessing.