In elementary and high school, Fahad Hamed Khatani said he spent much of his time memorizing verses of the Koran and sayings of the Prophet Muhammad and completing exercises in classical Arabic that did little for his ability to reason and write persuasively, analyze or create.

After foundering for a decade in college classes where professors expected him to offer his own ideas, Khatani is finally graduating this year from King Saud University -- and is worried that upcoming generations in this religiously conservative monarchy are not being prepared better to compete in a global economy.

"In high school, most of our students are memorizing. . . . and no more," said Khatani, who hopes to land a job in public relations. "This period is a period of competition, and we are trying to be competitive. . . . They should at least give [students] some idea of other things -- that after three to four years you will be in the market, and you don't want to be in the market without being prepared."

Twenty years ago, at the peak of an oil boom that transformed Saudi Arabia from a society of mud houses into one with modern highways and consumer goods, a student like Khatani probably would not have spoken of his standing in the labor market with the same sense of urgency. Students coming of age then could look forward to almost guaranteed employment by the government, if they wanted or needed a job at all, and a rich array of publicly subsidized home loans, utility rates and other benefits.

At that point, there also was plenty of money to indulge the wishes of a clerical establishment that wanted to ensure that religious studies, heavy on rote learning and short on critical analysis, were a mainstay of the curriculum.

Those days are dwindling. Per capita incomes in Saudi Arabia are only a third of what they were at the peak of the oil boom, a decline caused in part by falling world prices and by the fact that approximately two-thirds of the jobs in the country are held by foreign workers from Asia, Europe, North America and other parts of the Middle East. They send an estimated $15 billion a year out of the local economy, more than 10 percent of what the country produces.

What's more, the figure threatens to fall further because of rapid population growth. As much as one-half of the Saudi population is under 18, and the government is increasingly worried about diversifying and expanding the private economy fast enough to keep up with that "demographic bubble" and weaning the country from its heavy reliance on a single resource.

Efforts are underway, for example, to join the World Trade Organization and to ease restrictions on direct foreign investment. Government spending habits are also changing: There is a government hiring freeze, and in recent months subsidies for gasoline, electricity and some other services have been cut while the cost to consumers has grown.

But there is a gradually increasing recognition here that major changes in the educational system are also going to be needed. Saudi Arabia has produced many skilled graduates -- doctors, engineers, scientists and others, educated at home and abroad, who hold top positions in government, the oil industry and local corporations. But below that elite level, "our system is archaic," said Abdullah Dabbagh, an adviser to the Saudi Chamber of Commerce and member of a council that advises the ruling monarchy on government policy.

At this point, said one college administrator, students routinely leave high school with weak basic skills and little training in critical or creative thinking. Bereft, because of religious restrictions, of music, acting and other humanities that encourage individual expression, students rely on memorization as the only way to learn, said Abdulrahman Enad, chairman of the department of mass communication at King Saud University.

He said his faculty spends so much time on what amounts to remedial studies that the university has had to "lower expectations" and grant degrees to students he feels are not ready to compete for jobs.

"Students in high school and elementary school are wasting lots of time on other than basic courses. [The schools] stress a religious curriculum . . . which is memorizing hadith [sayings of the Prophet] and Koran."

College officials said that through high school, children spend about one-third of their time on religious studies, one-third studying Arabic and the remainder on other academic subjects. Even the curriculum for the country's technical schools and academies includes mandatory courses in Islamic culture.

As sensitive as it is, the issue is starting to receive more attention. Staff at the King Abdelaziz City for Science and Technology recently completed an analysis of the country's schools and recommended reforms in teacher training, curriculum and a number of other areas, said Abdullah Rasheed, the institute's vice president for scientific research.

The country's first program for gifted and talented children is being organized, and experts from the American Association for the Advancement of Science have been brought here to discuss how to improve math and science instruction. In an effort to cope with a growing student population and increasingly limited public funds, the country's first private university is scheduled to begin accepting students this fall.

Sweeping change, however, probably will not come easily. The education system's concentration on Islamic studies is an outgrowth of the Saudi system, a sort of hybrid in which the political power of the ruling Saud family and the religious authority of the country's top clerics are closely interwoven.

The result is a country under increasing economic pressure to open itself to foreign ideas and investment, even as it tries to hold onto a conservative set of social rules in which women cannot drive or appear unveiled in public, alcohol and many forms of entertainment are prohibited, and the government tries its best to police the Internet, satellite television and other modern media.

The effect of the current system can be seen at the construction sites and industrial parks of Riyadh, just as it is apparent in the comments of Khatani and some of his classmates.

It is not unusual for major public projects to proceed here with little more than token Saudi representation in the work force -- and often no representation at all among the manual laborers. Employers at the industrial park said young Saudis often shun entry-level jobs, even though they have no qualifications for higher-level positions.

Those willing to enter the private sector, said one, often struggle with "daily workplace skills."

Saudis Face Global Market

Many Saudis worry that their traditional education system does not prepare students for the competitive global marketplace. Already most of the Saudi work force is foreign.

Saudi Arabia has a huge population of foreigners: (In millions)

Foreigners 6

Saudis 14

The work force is largely foreign:

(In millions)

Foreign workers 4.7

Saudi workers 2.5

Gross domestic product per capita, a good measure for personal income, has declined.

SOURCE: Saudi government

CAPTION: Many students at King Saud University say the stress on religious studies has kept them from learning job skills.