SPEIGEL ONLINE 03/01/2011 08:57 AM
Saudi Arabia’s Billion Dollar Question
Can Oil Money Buy Political Stability?
By Bernhard Zand
The slightest uncertainty about the stability of Saudi Arabia, one of the world’s biggest oil producers, is enough to make the markets nervous. Now analysts and politicians around the world are waiting anxiously to see if the wave of unrest in the Arab world will spread to the kingdom.
Abdullah bin Abdul-Aziz, the 86-year-old king of Saudi Arabia who also holds the title Custodian of the Two Holy Mosques, was suffering from back pain last fall. He apparently had a slipped disk.
As is usually the case when a leading member of the house of Saud needs to see a doctor, he and his entourage boarded three jumbo jets and headed to the West — specifically, to New York, where the VIP wing of New York-Presbyterian Hospital was already reserved for him.
The news of his departure was enough to trigger a moment of deliberation in the world of geostrategists and oil speculators. After all, Saudi Arabia pumps about 9 million barrels of crude oil a day, or one-ninth of world production. The kingdom is the only oil exporter with what is known as swing capacity, or the ability to single-handedly offset the loss of production in any other OPEC country, thereby temporarily stabilizing the oil price.
In addition, Saudi Arabia, a state that is a few years younger than its geriatric king, is on the verge of a major dynastic change. Until now, all of the men who have ruled the country since the death of its founder Ibn Saud in 1953 have been his sons. Even the youngest of those sons is now 65. It is only a question of time before the line of succession goes to the second generation — and a question of which of the roughly 20 sons still alive has enough power to turn his own sons into kings.
In early December, doctors in New York removed a blood clot in Abdullah’s back. In late January he traveled to Morocco to stay in his brother’s palace near Agadir, as he usually does when he needs to recuperate. But as it turned out, it would not be a relaxing stay.
A week earlier, the Tunisians had ousted their president, Zine El Abidine Ben Ali, and the Egyptian revolution began two days later. For two torturous weeks King Abdullah watched as his friend Hosni Mubarak, the now-deposed Egyptian president, struggled in vain to remain in power. Revolts in Bahrain, Yemen and Libya followed.
The Arab world to which Abdullah had returned was no longer the same one it had been a few weeks earlier, when he left for New York. When Abdullah arrived in the Saudi capital Riyadh last Wednesday, it was no longer just geostrategists and oil speculators who were asking themselves whether Saudi Arabia could be next.
It is the billion-dollar question of the Arab revolution — literally. That is roughly the sum the kingdom earns every day at the current oil price of about $114 (€83) a barrel. Until its revolution began, Libya was producing about 1.6 million barrels a day. The mere idea that Libyan production might no longer be available to the oil market in the future drove up the price of oil by $10 a barrel last week.
What, then, happens if the revolutionary virus infects Saudi Arabia? Is this even a realistic threat? Despite its pre-modern, antiquated system of government, the kingdom is considered to be one of the most stable countries in the Arab world. The overwhelming majority of the population is strongly influenced by tribal loyalties that have developed over centuries, and by a deeply conservative worldview derived from Wahhabism, one of the strictest schools of Islam. So far, the leadership has allowed no more modernization than the bare minimum that is required for the state to function. It is mainly the half of the population without rights that suffers as a result, namely women.
However, this archaic social contract is supported by Saudi Arabia’s enormous wealth, which the rulers distribute with patriarchal skill. Real poverty of the sort that prevails in neighboring Yemen and which fueled revolutionary fervor in Egypt is not widespread in Saudi Arabia.
Nevertheless, the composure with which Abdullah departed for New York in November has given way to deep uncertainty. Shortly before setting foot on Saudi soil again on Wednesday, when he arrived from Agadir, he had his government announce that he was increasing the amount the government spends to help young Saudi Arabians buy houses, start families and establish businesses, from about €9 billion to €17 billion. He also said that wages for government employees were to be increased by 15 percent to offset increases in the cost of living. None of his predecessors had ever shown such a sudden burst of generosity.
Apparently the mere perusal of his flight route from Morocco to Saudi Arabia, over Algeria, Tunisia, Libya and Egypt, was enough to make the king realize how much his country, all differences aside, resembles the countries in turmoil below.
Lust for Life
Jeddah and Riyadh are home to just as many young people who are keen to enjoy life as Tunis and Cairo. They are equally avid tweeters and share their experiences on Facebook just as enthusiastically as their Egyptian and Tunisian contemporaries. And, as in much of the Arab world, Saudi Arabia’s leadership is remarkably old compared with its young population. The average age of a cabinet minister in Riyadh is 65.
Corruption among the elite is also rampant in Saudi Arabia. The excesses of the Saudi royal family, which has grown to include almost 7,000 members, are less visible under Abdullah’s reign than under that of his flamboyant predecessor King Fahd. Nevertheless, no young, politically interested Saudi Arabian can fail to notice that every car dealership, every gas station and every five-star hotel is a source of income for at least one member of the royal family.
Some of the frustrations that led to the undoing of former Tunisian President Ben Ali and former Egyptian President Mubarak could have an even more drastic impact in Saudi Arabia’s comparatively affluent society. It is precisely because young Saudis are relatively well educated, mobile and have widespread access to Western television and the Internet that many perceive unemployment and the bigotry and narrow focus of the Wahhabi regime as particularly oppressive.
Even in Saudi Arabia, blessed as it is with prosperity, the first signs of protest are now emerging. Last week, several hundred dissatisfied Shiites took to the streets near the city of Qatif, and in Riyadh 40 intellectuals presented the king with an open letter demanding political reforms. The first revolutionary Facebook pages have already appeared, with one of them openly calling for the overthrow of the regime and a “Revolution of Longing” to begin on March 11.
In an interview with SPIEGEL several years ago, Prince Al-Waleed bin Talal, a multi-billionaire, described the fact that many young Saudi Arabians had no work as a “time bomb.” They are not unemployed because there are no jobs, but because most work is performed by foreign migrant workers.
Last Thursday Al-Waleed, who is a nephew of the king, issued an even stronger warning. In an opinion piece in the New York Times, he wrote: “Unless many Arab governments adopt radically different policies, their countries will very likely experience more political and civil unrest.” The facts, Walid added, are undeniable, with youth unemployment at 20 percent or more in most Arab countries, the standard of living of the middle classes declining under rising inflation, and a widening “gap between the haves and the have-nots.”
A few days earlier, Prince Al-Waleed’s father, Talal bin Abdul-Aziz, put things even more directly. The population, said Talal bin Abdul-Aziz, a half-brother of King Abdullah who is known for his straight talking, want more than handouts. Instead, they are demanding political reforms and a share of power. If the king does not fulfill this hope, he added, “it will be very dangerous for our country.”
The kingdom is facing more than just a billion-dollar question. It is being confronted with the question of whether it is possible to buy stability.
Translated from the German by Christopher Sultan
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