As many of you know, Jeddah is quite humid. I was fed up of waiting for something to be shown CNN. There was actually nothing happening and the worst thing is when the journalists are talking to each other waiting for something that is not going to happen. Everybody knew that there would be a third night of bombing but nothing had happened yet.
So I wanted to get whatever breeze was available on the corniche so I went out of the hotel and a young Saudi approached me and asked me for money. The people of Jeddah were telling me that it is quite a common sight when you are driving to see young kids begging. Some are Africans and they may be deformed. Some are young Afghan kids.
The act of the young Saudi was more discreet. It was obvious that he felt ashamed of the need to beg. I guess I was a Westerner and I represented somebody with some money.
So these two things that happened to me on the night of Friday the 18th a few hours before I left. I saw one tiny example, and it is only tiny of the economic problems which the kingdom now faces. Economic problems that are not highlighted in the media. The media image of Saudi Arabia is still that of a fantastically rich country. The wealth may go up and down but it is still fantastically rich.
I think this has always been a misleading image but it is particularly misleading now. The bigger thing that happened which clearly attracted an enormous amount of media attention throughout the world was the bombing of Iraq. If you want a summary of what I am going to say it can be summed up as begging in Saudi Arabia. It provides signposts to two of the main challenges which face Crown Prince Abduallah.
The bombing of Baghdad summarises Western policy and how Saudis see Western policy.
I want to pick out what seem to me to be the four main challenges which face the kingdom and Abduallah. The economic squeeze which is affecting a large part of the population, especially the middle class and the issues involving the West and Western policies are perhaps the two most important challenges.
I am not the man to give you all the facts and figures about the Saudi economy but theoverall picture is very clear. And this is the first challenge. It is the one that I found Saudis were talking to me about.
The collapse of oil prices last year was very severe. Saudi Arabia lost between 30 and 40 percent of its revenue. The problems had preceded this oil collapse but were obviously affected by the collapse of oil prices and even though to some extent there is some modest improvement now and the oil prices went up slightly as a result of the last deal, the underlying problems remain.
So there may be fluctuations but the problems are very severe and I think Saudis now appreciate that they are severe. The figure for the kingdom’s debt is $130 billion. It has always been said, and it is still being said today that most of that is to domestic banks, to Saudi banks which are overburdened by this debt as they are lending more money than they want to. But I think its true that most of this debt is a domestic debt.
The size of the foreign part of the debt is not always clear from the figures we get. Just to give you one example, Saudi Aramco borrowed $4 billion abroad last year from foreign banks. It gave the money to the treasury. Aramco was not acting on Aramco’s behalf. It was acting on behalf of the sovereign state of Saudi Arabia.
The overall picture is extremely clear. In setting out these four main challenges the point I want to make is that this is the first one. The other dimensions of this economic crisis – I don’t think crisis is too strong a word – are familiar and I am not going to go into them in detail. It is not just a matter of deficit, debt and declining revenues. Unemployment is something that everybody talks about. Given the demographic trends the Saudi government quite simply faces a situation of declining revenues and a burgeoning population. The official figures, or rather the published figures that I saw in the New York Times a few days ago, were 3.4%. That is very high by world standards.
My own judgement is that it is nearer four percent. The average family consists of a man and wife and six children. That is the general norm. People would tell me this is a town of 300 families. I would ask them what do you mean by that. We talk about people or we talk about numbers rather than families. So I wanted to know what you multiply by. And they multiplied by seven or eight to get the actual population.
This is a demographic pattern that is quite common in the region as a whole. But in Saudi Arabia you have declining revenues and burgeoning population. Given the reliance on oil and gas, the Saudi economy has only diversified to a certain extent and it is still heavily reliant on oil revenues. You have a more or less fixed pot of money but the demands and pressures on this pot of money are growing.
Everybody sees this. The schools, hospitals and clinics that were built in the days of big money in the 70s and very early 80’s were show piece schools and hospitals. In many cases they are under pressure. The number of kids attending those schools, which were verygood in their time, quite impressive structures, are heavily stretched now. And the same applies to the health service.
People notice this and they grumble about this and daily life has become harder for people. Income has fallen and people are very aware of corruption. I think this term is always imprecise in the sense that people use it in the West to mean illegal enrichment. It may be legal enrichment. What people resent is the continual enrichment of people who are already extremely rich.
And so the grumbling that I heard in different parts of the kingdom is about the ways in which 7000 princes muscle in on contracts, buy land using various devices and then sell if off at an enormous profit.
At a time of economic squeeze this sense of grievance is obviously more acute. It has always been there. It is a problem which is not new. You notice that I have not talked about Abduallah at this stage. I want to set out the four challenges for you and then lets see what Abduallah has either said or done or is likely to do. That is why I am going to try and move through these four points. I am a notoriously digressive speaker so I am going to tell you in advance what I am going to try and do and you will be able to judge whether I actually do it.
There is plenty more that can be said about the economy. I am not trying to give you a comprehensive view. I am trying to give you the big picture on these issues and then look at how Abudallah is likely to handle them or in some cases is beginning to handle them already.
The second big challenge is I think an issue that was very big at the time of Gulf war and immediately after the Gulf war. The second Gulf war is you prefer, the war of 1991 – and that is the issue of Islamic dissent.
The war, above all the invitation by King Fahd to allow an enormous American-led military force into the kingdom, sparked off a wave of overt Islamist opposition of a kind that hadn’t been seen before. It produced faxes, petitions, calls for change, calls for the end of corruption, calls for a big standing army rather than the two smaller forces in the kingdom, calls for the cleansing of the bureaucracy.
The key thing which strikes a visitor like me at the end of 1998 when I visited was that this has largely gone. I was not aware and I am still not aware of a single petition or fax from inside. Massari and Faki, the two Saudi opposition figures here in London still produce their material on web sites and on fax. I am now talking about dissent inside which in the early 1990s was of an unprecedented kind. It is not there in this overt form. But I think the grievances are there. I have mentioned some of them already. The economic and social grievances, the resentment of corruption or enrichment, a term that seems to me more accurate.
The burning issue is still America. And the key bit of the legacy of the Gulf war, the physical, tangible legacy of the Gulf war on the soil of Saudi Arabia is the 5000 American troops, 70 or 80 miles south of Riyadh down in the desert.
I tried to go there. I tried to visit the Prince Sultan airbase. There are some Brits there and some others floating around, but essentially it is the 5000 Americans. I had some very funny phone calls and conversations with some very polite young Americans. And somehow you could sense the short cropped hair on the other end of the phone and it was all ‘sir’ and ‘well sir’, but I never got there to cut a long story very short. But I had some very interesting conversations along the way.
Journalists are not too welcome. They have occasionally gone. I don’t know if you listen to a programme which we in the BBC call Fuek, but which is generally known as From our own correspondent. I heard from my children that an American group Hottie and the Blow Fish played to the troops down in the desert. I thought this was great from a journalistic point of view. But on a more serious note it was kind of surreal. In the depths of Saudi Arabia, Hottie and the Blow Fish.
So like many journalists, when you don’t manage to do something that you want to do you do a story which describes how you didn’t manage to do it. So I did a tongue in cheek piece about Saudi Arabia and America and hottie and the blow fish.
The sense of grievance is shared by many Muslims in Saudi Arabia, Muslims and Islamists. Muslims in the traditional, religious and cultural sense of the word and Muslims who are politicised Muslims in the more modern sense. It is still there. The manifestations are not there – the petitions, the faxes the cassettes. I am not aware of a flood of new cassettes. Maybe they are there but I didn’t hear about them.
But the grievances which underlie those early manifestations are still there.
The first challenge for Abduallah is the economy and the whole set of socio-economic and political decisions that flow from this economic pattern.
The second issue I would like to raise is the issue of Muslims and Islamist dissent which may have died down somewhat but I don’t think it has gone away from the scene entirely.
The third issue I would like to raise as being the third challenge for Abduallah is the issue of unity and cohesion. I mean two things by this. The unity and cohesion of the kingdom itself and the unity and cohesion of the ruling family.
On this visit I visited four regions be it only fairly briefly. And I had to cut my visit short. It was only two weeks because the visa for two weeks. But also at the end of the two weeks there was Ramadhan. Journalists tend to shy away from Muslim countries during Ramadhan. I always thought it would be fascinating to experience Ramadhan in any country where you are. But as a journalist who wants to make appointments to see either officials or university people it is not a very good time to be making appointments. So Ramadhan was the cut off point of my visit.
But within that short time I paid visits to Riyadh in Najd the heartland of the familyitself and the heartland of what we Westerners still call Wahabism. The Saudis do not like the term. And then I went up to the industrial city of Jubail on the north eastern coast. And from there crossed to the other side to the mountainous region of Asir which borders Yemen and which is now opening up quite rapidly to tourism, something new in Saudi Arabia.
And then finally to the Hejaz and Jeddah the business capital where I spent the last few days and where as it turned out I watched Saudi reaction to bombing of Iraq.
These four regions are still very distinct. It is an obvious point but it is still there. What this means it seems to me is that the idea of a Saudi national identity is still young. There is the idea of such a national identity, the state clearly believes in it and is presenting it not only through the media but through school text books and the school system as a way of trying to forge the national identity. But it is not fully formed. The hejazi still feels that he or she is hejazi which makes them different from najdis. The ruling family is nejdi and therefore the nejdis are in a special position.
The Islamist dissent which I was talking about before, the Sunni Islamist dissent was essentially a nejdi affair in the heart of the kingdom. And the rest of the fringes of the kingdom were largely bystanders. I am not saying that there was nothing going on there but essentially the Islamist dissent which captured so many headlines in 1991 – 1994 was essentially a nejdi affair. This made it all the more worrying for Al Saud. This was not another group, it was his own group.
The sense of identity of the Shia of the Eastern Province is still there. It is strong in the sense of a tightly knit community and many grievances that go back a long time.
In a region that was new to me, Asir, I noticed that the Asiris feel different too. I couldn’t help wondering if the tourists that come from Riyadh are coming to a foreign country. If that sounds extreme at least in the sense that as a Londoner, when I go to Scotland I am going to another country. We could debate how foreign it may be. They speak the same language with a specific dialect. But to put it simply, Asir like many mountainous regions in the world, has been cut off for a long time from the rest of the country.
Under the impact of tourism and development – I saw two developing projects there – it is opening up. So the Hejazi, the Asiris, the Nejdis of the Eastern Province they all feel themselves to be distinct and the extent to which they feel Saudi may vary. Some of them may feel Saudi, others may still feel principly hejazi, nejdi or whatever.
So there is the issue of the cohesion of the kingdom which I don’t think is an issue that has faded away in history and does not exist today. I think there is still an issue there. And there is the issue of the cohesion of the ruling family. I think I will come back to the ruling family in a moment.
So the three challenges are: the economy, Islamic dissent in one form or another the issue of unity and cohesion, to what extent is there a national identity. And the fourth issuewhich is important is the whole dimension of foreign policy, but particularly what the USA is doing in the Middle East and the Muslim world represents a number of challenges for Abduallah.
Quite simply I was startled at how angry Saudis were at the bombing of Iraq. To give you a simple example and I am interested as to whether some of you might react to this differently. I was with a Saudi lawyer who in the most trenchant terms said the United States is our number one enemy and Israel is only number two.
In other words the United States is even more an enemy than the traditional enemy of the Arabs. For me as a journalist, if I am sitting in Cairo and I hear this my eyelid dosen’t even move a fraction of a millimetre. If you are in Gaza or Beirut it is nothing to make you very interested.
Somehow if you are in Riyadh or in Jeddah this is more stricking because Saudi Arabia is the key Arab ally of the United States and the United States sees Saudi Arabia and the people of Saudi Arabia as closer to them and by implication more loyal to them. I think the Americans believe they are less likely to make a fuss and oppose an American action.
So what struck me very forcibly was the contrast between the very careful, cautious phrasing of Saudi policy trying to essentially blame the problem on Saddam Hussein while clearly wanting the bombing to stop.
A fine balancing act. Of course the Saudis do not like Saddam Hussein and this was absolutely clear whoever I was talking to, lawyers, university people, people I bumped into. But their anger was directed at the USA and at the Tony Blair government here in Britain which they thought was spineless. When they saw me they immediately denounced Saddam Hussein but that was last. I heard the term "obscene" used of the bombing. I heard various people say how offensive it was as it was so close to Ramadhan and the last bombing was actually on the first day of Ramadhan.
Incidentally the British had not wanted this. I had evidence to believe that the British had been told the bombing would stop. The Americans following what the military wanted to do went on for an extra day. They said they "wanted to finish the job". As a layman I don’t know what they were describing. I don’t know what job was being finished. The British did not want that final night of bombing.
All that struck me very much and of course Iraq is only one of the burning issues. There is the Arab-Israeli issue which never goes away and is never far from people’s minds.
The Kosovo issue wasn’t a big issue when I was there but I have reason to believe that Kosovo is becoming to some extent the new Bosnia. It is becoming another Bosnia in the minds of many Muslims and I believe in the minds of many Saudis Muslims.
So I want to present these four challenges. I think there are others and I think there is much more that could be said about these four. In the last minutes I want to say more aboutAbduallah himself and how he is beginning to tackle these four issues that I have singled out.
On the first, the economy, I think his room for manoeuvre is quite constrained. The price of oil is the price of oil. You can try and bring it up you can try and use various devices to boast your revenue but in the end your population growth rate is what it is and the price of oil is what it is and if there is a basic mismatch between the two you don’t have a lot of room manoeuvre.
Abduallah did make this remarkable speech at the GCC Summit. This was while I was there in Abu Dhabi. He said we can’t stand idly by while the price of oil plummets. The period of the oil boom has gone. It is not only gone, it will never come back. Gulf citizens should stop depending on their governments for everything. We must act quickly in an age of globalisation and rapid change or be left behind.
The Saudi media, never slow to take their cue from a big speech of that kind cal, l it the wake up call. I think it was designed to be a wake up call for Saudi citizens and for the citizens of neighbouring states. The word ‘new’ was peppered through that speech. A new way of thinking, a new work ethic, a new way of life.
It reminded me of early Gorbachev, when he arrived and it was new thinking versus old thinking. Whatever was out was wrong was bad, was old thinking. Whatever was good and fashionable in the way of the future was new thinking. It was that kind of speech.
I think it was intended to be that kind of speech. It provoked a lot of debate. When I was there I was able to get some flavour of this debate from the people that I talked to.
And just to give you one final quotation. It wasn’t from Abduallah himself but it was from the Arab News, the English paper in Jeddah giving its gloss. I noted it down as an example of plain speaking. Many Gulf leaders, including Saudi leaders are not famous for plain speaking, for calling a spade a spade. But the way Arab News put it reminded me of Tony Blair whose election theme was education, education, education. Abduallah was more or less saying education is the key.
But the sentence that struck me from Arab News commenting on Abduallah’s speech was: "No nation can reach anywhere if it depends on imported talent to drive the engine of its progress". I think Abduallah’s speech was designed to kick start the process of Saudis taking the jobs that foreign workers have. Again Saudisation is not new. But under the pressure of this economic crisis, at least to judge from the rhetoric, the message is that Saudis have got to do this. The Saudis have to take these jobs so we are training and employing our own people so we can gradually dispense with this enormous army of five to six million foreign workers from a population of 20 million.
I can’t tell you if this is a true figure but it would suggest that there are 13 million Saudis and about six million foreign workers. It sounds a little bit high to me but that is the figure we are hearing nowadays.
So Abduallah has begun to respond to this crisis and it was a speech well timed for the moment.
He has also sought to introduce the idea of cutting back on government revenues. I wouldn’t say he has done so dramatically but there is an attempt to reduce some of the heavy subsidies on utilities. I think he is trying to say that the days of free phone calls are over along with heavily subsidised electricity.
And this is beginning to happen. Everybody is asking how far and how fast it will go. He wants to encourage privatisation. Not a lot has happened and everybody is waiting to see how far and how fast this will go. Whether this is for real in other words.
And I am told that Abudallah has told his own sons to keep out of any involvement with foreign companies doing business in the kingdom. Now whether this amounts to a crackdown on corruption I am not sure.
Let me repeat, the enrichment of the already rich is the term I use. Corruption is very specific, it has a legal flavour. The enrichment of the already rich. Is Abduallah going to try and curb this? Some people believe he is and a great many hope he is. This is the first point.
Islamic dissent is the second. I think this is very interesting because what is clear is that Abduallah is regarded on the whole as a good, honest Muslim and therefore many people believe, both Saudis and non Saudis, that he is better placed to deal with Islamic dissent or Islamic opposition groups in so far as there are any. I tend to call them currents of opposition rather than clearly formed groups.
In other words he may be the man to pull the rug from Islamic dissent. Many people believe so. And of course since we are in this transitional era now from the Fahd period to Abduallah which has been going on for more than three years now. The point of this comparison is that Fahd is better placed than Abduallah to do this. He is a different kind of man.
One Westerner in Riyadh said Saudis feel comfortable with Abduallah. He is like Spencer Tracey for them. How you respond to that will depend on whether you know Spencer Tracey movies or whether you give a dam about who Spencer Tracey is.
It was also said to me that he is a sort of Ronald Reagan. He is a father figure who represents the old time values. That makes him a figure that Western liberals would find easy to mock, as they did with Ronald Reagan. But the point the person was making to me was again that many Saudis feel comfortable with him as he is a kind of father figure that they respect rather than just feel comfortable with. This is important. Don’t forget that Ronald Reagan was probably the laziest American president in recent history. But a lot of Americans loved him. Even when he forgot the lines in his speeches they loved him.
I am not trying to push the analogy too far. I am just reporting to you that the analogy was made. I think the Spencer Tracey one is closer to the mark as the Americans view Spencer Tracey as many Saudis view Abduallah.
The third issue, the issue of the cohesion of the kingdom, is a tricky one. I don’t think there is a lot he can do to make hejazis feel more Saudi, to make assiris feel part of the Saudi national identity. Either this national identity evolves or it dosen’t and it may evolve quite slowly because I think this is how national identities evolve.
The tricky question for him is how he handles his relations with the other senior princes. I think this is important and everybody is looking at this. Don’t forget that Abduallah has no full brothers. He is the half brother of Fahd. Fahd had the advantage of this powerful group of brothers, Najf the interior minister, Sultan the Minister of Defence, Salman the Governor of Riyadh.
Abduallah has to work with these brothers of Fahd, these half brothers of his. He dosen’t start with that advantage of having these brotherly group. I am not saying that the brothers always agree on everything. But they have this cement which holds them together.
When Fahd became king he had lots of jobs. He had key jobs. He had a track record in government. Abduallah has simply been the Crown Prince and head of the National Guard. He is not a guy whose cv you can track in the conventional way. There is very little there. I ask people for a cv of Abduallah. I haven’t got one. He didn’t go to Harvard or more to the point he didn’t become Minister of Education and learn the ropes by doing this and doing that.
How far he can maintain not only the cohesion of the senior ruling group but also impose his authority or rather create a situation where he has authority but defer it to the brother of Fahd, the Suadaris as they are sometimes called, how far he can make this work harmoniously is absolutely crucial.
He is king now in all but name. But ‘all but name’ is a very Western way of looking at it. Having the name of the king, the authority of king, being the full king is terribly important. When that happens, assuming that happens, will he appoint Sultan the present Minister of Defence as his Crown Prince? Sultan is the next in line.
It is no secret that Abduallah and Sultan have not always got on. Sultan heads the regular army, the conventional army. Abudallah heads the National Guard, the irregular army the bedouin army as it is sometimes called as it draws it recruits from the tribal areas.
Rather than saying more about that let me go to the final challenge which is the foreign policy issue. My own feeling now is that the one area where Abduallah may have more room from manoeuvre is the foreign policy one. He can, of course take initiatives on the economy and everyone hopes he will. But there are constraints. No human being can engineer an oil price to suit him. No leader can create a climate in the world economy which favours the Saudis. There are distinct limits as to what any leader can do.
In foreign policy it is at least a bit different. I think it is very important that relations between Saudi Arabia and Iran are really quite warm and cordial. One might say that this haspreceded Abduallah. I won’t go into the origins of this warming up but Abduallah is very keen on this relationship.
I was in Tehran for the Islamic Conference and Crown Prince Abduallah represented Saudi Arabia. This was very important and the Iranians took it as something very important that Saudi Arabia was represented by the man who before very long would become the king of Saudi Arabia.
One aspect of that changing relationship is that Iraq, the troublesome, the rouge is playing the sort of role that Iran played in the 80s. Iran was the thorn in the Saudi flesh. Now interestingly it is Iraq that is the troublesome player, not simply because of the lingering ambitions of Saddam.
If we look at what happened at hajj this year, this game in this piece of political theatre played out by Saddam Hussein, pushing thousands of Iraqi pilgrims in and then in a very public way pulling them out.
He was telling the Saudis I can make life very hard for you but if you start joining what many see now as a consensus for the easing if not the removal of sanctions against Iraq, if you go the other way I can be nice and stop being so troublesome for you. So I think Saddam is using traditional bullying tactics. I don’t know that it will work. Iraq has taken the place of Iran in that sense.
How will Abduallah handle the relationship that matters, the US Saudi relationship? I don’t think he is anti-American. And you only have to look at that world tour that he made when he went to Washington. In September and October he visited seven countries in six weeks. Not bad for a 75-year-old. He is certainly two years younger than Fahd.
Many people in Washington saw it as a charm offensive and it was. The message was you don’t know me so well. I haven’t played a big role on the international stage but here I am. You don’t need to worry. I read his invitation to the American oil companies to discuss co-operation in the oil field in a political way. The oil men got excited but it was part of his charm offensive.
I think the interesting thing about Abduallah is that he will not say ‘yes’ to the Americans as readily as Fahd did. He is not anti-American but he is not as pro-American as Fahd and Fahd was really the most pro-American king Saudi Arabia has ever had. I think the American are beginning to prepare themselves for this.
Finally how would I try to sum this up and it is not an easy issue to sum up. I found that Saudi Arabia was waiting for Abduallah. The name of the game is waiting for Abduallah. The Saudis I met, and the contacts I have, are waiting for Abduallah with quite a high sense of expectation that he is the man to solve their problems.
And I would only end with a question mark to you whether these expectations are highly realistic given the problems that the kingdom faces . There is also the background of theman himself who has a degree of credibility and authority which he can use. This I think is important. How far he will be able to use it to meet the high expectations which he has aroused we will have to see.
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