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A long walk A survey of l January 7th 2006

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C B M R Y G K W C B M R Y G K W The Economist January 7th 2006 A survey of Saudi Arabia 1

A long walk Also in this section

All in the family The Al Sauds run everything. Page 3

Glacier in the desert Ever so slowly, Saudi society is moving forward. Page 5

Keeping the faith A very special kind of Islam. Page 7

A for money The economy is doing almost too well for its own good. Page 9

Saudi Arabia seems a law unto itself: rich, unequal, uncompromising and unchanging. But, cautiously and almost imperceptibly, it is moving forward, says Max Rodenbeck AUDI ARABIA is hard to pin down. Re- mese twins. Many people who live there, S cent book titles, strong on words such and not just the foreigners who still make as crisis, threat, secrets and terror, seem to up the bulk of the workforce, nd the envi- suggest that this is a dark and desperate ronment hostile. It is hot, parched, socially place. Newspaper headlines echo the prickly, intellectually sterile, politically op- gloom with reports of bombings and pressive and legally capricious: minor in- shoot-outs. Opinion columns bemoan the fringements can lead to unpleasant en- fanaticism of its youth, the remoteness of counters with roving religious enforcers. its rulers and the power of its clerics. But other residents, including plenty of ex- Yet the latest economic reports picture a patriates, love the winter sunshine, the country in the prime of health where fast- open spaces, the easy prots and the fam- unfolding reforms promise a sustained ily-oriented lifestyle. Every critic who rolls rise in living standards and an increasingly his eyeballs over excesses of religious zeal equitable spread of wealth. In the year just has a contented counterpart warmed by ended, Saudi Arabia chalked up a 7% rise the all-encompassing faith. Each angry in GDP, a 50% surge in oil exports and a word about the intractability of Saudi bu- 100% leap in prices on a stockmarket that is reaucracy or the arrogance of princes is now worth $600 billion. Moreover, 2005 matched by praise for the light taxes, the re- was the third successive year of similar assuring prudence of government policy growth. Although high oil prices clearly and the generosity of ordinary Saudis. helped, the biggest rise was in such oil-free pursuits as nance, manufacturing and Family secrets tourism, with the holy places attracting a If Saudi Arabia remains such a conun- record 6m visitors. Last year the country drum, the Saudis themselves are partly to won admission to the World Trade Orga- blame. After all, the place was built and nisation. More surprisingly, it was also continues to be run by a family. Families Acknowledgments judged by the World Bank to have the best like privacy, and colossally rich and con- The wise and generous advice of many people went into the overall environment in the region for do- servative Muslim ones, such as the Al making of this survey. Special thanks are owed to the Saudi Arabian General Investment Authority (SAGIA) and to ing business, outperforming even such Sauds, doubly so. Getting a visa to visit the Faiza Ambah, Beshr Bakheet and Ibrahim al-Mugaiteeb. high-yers as Dubai. country can be tricky. Subjects such as the A visit to the kingdom can generate national budget are not considered t for A list of sources can be found online equally clashing impressions. This is a close public scrutiny. Scandals tend to be www.economist.com/surveys place that, infamously, chops o the swept under costly carpets. hands and heads of malefactors, but its ex- The kingdom’s Islamic conservatism is An audio interview with the author is at cellent hospitals also pioneer such micro- of a peculiar kind. Detractors call it Wah- www.economist.com/audio surgical miracles as the separation of Sia- habism, after the 18th-century puritan re-1 2 A survey of Saudi Arabia The Economist January 7th 2006

2 former whose family alliance with the Al SYRIA to share the radicals’ perception that their Sauds laid the foundation for their even- faith itself is under threat, whether from tual conquest of Arabia. Saudis call it Han- IRAQ the benign inuence of cultural globalisa- AN balism, after a man who, a thousand years D tion or the malign force of what many see R

O earlier, founded the most restrictive and J as American-led Crusader imperialism. KUWAIT least popular of the four accepted schools IRAN Like other people, Saudis want to be mod- Hijaz of Sunni Muslim jurisprudence. In fact, Najd Jubeil ern but also to retain their identity. At most Saudis now profess to something Damman BAHRAIN present, they are torn between those who more of a hybrid, mixing local traditions Red SeaMedina QATAR Dubai seek to modernise Islam and those who Riyadh with modern currents. Yanbu U.A.E. prefer to Islamise modernity. Whatever it is called, most people Saudi Arabia can no longer be regarded SAUDI ARABIA would agree that Saudi Islam is rigid and Mecca EASTERN as a simple place where an obscenely oil- uncompromising, leaving a gap between PROVINCE rich king holds absolute sway over Bed- ideal and practice that provokes accusa- ouin subjects controlled by cash and a SUDAN NAJRAN OMAN tions of hypocrisy. It is also self-righteous bleakly puritan Islam. It is now a complex, and more than a little xenophobic. The ERITREA diverse and highly urbanised society, not kingdom is the only country in the world, insulated from the world but rudely ex- Main Saudi oil fields YEMEN 500 km except perhaps North Korea, where the posed to it, where citizens increasingly practice of all faiths but one is ocially long to be able to inuence the direction of banned. Even other forms of Islam are tween the citizen and the state, and be- change and expect their leaders to earn le- frowned upon. That is not surprising, be- tween eort and reward in the workplace. gitimacy. For example, the Majlis al Shura, cause other tend to regard such And then there was September 11th the kingdom’s loyal, all-appointed proto- Saudi rules as forbidding women to drive 2001, when 15 young Saudis helped steer parliament, has let it be known that it will cars or imposing the death penalty for several passenger planes into American approve new taxes only if it is granted full sorcery as seriously backward. Pam- landmarks. This act of mass murder thrust oversight of how the money will be spent. pered Saudi clerics still see relations with the kingdom into the hostile glare of global the wider world as a zero-sum game in public opinion. The sheer dastardliness of Twin pillars which every adoption of some modern the deed, and the mumbled approval of Oil and Islam continue to dene Saudi habit or gadget is seen as a loss for the pu- some Saudis (much to the embarrassment Arabia’s room for manoeuvre. With global rity of Islam. This breeds suspicion and of the rest), brought on a bout of Saudi- demand unlikely to wane in the foresee- mistrustand occasional ridicule. bashing. The Saudis, for their part, bridled able future and reserves elsewhere dimin- History, too, sets the kingdom apart. at being described in Washington as a ishing, oil will continue to keep the king- Few outsiders realise that this is one of kernel of evil, particularly when their dom rich for decades to come. At the same only four Muslim countries that were own country, starting in the spring of time, the Saudis’ attachment to their faith never colonised by Europe, and the only 2003, itself began to suer from terrorism. is not diminishing; it may even be growing one never invaded. All the others that es- All this has made an already confused stronger. But the faith itself is changing in caped outright conquestTurkey, Iran and picture even more confusing. Most Saudis subtle ways. Afghanistanat various times had parts of share the West’s anger and despair over vi- Having gone through waves of pro- their territory captured by indels. Saudi olence perpetrated in the name of Islam. gress and retrenchment during its 73 years Arabia is the site of the holiest places in Is- They admit, albeit often grudgingly, that as a unied kingdom, Saudi Arabia is now lam, which carries with it both heavy western protection has helped save them well into another period of rapid change. responsibilities and wide inuence from the failed social experiments that This time, however, the well-oiled compla- among the world’s 1.2 billion Muslims. It is have plagued many other Arab countries, cency of the previous big boom, in the also the only modern state to have been and that western know-how has vastly 1970s, is largely gone. Four years ago, a sur- created by holy war, or jihad: its present improved their lives. Yet Saudis also tend vey in this newspaper argued that it might territory was captured between 1902 and require internal shocks to jolt the Saudis 1925 by a crusading puritan army under into taking reform seriously. Those shocks Abdul Aziz ibn Saud, who declared him- Watch it grow 1 have now arrived. self king in 1932. Population, m Since May 2003, when suicide bom- That same year, American prospectors bers attacked a housing compound in Ri- Saudi nationals Foreigners struck oil in the east of the kingdom. But yadh, terrorist violence has touched every 40 this great prize, and the avalanche of corner of the kingdom, claiming some 200 wealth it soon brought, came with un- lives. Saudi nationals, the most famous be- 30 wanted consequences. One of these was ing , continue to be im- security dependence on the United States, plicated in terrorist attacks abroad, most which continues to this day. Another was 20 notably in Iraq. Yet far from rallying Saudis the mix of envy and obsequiousness (and to the jihadist cause, terrorism has made Schadenfreude when things go wrong) 10 them identify more closely with the state. with which other countries have treated More importantly, the violence has the Saudis ever since. Oil wealth yanked a 0 brought intense introspection and debate. 1974 92 2004 2020* dirt-poor desert country into modernity Long accustomed to blaming outside but distorted relationships such as that be- Source: National Commercial Bank *Forecast inuences for all ills, Saudis now accept1 The Economist January 7th 2006 A survey of Saudi Arabia 3

2 that the xing needs to start at home. Aside nosaur nation, lumbering to extinction, king is personally far more popular than from extremism, the problems of unem- Saudi Arabia is capable of rapid evolution. the previous one. Yet reforms would un- ployment, poverty and the abuse of hu- On some important issues, such as the doubtedly be more eective if they were man rights have moved to the top of the rules governing business, it is already far backed by a clear popular mandate. Most national agenda. Even the most absolute down the right track. On others, such as Saudis reckon it is premature to speak of of previous taboos, political reform, is be- the ways it educates its youth and excludes democracy in their country; but there are ing widely debated. In dozens of inter- women, the kingdom is only just begin- myriad ways to emancipate citizens, from views with Saudis of all stripes, one ning to shift course. What has been sorely upholding the rule of law to making bud- phrase kept coming up: the question is no lacking is a rm hand at the wheel. gets more transparent and loosening the longer whether to reform/restructure/ Such leadership could come from the grip of security agencies over universities change, but how fast to do it. Al Sauds themselves. The assumption of and the press. Instead of their old tactics of The government’s answer, to date, has the throne last year by King Abdullah, who prevarication, slow consensus-building been slowly, and not very surely. But this has embraced greater openness than his and co-optation, the Al Sauds should try a survey will argue that far from being a di- predecessor, has raised hopes. The new new one: putting trust in their people. 7 All in the family

The Al Sauds run everything

MAGINE that Britain was known as and the Ismailis along the border with Ye- also helped cement the nation. There have IWindsor Britannia, or Spain as Bourbon men, as well as among the proud old fam- been eight generations of Saudi rulers, dat- Iberia; that their royal families still ruled ilies of the Hijaz, the relatively cosmopoli- ing back to 18th-century sheikhs who held directly, with no messy elected bodies in tan region around Mecca. But although its sway in a few oasis towns near present- the way; and that their members included advocates would like more rights and less day Riyadh. Many have been prolic. King not just the royal couple, some wayward Wahhabism, they do not question the le- Abdul Aziz himself sired some 36 sons and kids and a few cousins, but thousands of gitimacy of the Al Sauds. even more daughters. The rst son to suc- princelings, all demanding grace and fa- ceed him, King Saud, fathered 107 children. vour. Imagine, further, that every newspa- King and country King Abdullah is believed to have 20 per felt obliged to print such choice items One reason for this is that most Saudis daughters and 14 sons. The extended Al as this: The Custodian of the Two Holy have done pretty well under the family’s Saud family is now thought to number Mosques, King Abdullah bin Abdul Aziz, rule. The kingdom’s social peace may some 30,000, though only 7,000 or so are has sent a reply cable of thanks to Crown come at a high cost in personal freedom, princes. Of these, only around 500 are in Prince Sultan bin Abdul Aziz, Deputy Pre- but it compares well with the unrest in government, and only perhaps 60 carry mier, Minister of Defence and Aviation nearby countries. For all the talk of mis- real weight in decision-making. and Inspector-General, thanking the management and waste, Saudi Arabia has Aside from controlling positions di- Crown Prince and all personnel of the a decent infrastructure and some fairly e- rectly, the Al Sauds exert continued inu- armed forces for their congratulations to cient institutions. In some autocratic re- ence through marriages with such respect- the King on the occasion of Eid al Fitr, gimes there is no good intention to im- able Najdi families as the Al al-Sheikh, marking the end of the holy month of prove things, says one junior prince. who are descendants of the founder of Ramadan, in the cable sent earlier to the Here there was always a good intent, only Wahhabism. Many princes still surround King by the Crown Prince. Surely a text the tools were sometimes weak. themselves with traditional retainers message would have done. Besides, Saudis know that their coun- knows as khuyas, or little brothers, who Apologists describe Saudi majlises, try would not exist without the Al Sauds. typically represent Bedouin tribes. Tribal those public receptions where princes lis- Until the 20th century, there had never links are also maintained through selec- ten to their subjects’ pleas and panegyrics, been a state that covered similar territory. tive manning of such institutions as the as a form of desert democracy. In fact, The prized Hijaz fell under the sway, suc- Saudi National Guard. they are stilted, staged aairs. Prince Wa- cessively, of rulers in Damascus, Baghdad, Such layers of inuence have proved leed bin Talal, the king’s nephew, is re- and Istanbul, who ignored the Ara- gratifyingly coup-proof, but the real nowned for the charity dispensed at his bian interior, or Najd, as worthless. King clincher has been the perpetual fountain weekly majlis. Yet the billionaire investor Abdul Aziz, the current king’s father, built of oil wealth. Forty years ago King Faisal, pays scant attention to the hundreds of his kingdom through a mix of outright the great reformer and moderniser, having supplicants who shue forward for a per- conquest, appeals to the faithful, strategic ousted his proigate brother Saud, decreed functory hearing, after which an aide often marriage and clever diplomacy. He and that the royal family’s take from oil exports hands them an envelope of cash. his heirs sustained it by carefully cultivat- should be capped at 18%. That rule proba- The surprising thing is how comfort- ing tribal, business and religious leaders bly still applies today, though it is hard to able most Saudis seem to be with their rul- and through the wildly generous patron- tell because the state budget remains ing dynasty. Testy regionalism persists, for age made possible by oil wealth. opaque. The current king, Abdullah, is instance, among the Shia of the Gulf coast The sheer size of the Al Saud clan has known to frown on extravagance; he likes1 4 A survey of Saudi Arabia The Economist January 7th 2006

A history of privilege 2 Al Saud family tree

Saud bin Muhammad bin Muqrin (local sheikh ca. 1730-40) Muhammad bin Saud Al Saud (allies with Wahhabists, expands domain 1742-65) Four generations of Al Saud (local rulers, founded two short-lived states) Abdul Aziz bin Abd al-Rahman bin Faisal Al Saud (ruled 1902-53, from 1932 as king). 36 recognised sons, among them five kings: Saud b. 1902 (ruled 1953-64). 107 children Faisal b. 1906 (1964-75). Sons include Saud, foreign minister; Turki, ambassador to US; Khaled, governor of Asir Province Khaled b. 1912 (1975-82) Fahd b. 1921 (1982-2005). Sons include Muhammad, governor of Eastern Province Abdullah b. 1923 (2005- ) and prominent princes: Sultan b. 1924 (crown prince, minister of defence) Talal b. 1931 (no government post) Nayef b. 1933 (minister of interior) Salman b. 1936 (governor of Riyadh)

Source: The Economist

2 desert rambles in his specially tted bus, sometimes, merit. During the 52 years king’s appointment of Prince Bandar bin whereas King Fahd liked ying his entire since the death of the kingdom’s founder, Sultan, the amboyant former ambassa- court to his holiday palace in Spain’s Mar- many of his sons, of whom a dozen are still dor to Washington, as head of a more pow- bella. No doubt, however, the Al Sauds are in line for possible succession, have used erful National Security Council is seen as still comfortably o. Even lowly princes their long wait to create powerful efs. trimming Nayef’s sails further. are believed to receive a monthly stipend Prince Salman, now 69, has been governor King Abdullah has taken other small of at least $10,000. The combined wealth of Riyadh since 1962. His full brothers in- steps to boost his already considerable of the Al Sauds is impossible to guess, but clude Sultan, the 81-year-old crown prince, popularity. One of his rst acts in oce it must be hundreds of billions of dollars. who has been minister of defence since was to free three prominent dissidents, Commoners do complain about undue 1962, and Prince Nayef, minister of the in- whose jailing, for the crime of calling for a spoils, but money on such a scale also terior since 1975. All have appointed their constitutional monarchy, had sent a chill buys consent. Al Sauds and their loyalists own sons to top posts. through reformist circles. Soon after, Abd- control all of the dozen Saudi daily news- It is often claimed that these full ullah decreed that the kingdom’s little-ob- papers. They own the two most respected brothers, called Sudairis after the family served National Day should become a pan-Arab dailies, as well as four out of ve name of their joint mother, have stood in public holiday. Conservative clerics com- of the most popular Arab satellite TV chan- opposition to other princes. As crown plained of creeping secularism, but ordin- nels. The exception is al-Jazeera, which is prince, for example, Abdullah, who has no ary Saudis loved it. The king also decided one reason why the cocky channel is sub- full brothers, was forced into some humili- that no one should kiss his hand any more. ject to a ruinous boycott by Saudi advertis- ating retreats from initiatives he had spon- Such gestures reect Abdullah’s own ers. Aside from keeping top western lobby- sored, even after the 1995 stroke that inca- attachment to Bedouin egalitarianism, but ing rms on their payroll, the Al Sauds can pacitated King Fahd (another Sudairi) and also an awareness that times are changing. also atter inuential Muslims by oering left Abdullah supposedly in charge. But Since the reign of King Faisal, who was them privileged access to the crowded some analysts identify at least ve compet- murdered in 1975 by a disgruntled holy sites. Their money turns lies into ing spheres of power within the ruling nephew, the Al Sauds have suered a truth, says one human-rights activist. family. This, it is said, explains the some- steady loss of public goodwill. One symp- times erratic course of Saudi policy, with tom of this has been the presentation of Caesar, thou art mortal reforms being promised and then re- citizens’ petitions demanding reform, a Yet Saudi kings, despite the lack of con- tracted. Elections to municipal councils, trend that began in 1990 and reached its stitutional constraints on them, are far for instance, were rst mooted in the 1970s, height in 2003 before a crackdown in the from absolute rulers. They have, rst of all, but held only last year, and then only for last year of King Fahd’s reign. Although the to account to the Wahhabist religious half the seats. Al Sauds’ response to such polite prodding establishment that has been their tradi- Certainly Abdullah, aged 82, appears to has been outwardly muted, many of the tional legitimation. This can be a serious have more leeway now that he is king. So reforms undertaken in the past 15 years handicap. King Fahd, who ruled from 1982 far he has pointedly refrained from the cus- have been aimed at meeting petitioners’ until last August, is said to have lavished fa- tomary naming of a second deputy prime demands. In 1992, King Fahd decreed a ba- vour on religious causes to atone for his minister. This is the traditional post for a sic law that for the rst time outlined an in- own youthful reputation for high living. runner-up to the throne. Crown Prince Sul- stitutional structure for the state. (Saudi And although kings appoint senior mem- tan held that position under Fahd, and is Arabia has no constitution, claiming that bers of the clergy, they have no direct over- now rst deputy prime minister. This has the Koran serves this function.) sight of the 700 judges who run the sharia been read as an oblique signal of discom- King Fahd also created the Majlis al- courts, the backbone of the Saudi legal sys- fort at the prospect of power passing to Shura, or consultative council, which has tem and the bane of reformers. Prince Nayef after Sultan. The 72-year-old since expanded to 150 members. It is easy The king must also answer to his own interior minister is the most prominent, to dismiss this all-appointed body as win- enormous family. By tradition, succession though not the most senior, contender, but dow-dressing, but even detractors admit is not vertical, passing to sons, but horizon- he is widely regarded as moody, abrasive, that its legislative record is good, and its tal, passing to brothers in order of age or, capricious and prone to intrigue. The membership broadly representative of the1 The Economist January 7th 2006 A survey of Saudi Arabia 5

2 kingdom’s diversity (with the huge pro- untroubled by another issue that will af- or at least a clearer mechanism for transfer- viso that it excludes women). Senior fect the country’s political future: the suc- ring power. For the time being, though, princes speak of elections to at least some cession. Both King Abdullah and his desig- Saudis will just have to wait. One young Shura seats in the future. Already, promi- nated heir are old men, but the general prince, Muhammad bin Abdullah al-Fai- nent members have called for greater assumption is that the Al Sauds are not yet sal, who runs one of the kingdom’s largest power to grill ocials and authorise bud- ready to see power pass to the next genera- private rms, the Faisaliah Group, nds gets, and even talked about launching pub- tion, King Abdul Aziz’s grandsons. Many the political arena overcrowded, but lic debates on controversial issues. suspect that the brothers of the ruling gen- thinks the family will sort something out. Such gradual progress goes some way eration could not agree on whose son The oor that stops me feeling uncom- towards appeasing the many Saudis who should get the prize. fortable is that there is no one in the line of would like to see a fuller devolution of au- Clearly it would be good for the coun- succession who wants to go down in his- tocratic powers. Many of them claim to be try to have a younger, more dynamic king, tory as the one who lost the kingdom. 7 Glacier in the desert

Ever so slowly, Saudi society is moving forward

HE National Commercial Bank, the Saudi Arabia are the holy cities of Mecca worth only half a man’s share in inheri- Tkingdom’s oldest and biggest, is run- and Medina: less prudish foreign Muslims tance, in blood-money and in the weight ning an advertising campaign. One slick mingle freely here, and statutory pilgrim of her testimony in court. But most of them television spot features a smiling young garb is actually more revealing than the object to the general infantilisation of woman showing her delighted father how cover-all black abaya required in other women, which has no basis in Islam. Suc- to settle bills by direct debit. The same ad Saudi cities. cessful female entrepreneursand there could have run anywhere (though per- In fact, a surprising number of Saudi are many in the kingdomresent having to haps without the headscarf for the dutiful women are quite content with the ban on appoint male agents to represent them. daughter). But in a country where until a ikhtilat. Some of them are more bothered And even happy housewives know that few years ago women did not appear on by the incompleteness of the separation. their husbands can, if they choose, deny TV at all, and until the 1960s did not even Many government departments, for in- them the right to travel, work, or study at go to school, there is a subversive signi- stance, have failed to create a women’s sec- university. Should a marriage go sour, cance to suggesting that a woman can be tion, so women either have to send an ap- mothers have no right to custody of the more savvy than a man, and that the old pointed male agent or be accompanied by children. Men may divorce their wives can learn from the young. Formally, the a mahram or protector: a father, husband, with a simple oath, but women must kingdom’s women remain the most op- brother or son. plead with the all-male, all-Wahhabist ju- pressed on earth. They are, famously, This is what really riles even the most diciary to divorce their husbands. barred from driving, and this in a steamy pious of Saudi women. They may accept, land with sprawling cities. It is not merely on scriptural grounds, that a woman is What women really want humiliating to be at the mercy of male rela- Even some feminists, however, say there tives, who need cajoling or sometimes are more pressing issues. Just give us all, bribing to get behind the wheel. It can be Bottom of the heap 3 men and women, free speech and the right crippling, even for wealthy women who Women’s social and cultural rights* in Arab countries to organise, says one Riyadh activist. All can aord drivers. One mother of a two- May 2005 else will follow. Ibrahim al-Mugaiteeb, year-old describes her rising panic when 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 one of the country’s most tireless human- her son fell ill while her husband was trav- rights campaigners, reckons that although elling, and her driver failed to show up for Tunisia such formerly common abuses as torture several days because he had wrecked her Lebanon in prisons have lessened, nasty practices car for the third time. Palestine such as arbitrary arrest, imprisonment Yet few women see driving as a priority without trial and being denied access to a for reform. Not even the Wahhabist obses- Kuwait lawyer continue. Like scores of others, Mr sion with preventing ikhtilat, or mixing Jordan Mugaiteeb is himself banned from travel of the sexes, comes near the top of many outside the kingdom, and harassed by fre- Saudis’ long wish list for change. This may quent summonses for questioning by po- sound odd to visitors, for whom the most Syria lice. Millions of immigrant workers, he striking aspect of Saudi life is the eort to UAE says, face constant petty discrimination separate the sexes entirely, not only in Iraq and have little recourse to justice. House- schools and universities but also in oces, Saudi hold servants are often kept in slave-like restaurants and even banks. So successful Arabia conditions. Persecution of religious minor- is the eort that, aside from private homes, *Rated on a scale of 1-5; ities, including non-Wahhabi Muslims as the most uninhibited spaces in today’s Source: Freedom House 1=fewest rights; 5=most rights well as visiting Christians, continues. 1 6 A survey of Saudi Arabia The Economist January 7th 2006

2 Activists from the 200,000-strong Is- more accurately than in most other Arab maili Shia community in the remote prov- countries. The recent intrusion of other ince of Najran, for instance, complain of media that are immune from princely gross under-representation in all branches threats, such as internet chatrooms and of government, the deliberate settling of mobile-phone messaging, has made Sau- Sunni Bedouins in the region, and ritual dis far more aware and engaged with their humiliation in courts and schools that are surroundings than they used to be. uniformly run by Wahhabists. In one par- Public exposure of scandals has not ticularly odd case, a Najran judge sen- only widened the range of permissible de- tenced a 16-year-old Ismaili schoolboy to bate, it has increasingly prompted a death for blasphemy. This was commuted healthy search for practical solutions. A on appeal to 14 years in prison and 4,000 school re in 2002 that killed 15 girls, lashes, to be administered publicly in 80 whom religious police were reported to weekly sessions of 50 blows. have stopped from eeing the building un- Most Saudis are unaware of such injus- veiled, led to the sacking of the Wahhabist tices. A poll conducted in 2004 found that head of girls’ education and the depart- the issue which concerned them most, ment’s absorption into the education min- more than religious extremism or istry. In 2004, a popular TV presenter, Ra- women’s rights, was unemployment. This nia al-Baz, took the unprecedented step of is certainly a big problem. Ocial gures A woman’s lot inviting reporters to photograph her shat- put the rate at 9.6%. Outside estimates sug- tered and bruised face after a savage beat- gest it may be as high as 20%, but it is hard pushed growing numbers of Saudis into ing by her husband. The outcry helped si- to tell because many Saudis of working jobs that their parents would have dis- lence conservative critics of several age, including nine out of ten women, are dained. It is no longer odd to see Saudi subsequent reforms, including laws grant- not actively seeking jobs. What is clear is clerks, receptionists or salespeople. I ing women the right to ID cards. More re- that the problem has grown rapidly. know guys who are making just 1,500 ri- cent exposés have revealed such things as Part of the reason is that with half its yals a month ($400), with terrible working inhumane treatment of mental patients people under the age of 20, the kingdom is hours, says Pascal Menoret, a French aca- and the sexual harassment of women. having to cope with a big population demic who has spent years studying the A dierent kind of scandal erupted two bulge. More importantly, though, govern- kingdom. You can barely live on that, and years ago when Lubna Olayan, a rich busi- ment statistics show that despite 20 years there’s no hope of saving for marriage. nesswoman who heads a 40-rm con- of ocial eorts to Saudise the work- glomerate, failed to notice as her headscarf place, foreigners still make up 60% of the Something to do slipped during her opening address at a 8.5m-strong workforce, and a much higher A more common hazard of Saudi life is business event in Jeddah, prompting a proportion of those employed by private harder to measure: simple boredom. The thunderous warning against such corrup- businesses. Saudis are averse to taking or- bans on mixing, as well as on public enter- tion and depravity from the kingdom’s ders or work they see as demeaning, and tainment such as cinemas and theatres, most senior cleric. The conservatives imported labour is, on average, 30% leave few distractions beyond home, fam- seemed to have won that round. The gov- cheaper than Saudi manpower. Private ily and the mosque. Many Saudis have ernment said nothing. But this autumn, employers have such a strong preference grown addicted to satellite TV. Sociologists when it backed a move to let women vote for foreigners that many resort to creating also note an increase in tafheet, juvenile and run in elections for the board of the pretend jobs for Saudis to meet increas- delinquency such as drug-taking, hooli- Jeddah Chamber of Commerce, there was ingly tough quotas. A law just passed that ganism and late-night drag-racing in city not a peep of clerical complaint. requires 75% Saudisation simply cannot streets. Boredom also prompts some to People who oppose modernism shout be complied with in the short term, says turn to religious extremism. a lot, says Madawi Hassoun, an enthusi- one experienced consultant. The rest make do with shopping. When astic candidate for the board. But if you The underlying obstacle to getting Sau- a new store in Jeddah handed out gift deliver results, they stay quiet. Ms Has- dis to work is that schools are not produc- vouchers to promote its opening last year, soun, who runs a string of beauty parlours ing employable people. This is due partly 15,000 people turned up, creating a stam- and home-accessories shops, believes that to the weight put on religious instruction pede in which two people got trampled to change is inevitable. Even so, she sees wis- and partly to the emphasis on rote learn- death. What attracted them, said a local dom in the government’s slow, consen- ing. The oputtingly dull curriculum may columnist, was the utter lack of anything sual approach. explain, for example, why a survey of Ri- else to do. In such halting, roundabout ways, the yadh high-school students found that Cataloguing such social ills is some- agenda of social reform slowly progresses. fewer than one in six did any reading for thing of a Saudi national sport. Yet Even the touchstone issue of women driv- pleasure. Absolute separation of the sexes whereas complaints used to be whispered ing is no longer taboo. Opinion polls show creates obvious ineciencies, too, espe- behind closed doors, they are now increas- that a majority of Saudis think it should be cially in universities (where women, inci- ingly aired. The Saudi press has gone allowed, and also that a third of women al- dentally, make up 55% of all students). And through phases of daring and cowardli- ready know how to drive. King Abdullah’s most of the degrees granted are in theoreti- ness in turn, depending on the govern- own daughter, Princess Adila, was re- cal subjects, such as theology. ment’s mood, but in general it is more pro- cently quoted as saying that giving them li- Even so, economic pressures have fessional and reects public concerns cences was only a matter of time. 7 The Economist January 7th 2006 A survey of Saudi Arabia 7 Keeping the faith

A very special kind of Islam

NTIL two years ago, Saudi religious such theatres of war as Afghanistan, sponse at rst seemed bungling and con- Utextbooks suggested that a good way Chechnya and Bosnia. Some estimates put fused, but slowly they gained the upper to show love for God was to treat indels the number of Saudi volunteers in those hand. There have been no signicant at- with contempt. Students learned that conicts as high as 30,000. Generous tacks since December 2004. communism, secularism and capitalism funding also owed to jihadist causes, of- The killing of scores of suspects and the were forms of apostasy. Inventors and ten without the knowledge of the donors. arrest of hundreds more is one reason for those who call themselves scientists, they (I thought it was like the Salvation Army, the decline in violence, but psychological read, were nothing of the kind because says a Riyadh businessman of a charity he attrition may have been more eective their so-called science was limited to had long sponsored before it was linked to still. Ordinary Saudis have been outraged worldly matters. The only true men of sci- terrorism.) The skies of America, as well as by the militants’ callousness, and dis- ence were those who knew God and Iraq, have been more recent arenas for turbed to see their safe, quiet cities rattled feared Him. youths wishing to sacrice their lives for by gunre. Even outright bigots have Passages such as these have since been what they see as the good of the faith. found it hard to excuse the radicals’ taking purged, as part of a general campaign Whatever their reservations about jiha- of Muslim lives. The authorities have capi- against exaggeration in religious teach- dist tactics, most Saudis were impressed talised on such feelings by showing emo- ing, but not without erce resistance. In by their zeal and at least somewhat sympa- tive footage of weeping mothers and fa- 2004, for instance, a group of 150 religious thetic to their goals. Television pictures of thers denouncing their jihadist sons. A scholars, among them ocials in the edu- Muslims suering injustice in Palestine senior prince in the security forces reckons cation ministry, blasted such revisionism and elsewhere bolstered the already xeno- that 80% of their success is due to such per- in a petition. It is not possible to erase this phobic world view of the Wahhabist suasion and only 20% to better policing. enmity simply by removing something establishment that controls the kingdom’s More signicantly still, the bloodshed from the curriculum! exclaimed their mosques and schools. After September has prompted inquiry into its root causes. message to the king. The enmity between 11th 2001, America’s proclamation of war Some of these are historical. Before the cre- indels and Muslims is a fact of existence on terror, accompanied by words and ation of the Saudi state, the majority of as well as a legal obligation. phrases such as crusade and with us or people in the future kingdom’s territory Many teachers have simply refused to against us, fed suspicions of a plan to di- did not follow the Wahhabists’ Hanbali use the kinder, gentler new texts. Even vide and weaken Muslims. school of Islam. The great mosques of some parents complain that they no lon- Mecca and Medina were famed for the ger trust the curriculum to convey correct Not in our backyard diversity of the scholars who taught there. values. In one notorious incident last year, But such defensive complacency came to This liberal stance incensed the Al Sauds’ colleagues and students of a high-school an abrupt end in May 2003 when a local puritan Bedouin warriors. Yet once he had chemistry teacher pressed charges against cell linked to al-Qaeda sent suicide truck captured the holy cities, in 1925, Abdul Aziz him for speaking against jihadist violence, bombs into three residential compounds Al Saud began to bridle at his allies’ fanati- for favouring Christians and Jews, and in Riyadh. The following 18 months saw a cism. They alienated his subjects by such for poking fun at clerics’ beards. The local series of deadly bombings and shoot-outs actions as destroying the tomb-shrines of judge handed him a 40-month jail sen- as militants attacked expatriate workers as the Prophet’s descendants, which they tence, plus 750 lashes. well as Saudi police. The security forces’ re- said were objects of idol-worship. The Texts containing incitement to religious Wahhabi ranks split and senior clerics hatred are still stocked in mosques, book- sided with the Al Sauds, arguing that obe- stores and libraries. A giant state-run press dience to a rightful commander was outside Medina, for instance, produces preferable to anarchy. Some joined jiha- some 10m beautifully printed Korans a dist rebels who denounced the Al Sauds year, in 40 languages, which are distri- for going soft. The rebels were eventually buted free throughout the world. Yet these crushed, but the conict underlined the are no ordinary Korans. They are anno- Saudi rulers’ dependence on loyal Wah- tated by Wahhabist scholars, who pro- habist clerics. nounce, among other things, that jihad is Ever since, Saudi rulers have been care- one of the pillars of Islam. (Most Mus- ful to maintain this loyalty, taking out lims recognise ve pillars: the profession what the French Islamologist Gilles Kepel of faith, prayer, alms-giving, fasting and calls ideological insurance. Clerical ap- pilgrimage.) By abandoning jihad, Islam proval was always sought, and sometimes is destroyed, says one footnote. Jihad is obtained only with great diculty, before an obligatory duty, and he who tries to es- reforms such as the introduction of bank- cape this duty, or does not in his innermost ing and paper money in the 1950s and the heart wish to fulll this duty, dies with the abolition of slavery and the start of school- qualities of a hypocrite. ing for girls in the 1960s. When television Obviously, most Saudis make their arrived in 1965 it caused riots, quelled only way through life without taking up arms when senior clerics grasped the fact that against the world. But plenty do feel in- they could use this heathen innovation to spired by such ghting words. In the past, promote the faith. In 1979, after a band of and often with a nod from Washington, messianic Wahhabist radicals invaded the the most enthusiastic were exported to Home truths great mosque at Mecca, loyal clerics gave1 8 A survey of Saudi Arabia The Economist January 7th 2006

2 their blessing to the use of rearms to ush The 1970s and 80s saw the quiet emer- a Muslim country. You could say we are them out. Perhaps most controversially, in gence of a youthful counter-movement to fundamentalists, but not fanatics. I want 1990 they gave grudging approval to the ocial Wahhabism. Known as the sahwa, my country to be Islamically inclined, but deployment of American troops on Saudi or awakening, it came into sudden full with an open mind. Right now, the use of soil to repel Iraq’s invasion of Kuwait. view during the 1990-91 Gulf crisis. Islam by the Saudi government is much The clerics’ loyalty stretched to over- Preachers such as Mr Hawali gained in- like the way communism is used by the looking other things that might have been stant prestige from their opposition to the Chinese, just to control people. Mr Alim criticised on religious grounds, such as alliance with indel America and their de- has taught his daughters to drive, and royal corruption, as well as many practical mands for political reform within a new would be ecstatic to have American-style secular innovations. Saudi banks, for in- model of an Islamic state. Their outspoken democracy or any kind of democracy. stance, have been oering interest-bearing views inspired a wave of activism, includ- But he describes America as a racially big- accounts right from the start, despite Is- ing attacks on shops selling videos and sat- oted country bent on world domination. lam’s reservations about interest. The ellite dishes. In a crackdown in the A small but increasingly vocal group of highly regarded central bank simply ar- mid-1990s, many young activists were im- Saudis takes a much more liberal view of gued that the banks’ clients should be al- prisoned or ed abroad. The heavy- religion and state. This progressive elite is lowed to choose the kinds of nancial in- handed response pushed some activists, poorly organised, as its trouncing in the struments they wished to use. such as Mr bin Laden and his followers, to- election showed, and Islamists, even mod- Commercial disputes have not been set- wards terrorism, and the Al Sauds them- ernist ones such as Mr Alim, say it is out of tled in sharia courts since the 1960s be- selves became a prime target. touch with the pulse of Saudi society. Yet it cause their rulings were found to be ruin- has a strong voice, both in the local Saudi ously unpredictable. Instead, such A symbiosis challenged press and on the satellite channels that are disputes are referred to a commission ap- The Wahhabi-Saudi alliance worked like the kingdom’s main source of information pointed by the Ministry of Trade. magic, says a liberal lawyer in Riyadh. and entertainment. I don’t want revolu- The Al Sauds rewarded the clerics’ loy- But now it’s turned against the magician. tion, and I think most Saudis believe de- alty well. Wahhabists were given full con- However, that may be too simple a view. mocracy is pie in the sky, says a cigar- trol of criminal and personal justice and The large ocial religious establishment, chomping stockbroker. But I want the in- extensive inuence over education. Wah- paid for by the state, is ostensibly made up terior and justice ministries purged, and habist schools and sharia courts sup- of loyal Wahhabists. Some of them, in- the whole question of who appoints planted older institutions across the king- cluding nearly all the kingdom’s 700 judges revised. dom. The powers of the mutawaa or judges, are extremely conservative. The The Al Saud family itself represents a religious police were widened, and rules country’s main universities also remain broad spectrum of opinion. King Abdul- on such things as female dress more rigidly steeped in Wahhabist thought. But the lah, for example, is a traditional, pious con- enforced. Huge sums went to religious Wahhabists’ religious rulings have lost servative, but quietly backs a more liberal causes, from the founding of Islamic uni- credibility with the wider public. Their of- social agenda. He feels betrayed by the re- versities to the building of mosques and cial condemnation of terrorism, for ex- ligious establishment, says a history pro- the expansion of pilgrimage facilities. In ample, is based mainly on the argument fessor in Riyadh. He thinks they created the 1980s funding was increased further that it represents disobedience to the the environment that made terrorism pos- by King Fahd, who wanted to bury his pre- rightful commander under whose sole sible. But although many younger princes vious reputation for moral laxity but also authority jihad can be pursued. would like to see a full break with the Wah- saw a threat to the kingdom’s primacy Many Saudis, particularly junior bu- habist alliance, senior princes remain fear- among Muslims from revolutionary Iran. reaucrats and schoolteachers, look instead ful of radical action. One very wealthy But the clerics’ loyalty came at a cost. to the activist of the sahwa and member of the royal family, himself a lib- Students in the new institutions began to the . It, too, is conser- eral, says he still prefers to buy immunity question the scriptural basis for their sup- vative and xenophobic, but its attitude to from conservative criticism by handing port of the Al Sauds and their policies. the role of the monarchy is more question- out generous charitable donations. Some turned to the ultra-puritan ideas of ing and its approach to social issues To date, the Al Sauds seem to have tried earlier Wahhabist rebels, but the lavish slightly more progressive. To its suppor- to preserve a balance. They have silenced state patronage also attracted foreigners, ters, al-Qaeda-style violence is an aberra- liberal demands when they have grown who brought with them new ideological tion in itself, although resistance in Iraq too strident; yet in the past few years they currents and a modern take on Islamic or Palestine is perfectly legitimate. It was have also got the most fanatical preachers governance. Thousands of Muslim this movement, which some call Islahi or sacked, school curricula revised and reli- Brothers, persecuted in Egypt and Syria, reformist, that performed best in last year’s gious tolerance vigorously promoted. Un- found refuge in the kingdom. They in- partial municipal elections. til two years ago the mutawaa could say cluded Muhammad Qutb, whose better- Some charged Islahi candidates with anything they like, they could not be chal- known brother, , was hanged using scare tactics, such as accusing liberal lenged, explains Prince Waleed bin Talal, in Egypt for teaching that jihad must be rivals of secularism, which Saudis con- who is both actively pious and an outspo- waged against Muslim rulers who stray sider a vicious slander. But Bassim Alim, a ken defender of women’s rights. Now from Islam. Muhammad Qutb taught for Jeddah lawyer with a Harvard degree, they are being handcued, but gently, be- years at Mecca’s Umm al Qura University. thinks the Islahi movement was simply cause when you ght them with logic they His ardent followers included Osama bin better organised. Many people felt like prove to be weak. He adds with a mischie- Laden, his deputy Ayman al-Zawahiri and me, he says. The elections were an vous grin: I like it when they bark. It the populist Saudi preacher Safar Hawali. opportunity to send a message that we are means they’re in a corner. 7 The Economist January 7th 2006 A survey of Saudi Arabia 9 A Mecca for money

The economy is doing almost too well for its own good

UMOURS, whether true or not, can tell Yet it is not just the world’s thirst for oil Ryou much about the mood of a place. Comfort zone 4 that justies Saudi optimism. In the rst One story whispered around Riyadh con- World oil prices, $ per barrel three quarters of 2005, for instance, the cerns a prominent businessman who 70 kingdom’s 11 banks raked in combined spoke loudly and often about the astonish- FORECAST prots of $5 billion, $1 billion more than ing progress being made in Dubai. It was a 60 for the whole of 2004, which itself was a shame, he said, that Saudi Arabia was 50 vintage year. This is not bad for a $300 bil- high slow to follow the nearby emirate’s free- 40 lion economy. Corporate lending has in- wheeling style of business. A senior prince creased by half in the same two years, and summoned the man to hear all about it. medium 30 overall loan-to-deposit ratios rose from a When the businessman had nished, the 20 limp 64% to a sounder 80%. In other words, low prince slapped him hard on the cheek and 10 banks are not just accumulating deposits said, Don’t speak of Dubai again. or funding the stock frenzy, but pumping It may be nothing more than a good 0 capital into productive investment. 1970 75 80 85 90 95 2000 05 10 15 20 25 story, but it says much about the issues on Other industries are doing nicely too. Saudi minds. For all the kingdom’s wealth, Source: US Energy Information Administration Take SABIC, a maker of petrochemicals even the oil windfall of the past few years and steel and the Middle East’s largest in- has raised its income per person only from year’s spike, and forecasts are notoriously dustrial group. Twenty years ago it hired the level of Mexico to that of Argentina. A risky. But America’s Energy Department, an American consulting rm to gauge its quarter of a century ago it was, albeit whose data-crunching is well respected, long-term prospects. The same consultants briey, on a par with America’s. For most has recently adjusted its medium-term sce- reckon that SABIC is now 70% bigger than of the time since then, at oil prices have nario from the present to 2025, suggesting they had predicted back in the 1980s. It cur- kept the pie from getting much bigger but that oil prices during this period could on rently makes 7% of the world’s petrochem- rapid population growth has meant it had average be around 50% higher than in the icals, a gure it expects to rise to 13% by to be divided up into many more pieces. previous 20 years, and rising. 2010. The company doubled its prots be- Citizens of some smaller Gulf emirates, That would be very comfortable for the tween 2003 and 2004, and increased them by contrast, have come to enjoy a standard Saudis. Since the 1970s, they have been by a further 54% in the rst nine months of of living closer to that of Luxembourg or wary of prices rising to the point where ri- 2005, to an enviable $3.9 billion on sales of Monaco. Multinationals that ock to in- vals would be encouraged to exploit oil $15 billion. SABIC’s stockmarket value has vest there have largely shied away from elds that had previously been unecon- grown to a whopping $175 billion. the kingdom with its stricter laws and even omic. Saudi oil costs just $2 a barrel to pro- Nor is the company alone in being so stricter rules of personal behaviour. Sau- duce, a small fraction of what it costs to ex- successful. Dozens of Saudi rms have ex- dis themselves travel a lot and invest tract the stu in Alaska, say, or the North panded similarly, and can hold their own heavily in the rest of the Gulf. A recent Sea. Demand from both Asia and America against the world’s most competitive en- share oering in the United Arab Emirates remains strong. Saudi Aramco, the giant terprises. Non-oil exports were forecast to sent 30,000 of them scuttling next door to state oil monopoly, is ramping up its pro- reach $17.5 billion in 2005, a healthy 10% place bids, causing the petrol station at the duction capacity. Having remained static rise on the previous year. Overall, reckons border to run out of fuel. The IPO was 222 at around 10m barrels per day for a genera- a report from SAMBA, the kingdom’s sec- times oversubscribed. tion, this is currently pushing 11m and may ond-largest bank, about half of last year’s reach 12.5m by 2009 and perhaps 15m by growth in real GDP of 6.5% is attributable Nice big earner 2015. Assuming a middle-of-the-range to the non-oil sector. But the Saudi punters’ interest in their price of around $40 a barrel, the oil bub- Sound government policies have neighbour does not signal weakness in bling out of the ground could continue to helped. In the past ten years the kingdom their own economy. Oil exports, having be worth around $500m a day for many has issued over 40 new laws to streamline bottomed out in 1998 at $35 billion, have years to come. commerce, scrapping nearly all the oner- since soared, hitting a record $160 billion ous rules that used to insulate its economy. in 2005. Last year’s current-account sur- Well-regarded regulatory bodies now gov- plus was close to $100 billion and the cen- Pride before the fall? 5 ern capital markets, telecoms and indus- tral bank’s net foreign reserves rose to $135 Tadawul all-share index trial standards. The country’s patent oce, billion, a jump of $90 billion in just three Feb 28th 1985=1,000 which until recently had a ludicrous 50- years. Last August the government granted 18,000 year backlog of applications, has been rad- a 15% across-the-board pay rise to its em- 16,000 ically reformed. SAGIA, the government’s ployees, the rst in 22 years. Though con- 14,000 highly competent business-promotion sumer ination remains very low, the in- 12,000 arm, has ambitious plans to attract foreign ux of cash has sent asset prices soaring. 10,000 investment. It should have an easy job. The Riyadh stock index has quadrupled in 8,000 Foreign rms, recently granted the right to just two years. Prime building land in 6,000 own land and hold majority stakes in most Mecca now fetches close to $100,000 a 4,000 sectors, are now taxed at a modest 20% of 2,000 square metre ($9,300 a square foot). 1,000 prots and face no capital controls. Cus- Even better, oil prices are likely to re- 0 toms duties average just 5%, and are zero in 1985 90 95 2000 05 main strong. True, in the past six months trade with neighbouring Gulf states. The Source: Al Rajhi Banking & Investment Corp they have drifted downwards from last time it takes to license a business has fallen1 10 A survey of Saudi Arabia The Economist January 7th 2006

2 from six months to a couple of weeks. best chance for future stability lies with Many of these reforms were part of the shifting assets from the state to the public kingdom’s eort to join the World Trade to change the underlying imbalance of Organisation, in which it has now suc- power. As stakeholders rather than depen- ceeded. More surprisingly, the World Bank dents, ordinary Saudis would be wary of last year ranked Saudi Arabia as the best taking risks, but would also be better place in the region to do business. But per- placed to bargain for a stronger political haps that is not so odd. The cost of living is voice. He is optimistic about progress on far lower than in other Gulf countries, as social issues: If we can stick to the same are shipping, warehousing and licence pace of change for three years, there will fees. And the large Saudi market, with 23m be no going back. people now and a forecast 33m by 2020, of- Saudi Arabia is not going to turn into fers better prospects. Dubai. Subtract the bars and bathing beau- That population growth will require a ties, however, and the holy cities, Mecca huge investment in infrastructure. The hy- and Medina, are starting to look surpris- drocarbon sector alone is expected to ab- ingly like the boomtowns on the Gulf. It is sorb some $100 billion in the next ve not always a pretty sight. Rampant de- years, says SAGIA’s director for energy, Buy the lot velopment combined with Wahhabist dis- Abdulwahab Saadoun. Meeting an ex- dain for idol-worship has stripped away pected doubling of electricity demand by cal telecoms giant, and 69% of the National nearly all that is old. Time-share deals in 2020 will cost $150 billion. Similarly vast Commercial Bank, the country’s largest. both cities on anything from studio units sums are forecast for roads, railways, air- Prudent divestment of such assets would to royal suites promise visa facilitation ports and the water-desalination network soak up excess liquidity and quickly wipe as part of the package. A wall of 20-storey that already supplies 60% of the king- out the state’s $180 billion debt. brand-name hotels surrounds the shrine dom’s voracious demand. Yet despite the government’s declared at Medina, which itself looks rather like a Observers believe that this round of intention to press ahead, privatisation has giant Arabian-themed shopping mall. heavy spending will be far more judicious lagged. That is a pity, and not just because In Mecca, the 18th-century Fort of than that during the last great leap for- of the danger of an overheated equity mar- Ajyad, built as a defence against Wah- ward, in the 1970s. The era of paying lavish ket. There used to be growing income po- habist marauders, has been demolished. commissions on public-works contracts is larisation, but lately everyone has gained, Rising in its place are seven apartment over. Much of the new investment is in the says Abdul Aziz Qasim, a clever Riyadh towers, six huge hotels and a four-storey form of build-operate-transfer contracts lawyer who, like many former Islamist shopping centre. Facing the main gate of with private rms. Subsidies persist here radicals, has mellowed towards liberal- the Great Mosque, the construction group and there: the price of household drinking ism. This has helped keep things quiet Saudi Binladin (owned by the family of water, for instance, is only one-seventh of and returned legitimacy to the monarchy. Osama bin Laden) is building a mammoth the cost of distilling and piping it. But utili- Mr Bakheet concurs. Marx was wrong, complex of skyscrapers for the Al Saud ties and other state services are increas- he says. Money, not religion, is the opiate family. The tallest, at a height of 485 me- ingly run on commercial lines. The role of of the masses. It may be no coincidence tres, will dwarf the great mosque’s mina- the government is evolving towards that that the unrest in the 1990s coincided with rets. Mecca’s Most Prestigious Retail Ad- of a regulator rather than a provider. a prolonged economic slump. dress, reads a billboard. No doubt it will All this bodes well, but the kingdom’s Mr Qasim suggests that the kingdom’s still be there when the oil runs out. 7 recent success carries its own dangers. With a lack of other outlets for investment, Future surveys share prices have risen to a giddy 40 times Reprints Reprints of this survey are available at Countries and regions earnings. Some 3m Saudis, close to half the US$4.75 each, with a minimum of 15 copies, adult male population, now hold local plus 10% postage in the United States, 15% Germany February 11th equities. Sober nancial minds fear that if postage in Mexico and Canada. Add tax in CA, Chicago and the American heartland the bubble were to burst, the middle DC, IL, NY, VA; GST in Canada. March 18th China March 25th classes would get hit. That, in turn, could For orders to NY, please add tax based on South Africa April 8th start a backlash against the government’s cost of reprints plus postage. Poland May 6th liberalisation policies, says Beshr Bakheet, For classroom use or quantities over 50, Business, nance and economics and ideas a respected investment adviser. please telephone for discount information. Corporate organisation January 21st Please send your order with payment by Wealth and philanthropy February 25th A piece of the action cheque or money order to: New media April 22nd There is a simple way out. It’s a no- The Economist brainer, says Prince Waleed bin Talal, Newspaper Group, Inc., whose own colossal Saudi portfolio has Reprints Department, quadrupled in value since 2000. The gov- 111W 57th St, New York, NY 10019. ernment should get out of all investment Tel (212) 541 0532 Previous surveys and a list of forthcoming in public companies. At the moment, it (American Express, Visa and MasterCard surveys can be found online holds 55% of the stockmarket by value, in- accepted) www.economist.com/surveys cluding 70% of SABIC, 70% of STC, the lo-