TCS Daily

Terrorist Task For New Saudi King

By Melana Zyla Vickers - August 5, 2005 12:00 AM

Here's a question for a little weekend bet around the barbecue: Will high oil prices be good or bad for Saudi Arabia, whose King Fahd died Monday?

Everyone knows expensive oil is good for the royal family. Members of the House of Saud are sure to find all sorts of benefits -- 24-karat fingernail clippers, diamond contact lenses, whatever -- in the additional tens of billions of petrodollars they'll pull in this year. The question is whether the money will help the actual country, seeing as its troubles have caused it to export security problems as readily as it exports black gold.

Crude oil futures shot above $61 on the news of Fahd's death, a level not seen since 1983. They've stayed there all week. These prices, coupled with steady highs all year, mean Saudi Arabia is expected to pull in $100 billion in oil revenues this year, $23 billion more than in 2004.

What will Crown Prince Abdullah, soon to be king, and the leadership do with the money? Here's what he ought to do: Encourage the diversification of his national economy, in which the petroleum sector generates almost half of GDP. Expend additional money to protect gulf-front oil facilities, which are among the world's top terrorism targets. Improve the water supply and other elements of the national infrastructure that have been drooping since the last oil heyday. All this he should do with an aim to lower unemployment, which is estimated at over 25% and which involves about 370,000 idle young males.

Putting young Saudis to work and offering political reforms could help ease societal tensions in the country. Right now, rich young men with no sense of purpose and no sense of political enfranchisement find their way into the clutches of conservative, sanctimonious religious leaders. Religion isn't bad in and of itself, of course. But as we all know, some of these Wahhabi Islamic leaders weave religion and politics and fill the young mens' heads with false notions about the righteousness of suicide bombings and deadly jihad against the West. These men go on to finance their crazy ideas globally. The results are plain to see: Osama bin Laden has Saudi roots. Fifteen of 20 September 11 hijackers were from Saudi Arabia. And tracks between Saudi Arabia and the men who bombed the London subway several weeks ago are increasingly clear.

While using petrodollars to clean the rot of an idle society is what Saudi Arabia's rulers should do, it's not clear they can do it. After all, it's money and a welfare-state mentality that made so many Saudi men idle and purposeless in the first place. A third of Saudi Arabia's workforce is foreign, revealing that the problem isn't a shortage of work, but a shortage of willingness to do it.

The trouble runs deeper than that. The House of Saud is rife with its own problems -- Fahd's successor Abdullah is in his 80s, and many of his own potential successors are aging as well. Much energy is sure to be expended on internal political machinations. In addition, the thousands of family members have a hard time managing their money, to put it mildly, which means that a lot of the oil revenue could sink into private pockets and into the sand. There's a great risk the increased wealth will simply embolden the leadership to stick to its old ways.

After all, tackling political enfranchisement in Saudi Arabia would hardly be a cakewalk. Recent experiments with low-level democratic elections revealed pent-up public support not for moderate good guys, but for radical fundamentalists. That's been seen in other Muslim states -- Algeria, Turkey and Iran in the time of the Islamic revolution -- and is a gnarly problem that's difficult to solve: Is a democratic process that produces radical Islamic governments that hate the West something the US really wants to encourage?

One thing that's certain is that the oil revenues are going to keep pouring in. A global shortage of refinery capacity, and growing Chinese and Indian demand will keep prices high for the foreseeable future.

Which means all eyes are on the world's biggest oil exporter. If Saudi Arabia's leadership can use these rich conditions to calm its roiling society, the security of the United States, and the rest of the world, would be much improved.


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