Understanding Saudi Stability and Instability: A Very Different Nation

Saudi Arabia is scarcely immune to protest and dissent, and has long struggled with the challenges of reform. What is most striking about the Kingdom over the past weeks of crisis, however, has been the lack of any major challenge to government and the way it functions

This may well not continue. More secular Saudi intellectuals and youth are already sending letters and petitions, and calling for more rapid reform. Some more extreme voices are going further and calling for “days of rage” – mirror imaging similar calls in Tunisia and Libya. In today’s Middle East, some demonstrations seem inevitable in every country, and no one can guarantee Saudi Arabia’s future stability in a time of turmoil.

At the same time, there are good reasons to hope that Saudi Arabia will continue on the path to peaceful reform and change. A small, highly vocal minority does not speak for a nation, and Saudi stability may well prove to be strong enough so that the end result is to aid reform rather than threaten the regime.

A History of Concerns versus a History of Stability

One reason is the Kingdom’s history. Every crisis in the Middle East since the time of Nasser has led to a new round of speculation about Saudi Arabia and the future of the monarchy. Yet, it has now been more than half a century since that speculation began and Saudi Arabia has not changed its regime  As other countries in the region have shown all too clearly, a history of stability is no guarantee for the future, but it is important to note that Saudi stability has been the product of the fact that its government has dealt with each wave of change by making the reforms that are critical to maintaining popular support.  

The current King – King Abdullah bin Abdul Aziz -- may be in his late 80s, he led a government that consistently pursued policies that made him a symbol of social, economic, and educational reform to many Saudis but long before the current crisis.  At the same time, he has dealt with the fact that the Saudi population and clergy are deeply committed to a puritanical form of Islam and resist social change when it seems to come into conflict with traditional religious and social practices, and that Saudi society is driven by its internal values and demands that are very different those of Western secularism.

It is striking that when this new wave of crises began, King Abdullah did not react with a wave of new security measures. Instead, his government issued a series of royal decrees that provided a multi-billion dollar investment in stability by meeting the people’s needs. The Saudi government has announced that these investments include:

• $10.6 billion (SR 40 billion) in new funding for housing loans through the Real Estate Development Fund. 

• $7.9 billion (SR 20 billion) in funding to increase the capital of the Saudi Credit Bank
• $266 million (SR 1 billion) to enable social insurance to increase the number of family members covered
• $319.9 million (SR 1.2 billion) to expand social services.

• $933 million (SR 3.5 billion) to help the needy repair their homes and pay utility bills
• $126.9 million (SR 476 million) to support programs for needy students at the Ministry of Education.
• $3.9 billion (SR 15 billion) to support the General Housing Authority 

• A 15% pay increases for state employees.

• 50 percent increase in the annual allocations for charitable organizations to $120 million  (SR 450 million). 

• $26.7 million ($100 million) annually allocation to projects of the National Charitable Fund will get SR 100 million

These investments total some $36 billion and they are obviously intended to defuse popular unrest. At the same time, they are not some sudden rush to invest in jobs, housing, medical services, and education. They reflect half a century of Saudi government investment in precisely the priorities that drove the core demands of the protesters in Egypt and Tunisia and the focus of social justice that has been the key to most of the current unrest in the Middle East.

History scarcely means we can take Saudi stability for granted. Saudi Arabia is simply too critical to US strategic interests and the world. Saudi petroleum exports play a critical role in the stability and growth of a steadily more global economy, and the latest projections by the Department of Energy do not project any major reductions in the direct level of US dependence on oil imports through 2025.

Saudi Arabia is as important to the region’s security and stability as it is to the world’s economy. It is the key to the efforts of the Gulf Cooperation Council to create local defenses, and for US strategic cooperation with the Southern Gulf states. It plays a critical role as a counterbalance to a radical and more aggressive Iran, it is the source of the Arab League plan for a peace with Israel, and it has become a key partner in the war on terrorism. The US strategic posture in the Middle East depends on Saudi Arabia having a friendly and moderate regime.

Finding the Balance

No one can ignore the fact that Saudi leaders face many challenges that might explode into popular unrest if they are not handled with great skill. They have to try to retain power and popular support while constantly adjusting their actions to find the right balance between modernization and social progress and the desires of a very conservative population. They have to seek the best balance between those who focus on secular needs and call for rapid change, and religious leaders whose primary focus is to preserve the values of a puritanical form of Islam. 

Finding this balance means the monarchy, and Saudi elites and technocrats, must work within a political system and culture few Americans understand, and one that is hard to put in perspective. The Saudi monarchy is scarcely the representative democracy Americans are familiar with.  Its limited experiments with a carefully selected national assembly or Majlis, and representative local government, have moved slowly and been very limited. At the same time, the Saudi monarchy has proved more adaptive and responsive to popular demands than many Middle Eastern regimes that use the title of president, or whose leaders are the product of much more authoritarian post-colonial regimes.

The top leaders in the Saudi royal family may be firmly in charge, but they rely heavily on finding consensus within the entire royal family (now well over 5,000 members), with other leading families in Saudi Arabia, with technocrats and educators, and with its religious establishment and key leaders like the Al Shaikh family. Unlike most governments in the developing world, Saudi officials also provide direct access for complaints and petitions, and do have a good track record of anticipating and responding to popular demands.

Conservatism versus Reform

Outsiders need to understand just how much Saudi political and social dynamics also differ from those of any other nation in the Middle East. For well over half a century, each successive Saudi government has had to struggle with the tensions between religious and social custom and the need for change. The Saudi popular commitment to conservative Islamic values has steadily evolved in the process, but the Saudi monarchy must move slowly and carefully, it must constantly demonstrate its religious legitimacy and commitment to Islam, and every reform produces an inevitable series of challenges and resistance.

The King’s title of Custodian of the Two Holy Mosques is not a hollow honorific. The Saudi government’s success in honoring and supporting Islam, in support the global flow of pilgrims to Mecca and Medina, and in honoring the Koran is absolutely critical to its popular legitimacy.

At the same time, Saudi religious conservatism is not Islamic extremism, and also has a stabilizing effect. The same Saudi religious conservatism that means the Saudi government must be cautious in making reforms, limits the prospect of sudden waves of popular demands for secular reform that emerged in Egypt and Tunisia. There are many in the Saudi elite that continue to push reform forward, but there are few signs that Saudi popular conservatism will suddenly give way to broad calls for a more secular society or form of government.

Legitimacy and the fight Against Extremism

The government’s care in preserving its religious legitimacy is also a key to the government’s fight against terrorism both within the Kingdom and outside it. Its success in keeping popular trust in its commitment to Islam helps explain why it could drive Al Qa’ida in the Peninsula out of the Kingdom and force it into Yemen.
It helps explain why Department of Defense reporting, and the State Department annual reports on terrorism, now consistently praise Saudi progress and cooperation in dealing with Al Qaida and the broader threat of terrorism. 

This success in the struggle against extremism does pose challenges of its own. The Kingdom has a very different justice system. It is slow to modernize and both Saudi courts and internal security practices can be repressive and still have many problems. Yet, the annual State Department report on human rights is more favorable to Saudi Arabia than in its assessments of many other developing countries. Moreover, the Saudi regime relies far more on cooption than repression. It often brings moderate reformers and dissidents into the system, rather than simply silencing or repressing them. It may hunt down Al Qa’ida activists, but it has one of them most outstanding programs to reeducate and reconcile young extremists in the Middle East.

Maintaining the Commitment to Change

Every change in the monarchy does create a new round of fears that the next King will not allow Saudi Arabia to evolve at the pace it needs, and make enough reforms. Somewhat ironically, many feared that King Abdullah would be too conservative and resist reform before he became king. In practice, King Abdullah’s became a symbol of progress that now poses challenge of its own.

King Abdullah and other Saudi leaders of his generation are all old, and no one can guarantee that a new king with an equal emphasis on reform will replace him. At some point in the next few years, Saudi Arabia also must move from selecting a king form the sons of its founder -- Ibn Saud – to selecting one from the next generation in the royal family. The government has made important reform in defining how a new King should be chosen, and are many competent and experienced princes in the next generation. But, the choice of a new king is important and it is not clear how this political transition will take place.

That said, the royal family has shown a remarkable ability to deal with its internal politics, and has consistently made an underlying commitment to social and economic reform over all of its modern history. The monarchy is scarcely immune to self-advantage, but it has supported educational reform, the adoption of new technology, and public welfare measures ever since its founding.  These efforts have sharply accelerated since oil exports began to turn into “oil wealth” in the early 1970s. 

The Quality of Governance

It is all too easy to focus on politics and ignore the quality of governance. The fact remains, however, that the way states actually spend their money is at least as critical a measure of their “legitimacy” as their politics. Saudi national budget and five year plans have consistently reflected the fact that Saudi leaders do not simply talk about reform and progress, they have made massive expenditures on every critical aspect of social welfare.

Any examination of Saudi budgets, five-year plans, and the reports of the Saudi Arabian Monetary Agency since the mid-1970s, shows that Saudi Arabia has not suffered from the “petroleum disease.” Money has gone where it is needed and where it helps preserve stability. The government has invested massive amounts of money in job creation and pushed hard to reduce its dependence on foreign labor. Its elite may be incredibly rich, but the vast majority of Saudi revenues have gone to national security and the broader population, including both the poor and a steadily expanding middle class.

This investment has included massive increases in key services like power and water. There has been an almost incredible expansion of education (now some 6% of the GDP), health care, and housing in the face of massive population growth. Government services have become much more effective while the barriers to private Saudi and outside investment have been sharply reduced.  The Saudi national oil company, ARAMCO, has become a model merit-based employee. The Kingdom has spent billions and billions to  create and expand industrial cities throughout the Kingdom, while it has opened up the rest of its economy, sought to replace foreign labor with Saudis, and begun to develop new sectors of the economy like mining and new sources of income like tourism.

Looking Towards the Future

This does not mean there are not reasons for concern – although it seems unlikely that Saudi Arabia will face major popular unrest at this point in time. Every shift at the top of the Saudi monarchy does raise questions. Human rights and the rule of law need modernization. Saudi Shi’ites face discrimination that needs to be eliminated -- although things have slowly improved and few see a far more repressive regime in Iran as much of a model.

The key reasons for concern, however, are structural, and economics and demographics may ultimately prove to be far more of an issue than politics. Saudi Arabia has to deal with the same demographic pressures, and “youth bulge,” that has threatened or toppled regimes elsewhere in the Middle East. Saudi society is still dealing with all of the radical social changes caused by moving from a small, poor population of some 3.8 million uneducated Bedouins in 1950 to a largely settled, urbanized, and far better educated nation that exists today. 

No one has an exact figure for the rate of change that is still going on, but the CIA estimates that Saudi Arabia now has the same very young population that challenges every government in the Middle East. It estimates that some 38% of Saudi Arabia’s 25.7 million people are 14 years of age or younger, and that some 280,000 young men and 270,000 young women enter the job market every year.

In spite of Saudi government efforts, direct unemployment is close to 11% -- and this does not take account of lags in getting jobs, limits to the number of women seeking jobs, and disguised unemployment.  Moreover, the US census bureau estimates that Saudi Arabia will grow to 34 million in 2030, in spite of a sharp decline in its past rate of population growth.

As is the case with every state in the Middle East, this means longer-term stability involves challenges that go far beyond political reform. Saudi Arabia must find better ways of giving men education for jobs, rather than in religion. It must bring women – who are a larger percentage of secondary school and university graduates than men – a full role in the labor force and society.

 Finally, Saudi Arabia must cope with the fact that “oil wealth” is relative to the population. Successful governance and the search for stability must change an economy that now draws on petroleum income for 80% of its budget revenues, 45% of its GDP, and 90% of its export earnings. The US Department of Energy also estimates that this  “oil wealth” only amounted $5,500 per person in 2010, and this narrow base of wealth is why Saudi Arabia’s overall per capita income ranks 55th in the world.

This dependence on petroleum exports is scarcely poverty, but it helps explain why the total Saudi per capita income of around $24,000 compares to $145,000 per person for sparsely populated neighbors like Qatar, $51,000 for Kuwait, and $40,000 for the UAE (And $47,000 in the US). It also illustrates why continued Saudi investment in jobs, education, and development is so critical to giving the Kingdom a substantial higher level of stability than most countries in the region, and why the future quality of Saudi governance, and the ability to find the right balance between conservatism and reform, will remain  more important than conventional politics.