September 10, 2013
Saudi
Arabia appears, on the surface, to have escaped the Arab Uprisings untouched.
Yet its political trajectory and future stability remain uncertain. The kingdom
is not immune to rising pressures, from concerns about wages and unemployment
to the effects of social media activism, sectarianism, and the price of oil.
Are government responses to these pressures indicative of an impending change
or a sign of state strength?
Five experts
on Saudi Arabia discuss the kingdom's prospects for maintaining stability. Each
provides a different perspective on a particular set of domestic issues and
government responses.
The
Eastern Province: A Bellwether for the Kingdom
Frederic
Wehrey
Two years
after the start of the Arab uprisings, the threat of regional chaos has helped
shield the house of Saud from the dissent brewing at home. In a time-worn
strategy, the ruling family has skillfully portrayed itself as a bulwark
against the specter of communal strife and civil war brought about by rapid and
uncontrolled political change. Regional sectarian tensions—exacerbated by Sunni
clerics and state-owned media—have spilled over, casting a chill over
cooperation and coordination between Sunni and Shia activists in the Kingdom
—to the benefit of the monarchy. In tandem, a campaign of massive subsidies and
carefully calibrated reforms has been used to produce consent among an
increasingly restive younger generation.
A key
question confronting the kingdom now is whether the diminishing returns from
such a strategy are sufficient in light of spreading disenchantment that could,
at some point, mutate into something more serious. Among activists and
reformists across the country, there is the growing sense that the National
Dialogue and municipal council elections were fundamentally hollow reforms that
yielded little in the way of actual political or economic change. Confronted
with a regime that has typically presented itself as a gatekeeper for dialogue
among the kingdom’s sects and regions, these young activists have found new
spaces in social media to share ideas and find common ground. So far, such
activity has not yielded anything resembling a coherent popular movement or
political force.
That said,
a number of grievances have arisen that are shared by disparate sectors of
Saudi society: low wages, unemployment, infrastructural neglect at the
municipal and provincial level, and—perhaps most importantly—protests over the
incarceration of political dissidents. On top of this, the previous tools of
social control—familial and clerical authority—may be showing the strains of
overuse.
If there
is one corner of Saudi Arabia that provides a laboratory for observing these
dynamics at work, it is the Eastern Province, which has witnessed sustained and
seldom-reported protests since 2011. True, the region carries its own unique
grievances related to sectarian discrimination against its Shia citizens.
But many of the protesters’ calls are echoed by activists elsewhere in
the country, albeit at lower decibel levels: the release of political
prisoners, greater power for elected municipal councils, an independent
judiciary, a constitution, and economic reforms. In this respect, the province
should not be treated solely as an isolated pocket of discontent, but rather a
sort of bellwether for the overall health of the country.
Frederic
Wehrey, senior associate in the Middle East Program at the Carnegie Endowment
for International Peace and author of Sectarian Politics in the Gulf:
From the Iraq War to the Arab Uprisings.
Stable
for Now
F.
Gregory Gause
Ironically,
questions about Saudi stability tend to arise after the Saudi regime has
recently demonstrated its resiliency in the face of regional crisis—and the
Arab Spring is no exception.
There are
two central reasons that Riyadh was the major Arab state least affected by the
upheavals of the last few years. The first is that it has plenty of money in
the bank. Only one major oil exporter, Libya, faced a regime-shaking crisis in
2011, and the regime there fell because of external intervention. Because the
Saudis (and other oil exporters) had enjoyed a ten-year period of rising
prices, the skids of the patronage state were well greased. To remind everyone
of how good they have it, King Abdullah committed to spending $130 billion on
such public provisions as education allowances, unemployment benefits, higher
wages, and low-income housing—even as demonstrations were gaining momentum
around the region. That commitment put a dent in Saudi financial reserves
(which total approximately $700 billion), but hardly exhausted them. The second
reason explaining Saudi stability is the presence of serious divisions in Saudi
society along sectarian, regional, and ideological lines. Disparate groups in
Egypt and Tunisia could put their differences aside and come together against
their dictators because their common national identity is relatively strong,
while postponing the fights for power we see in those countries now. In Saudi
Arabia, potential axes of regime opposition do not have the levels of contact
and trust to join forces against the regime.
What
could change the picture of Saudi stability? Obviously, a dramatic and
sustained reduction in the price of oil would eventually lead to a fiscal
crisis in the Kingdom, calling into question the patronage base of the regime.
A serious split in the ruling family, when power finally passes to the next
generation of princes, could also shake the regime. If the two scenarios
happened simultaneously, the chances of regime survival would decrease
markedly.
F.
Gregory Gause, professor of political science at the University of Vermont and
a senior non-resident fellow at Brooking’s Doha Center.
Oil,
Jobs, and Long Term Stability
Steffen
Hertog
There can
be no revolution without a deep socio-economic crisis. Saudi Arabia hasn’t had
such a crisis yet. On the back of its large oil revenues and even larger
overseas financial reserves, it can provide enough employment for young male
job-seekers—the crucial segment of the population—in the public sector to
defuse any large-scale revolutionary anger.
The
sustainability of this policy depends on simple arithmetic: oil prices and
production levels on one hand, and domestic employment and subsidy costs on the
other. The latter have been increasing rapidly and are likely to continue doing
so, albeit at a more measured pace, due to continued growth of the working-age
population. But even under pessimistic oil price assumptions, the kingdom will
not run out of money for at least a dozen years. For the time being, it
continues to run significant surpluses, as the oil price at which the
government breaks even lies around $80 per barrel, a good deal below current
prices.
While the
kingdom’s mid-term outlook is the envy of its non-oil-producing peers in the
region, the long-run outlook is cloudy if not bleak. The spending binge since
the mid-2000s has made economic activity more dependent on the state budget.
The share of private sector wages in GDP lies below 10 percent, compared to
40-50 percent in mature economies, meaning little self-sustained demand is
generated. Most private sector jobs continue to be held by foreigners. In 2011,
less than 400,000 of 4 million expatriate-held jobs in the private sector paid
a salary of more than 3,000 Saudi Riyals ($800). This means that at prevailing
wage levels, there were precious few positions for which Saudis would even
consider applying, let alone successfully compete against migrant job seekers.
Recent
government efforts forcing employers to increase their share of Saudi employees
have increased the number of privately employed nationals, but the new quota
system is complex and hard to monitor; employers have developed a variety of
evasion techniques. As long as an open migration system forces nationals to
compete with Asian workers at rock-bottom wages, businesses will have strong
incentives to prefer foreigners, undercutting the private sector job creation
for nationals that is needed for long-term stability. The use of low-cost labor
has also led to stagnating or declining productivity, moving the kingdom away
from the post-oil “knowledge economy” it strives to build.
In the
long run, Saudi Arabia will have to undergo a painful shift away from both
public sector over-employment and dependence on migrant labor. Such a shift
means short-term pain for both citizens and business. Times are probably too
good to impose such pain right now. Once the state reaches its fiscal limits,
however, the forced shift away from state dependence would be all the more
sudden and violent. This does not guarantee revolution, but it would mean
potential for serious instability for the first time in decades.
Steffen
Hertog, senior lecturer at the London School of Economics and Political Science
and author of Princes, Brokers, and Bureaucrats.
Looming
Political Shift
Christopher
Davidson
One of
the most active current Twitter
conversations, loosely translated as Salaries are not enough,
is almost entirely Saudi-based and is mostly in Arabic. With hundreds of
tweets per second and millions per week, it is causing great alarm within elite
circles and in many ways encapsulates the multitude of problems that the Al
Saud regime is now facing. The size, content, and voracity of the debate
caught the international media’s attention. Complaining of ever-growing
wealth inequalities across the kingdom, along with rising poverty, corruption,
and unemployment, the conversation is helping prove that Saudi Arabia’s social
contract with its citizens is now publicly coming unstuck.
More
importantly, it is also demonstrating that powerful new modernizing forces—in
this case globalizing communications technologies that can neither be co-opted
nor controlled by the state—are having a huge impact on a restless, hitherto
traditional society that now enjoys one of the highest broadband and smartphone
penetration rates in the world. Indeed, Saudi Arabia now generates more
tweets per capita than the United States. Able to access new media
platforms that finally allow for unfettered free speech, and undoubtedly
emboldened by the demonstration effect of mass uprisings and denunciations of authoritarian
rulers in neighboring states, Saudis—from all walks of life and regardless of
sect—are undoubtedly mobilizing. Even members of the ruling family are
breaking ranks and wading in, with some describing the ‘looming crisis’ and
others publishing open letters of ‘defection.’
What’s
also clear is that the kingdom’s enormous Arab Spring public spending
program—now amounting to hundreds of billions spent on subsidies, welfare, and
public sector job schemes—isn’t having the desired effect. Clearly hoping
that the uprisings of 2011 would be a short blip and that the ongoing
revolutions—notably in Syria and Egypt—could be ‘managed’ by Saudi wealth
injections, the aim was to pacify the backyard and buy the political
acquiescence of citizens until the storm had passed, even if it meant pushing
up the breakeven oil price and increasing the kingdom’s now perilous dependency
on global oil demand. The reality, however, is that a fundamental shift
in political order is now taking place across the region, and in many ways is
just beginning. Large, youthful populations are signalling their discontent
with opaque authoritarian politics and the mismanagement of national resources.
There is no valid academic explanation for why Saudi Arabia should remain
exceptional to this shift.
Christopher
Davidson, lecturer of Middle East Politics at Durham University and author of After
the Sheikhs.
Reforming
at Their Own Pace
Fahad
Nazer
A common
perception among casual observers portrays Saudi Arabia as an anachronism: a
country whose political and social institutions are relics of a bygone age and
do not reflect the demands, realities—or sensibilities for that matter—of a
“modern” state.
However,
those who follow developments in the kingdom closely over an extended period of
time—particularly since the end of the first Gulf War—tend to consider
the tentative steps the government has taken towards political, social, and
economic reform as reflective of some level of awareness among Saudi leaders of
the changing demographics and political culture of the kingdom.
These
steps also suggest that leaders are more attuned to the pressures exerted from
the outside, especially since the Arab Spring swept the region, than some might
assume. Critics characterize them as mere cosmetic “window-dressing” intended
mainly to placate Western critics who—ever since it was revealed that the
majority of September 11 hijackers were Saudi—have been emboldened to
scrutinize what were once considered purely domestic concerns, including
what is being taught in Saudi schools. However, taking the long-view
suggests a less dismissive—or cynical—reading of these
initiatives.
Noteworthy
reforms include instituting periodic national dialogues that bring together
Saudis from different ends of the political and religious spectrums to debate
the challenges facing the kingdom, expanding the consultative Shura
council (which now includes 30 women), and holding nation-wide elections for
municipal councils—which gave Saudis their first taste of democracy. These are
not indicative of an acute case of political sclerosis, as some have
claimed.
In 2011,
King Abdullah took another calculated risk by declaring that women would be
eligible to participate and run in the next round of elections in 2014. Much
like his pet project, the King Abdullah University for Science and Technology
(a coeducational, graduate level university aimed at preparing Saudis to
compete in a global economy), the king’s initiatives to empower Saudi
women roiled conservative elements, who continue to view most reforms as
inherently antithetical to the Islamic precepts and mores upon which the
country was founded.
Nevertheless,
the recent crackdown on outspoken advocates of reform has given many observers
pause. While Saudi leaders don’t seem nearly as averse to reform as some
critics maintain, they do seem to prefer to implement it at their own pace and
on their own terms.
Fahad
Nazer, political analyst at JTG Inc and former political analyst at the Embassy
of Saudi Arabia in the United States.
This
article is reprinted with permission from Sada.
It can be accessed online at: http://carnegieendowment.org/2013/08/15/reforming-at-their-own-pace/gigx