The recent spate of terrorist attacks and kidnappings in Saudi Arabia has elicited familiar hand-wringing about the kingdom’s stability. On the June 10 edition of Marketplace, reporter Stephen Beard noted, “Saudi Arabia certainly has many of the prerequisites of revolution.” On May 31, a columnist in Britain’s Independent declared, “Saudi Arabia is in trouble. … All rational analysis leads to the conclusion that Saudi cannot survive.”
I’ve heard this song before. When I was based in Riyadh in 1993-94, several visiting journalists assured me of the regime’s pending demise. These days, predicting the fall of the House of Saud is a parlor sport among journalists and some Middle East specialists. The truth is: The al-Sauds are not in danger of falling to Islamic militants, and that’s good news for us, the global economy, and the Islamic world.
While it may be hard to believe that the survival of a tribal dynasty that gives its people virtually no political rights, has funded radical Islamists around the world, and whose subjects made up 15 of the 19 World Trade Center hijackers can be good for anyone, consider the following nightmare scenario: Islamist militants take over the kingdom; oil prices shoot up to $100 per barrel, leading to a prolonged worldwide recession; U.S. forces invade Saudi Arabia’s oil-rich Eastern Province to take control of the fields, sparking jihadists from around the world to open a new front against America; the most virulent strain of radical Wahabbism takes control of Islam’s holiest sites and establishes a Taliban-style theocracy in Mecca, a city that is a lodestar for the Muslim world.
While such a doomsday scenario is unlikely, the prospect explains why the Pentagon already has sophisticated plans for occupying the Eastern Province’s oil region. The Pentagon planning cuts to the core of why Saudi stability matters to us and the world: its oil.
Sitting on nearly a quarter of the world’s proven oil reserves, Saudi Arabia alone can swing prices through production rises or falls. It has mostly acted as a responsible price stabilizer, often to the chagrin of some OPEC partners, and much to the relief of American SUV drivers. The current high prices are due to “a fear premium” based on Saudi and Iraqi instability, increased Chinese demand, and oil futures speculation. In early June, Saudi Arabia again stepped forward to raise production to bring prices down. Prices have dipped below $40 per barrel since then.
Through its sheer oil might and its power to determine prices, Saudi Arabia remains a key strategic ally of the United States. According to the Christian Science Monitor, nine out of the 10 post-World War II U.S. recessions have been preceded by sharp rises in oil prices.
While Washington should continue to urge political, social, and economic reform on the kingdom, its long-term vision for Middle East democracy must be reconciled with its short- and medium-term need for Saudi energy security. The two are, of course, not mutually exclusive. In fact, a gradual opening of the system to placate rising demands from middle-class Saudis should be viewed as essential to any energy security program.
With the world’s spare oil capacity dwindling to razor thin margins, China’s energy demands rising exponentially, India’s energy thirst set to reach China-like levels in the next decade, and little sign that our own insatiable oil and gas hunger is on the decline or that alternative fuels will be produced on a mass scale, Saudi oil remains crucial. The Department of Energy estimates that Saudi production must increase from 10.2 million barrels per day to 23.8 million barrels per day by 2025 to keep up with rising global demand. A cutoff of the Saudi oil supply, even a short disruption, would be disastrous. What’s more, the poorest nations will be hardest hit by a sustained hike in oil prices: We can survive $100 oil; Bangladesh cannot.
But the U.S.-Saudi relationship goes beyond oil. Saudi Arabian businessmen and members of the al-Saud family hold about $1 trillion on deposit in U.S. banks and another $1 trillion in the stock market, according to former CIA analyst Robert Baer. While bankers say a small Saudi capital exodus occurred after Sept. 11, it subsided over the past two years. If the money were withdrawn at once, Baer warns, it would have dire consequences on our economy. Saudi Arabia also has been one of the largest foreign buyers of U.S Treasury bills, which, in effect, helps finance our deficits.
From our side, we’ve done more than just provide Saudis with security from covetous neighbors. After all, Gulf War I was more about protecting the Saudi oil fields from Iraq than liberating Kuwait. According to Thomas W. Lippman, author of Inside the Mirage: America’s Fragile Partnership With Saudi Arabia, “There is no aspect of contemporary Saudi life that has not been influenced by Americans.” We’ve built roads, hospitals, ports, schools. We’ve introduced modern banking, medicine, science, and management. We’ve even contributed to Saudi obesity: Saudis are avid consumers of American fast food. In fact, the Mecca McDonald’s is one of the busiest in the Middle East.
But for far too long, Washington and Riyadh looked the other way as our joint creation, the Afghan Arabs of the 1980s, sprouted errant weeds across the Muslim world, including al-Qaida and the Taliban. For far too long, Saudi princes played a double game of supporting radicals abroad as long as they didn’t bring their jihad home. Sept. 11 jolted America into the dangerous reality of this policy drift, but the al-Sauds were not entirely convinced. It took attacks on their own soil to push them into substantive action.
Today, Saudi rulers have been roused from their slumber. On June 16, Crown Prince Abdullah said, “Our patience has limits.” Saudi Arabia’s ambassador to the U.S, Prince Bandar bin Sultan, has called on ordinary Saudis to violently resist militants. Thus far, two thousand radical imams have been stripped of their posts or forced into re-education. Money flows to Islamic “charities” are scrutinized more closely. Recent reports by the Center for Strategic and International Studies detail the many steps the Saudis have taken to bolster security and tighten the screws on extremist networks. Six formerly radical preachers have denounced recent attacks. The Wahhabi religious establishment has rallied around the al-Sauds.
In today’s Saudi Arabia, the insurgency is too small—a few thousand militants—to overthrow an entrenched regime with considerable domestic security and intelligence resources at its disposal. True, a great deal of homegrown frustration borne of high unemployment and tales of corruption among parasitic Saudi royals exists, but there is no broad-based opposition movement to organize this anger, nor is there any evidence to suggest that Saudis would prefer rule by Osama Bin Laden to life under Crown Prince Abdullah. In a recent opinion poll of 15,000 Saudis, only 5 percent favored rule by Bin Laden, even while a near majority said they respect his views. Nawaf Obaid, the pollster, explained the discrepancy by noting that Bin Laden’s favorable ratings refer to his foreign policy, particularly his stands on Israel, the United States, and Iraq.
Meanwhile, a small group of Saudi liberals—businessmen, professors, journalists, technocrats, and highly accomplished businesswomen—have become vocal in their calls for political and social liberalization, but they have shown a willingness to call for, rather than, demand change. The liberals are loosely organized through social networks and are said to have the ear of the crown prince. They might become a force for gradualist change, but none have shown a desire for revolution. Outside Saudi Arabia, a London-based Islamist opposition group—the Movement for Islamic Reform in Arabia—has made some inroads among Saudi Islamists and disgruntled youth, and even organized a few local protests from abroad, but it has yet to prove itself capable of the mass politics required of revolutions.
The radicals involved in the current uprising, many of whom are affiliated with a group known as “al-Qaida” on the Arabian Peninsula, have been the only ones to make serious noise, but the great irony of the militant uprising is that the fear premium that has driven up oil prices is a boon to the Saudi state, which struggled with high deficits for most of the 1980s and ‘90s.With high oil prices, Saudi fiscal health has improved. It can now go back to its usual style of governing: doling out patronage to the disgruntled, buying off the angry, and creating state jobs for the unemployed.
The Saudi militants are making the same mistake Egyptian, Algerian, and other Islamic militants made: They overestimate their own popularity. Most average Saudis, Egyptians, or Algerians are motivated more by jobs and economic dignity than Islamic revolution and violent extremism. When the militancy begins to threaten daily social and economic stability, much of their silent middle-class support turns to vocal opposition.
In the end, the militants may be doing the kingdom a favor. The al-Sauds have been shaken from their complacency and been given an oil windfall to boot. They will win this internal war and emerge strengthened. We must now hope and demand that they use this new potency to become more globally responsible, befitting the country’s key role in the world economy.