The Arabist

The Arabist

By Issandr El Amrani and friends.

Posts tagged saudi
In Translation: The abusive Egypt-Saudi relationship

Over the past week, the most serious crisis in Egypt-Saudi relations since the June 2013 coup against Mohammed Morsi has taken place. It is likely to be well-short of the divorce many have argued is impending (after all only last month Saudi Arabia deposited $2 billion into the Central Bank of Egypt), but is nonetheless significant enough to have raised tensions in the media on both sides of the Red Sea. In addition to vocal Saudi attacks against Egypt in the media, Saudi Aramco has suddenly suspended delivery of oil products (at low costs), a form of in-kind support that has been going on for over three years.

The immediate cause appears to have been Egypt’s UN Security Council vote in favor of a resolution on Syria proposed by Russia. However, Riyadh has been souring towards Cairo for several months, between frustration with the Sisi regime’s lack of support in Yemen, its outright opposition to an anti-Assad position in Syria (Egypt being concerned with the potential rise of Islamists there and generally aligned on Russia’s position), and the occasional incident such as the anti-Wahhabi line Cairo has espoused, most recently in at a conference of Muslim scholars in Groszny, Chechnya (note the Russia thread in these elements.) More generally, there have been grumblings that Saudi Arabia, itself under financial stress due to low oil prices, isn’t exactly impressed with how Sisi has decided to spend aid estimated at over $40 billion in the last three years.

There has been much discussion of all this in Egyptian and Saudi media, but the attention our Egyptian friend Amira Howeidy was piqued a few days ago when she noticed an anti-Saudi piece in El Watan, a daily newspaper known for its proximity to the Sisi regime and security services in particular. We have translated this piece below, as an example of the media wars between Egypt and Saudi Arabia. It would be a war that one would think Cairo can ill afford at a time of tremendous economic stress (supply shortages of basic goods, runaway inflation, restrictions on bank transactions, the collapsing value of Egyptian pound on the black market - think Argentina in 2001-2002), and indeed Prime Minister Sherif Ismail has rushed over to Riyadh to clear the air and President Abdelfattah al-Sisi has reiterated his deep commitment to the security of the GCC (the loose codeword for “we got your back in the case of a coup, against Iran or if the Americans betray you”). And he denies the oil thing has nothing to do with the UN vote. But the Egyptian media (at the higher end, even) mostly hovers between a defense of Egypt’s autonomy, veiled threats about having an Iran option, and assurances that Egypt-Saudi relations are unassaible even as it indulges some good old fashioned Saudi-bashing.

How long can this all last? I tend to see less of a turning point and more of a tiresome, ongoing negotiations. The relationship is based on a kind of asymmetric passive-aggressive perpetual renegotiation. What Egypt is saying, in effect, is: “I am an unreliable, disrespectful client that openly takes you for granted and jibes against you at every possible turn, but I know you will eventually come back to me because you are more afraid of my weakness and nuisance capacity than of my potential strength. So when is that next check coming?” Egypt has gotten away with it in its relationship with the United States for at least the last 15 years, after all, so why not Saudi Arabia?

Our thanks go to Industry Arabic for making this feature possible.


Saudi Arabia paying the price for harboring terrorism and violent armed groups

Abdel Wahhab Issa, El Watan "السعودية تدفع ثمن احتضانها للإرهاب وجماعات العنف المسلح"), 12 October 2016

The era of the late King Abdullah bin Abdulaziz, Custodian of the Two Holy Mosques, witnessed a fierce war against terrorist organizations and groups, during which the kingdom staved off the influence of al-Qaeda, Islamic State and the Muslim Brotherhood in the Arab region and the Gulf. This came after Saudi Arabia had spent decades undertaking sponsoring these groups, especially during the war in Afghanistan. Before his death, the efforts of King Abdullah culminated in the publication of a list of banned terrorist groups, on which the Brotherhood and al-Qaeda came first. However, when King Salman bin Abdulaziz took over the reins of power in Saudi Arabia, terrorist groups were able to obtain financial and military support directly from the kingdom. It reverted to harboring these extremist organizations, granting them material and military support, especially in Syria and Yemen, and abolished the list of terrorist organizations. By contrast, when King Abdullah bin Abdulaziz assumed power in Saudi Arabia, he began with an all-out war against terrorism, especially following the outbreak of the Arab Spring revolutions, during which tensions were heightened in the existing relationship between Saudi Arabia and the Brotherhood. This came as a result of the Kingdom's discovery, according to the opinion of political researcher Yousri al-Azabawi, of the Brotherhood's role in the fragmentation and division of the Arab states. As such, the kingdom began to co-operate cautiously with the organization while closely monitoring the situation. Following the June 30 Revolution, the discord between the Brotherhood and Saudi Arabia reached a breaking point after King Abdullah gave his blessing to the popular revolution that overthrew the group. In fact, this lead to Saudi Arabia banning the Brotherhood and regarding it as a terrorist organization. King Abdullah did not stop at combating the influence of the organization, but rather he also began to support the military maneuvers launched by the international coalition against ISIS. This led to the organization carrying out several terrorist attacks in Saudi Arabian territory in retaliation against King Abdullah and his war against terrorism. King Salman took power as the successor to King Abdullah with a view to bringing about total change, with Saudi Arabia turning away from the war on terror strategy in favor of supporting al-Qaeda and the Brotherhood in Syria and Yemen. In Syria, King Salman has given military and material support to the al-Nusra Front, the Syrian branch of al-Qaeda, under the pretext of overthrowing Bashar al-Assad. A report in the newspaper The Independent, citing Turkish officials, stated that Saudi Arabia is sending funds and weapons to the al-Nusra Front and that Turkey is facilitating the group's entry into Syria. It was also indicated that there was an agreement concluded early last March between the two countries, after a meeting in Riyadh attended by the Turkish president, Recep Tayyip Erdogan, and King Salman bin Abdulaziz. The first proposal was that the two countries should work to "fill the vacuum of failed Western intervention in Syria,” especially after the failure of Western nations to enforce a no-fly zone over Syria. It was also proposed that the two countries extend support for the armed opposition there – in reference to the al-Nusra Front – in what is the first such agreement between Saudi Arabia and Turkey following strong discord between them during the days of the late king. The Brotherhood's relationship with Saudi Arabia has improved considerably under King Salman inasmuch as, according to Brotherhood sources in Saudi Arabia, they have undertaken to mediate a reconciliation between the two parties. Furthermore, Saudi Arabia has hosted the leader of the Brotherhood in Tunisia, Rached Ghannouchi, president of the Ennahdha Party, more than once. With its funds, Riyadh has become a fertile breeding ground for all leaders of terrorist groups, receiving them in the royal palaces, whether it is the Brotherhood preacher Yusuf al-Qaradawi, or [Hamas leader] Khaled Meshaal, among others. As for Yemen, Saudi Arabia has supported the Brotherhood there against the Shia Houthi group, with the kingdom having led a Gulf alliance in launching a military operation named “Decisive Storm.” Co-operation between the Brotherhood and Saudi Arabia was also clearly evident in Yemen, after everyone in al-Qaradawi’s International Union of Muslim Scholars, the Association of Muslim Scholars in Iraq, the Syrian and Jordanian Brotherhood and Ahrar al-Sham declared their support for Operation Decisive Storm. Saudi Arabia is now paying the price for harboring terrorist organizations both in the past and currently, at the hands of King Salman, especially al-Qaeda, who are responsible for the events of September 11. This follows the passing of legislation in the United States Congress this past September, which allows families of victims of the September 11 attacks to sue the Saudi Arabian government for damages. This had previously been obstructed by the White House, after the US President Barack Obama used a presidential veto to block the bill. However, the United States Congress overrode his veto.

Moussaoui Calls Saudi Princes Patrons of Al Qaeda

Ahem:

WASHINGTON — In highly unusual testimony inside the federal supermax prison, a former operative for Al Qaeda has described prominent members of Saudi Arabia’s royal family as major donors to the terrorist network in the late 1990s and claimed that he discussed a plan to shoot down Air Force One with a Stinger missile with a staff member at the Saudi Embassy in Washington.

. . .

He said in the prison deposition that he was directed in 1998 or 1999 by Qaeda leaders in Afghanistan to create a digital database of donors to the group. Among those he said he recalled listing in the database were Prince Turki al-Faisal, then the Saudi intelligence chief; Prince Bandar Bin Sultan, the longtime Saudi ambassador to the United States; Prince al-Waleed bin Talal, a prominent billionaire investor; and many of the country’s leading clerics.

“Sheikh Osama wanted to keep a record who give money,” he said in imperfect English — “who is to be listened to or who contributed to the jihad.”

Mr. Moussaoui said he acted as a courier for Bin Laden, carrying personal messages to prominent Saudi princes and clerics. And he described his training in Qaeda camps in Afghanistan.

. . .

In addition, Mr. Moussaoui said, “We talk about the feasibility of shooting Air Force One.”

Specifically, he said, he had met an official of the Islamic Affairs Department of the Saudi Embassy in Washington when the Saudi official visited Kandahar. “I was supposed to go to Washington and go with him” to “find a location where it may be suitable to launch a Stinger attack and then, after, be able to escape,” he said.

Entirely plausible.

AsidesThe Editorssaudi, alqaeda
Saudi Arabia's insecurity

From an essay by Alain Gresh titled "Saudi Arabia's great fear", in Le Monde Diplomatique:

L’appui aux rebelles syriens fait consensus dans l’opinion saoudienne (sauf au sein de la minorité chiite) ; en revanche, le soutien au renversement du président égyptien Mohamed Morsi, en juillet 2013, suscite plus de controverses. « Pour la première fois, nous entendons des critiques, confie, sous couvert d’anonymat, un journaliste influent. “Pourquoi soutenons-nous le renversement d’un président qui se réclame de l’islam ? Pourquoi engloutissons-nous des milliards de dollars en Egypte à l’heure où nos problèmes de logement ou de pauvreté sont si importants ?” » Naguère inaudible, ce malaise s’exprime sur les réseaux sociaux que les autorités cherchent, sans grand succès, à brider. « Dans un monde arabe où les puissances traditionnelles que sont l’Irak, la Syrie ou l’Egypte s’effacent, absorbées par leurs problèmes internes, de plus en plus de forces se tournent vers nous. Et nous ne sommes pas capables de leur répondre. Nous sommes impuissants à régler les crises en Irak ou à Bahreïn, sans même parler de la Syrie », poursuit notre interlocuteur.

The article is also available in English, here. The article notes intra-GCC tensions (not just with Qatar) and the hesitation in much of the region with the Saudi position on the MB, as well as the Iran and US issue.

Dennis Ross and the Saudis

Dennis Ross' call for Obama to "soothe the Saudis" is hardly surprising for this pre-eminent supporter of the status-quo in US Middle East policy since the 1990s, with of course the usual focus on Iran (i.e. against the nuclear talks). But the bit about Egypt is telling too: 

Egypt and Syria will be harder nuts to crack. But focusing on our common strategic objectives is a starting point: preventing Egypt from becoming a failed state, ensuring that jihadis cannot gain footholds in Egypt or Syria, and stopping the genocide in Syria. Perhaps, on Egypt -- where the Saudis cannot afford to be Egypt's ATM forever -- the president could offer to lift the hold on key weapons in return for the Saudis using their influence to get Egypt to finalize an agreement with the International Monetary Fund.

If you think what's most important to achieve in Egypt these days is an IMF agreement, you're not just cynical, you're delusional. Ross is as toxic on Saudi Arabia as he is on Israel.

Lunch with the FT: Prince Turki al-Faisal

On America:

“For the Kingdom, it is a matter of putting our foot down, where in the past we did not. It is a matter of accepting reality. You have to acknowledge the world has changed. Obama’s speech to the UN last September made it clear that America will be concentrating exclusively on Palestine and Iran, and for everywhere else – Syria, Libya, Sudan, Yemen, Mali, Iraq, Egypt, and so on – you will have to fend for yourself. So whether it is collecting your [Saudi Arabia’s] own resources to do that, or reaching out to others in the area to help you overcome these challenges, we are adjusting to the reality of a retreating America.”

Also reminded me that he stepped down after 24 years as head of intelligence only 10 days before 9/11.

Dennis Ross' tortuous logic

Dennis Ross writes on the Room for Debate blog of the NYT, on the question Saudi support for Egypt:

For the Saudis, there are two strategic threats in the region: Iran and the Muslim Brotherhood. The Saudis back certain opposition forces in Syria to weaken Iran and they support the Egyptian military to undermine the Brotherhood. We will not persuade the Saudis by arguing that the military is overplaying its hand.
If we want to move the Saudis on Egypt, we must address their strategic concerns; meaning, for example, that we must convince them that we are prepared either to change the balance of power in Syria or that we will, in fact, prevent the Iranians from acquiring a nuclear weapons capability.

That sounds more like what Dennis Ross wants the US to do (i.e. more hawkish positions on Iran and Syria) than something that the Saudis would genuinely take into consideration. For if they are concerned about the MB, why would they adjust that concern based on the Iran question? And why should the US decide to shift its positions on Iran simply because of the Egypt question?

Saudi thinking on Egypt

Saudi Arabia has taken a very strong stance in support of the Egyptian military's overthrow of Morsi and the Muslim Brothers. The piece below, published in Saudi's al-Watan, has some glimpses on the al-Saud regime's thinking on this, and especially the role of the US. An experienced Saudi-watcher tell us that the interview, ostensibly with an analyst, actually conveys the views of very high-level officials, most notably their tiff with Washington over the handling of Egyptian crisis. Some interesting points on aid, allusions to Saud al-Faisal's recent trip to France, and more.

(I'm not sure who did the translation, though.)  

Saudi Expert Reveals to Elwatannews: King Abdullah to Obama: If Providing Aid to Egypt Burdens You, We Will Provide Double Your Aid”

Ahmed Al Ibrahim: Obama demands suspending aid to Egypt and the King refuses

By Mohamed Hassan Amer

“Obama dealt with the demands of Egypt as if they were demands of his hometown Chicago. He disregarded the interests of Egypt. It would be the Kingdom’s turn next should Egypt fall”. In these words, Ahmad Al Ibrahim, Saudi expert in Saudi-US relations described the Kingdom’s position on the events in Egypt and the pressure exercised by the US Administration following the dispersal of Rabaa al-Adawiya and al-Nahda sit-ins.

According to Al Ibrahim, KSA and General Abdel Fattah al-Sisi recognised that the “US fierce defence of the Brotherhood confirmed that they had made outrageous promises to the US against the interests of the region. It is therefore urgent to put an end to thisconspiracy.” Al Ibrahim reiterated that the Obama administration proved to be a failure and unworthy of the Kingdom’s trust. But having a wise man like al-Sisi in Egypt ushers in a huge, Arab political cooperation.

How do you explain the Saudi stance and the support the Kingdom has shown to Egypt in its current crisis?

The Kingdom’s stance is not a novel one, but reaffirms the natural historic relations with Egypt. KSA would never allow dividing up Egypt, as that would threaten the Kingdom. The Obama administration does not understand the Gulf region or its interests, and cares solely about Israel. There is no doubt now that the US administration is two-faced when it comes to elections, after having refused the results of Hamas elections in 2006 and considered Hamas a terrorist organisation, while accepting the elections of the Brotherhood in Egypt.

Didn’t the Kingdom fear that adopting this position might cause a conflict with the US?

The Kingdom has played along the US on more than one occasion, particularly in US policies in the region and the Gulf. KSA has sent more than one delegate to the US Administration to explain the situation in the region, particularly the Syrian crisis. However, the Americans always say one thing do another. If we kept on playing along, the conspiracy will be on us next.

Have there been any secret calls between the Kingdom and the US regarding the situation in Egypt?

King Abdullah told the US President more than once that “if the USD1.5 billion paid to Egypt in aid are a burden, leave Egypt be and we are prepared to pay double that amount. Just work in the interest of Egypt.”Obama called the King after June 30 and asked him to cut off the aid to Egypt, or at least delay delivering it, to which the King replied: “We gave our word to our brothers in Egypt, and we will not suspend aid.” This is a clear indication of a change in policy.

In your opinion, what is the limit of the Saudi aid to Egypt?

There is no limit for the aid provided to Egyptand it shall be provided until Egypt recovers. It is not just financial support, but a politicalone as well through Saudi involvement with Europe, France and the US. I think the Kingdom turned to France because high-ranking Saudi officials reached a dead-end with the US. Even though Egypt may not need it, we are prepared to provide military backup if need be, as well as support to Sinai since instigators there will wreak havoc to serve their own interests and provoke Israel. But the Kingdom flatly refuses that.

What is common between the Kingdom’s stance today and its support to Egypt back in October 1973?

I cannot say that they are similar, but this time the Kingdom stood in the face of most Western powers and all its allies to show them that the so-called democracy they are building aims at dominating Egypt and not instilling real democracy. The Kingdom will stand against anyone who seeks to control Egypt and it is clear now that there is a rift between KSA and the US. KSA wants to make it clear to the US and Europe that they do not understand the region and should leave the matter to the Arab states to solve their own problems.

Are we on the verge of a new Arab unity after the Saudi-Egyptian cooperation?

Perhaps. If we look at King Abdullah’s stance and the Saudi role which is firm on protecting Egypt against the West, and in the presence of General Abdel Fattah Al Sisi, which everyone is describing as the “silent leader”, we may well be on the verge of a political Arab unity. But there are other Arab states with different views, among them an Iranian front in Iraq and another in Syria, so we are bound to face more challenges.

Do you think that the Kingdom’s stance and the events in Egypt have put the US administration in trouble?

The US is suffering from clear divisions regarding Obama’s foreign policies, as the President has made many enemies. There are two policies in one country and Obama is in a clash with the Republicans because of his policies. The crisis will aggravate if the Kingdom turned from an ally to a neutral party, after the US failed to appreciate the interests of Gulf and Arab countries and after Obama placed all his stakes on the Brotherhood. The US proved to be untrustworthy and unreliable.

What are the new facts that Obama has not realised yet in the Middle East?

The US sees the Arab Spring as an opportunity to spread Western democracy, but in fact it is just a means to dominate the region and the Gulf. As for Syria, every time we agree to supply the opposition with weapons, the US backs out, asking to provide medical aid whereas the Kingdom provides armament.  We cannot take them seriously anymore. It is high time that the US realises that the democracy they are so keen on has failed in Iraq, and led to the rise of Nouri al-Maleki, the Iraqi Prime Minister so similar to Saddam Hussein. The US has proven that it only has Israel’s best interests at heart, which prompted us to declare that “we work for our own interest as we see fit.”

Is the US aiming at changing the leaderships in Arab states, including Saudi Arabia, through the Muslim brotherhood?

I believe there is a bigger scheme in the works. America’s ferocious defence of the Brotherhood indicates that there is an outrageous, shocking deal at stake, with promises given by the Brotherhood for the US and Israel. I wonder why Obama is focusing only on Egypt and the Brotherhood, turning a blind eye on Iran, the nuclear issue, the violations in Iran, the threat of North Korea, terrorism and a plethora of other issues that used to be at the top of the US agenda. Accordingly, the Kingdom has called upon the US, as well as Qatar and Turkey, to leave Egypt alone.

Could the Saudi-Russian ties be a reference for facing the US pressure on Egypt?

The relations between the Kingdom and Russia are somewhat weird. They differ on the Syrian crisis but agree on Egypt. It is clear that the Kingdom wants its ties with Russia to be more balanced, especially after the latter proved to be more influential in the Syrian crisis than the US. Given the importance of Saudi-Russian ties in the recovery of Egypt, the Kingdom will hold on to them.

 

A Saudi Arabia made in the USA

NewImage

Will Saudi Arabia Ever Change? by Hugh Eakin | The New York Review of Books

Hugh Eakin on Saudi in NYRB provides an overview of post Arab uprisings Saudi Arabia in this review of three new books on the kingdom:

With three quarters of its own citizens now under the age of thirty, Saudi Arabia faces many of the same social problems as Egypt and Yemen. By some estimates, nearly 40 percent of Saudis between the ages of twenty and twenty-four are unemployed, and quite apart from al-Qaeda, there is a long and troubled history of directionless young men drawn to radicalism. The country suffers from a housing crisis and chronic inflation, there have been recurring bouts of domestic terrorism, and the outskirts of Riyadh and Jeddah are plagued by poverty, drugs, and street violence—problems that are not acknowledged to exist in the Land of the Two Holy Mosques.

On top of this, Saudi Arabia also seems to possess several of the attributes that have led to broader revolt in neighboring countries. There is a restive and well-organized Shia minority in Saudi Arabia’s Eastern Province, who have engaged in a series of street protests since early 2011. And young men and women all over the country are exceptionally well connected by new media: only Egypt ranks ahead in Facebook usage in the region; a higher proportion of Saudis now use Twitter and YouTube than almost any other nation in the world. This has made it easier to expose alleged corruption by members of the royal family, as one anonymous Twitter user, “Mujtahidd,” with apparent inside sources, has been doing, attracting more than 800,000 followers in the process. (A mujtahid is a scholar with independent authority to interpret Islamic law.

This youth crisis — some call it a lost generation produced by an incompetent and ultra-conservative educational system — and Saudi Arabia's structural economic problems were touched upon by occasional Arabist contributor Nathan Field here.

There's one particularly intriguing book Eakin reviews:

The reasons Saudi Arabia became the authoritarian US client state we know today—rather than the more pluralistic society this early experience might have foretold—is the subject of Sarah Yizraeli’s revelatory new study, Politics and Society in Saudi Arabia: The Crucial Years of Development, 1960–1982. A senior research fellow and Arabist at Tel Aviv University, Yizraeli has managed to penetrate Saudi society from afar in ways that have eluded journalists and scholars with more direct access. Although she is apparently barred from entering Saudi Arabia as an Israeli citizen, she has long had a following among specialists for her mastery of obscure Saudi and international source material. Significantly, she focuses not on the much-studied decades since 1979, during which an Islamist awakening pushed the regime to reassert its Wahhabi credentials and impose sweeping restrictions on cultural life, but on the largely neglected preceding era.

Intricate in its accumulation of detail and nuance, the story Yizraeli tells is nevertheless stark in its conclusions. During the 1960s and 1970s, exploiting its unprecedented oil wealth, Saudi Arabia was able to build with great speed a technologically advanced, economically self-sufficient welfare state. Far from a project driven by the US and Aramco, however, this radical transformation was masterminded by the royal family itself (above all by King Faisal, who after a power struggle succeeded Saud in 1964) and expressly designed to strengthen its rule and neutralize any pressure for political reform.

Described by Yizraeli as “defensive change,” this strategy involved creating a vast central administration that could co-opt competing factions of society even as it broke down traditional tribal loyalties. Crucial to the state were the assertion of the monarchy’s Islamic roots and the consequent need to separate economic development from political and religious institutions, which could not be tampered with; and the embrace of an ideal of broad consensus that served to isolate and marginalize proponents of more radical reforms.

Equally provocative is Yizraeli’s careful dissection of US policy beginning in the 1960s. Up to the early years of the Johnson administration, she observes, the State Department assumed that economic and social development was supposed to produce representative government, and put constant pressure on the Al Saud to open up the political system. “So consistently did the American Ambassadors to Saudi Arabia…highlight the issue of political and social reform,” Yizraeli writes, that at a meeting with then US Ambassador Hermann Eilts, Faisal “once responded by exclaiming: ‘Does the US want Saudi Arabia to become another Berkeley campus?’” But all this came to an abrupt end in the mid-1960s, when Washington began to take a paramount interest in curbing the spread of Nasserism and promoting the US-led industrialization that Faisal championed: “Stop pushing the Saudis on internal reform,” Secretary of State Dean Rusk advised Eilts, “the king knows what is in his own best interest.”

Thus King Faisal, the robust defender of Al Saud absolutism who by the early 1970s had thousands of political prisoners in his jails, quickly became seen in Washington as the ruler who “modernized the kingdom.” In effect, the US endorsed a state-building strategy that brought American companies such as Chevron, Bechtel, and Lockheed Martin billions of dollars of contracts and investments while giving the monarchy and the religious establishment an ever-growing hold on Saudi society. This was a fateful decision. It fostered years of disregard for human rights and an abysmal record of stirring up violent jihadism, and both continue to this day.

The same US policy towards Saudi Arabia — based on what another Israeli scholar calls the "weapondollar-petrodollar coalition" — continues to this day.

Fixing Saudi unemployment — more than creating jobs

This is a guest post by Nathan Field — a little break from Egypt, Gaza and all that.

Great Tuesday Washington Post piece by Kevin Sullivan on Saudi women and unemployment. The part at the end on Saudi labor policy and the two-tier labor force is critical.

What Sullivan doesn’t address in much detail though is how the presence of so many foreign workers has distorted wages in the private sector, and causes the unemployment problem to persist in a country where there are literally millions of jobs that Saudis could be working.

Importing foreign labor was necessary initially because for the first several decades of the Kingdom’s development the Saudi labor force was not nearly large enough. Harder to understand is why the situation has been allowed to persist through the present, when despite a reasonably qualified Saudi labor force, the ongoing option of easily hiring workers from countries such as the Philippines and India still exists.

With the option of hiring cheaper foreign workers so readily available, employers have become addicted, and a perverse situation exists where many firms can not afford to hire Saudis but most Saudi nationals can not make even a modest living wage in their own private sector.

The Saudi trucking sector perfectly illustrates this point. Until the 1970s, the overwhelming majority of truck drivers in the Kingdom were Saudi nationals, but over the ensuing decades they have been gradually replaced by workers from some of the poorer parts of the Indian subcontinent or often oftenthe Horn of Africa. $400 to $500 per month is far more than they can earn at home, so there is no shortage of those willing to work these jobs.

On the other hand, $500 is hardly enough to support even a modest lifestyle, much less a family, for a Saudi national living in Saudi Arabia where the cost of living is much higher. Not surprisingly, most don’t want to work in these companies.

This is why, Nitaqat, the new policy that Sullivan briefly mentions on page 3 is so important, because its an indirect attempt to implement a minimum wage that would undo some of these distortions to the labor market that cause the unemployment problem to be so persistent.

Previously, if there were two equal candidates for a job, an expatriate willing to work for $500 and a Saudi for $800, basic business logic suggests the employer will choose the least expensive option. Now, with the minimum wage that is gradually coming into place, there is no theoretical cost advantage of hiring the expatriate over the Saudi.

One of the really important and often overlooked points here is that Saudization and the minimum wage issue is to a large extent a zero-sum game between the interests of private sector firms (the employers) and citizens (the employees) as a whole. And the issue of imposing a minimum wage needs to be understood as an attempt by the government to secure full regulatory control of the labor market - which it hasn’t had due to the power of private sector employers.

A useful historical comparison here might be with US firms before the New Deal. Until the 1930s, the balance of power between employers and employees stood firmly in favor of the former (see The Jungle). Business was generally powerful enough to beat back any government attempt to increase regulation of work conditions.

Only with the crisis of the Great Depression was public opinion so strongly siding with the workers that FDR had the ability to increase the state’s control in this area with policies like a minimum wage, unemployment insurance and to ignore complaints from businessmen which were largely anti-New Deal.

Is Saudi Arabia in a similar situation today with the Arab Spring? Does this give the government enough cover to go after the interests of business, the way FDR did in the 1930s? ** **Maybe. But as we mentioned above, the government and the people in this situation, have different interests than employers, and not everyone can ultimately be happy with the Nitaqat policies.

In general, the costs of doing business for companies will inevitably rise. With higher wages, profits will decrease, and since many of the newly hired Saudi nationals will be younger and less experienced, managers will have to spend more time on training instead of running their businesses, and productivity will theoretically decrease. Ironically, one consequence of a government policy intended to increase employment is that some firms might be less likely to hire new workers in general or will try to get by with fewer.

There are, however, good business reasons why Saudi firms can and should adopt the minimum wage. One obvious benefit is that it would increase employee loyalty. And for big firms hoping to win government contracts (and who can more easily absorb the new costs), voluntarily adopting the minimum wage will likely give them a marketing edge compared to those who drag their feet. But most importantly, as the majority of business persons seem to understand, no one will make any money if the system collapses because of rRevolution due to long-term high unemployment.

Like the US private sector during the New Deal, many (although not all) Saudi private sector firms are complaining about Nitaqat, which they see as unwanted intrusion into their affairs, which will have negative economic consequences for their businesses, and maybe even force some to close their doors. It is probably true, as the government apparently acknowledges but that seems to be a goal if its it bankrupts companies who are only employing low-cost foreign labor.

From the government’s perspective, such a hard-line is necessary to show their resolve on Saudization. The country’s firms already enjoy a fairly significant advantage by not having to pay taxes, so the government sees it as reasonable - and essential for the Kingdom’s long-term stability - to take a stand against those who also refuse to hire Saudi nationals.

For Arabist readers, the implementation of Nitaqat should be viewed as more than just an isolated question of Saudi labor policy. It needs to be seen in the context of ongoing reforms throughout the region as a result of the Arab Spring. There might not be elections or drafting of new constitutions in the Kingdom like there is in Egypt, but the balance of power between workers and employers is shifting - at the government’s initiative - more in favor of the people, and this is an important reform trend that is no less meaningful.

Nathan Field is the co-founder of Industry Arabic. Contact him at Nathan@IndustryArabic.com.

✚ Cameron Gulf tour to mend trade links

Cameron Gulf tour to mend trade links

From the FT:

Mr Cameron will sidestep concerns over regional security and human rights as he pushes British military exports in an effort to get the UK economy moving again. Although the prime minister is expected to raise issues such as Saudi Arabia’s record on suppressing minorities and political opponents, the overwhelming focus of the trip will be commercial.

A Downing Street adviser said: “Pushing commercial interests and promoting human rights go hand-in-hand. But it is worth noting that Saudi Arabia recently came very high on the Human Development Index.”

Worth noting!

How textbooks protect the al-Sauds

How nasty textbooks protect the al-Sauds

From piece on textbooks around the world in The Economist:

Other people’s textbooks have long been a source of worry. After the first world war, the League of Nations sought to make them less nationalistic. Anxieties increased, though, after the attacks on America on September 11th 2001, when some in both America and Saudi Arabia, including officials, supposed that Saudi Arabia’s curriculum of intolerance was responsible, at least in part, for the emergence of al-Qaeda’s brutal brand of jihad. Buffeted by the criticism, Saudi rulers promised reform. From King Abdullah down, Saudis have insisted repeatedly that the intolerant bits of their teaching materials have been removed. But in a stubbornly autocratic country that adheres to a puritanical Wahhabism, there is a lot of intolerance to go round.

The Institute for Gulf Affairs (IGA), a think-tank and human-rights lobby in Washington, DC, reports that much of the material that provoked fury in the West after September 2001 is still used in Saudi classrooms today. Ali al-Ahmed, director of the IGA and author of a forthcoming work on Saudi textbooks, cites such examples as “The Jews and Christians are enemies of the believers”, and “The Jews occupied Palestine with the help of the crusaders’ malevolence towards Islam… But the Muslims will not remain silent”. The Saudi education minister says the books are being revised—but that it will take another three years. Mr Ahmed says change is not happening sooner “because the state would be putting its survival at risk. The purpose of education is to ensure social obedience to the ruler.”

Citing U.S. Fears, Arab Allies Limit Aid to Syrian Rebels

✚ Citing U.S. Fears, Arab Allies Limit Aid to Syrian Rebels

Robert Worth, writing in Riyadh for the NYT, sees growing sign of Saudi buyers' remorse on their backing for jihadists in Syria — US reluctance is an excuse:

Many Saudi and Qatari officials now fear that the fighting in Syria is awakening deep sectarian animosities and, barring such intervention, could turn into an uncontrollable popular jihad with consequences far more threatening to Arab governments than the Afghan war of the 1980s.

“If the killing continues, the youth will not listen to wise voices,” said Salman al-Awda, one of this country’s most prominent clerics, in an interview at his office here. “They will find someone who will encourage them, and they will go.”

Already, there are signs of an uptick in the number of young men crossing illegally into Syria from Saudi Arabia and other Muslim countries, and of private fund-raising efforts across the gulf to help the rebels acquire heavier weapons. The fighting has also spilled into Turkey, which shelled Syria for four days last week after a Syrian shell killed five Turkish civilians.

Saudi Arabia has long had an antagonistic relationship with the government of President Bashar al-Assad in Syria, and sees itself as the protector of Syria’s Sunni majority in a country governed by Mr. Assad’s Alawite minority. But the prospect of an increasingly sectarian civil war in Syria is deeply troubling to many here, where the Afghan jihad spawned a generation of battle-tested zealots who returned home and waged a bloody insurgency that was brought under control only recently.

“The government really doesn’t want to repeat the experience we had with the guys who went to Afghanistan and Iraq,” said Mshari al-Zaydi, a Saudi columnist and an expert on jihadi movements. “The damage from Al Qaeda was worse in Saudi Arabia than it was in the U.S.A.”

The fight in Syria is now terrible, but imagine what the fight will be like when the various countries backing the rebels start backing individual factions...

Osama Bin Laden And The Saudi Muslim Brotherhood

✚ Osama Bin Laden And The Saudi Muslim Brotherhood

Enlightening piece by Stephane Lacroix in FP on the Saudi Brotherhood(s):

From the days of Hassan al-Banna, the Saudi monarchy made it clear that it wouldn't allow the Brotherhood to establish a section in the kingdom. Yet from the late 1960s onward, different groups of Saudis influenced by Egyptian and Syrian Brotherhood exiles started creating local semi-clandestine organizations claiming an affiliation to the MB. A sign that this was the result of a bottom-up dynamic, not a top-down creation, is that four such distinct organizations saw the light at about the same time: one in the western province, called the Brotherhood of the Hejaz (ikhwan al-Hijaz); and three in the central region -- two named after their alleged founder, the Brotherhood of al-Sulayfih (ikhwan al-Sulayfih) and the Brotherhood of al-Funaysan (ikhwan al-Funaysan), and one called the Brotherhood of Zubayr (ikhwan al-Zubayr) because it was established by Saudis whose families had lived in Zubayr, in Southern Iraq. Although the four groups attempted to coordinate their activities and saw themselves as part of one broader entity, they never managed to formally merge.

These groups of Saudi Brothers maintained links to the MB in Egypt and elsewhere, but, because of the sensitivity of the topic, those links remained loose and were never formalized. For instance, Saudi Brothers sometimes attended meetings of the Brotherhood's international organization in the 1980s, but officially they did so in their individual capacity, not as representatives of their organization. Also, Saudi Brothers generally did not pledge allegiance to the supreme guide in Cairo, as members of the Brotherhood are usually required, because, as Saudi citizens, they were already bound by an oath to the Saudi King. In terms of ideology, Saudi Brothers were also quite different from their counterparts elsewhere: although they did read Hassan al-Banna, Sa‘id Hawwa, and Sayyid Qutb, they were also heavily influenced by Salafi authors whom they quoted on issues of creed and on certain issues of fiqh.

If and when Syria is run by the MB, and if and when the MB strengthen their position in Jordan, the al-Sauds will have to start really worrying about their local MB.

The Iranian rial and the price of Saudi chicken

Any connection here? 

The Iranian Regime Is In Trouble - World Report

The devaluation of Iran's currency, the rial, by as much as 40 percent in the last few days has made it very difficult for the average Iranian to afford everyday food stuffs. It is no surprise that protests have broken out in Tehran's central bazaar and its surrounding streets. The bazaar is a critical pillar of support for the Iranian regime. The loss of confidence among Iran's merchant and business classes could shake the foundations of the Islamic Republic.

Chicken price rises lead Saudis to tweet - FT.com

Saudi Arabians are forgoing one of their favourite foods as a Twitter campaign against high poultry prices spreads.

The “Let it Rot” campaign urges Saudis to refrain from eating chicken to punish traders who they say have raised prices by about 40 per cent in the past two weeks.

Saudi Arabia is a leading supplier of chicken, a staple in the country, to neighbouring countries and an export ban imposed this week in an effort to defuse the anger is likely to trigger regional shortages.

One would think not if Saudi chicken are domestically produced. Still, there's much schadenfreude about the troubles of the Iranian economy (which appear not to target regime officials, as "smart sanction" advocates argued, but ordinary people in the hope that this will put pressure on the government — something that led to a disaster in Iraq) and much less about Saudi Arabia's.  

Here's an argument that the rial's devaluation is not as serious as might appear, because the government itself is the main foreign currency earner. The conclusion:

Does all this mean that Iran’s economy is on the verge of collapse, as Israel’s Finance Minster reportedly said?  The answer is no, because most of the economy is shielded from this exchange rate, though not from the ill effects of the sanctions, which will continue to bite for a while. Would it cause sufficient economic pain that would push the Iranian government to make concessions in its nuclear standoff with the West?  The answer is not likely.  The multiple exchange rate system, as inefficient as it is, will protect the people below the median income, to whom the Ahmadinejad government is most responsive.

Update: Paul Mutter has a round-up of the issue of the Iranian rial at PBS' TehranBureau