Saudi Arabia: In the face of war

28 March 2003
In the end, diplomacy failed. At 02:24 GMT on 20 March, as the final ultimatum issued by the US to Iraqi leader Saddam Hussein passed without notice, international efforts to prevent war were buried under the first barrage of bombs. Once again, with a mixture of fury, fear and fascination, the world watched their television screens as Washington displayed its military hardware in the first aerial bombardments on Baghdad.

Unlike the last Gulf war in 1990-91, the US-led forces this time staged an early ground attack aimed at securing key strategic points across Iraq and at throwing out Saddam's regime in Baghdad. As the first pictures of dead and wounded Iraqis emerged, so did the voices of millions of anti-war protesters around the world, calling for an end to the war. In the Middle East, Bahrain, Jordan, Egypt and Yemen saw the angriest demonstrations, as security forces fought to keep their own peoples under control.

Predictably, most of the official responses from the region were harsh and condemning. Although the voices from the kingdom were comparatively muted, Riyadh's position was clear. In its first reaction to the start of the military campaign, the Saudi government insisted that what it called an 'illegitimate war' had to stop. Foreign Minister Prince Saud al-Faisal expressed 'hope for a quick halt to military action and the return to peaceful efforts' and urged Washington to preserve Iraq's 'unity, internal security and territorial integrity'. He also called for a return to the diplomatic track.

'Stop the war. Let's sit down, let's have a breather after what we have seen. Let's have diplomacy work. That would be the message we would send to both [sides],' Prince Saud said on 22 March. 'Saddam Hussein now knows what his country faces. If he asks the people of Iraq to sacrifice their lives. perhaps he should also begin to think of what sacrifices he can make for his country.'

Criticism of Washington and condemnation of the war campaign were expected. More of a surprise were Crown Prince Abdullah's frank remarks on the inability of Arab states to find and pursue a common stance on the Iraq crisis. 'Let me be candid with you,' Crown Prince Abdullah told journalists shortly before military action started. 'If it were not for the obvious weakness of the Arab world, we would have come up with an effective, unified Arab stand that would have bypassed declarations.'

So far, there have been no public demonstrations in the kingdom, but emotions are running high, not least due to comprehensive media coverage of the war. Local newspapers have become increasingly outspoken in their reporting on political issues and Arabic satellite channels such as Qatar-based Al-Jazeera have brought pictures of the horrors of war to many Saudi households.

Aware of the general mood among its people, the government refrained from granting the US permission to launch attacks from its territory. But the vast majority of Saudis know that Riyadh co-operates on other levels, notably by opening up airspace to US military aircraft. Moreover, the US continues to have the use of the Prince Sultan airbase and still has several thousand soldiers based on Saudi soil, something many locals deeply resent.

Growing anger towards what many perceive to be an arrogant and imperialistic US foreign policy has manifested itself in rising anti-Western sentiment in the kingdom. While this is generally reflected in calls for an informal boycott of US products and companies, several apparently isolated incidents show the potential dangers for Western expatriates in the kingdom.

In late February, a UK national was shot in broad daylight in Riyadh while waiting in his car at traffic lights. The BAE Systems employee was the fifth Westerner to be murdered in Saudi Arabia in the last three years. Several others have been targeted in recent months in drive-by shootings and car bombings. Fears are that a large number of civilian casualties in Iraq will further fuel the already heated atmosphere in the kingdom, provoking new attacks against Western expatriates.

Despite the fragile situation, most foreigners concentrate on what they're in the kingdom for - business. The war has affected the pace of many major projects, but the common assumption is that these are only temporary delays. 'It will be difficult to work [with the Iraq crisis unfolding] and there could be some negative impact on logistics and imports,' says a Dammam-based representative of an international company. 'Nevertheless, this is only a short-term problem, a matter of months, and [in the medium term] we want to increase our presence here.'

Most local businessmen take a similarly optimistic view. 'Even in the last Gulf war things continued more or less as usual,' says a Riyadh businessman. 'Projects might be delayed, but things are going to pick up again once it's over.'

Delays on projects have been reported across most economic sectors, although a number of these were stalled long before war broke out. Perhaps the most important scheme suffering from inertia is the gas initiative, which has entered yet another round of protracted negotiations. For months, discussions have stalled repeatedly over the question of the quantity of gas to be made available to the companies in the remaining core ventures; core venture 2 having been officially declared dead. Not content with the offer on the table, international oil companies are still holding out for a better offer from the government, but a decision is unlikely until the Iraq crisis subsides.

While many Saudis have little sympathy for the US these days, government relations between Washington and Riyadh remain essentially intact. The underlying basis of the relationship remains the Saudi commitment to make up any shortfall in oil supplies to the world markets, even in the case of a fully-fledged war and serious disruptions. 'Oil is no longer a weapon,' Petroleum & Mineral Resources Minister Ali Naimi said days before the war started. 'A war is looming - that obviously has consequences for the markets, but there is enough oil. We can deliver - whatever happens.'

There has been no reason to doubt Naimi's pledge. Saudi oil production was raised to the present level of 9.2 million barrels a day (b/d) from 8 million b/d in December, still leaving another 1.3 million b/d of spare capacity available to meet shortfalls following the interruption of Iraqi supplies. With Venezuelan production creeping back up, a significant shortfall on international markets is unlikely.

Moreover, Saudi Aramco marine shipping subsidiary Vela International Marine in January and February booked seven tankers, each carrying 14 million-17 million barrels of oil destined for the US. Another 8.5 million barrels of crude were sent on their way in late February after Vela chartered an additional four crude tankers, scheduled to arrive in the US in late April. The government says it has also been stockpiling at least 50 million barrels of oil in storage facilities throughout the country.

The outbreak of war in Iraq has come as an unwelcome addition to the long list of grievances that Riyadh already has to address on the domestic front. Unemployment in particular has become a key concern for the government. According to the Central Department for Statistics, the unemployment rate now stands at 8.1 per cent, but unofficial estimates are well above this figure.

The urgency of the matter is reflected in a flurry of new measures aimed at reducing the foreign workforce while creating new opportunities in the job market. The government in early March embarked on a programme to enforce a 2001 regulation to ban foreign labourers from working as sales executives and administrators in the gold and jewellery sector.

Other businesses already have to cope with the effects of Saudisation measures on their bottom lines, and the initiative has come in for criticism, particularly from the private sector.

'The training of our kids and job creation are the two key issues,' says a Riyadh-based economist. 'There must be more focus now on the curriculum, which is very sensitive. We have to encourage private training and private colleges, to prepare our young generation. Our economy creates job opportunities, there are enough jobs. But Saudisation [in this form] does not work. The job needs have to be matched with qualifications. Taxing expats and Saudisation is not the right concept for highly-skilled jobs.'

Saudisation is a particular concern for smaller, specialised companies. 'We are forced to follow Saudisation regulations but people here are not trained to do such jobs,' says the representative of a local construction company. 'Also, construction jobs have a low status and we compete with the likes of Aramco and Sabic [Saudi Basic Industries Corporation] on the job front. Naturally, they can get the best graduates and best-qualified Saudis. Without our expat workforce, our company would come to a complete standstill.'

Aside from economic concerns, Crown Prince Abdullah's January covenant has found widespread interest and support both inside and outside the kingdom. The unprecedented call for internal reform and enhanced political participation in Arab countries was echoed by a petition signed by 104 Saudi intellectuals and presented to Crown Prince Abdullah on 2 January.

The paper, entitled 'A Vision for the Present and Future of the Homeland', essentially calls for a Saudi institution and bill of rights, all within a framework of the language and values of Islam. The authors of the petition included Sunni and Shia businessmen and professors as well as technocrats and moderate religious leaders.

The new mood of openness is reflected by an increasingly outspoken national press, which is careful to acknowledge government attempts to address internal problems, but continues to voice local concerns that the kingdom has failed to take the initiative on the international scene. 'The Saudis must not allow events in Iraq to pass them by,' wrote a columnist in the daily Al-Watan recently. 'They must play some role in the liberation of Iraq.'

If the US succeeds in its objective of regime change in Iraq, there will be little love lost for Saddam Hussein, the 'Arab Nero' of Baghdad as he has been dubbed by local newspapers. But there are worries that the influence of Riyadh on US foreign policy in the region will be eclipsed by the emergence of a new oil-rich American protectorate in Iraq. This may well prompt Crown Prince Abdullah to wonder if this latest crisis marks the beginning of the end of a beautiful friendship.

Exchange rate: $1=SR 3.75

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