Argument

Riyadh May Have Unleashed More Change Than It Can Handle

In the wake of social and economic reforms, some Saudis are speaking out.

Teenage girls pose behind a pretend car in Jeddah, Saudi Arabia, on June 22, 2018.
Teenage girls pose behind a pretend car in Jeddah, Saudi Arabia, on June 22, 2018. Sean Gallup/Getty Images

A spring breeze blew through Riyadh’s Tahlia Street, a main thoroughfare in the Saudi capital packed with young Saudis watching soccer in outdoor cafes. The men were transfixed by the match as unveiled women, dressed in casual Western attire with black robes known as abayas loosely hanging off their shoulders, traversed the sidewalks, enjoying a late evening stroll.

Peaceful as it was, the scene was jarring. Having grown up in Saudi Arabia, I have vivid memories of my mother being regularly harassed by the much-feared religious police, the mutawa, who would demand that she cover up much more than the women around me now. But such fixtures of daily life are quickly falling by the wayside.

A rapid process of social and economic transformation is unfolding in a deeply traditional society, where it is inevitably causing some disquiet. Saudi Crown Prince Mohammed bin Salman, whose reputation has suffered for his government’s involvement in the brutal assassination of the Saudi journalist Jamal Khashoggi, is still very popular in his own country. Still, some Saudis are not shying away from expressing their discontent.

As our delegation of Middle East researchers from various U.S.-based think tanks drove through streets upended by the ongoing construction of the Riyadh metro, a longtime childhood friend who never left the kingdom channeled anger from more conservative segments of society. They are outraged, for instance, that their daughters, compelled by economic necessity, must now fill menial jobs that expose them to unsupervised interaction with male counterparts. “You know the mentality here,” he said. “What the government is doing is just unacceptable to the traditional Saudi mindset.”

This deeply controversial process of social and economic change is not only empowering women but is also opening up new opportunities for all young Saudis to join the workforce. Gone are millions of expatriates who dominated entire sectors of the economy, replaced by less experienced, yet still enthusiastic, nationals of all genders who increasingly have to work for a living rather than depend on generous government handouts or cushy public sector jobs. Between 2017 and 2018 alone, over 1.1 million foreign workers left the country according to government statistics.

All the Saudis I met—whether for or against government policies—agreed that the crown prince has upended the country’s longstanding social contract: state-provided jobs and lavish subsidies in return for unquestioned loyalty. The new (if unarticulated) contract grants Saudi millennials liberation from the suffocating grip of the religious establishment but, in return, expects them to earn their livelihood and not depend on the state’s largess. The lifting of generous government subsidies, for example, has resulted in the almost doubling of gasoline prices and tripling of people’s electricity bills.

The changes are driven, in part, by what the crown prince and his top advisors believe are long-term structural changes in global oil markets. The advent of shale oil and other technological developments, they argue, will keep oil prices low for the foreseeable future. That means hundreds of billions of dollars less in income than the country was expecting.

Their answer to the shortfall is Vision 2030, an ambitious (if somewhat aspirational) blueprint for escaping impending financial disaster. “The country must diversify away from oil,” one prominent government minister underscored. “It must use its accumulated wealth to become a global investor, not just an oil producer.”

Saudi Arabia’s preferred investment vehicle is its Public Investment Fund, a sovereign wealth fund under the direct control of the crown prince. The majority of its asset allocations have been overseas, but it has also stepped into the domestic economy, including in the health care, manufacturing, entertainment, and waste management sectors. This is causing consternation among some of the merchant families of Jeddah, the kingdom’s commercial hub on the Red Sea.

“The government is purposely undermining us, including by entering the market as our competitor,” an heir to one of the country’s business tycoons grumbled. “They are cutting down to size the long-established economic families, perhaps in an effort to encourage greater market competitiveness and, eventually, establish a more leveled playing field for foreign direct investments,” he suggested. “The crown prince thinks he can turn Saudi Arabia into a Muslim economic powerhouse like Indonesia and even Malaysia.”

Higher taxes and new fees meant to shore up public finances have come as a one-two punch for private businesses. The government also introduced quotas mandating that they hire generally less productive nationals rather than experienced expatriates as part of an effort to tackle stubbornly high youth unemployment and limit the remittances that have been leaving the country to the tune of over $36 billion a year, among the highest rates in the world.

Like the social transformation underway, such drastic marketplace disruptions also have political consequences. For now, those are buffered by the fact that an estimated 70 percent of Saudis still rely on the government for their paycheck. But ultimately, to fulfill its own vision for the public sector, the government will have to ensure a return to private sector growth—a daunting challenge for an economy that has always relied on public sector spending.

As it attempts to grapple with the social complexities brought about by rapid change, the Saudi state has grown more authoritarian.

Meanwhile, as it attempts to grapple with the social complexities brought about by rapid change, the Saudi state has grown more authoritarian, restricting an already limited political space. Riyadh’s dilemma is clear. It is trying to maintain momentum while also making sure it doesn’t lose control of disparate segments of society. In the process, high-profile figures who span the political spectrum—from religious sheikhs on the far right to liberal female activists on the left—have been detained.

The intricate balancing act was captured by a recent government decision to temporarily suspend a controversial television show that addressed taboo subjects such as the liberation of women and gender identity. It even hosted a transgender Saudi man who discussed his experiences. A top security official described the challenge: “The show set off a viral social media campaign by the conservatives, and this person’s entire clan came protesting, decrying the humiliation that has befallen them.” This kind of social pressure is something the authorities are trying to manage carefully while also reconfiguring the country’s economy.

Back on Tahlia Street on our evening stroll, a young woman approached us to give a male member of our party a public embrace—until recently a social taboo. Suddenly realizing what she just did in a moment of reflexive excitement at seeing a friend, she flashed a Vision 2030 badge on her lapel to show her support for the government’s policies. The crown prince may be counting on young Saudis like her to carry him and his agenda through. With reliable poll data lacking, it remains to be seen whether he will succeed. Either way, however, Saudi Arabia will never again be the place I grew up knowing.

Firas Maksad is an adjunct professor at George Washington University’s Elliott School for International Affairs. He is also a Washington-based political consultant on the Middle East. Twitter: @FirasMaksad

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