Saudis' Quicksand of Poverty
In a land of fabulous riches and extravagance, the middle class is withering and the hopes of the young are sinking beyond reach.By Kim Murphy
May 16, 2003: (La Times) RIYADH, Saudi Arabia — This kingdom's riches, fueled by the largest oil reserves in the world, are almost beyond dreaming.
Dozens of palaces are under construction here. Even the average businessman is likely to have a huge home with silk draperies, secluded fountains and crystal chandeliers. Malls are stocked with imported designer fashions. When ailing King Fahd vacationed in Spain last year, he took 50 black Mercedeses, 350 attendants and a 234-foot yacht, and had $2,000 worth of flowers and 50 cakes delivered each day.
But for an increasing number of citizens, that Saudi Arabia is a land of fable and memory. This country with pockets once so deep that it bought billions of dollars of U.S. weapons and helped finance U.S.-led military campaigns in Iraq, Afghanistan and elsewhere, is now deep in debt. Its younger generation is at pains to find jobs and houses in the suburbs, let alone palaces.
The dozen years since the Persian Gulf War have seen slums grow up on the outskirts of Jidda and Riyadh, the capital. Beggars hawk bottles of water at intersections. Penniless women huddle in strips of shade outside their crumbling mud-brick houses, begging for money. Many families in the capital are so poor they can't afford electricity. Raw sewage runs through parts of Jidda.
The suicide attacks against foreign residential compounds in the Saudi capital this week point up one of the most potent concerns U.S. officials have in a country seen as one of the United States' most reliable allies in the Arab world: The increasingly perilous economic situation that all in Saudi Arabia but the royalty face today may be a big factor in recruiting young Saudis to terrorist groups such as Al Qaeda.
Chronic joblessness, diminished incomes and difficulty in collecting enough money to marry and start families are all issues that can evoke anger — whether directed at the Saudi royal family, seen by many in the kingdom as spendthrift and corrupt, or at the millions of foreigners who hold high-paying jobs not available to young Saudi men.
"The problem in Saudi Arabia is that the middle class is shrinking," said Turki Hamad, a Saudi political scientist. "And the more poverty you have, the more fundamentalism you have."
While the kingdom's economic problems are complicated, he said, "I think there is no choice any longer. It is a kind of imperative. Either you change the essence of our political culture or you just vanish."
The suicide bombings struck an expatriate community in Saudi Arabia that already had sent many families home in the weeks before the war in Iraq. Now the new attacks could cause the employees themselves to pack up and leave — a scenario that could threaten everything from banking to pumping oil.
Saudi Arabia's problems have been decades in the making. In the early 1980s, the nation's per capita income was $28,000 in current dollars, on a par with that of the United States. Since then, the U.S. per capita income has grown to $34,100, while Saudi Arabia's has slipped to $7,230.
Not since the early 1980s has Saudi Arabia experienced the kind of oil-price boom that had turned the kingdom from a desert backwater to a modern nation of office towers, freeways, state-of-the-art hospitals and space-age industrial cities. The oil-price crash of the 1980s and the $55 billion in debt accumulated during the 1991 Persian Gulf War left the kingdom struggling with substantial deficits through much of the 1990s.
Even now, the oil boom brought on by the war in Iraq is providing only a temporary fix for an economy that is growing far slower than the number of Saudis sharing the wealth.
These economic numbers spell out the U.S. government's concerns over the stability of its most important oil supplier in the Persian Gulf — and, possibly, help explain the Bush administration's determination to establish a stable free-market economy next door in Iraq.
"Actual poverty has been endemic in Saudi Arabia now for the last six or seven years. I think I would not be exaggerating if I said people under the line of poverty would be 20% or 30%," said Saad Fagih, head of the Movement for Islamic Reform in Arabia, a London-based group critical of the Saudi government.
"If you go to the south or the very eastern part of Riyadh, or to at least seven or eight [districts] in Jidda, you would imagine yourself in the middle of the Congo," Fagih said. "Extremely poor, and people are living with crime, living with drugs, living with all types of social disintegration."
Saudi Arabia's population has increased 300% since 1973, to 23 million. So many have moved to the kingdom's three largest cities, Riyadh, Jidda and Dammam, that they are now home to nearly 80% of the population. At nearly 600 square miles, Riyadh alone is larger than Los Angeles.
Early this year, the Saudi government announced a "national strategy to combat poverty," marking the kingdom's first official acknowledgment that poverty exists. That opened the door for a range of programs, from increased welfare to employment efforts, to help ease the lot of the poorest and aid the middle class.
Because the idea of poverty is so new that statistics do not exist, the government also ordered household surveys next year to establish a national poverty line.
The announcement followed an unusual visit to the poorest neighborhoods of Riyadh in November by Crown Prince Abdullah, the kingdom's de facto ruler since 1996 because of the illness of King Fahd.
The prince and his entourage tramped one evening into cramped, decrepit homes and met with families whose food comes from charities and rent money often from national social security assistance.
One told Abdullah he was supporting a family of 15 on his $11-a-day job at a secondhand market. Another said the care of his paralyzed wife had impoverished the family. Salim Hassan said he couldn't afford to feed his nine children. "Prince Abdullah said to us, 'Help will come to your door,' " Hassan told the newspaper Al Riyadh.
The interior of Riyadh's slums is rarely seen by outsiders. On several visits last month, a reporter was continually stopped and questioned by police. ("Are you a human rights investigator?" one officer asked.)
Most residents were reluctant to allow anyone into their homes, because of Saudis' profound sense of privacy and fears of police reprisals. But several families allowed a glimpse of their cramped homes in neighborhoods such as Al Aoud, Sebala and Shamissi, often described as Riyadh's slums. Some apologized because they were too poor to offer tea — a necessary accompaniment to nearly every Arab conversation. One family was living in a tent set up on a side street; a few had fashioned homes out of strips of plywood and corrugated aluminum.
For many such families, the kitchen was a hot plate, with pans and bags of rice scattered on the floor, and living rooms did double duty as sleeping quarters in apartments that were seldom larger than three rooms. Large cockroaches paraded confidently through the rooms, and visitors who ventured into the rubble-strewn streets were swamped by beggars.
Many of the inhabitants of these quarters are illegal immigrants who are not eligible for employment or government aid. But some are Saudis who have slipped through the normal aid channels: people from poor regions in the south who never went to school and are not qualified for skilled work; divorced women with children; women on bad terms with their fathers or brothers, without whose help they are ineligible for government aid; tribespeople who for various reasons don't have official Saudi nationality; the children and grandchildren of immigrants, who were born and grew up in Saudi Arabia but remain ineligible for work or aid because they are not citizens.
"There are the princes and the higher people in those palaces, but if they bothered to come outside, they would see that not everybody has a lot of money," said one woman, who asked not to be identified.
Haya Mubarak's husband died in a car accident 10 years ago. Since then, she has supported her six daughters and four sons alone. She and two of her daughters serve coffee at wealthy families' parties to earn an income; food comes from charities. The family used to receive $5,000 a year from social security, but that has been heavily reduced since her sons turned 16 — old enough to work. However, they cannot find jobs.
"Life is so hard, and it's becoming more difficult for everyone now," she said. "But what can we do? Things are not in our hands. We do the best we can."
Officials are less worried about the extremely poor than they are about the large number of middle-class Saudis who are struggling to find work — after many years in which virtually any college graduate was guaranteed a well-paying, relatively easy government job.
Officially, unemployment is about 8%. Private economists put the figure closer to 13%, and some Saudi political scientists have said it may be about 25%, if one considers the large number of young adults still living at home with their parents.
The number of people entering the job market is about twice that of jobs being created. The government would like to reduce the number of foreigners who work in the kingdom — 5.2 million — including Pakistanis, Indians, Bangladeshis and Egyptians, most of them hired because there were no Saudis qualified or willing to do their jobs.
But business has been slow to cooperate, said Ihsan Ali Buhulaiga, a Riyadh economist, because foreign workers often work cheaper and harder. Or they may have more skills and experience than young Saudis, many of whom hold university degrees in subjects such as Islamic studies, for which there is little market value.
"The new graduate from King Saud University will ask me for 3,000 rials [about $800] a month," he said. "The Indian will say 1,500 is OK with me. And what else? The Indian speaks English, and has no family to spend his time with. Work is his only entertainment."
Princess Moudy bint Khalid of the Al Nahda Philanthropic Society for Women, which aids about 2,000 poor Saudi families, has been working to promote local women as an alternative to foreign labor. They'll work cheaper, she says, and don't require accommodations, visa fees and travel tickets.
There are relatively few women in the workforce, largely because of Islamic restrictions that prevent women and men from working in the same place. To get around that, Al Nahda is operating three small factories staffed only by women.
"The women used to do everything 100 years ago," Moudy said. "Who made the tents? The women. They sewed it, they built it, they cooked the food, they tended the sheep, and the men used to fight. Why shouldn't women work now?"
Ali Namla, minister of labor and social affairs, said the antipoverty program would include training to make sure Saudis have skills for employment, economic development in outlying areas to minimize migration to the cities and programs to help women and others start microbusinesses. But the program won't simply hand out cash, he said.
"We know wherever there is a distribution of free things, the rich become poor and the poor take more than they need," Namla said.
Still, he said he would seek an increase in annual social security aid from $827 million to $1.03 billion and push private charities to expand their services.
Aid organizations also are playing a role. Prince Talal bin Abdulaziz, King Fahd's brother, is head of one of the region's most important aid organizations, the Arabian Gulf Fund.
Talal is known as one of the most progressive members of the royal family and has long spoken out on the need for political reform as a means of assuring economic stability in the region.
"We are reaching a level of $180 billion in indebtedness in this country, and the minister of finance keeps saying we have no funds because we are spending more than we have," Talal said. "All of this time, they have chosen to spend the money while ignoring issues like poverty.
"We need a rationalization of spending, and spending should be only for those who deserve it. This is basic. But this will come only when there is parliamentary questioning, when a member of parliament can stand and ask the minister of finance, 'Where is the money going?' "
Talal took a small first step by hiring two women who were fired from their university jobs for participating in a protest against discriminatory driving laws; women are not allowed to drive in Saudi Arabia, an impediment to employment and education. They work in offices next door to men in the fund's headquarters.
"There are changes we are imposing on society, and we are hoping people are going to cope with the 21st century," Talal said.
"We are facing problems and we are facing pressures. We have to be patient and not get desperate. We have to keep fighting," he said. "For the problem we are going to face otherwise is revolution or coup d'etat."
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