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Saudi King Counters Dissent With $36 Billion as Clerics Scold Protesters

As unrest escalated across the Middle East, activists in Saudi Arabia demanded a political voice as well. Rather than promises of democracy, they got a $36 billion handout and a slap down from Islamic clerics.

Saudi academics, writers and representatives of the minority Shiite Muslim population called on King Abdullah, the sixth monarch in the Arab world’s largest economy, to move the country toward a constitutional monarchy. While demonstrators advocated a “Day of Rage” today, police in anti-riot vehicles patrolled in central Riyadh, the capital, with checkpoints set up around the Al-Rajhi mosque to keep people away.

“Demands for political reform will inevitably increase in the kingdom as democracy takes root in the region,” said Thomas Hegghammer, a senior research fellow at the Norwegian Defense Research Establishment in Oslo and author of “Jihad in Saudi Arabia.” “If the regime does nothing, tension will grow between conservative and progressive factions.”

More than two months of protests have rocked the Middle East and North Africa as citizens demand civil rights, higher living standards and the ouster of entrenched autocratic regimes. In Bahrain, a Saudi neighbor and home to the U.S. Navy’s Fifth Fleet, mainly Shiite protesters are pressing their demands for free elections and a constitutional monarchy.

Photographer: Roger L. Wollenberg/Pool via Bloomberg

King Abdullah of Saudi Arabia. Close

King Abdullah of Saudi Arabia.

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Photographer: Roger L. Wollenberg/Pool via Bloomberg

King Abdullah of Saudi Arabia.

‘Urgent Matter’

The Saudi Tadawul stock index has dropped 9 percent since Tunisia’s Zine El Abidine Ben Ali was ousted by a popular movement and fled to Saudi Arabia on Jan. 14. The benchmark had been down as much as 21 percent since that date when it slumped close to a two-year low on March 2. Crude oil has advanced 19 percent since turmoil in Libya started on Feb. 17.

“The monarchy is trying hard to absorb demands for political change and cast them as economic demands,” Madawi Al- Rasheed, a professor of Anthropology of Religion at King’s College London, said in response to e-mailed questions. “Political reform is an urgent matter.”

Saudi Arabia has so far tried to calm oil markets and avoid the political upheaval with a package of new jobless benefits, education and housing subsidies and debt write-offs. There was also a warning from the Council of Senior Islamic Scholars that public protests won’t be tolerated.

Supplying Oil

To allay concerns about disruptions to global supplies, Oil Minister Ali Ibrahim Al-Naimi, said on March 8 that the kingdom can meet any increase in demand, the official Saudi Press Agency reported. OPEC’s biggest producer has raised crude storage in Egypt, the Netherlands and Japan, Al-Naimi said, adding that the kingdom has 3.5 million barrels of excess capacity.

“If the news flow deteriorates further, and Saudi Arabia can’t prove that it can move more oil into the market, prices will continue to rise,” said Juerg Kiener, chief investment officer at Swiss Asia Capital Ltd. in Singapore.

Saudi Arabia has seen protests in the kingdom’s Eastern Province this month, though nothing approaching the size witnessed in Bahrain and Egypt.

Shiite Muslims held two demonstrations on March 3 to call for the release of prisoners. About 100 people staged the first protest in the Shiite Muslim village of Awwamiya in the Eastern Province, while a similar number of people later demonstrated in the neighboring city of Qatif.

Protests

Security forces broke up another protest yesterday in Qatif. Police fired above the crowd of 120-150 people to end the rally after a policeman taking video to document the event was attacked, Major General Mansour al-Turki, an Interior Ministry spokesman, said in an interview. Three people were injured, two protesters and one policeman, he said.

Some people are trying to “instigate chaos,” he said in a telephone interview.

In Riyadh today, Saudi police set up multiple checkpoints in a show of force today. They were searching cars and checking identification papers. There were no protesters on the streets.

Saudi Arabia’s Interior Ministry said March 5 that demonstrations, marches and sit-ins are “strictly” prohibited under the kingdom’s laws, according to the Saudi Press Agency. A day later, the Council of Senior Islamic Scholars warned reforms cannot be realized through protests and “means that cause division,” the news service said.

King Abdullah, 87 this year, returned to the kingdom on Feb. 23 after three months of medical treatment. He promptly announced his spending package and then, five days later, made temporary state employees permanent and ordered government organizations to advertise jobs.

Delayed Elections

Although Saudi Arabia held its first municipal elections in February 2005, they were delayed in May 2009 for two years. The 150-member Majlis al-Shoura council, the country’s assembly, is appointed by the king and plays only an advisory role.

King Abdullah has prevented broader political openness should raise the possibility of “introducing an elected component to the Shoura, which could still be done,” Jane Kinninmont, a senior research fellow on the Middle East and Africa, at London-based Chatham House, said in response to e- mailed questions.

“Quick-fix measures such as new economic handouts won’t address the root causes of the problem,” Kinninmont said. “Holding the promised municipal elections is really the minimum step they could take.”

The government announced in August a $385 billion, five- year spending plan to help tackle joblessness and stop young men from turning to more radical Islam. King Abdullah also battled with clerics by blocking unauthorized religious edicts, or fatwas, and allowing supermarkets to employ females.

Bloody Standoff

Saudi Arabia needs to create 5 million jobs for nationals of the kingdom by 2030, Labor Minister Adel Faqih said in Riyadh on Jan. 25. The unemployment rate is as high as 43 percent for Saudis between the ages of 20 and 24.

The Saudi monarchy has experienced violent opposition to its rule in the past from militants calling for a more Islamic state, not greater political openness.

A group led by Juhayman al-Utaibi took over the Grand Mosque in Mecca during November 1979 in a bloody standoff that lasted eight days. Al-Utaibi denounced the Saudi ruling family as un-Islamic and called for Saudi Arabia to stop selling oil to western nations. Saudi security forces also put down a Shiite uprising the same month in 1979, the year of the Islamic Revolution in Iran across the Persian Gulf.

In the 1990s, the kingdom experienced a rise of Islamic fundamentalism led by Sunni clerics, who criticized the ruling family for not applying Islamic law. A terrorist attack in al- Khobar killed U.S. military personal in 1996 as militants sought to harm the U.S.-Saudi relations.

“I don’t think the regime needs to make major concessions at this point,” said Hegghammer in Norway. “But in the long term, substantial political reform will be necessary. The danger of not reforming isn’t so much a revolution as a very turbulent succession process and perhaps a palace coup.”

To contact the reporter on this story: Glen Carey in Riyadh at gcarey8@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.

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