Saudi Life With $30 Oilby
Young population is at forefront of changing economy
Social media drives challenge to old conservative order
Times are getting tougher in the Hathut household, so father Mohammad is looking for extra work and the three kids are being told to switch off the lights to cut his electricity bill.
This is Saudi Arabia in 2016. It may be a familiar story to austerity-hit Europeans and Americans, but in a nation synonymous with conspicuous consumption, the belt-tightening has been unsettling. Unprecedented cuts to fuel and energy subsidies are forcing the kind of rigor never seen during the era of petrodollar-fueled wealth that quadrupled per-capita income since the late 1980s.
“A lot of things will change,” said Hathut, 30, who plans to supplement his income as a business-administration teacher at a Riyadh university with private training sessions. “But many youths are still in a state of shock. They haven’t processed the news and what to do.”
With oil having plunged to about $30 a barrel, signs of the tectonic shift taking place in the ultra-conservative Islamic kingdom are everywhere: from the royal palace where the nation’s founding family is contemplating the sale of its monopoly oil producer to the homes and businesses adjusting to the new economy.
Those aged 15 to 34, who make up more than 40 percent of the 21 million Saudis, are at the forefront of the upheaval. No longer can they take for granted free health care, gasoline at 20 cents a liter and routine pay increases.
Even the power of the religious police, which upholds the strict brand of Islam that defines Saudi Arabia, may no longer go unchecked by the government. The Consultative Council, an advisory body, last month urged the Commission for the Promotion of Virtue and Prevention of Vice to compile a list of banned behaviors to prevent abuse by officers. They can arrest unmarried couples found together in a car or people caught with flowers on Valentine’s Day.
More women are entering the workplace and were able to run in local elections for the first time last month, though they’re still banned from driving.
It’s “night and day” from 20 years ago when investment banker Khlood Aldukheil, 42, would get into the elevator to go up to her office only to be told no women worked in the building. People used to hang up on her because they thought they were calling the wrong department, she said.
Young, social media-savvy Saudis now expect to have more of a say in running and modernizing the country, changing Saudi Arabia as we know it, said Ghanem Nuseibeh, founder of London-based consulting firm Cornerstone Global Associates.
“Saudi youth won’t be content with what the previous generations were content with,” said Nuseibeh. “Whatever the state is going to take away from them because of dwindling financial resources they would expect to receive it by some other means.”
Something different is apparent from the minute you set foot at Riyadh airport. The drab arrival hall from years ago is now bright with televisions showing cartoons.
Passengers are greeted by smiling young officials in traditional white robes: “Welcome to Saudi Arabia.” Older women and mothers with children are guided to comfortable chairs as male relatives stand in line at passport control.
In downtown Riyadh, dining no longer feels like eating in a prison cell after many restaurants got rid of screens placed around tables to shield female diners from men.
Ten years ago, most eateries had a notice at the door that said women were not allowed entry without a male guardian. Uncovering would have been unimaginable. On a visit to one last month, young women took off their head covers and fluffed honey brown hair as they took selfies. The male waiters just went about their business.
The cloaks called abayas that women have to wear in public are increasingly adorned with colored designs, lacy trimmings and glittery panels instead of the mandatory black.
“There’s more freedom now,” Mona, 23, who works in human resources and was among the diners, said after she and her friend spent more than half an hour posting pictures on Snapchat. “Our parents weren’t so lucky.”
What those parents did have was the financial boom that made Saudis collectively rich.
Gross domestic product per capita soared to $52,000 by 2014 from about $12,000 at the time of the first Gulf War in 1990. Even during the troughs of the 1980s and late 1990s, wealth burgeoned more quickly because of the relatively lower cost of pumping oil and a smaller population.
Though many Saudis are embracing the changes, the more hardcore are pushing for restrictions.
The conflict played out at the restaurant, where two women covered entirely ordered waiters to comply with rules banning music in public. They did. But after the women left, the sound of Egyptian love songs filled up the place again.
The other side of allowing more openness is "how do the conservative powers that be in society react?" said David Butter, associate fellow at Chatham House in London. "That clearly is potentially a field of political confrontation in the period ahead."
Politically, the kingdom remains in crackdown mode. Prominent human rights activist Samar Badawi was briefly detained in Jeddah this week for questioning. Her brother, Raif Badawi, is currently serving a 10-year sentence for insulting Islam. Hundreds of writers around the world held readings of Palestinian poet Ashraf Fayadh, sentenced to death after being accused of apostacy.
Saudi Arabia also carried out its largest mass execution since 1980, putting 47 men to death on Jan. 2, including Shiite cleric Nimr al-Nimr. His execution led to the kingdom cutting off ties with rival Iran after protesters attacked its embassy in Tehran.
In the background is the new economic reality after oil sank from more than $100 18 months ago.
Saudi authorities, themselves a driver of the price collapse as the world’s biggest exporter, announced increases to the cost of fuel, electricity and water last month.
The government intends to cut spending this year and gradually privatize some state-owned entities in the biggest shake-up of economic policy in recent history. It comes almost a year after King Salman named his increasingly powerful son, Deputy Crown Prince Mohammed bin Salman, to head the economic council.
In an interview with the Economist published last week, Prince Mohammed said the country is looking into selling all or parts of oil behemoth Saudi Aramco. He also said it’s vital to create employment as he steers the kingdom away from an oil-based economy, including the possibility of putting Saudis into jobs occupied by foreigners who typically work longer hours for less money.
“We have great opportunities to create jobs in the private sector,” he said, according to a transcript published by the magazine. “At the same time I have reserves now, 10 million jobs that are being occupied by non-Saudi employees that I can resort to at any time of my choosing.”
The prince, who is in his early 30s, has been meeting with business leaders, ministers and young Saudis to address the challenges people of his age group will face. Khalid Alkhudair, 32, who attended one of the meetings, said he felt reassured.
“I’m not worried at all,” said Alkhudair, whose businesses include a company that works on finding jobs for women. “This is the time for us to create our own businesses. We need to roll up our sleeves and do something different.”
Bit of Color
Madawi al-Issa, 30, said nowadays young Saudis can start businesses thanks to social media. Hers is emblematic of the social and economic change: she sells abayas online, though not the traditional all-black ones.
Her goal, al-Issa said, is to “change the concept of the abaya from something boring to something you’d want to wear.”
Hathut, the university lecturer, echoed the optimism. But in the meantime, he needs to make some cuts. The first target is to reduce the family’s electricity bill by almost half, to 400 riyals ($107) a month. The children will pocket the difference and are definitely doing their bit.
“My wife says they are driving her crazy, switching off the lights even when she’s in the room,” said Hathut. “I’m glad it’s working. I want my children to become more responsible about spending money. The oil will run out one day.”