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Arabia
Tenuous Doings in the Saudi Kingdom
2005-08-01
Latter part of a Financial Times article, with a few new-to-me details of interest

.... (Fahd) had shown his mettle early. In 1979 when he was Crown Prince, the Shah of Iran was overthrown and replaced by a virulently anti-monarchist, republican Islamist regime. Saudi Arabia became the prime target for the invective which Iran began hurling at Gulf Arab monarchies. The attacks were damaging enough but worse was to come. The new climate of Islamist militancy inspired a rising by home-grown Saudi dissidents who seized the Grand Mosque of Mecca.

With King Khaled still ill, Fahd played a crucial role in bringing the rebellion under control. In great secrecy to disguise the Saudi government’s inability to deal with the militants on its own, French special forces were brought in to clear the insurgents. The bid to overthrow the Royal Family failed.

Even before the warren of tunnels beneath the Grand Mosque had been cleared of rebels, there came a further blow: the Soviet Union invaded Afghanistan. Fahd was instrumental in what appeared to be a brilliant manoeuvre helping to support the Afghan Mujahideen resistance fighters. The move, backed by the US and Pakistan, gave Fahd kudos among his own people.

Yet it was to rebound horribly on the Saudis and their allies. Many of the young Saudis who volunteered to help the Afghans often by working in the refugee camps became radicalised. Among them was Osama bin Laden. It was Osama and the “Afghan Arabs” who would later sponsor political extremism and lead terrorist attacks against the Saudi authorities and against the west - including the 9/11 assault on the twin towers in New York.

The early years of Fahd’s reign were dominated by the Iran-Iraq war. For six years the Saudis worried that the Iraqi army would crack and that the Iranians would be able to instal a revolutionary Islamist republican government in Baghdad. To forestall this, Fahd, backed by most of the Western powers, “lent” the Iraqi regime some $20bn to bolster its war effort. The war ended in stalemate - though Iraq was seen as having stopped the Iranian mullahs’ plan to export their revolution to the rest of the region. Yet far from showing gratitude to the Saudis for their help, the Iraqi leader, Saddam Hussein, invaded Kuwait in August 1990.

The move was embarrassing and shocking for Fahd partly because of the financial support he had lavished on the Iraqi regime and partly because he was forced to invite the US and her allies to come to the aid of Kuwait and Saudi. After US Defense Secretary Dick Cheney flew out and showed Fahd photographs of Iraqi units deployed for an advance into Saudi Arabia, the King agreed to a multinational force of more than 500,000 men, including many Americans, being based in Saudi. The move exposed the depth of Saudi and Gulf arab military weakness and the hollowness of official claims to self reliance.

Many Saudis felt unhappy about the presence of foreign armies on their territory and were angry that their government had so little to show for the billions of dollars it had been spending on defence. In February 1991 the US-led international force liberated Kuwait, but at home Fahd’s government faced growing pressures from two divergent constituencies: liberals on the one hand and the potentially more dangerous groups of conservatives and Islamists on the other.

From 1991 onwards, criticism flowed over the conduct of some of the Al-Saud princes, a few of whom were consuming quite extraordinary amounts of revenue. Some of the most senior princes diverted oil revenues into their own bank accounts, often because Fahd had allowed them to control the award of infrastructure and defence contracts.

In 1994, discontent appeared on the streets and in the next two years there were terrorist attacks on US installations in the kingdom. Many Saudi and western analysts came to believe that the US, on which Saudi depended for its external defence, became a liability in terms of domestic Saudi security because of perceived US support for Israel.

The crisis became acute after the 9/11 attacks. The US continued to regard Saudi as an important ally, though in practice many US officials blamed the kingdom for incubating terrorism and Islamic fundamentalism, not least because 15 out of 19 of the hijackers involved in the 9/ll attack had been Saudis. At the same time Islamic clergy stepped up public criticism of the Saud family’s dependence on the US.

On the domestic front, many regarded Fahd as a moderate among autocrats. As well as pioneering the majlis-as-Shura consultative council, he introduced in 1992 the Basic Law, a kind of secular constitution partly directed against unruly Islamist militants. It stated that people’s houses could not be entered without the owners’ permission and that the zakat, a religious tax, would in future be levied by the government, not the mosque, and paid to legitimate recipients. The aim was to discourage funding of private revolutionary groups.

Economically, the great test for Fahd was the rapid decline of Saudi oil production that started falling almost from the month he assumed power. Exports dropped from the previous level of 9m barrels a day to under 2m barrels in 1985 - at which point the King ordered his oil Minister, Ahmed Zaki Yamani, to abandon the OPEC formula and sell oil at market prices. The decision led to a collapse of prices in 1986 with the price of Arabaian Light - then the marker crude - going from some $32 to under $9 a barrel. From then on the Saudi government was forced to run a series of budget deficits financed initially from reserves and after 1990 by borrowing.

Whereas under Khaled the thrust of economic policy had been finding ways of spending oil revenues - in particular how to distribute them to the people - under Fahd it was encouraging the private sector to take up the running of the kingdom’s developments. Yet Fahd failed to persuade his people to lower their expectations and, given the non-confrontational character of the King and his family, until the last two years his government never quite managed to balance the books.

Fahd’s own preoccupation throughout his reign was the rebuilding of the great mosques of Mecca and Medina. The projects, which were managed by the bin Laden family construction group, cost billions of dollars and proved an important drain on the Saudi budget, but Fahd regarded the work as the most important achievement of his life.

In his last decade sickness rendered him progressively unwilling and unable to focus on mounting economic and social problems and this had potentially serious effects on the country’s long-term development. Analysts suggest it would have been better if Fahd had abdicated in the late 1990s in favour of his half brother, Crown Prince Abdullah. Abdullah has tentatively initiated political and economic reforms but his full brothers have regarded him as too much of a reformer. It suited them to keep Fahd on the throne as long as possible. That way they would deprive Abdullah of the authority, which emanates from the King alone, to push through reforms against the wishes of conservatives inside the royal family and the bureaucracy.

Fahd, in short, stayed as monarch too long.
Posted by:too true

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