A SAUDI POPULATION EXPLOSION: UNEMPLOYED, MULTIPLYING, AND LOSING STANDARD OF LIVING GROUNDS

There are significant domestic reasons that have restricted the Kingdom's ability to accommodate the United States fully. Political mobilization has swept the young and unemployed. This mobilization has been helped significantly by the perceived American-Israeli assault on the Arab Sunni world (the continued colonization of Palestine and the assault on a Sunni regime in mostly-Shiite Iraq.) Usama bin-Laden and his al-Qaeda have understood the stunning mobilization potential of this assault, and operate to take full advantage of it, with the hope of uniting the Sunni world.

This "American-Israeli assault" couldn't have happened at a worse time for the Saudi government. Unemployment in the kingdom is conservatively said to be at 25% and population growth at a high of 5.3%. In the last twenty years, it is reported that the per capita income in the Kingdom has fallen from $28,000 to $7,000. (We know that the de-classe, those who fall from one standard of living into a lower one, and not the poor, are the most easily politicized.) In essence, the production of children is at a high by world standard, yet employment opportunities are not expanding. To meet this challenge, the government is increasingly reserving certain jobs for Saudis, and taking them away from foreigners--most recently the driving of taxis. Too, agencies associated with the government have been investigating the possibility of importing labor from such countries as Vietnam and Cambodia, who are cheaper than the labor they would be replacing from such places as Pakistan and India. (These laborers hold jobs that are too low-paying--e.g., maids, nannies--to interest Saudi nationals.)
Add to these sources of turmoil the fact that the Saudi state is operating at a deficit, and the public debt is estimated at a conservative $168 billion--more likely $200 billion. (Most of this money is borrowed internally from pension funds--similar to the situation we have where our deficit is financed from social security funds.) To finance the deficit, and repay the debt, the Saudi state has begun to investigate the possibility of accelerated privatization of various public sector agencies.

The somber state of the government's finances has much to do with that government's funding in large part of the American war to liberate Kuwait--an estimated $60-8$80 billion. (SPC suspects that the estimates vary depending on whether the arms purchases after the war--another payoff to the United States--are included in the calculation or not. The American estimate of the cost of the war to Saudi Arabia is significantly less.) One way to interpret the kingdom's reluctance to cooperate fully with the United States on Iraq is that the U.S. wants to shake it down for money to finance the operation, at a time when public money is scarce, and public welfare demands are high.

(SPC NOTE: The effort to privatize should help the Kingdom in easing its relations with the United States. Should this privatization be open to Americans, it would create yet another pro-Saudi constituency in the United States, to join the oil and weapons constituencies.)