SAUDI ARABIA - The Challenge Of Globalisation - Part 15.

The kingdom of Saudi Arabia has long regarded change, especially rapid change, as being equivalent to instability. Its ruling system has remained relatively static for most of the 20th century with a series of relatively smooth successions of kings. The period between World War II and the end of the cold war was one of both unprecedented growth and a high degree of political calm, with domestic power struggles generally happening behind the palace doors and out of public view - except on rare occasions. There was never a situation which the royal family could not manage through its own internal mechanisms.

The situation began to change at the end of the 1980s and in the early 1990s, when a combination of global, regional and domestic developments resulted in a strategic environment that has put the kingdom in a delicate situation. On the global scale, the cold war came to an end with the collapse of the Soviet Union. This ended the bipolar confrontation, and the geo-political structures associated with it became weakened as both the US and the USSR's successor Russia found new friends and priorities.

On the regional level, the Iraqi invasion of Kuwait caused a deep split within the Arab World that has proved hard to bridge over the past decade. In addition, the Middle East peace process was launched which made it more difficult for Arab states to draw their legitimacy by targeting Israel. On the domestic level, it became increasingly clear that the potential heirs to the throne were all in their 70s and therefore future stability and continuity was less certain than it had been in the previous decades. Combined with all this, the Saudi economy felt the impacts of the 1990-91 Gulf crisis as well as the subsequent years of low oil prices.

In other words, Riyadh was ill prepared for the implications of globalisation which was one of the main consequences of the collapse of communism. By the late 1990s, it became quite clear that fundamental changes would become inevitable. Some measures were introduced, especially in the economic sphere.

Saudi Arabia has applied to join the World Trade Organisation (WTO) and currently has observer status. The Working Party on the accession of Saudi Arabia to the WTO was established July 21, 1993. The last meeting of the Working Party was in October 2000. Bilateral market access negotiations on goods and services have been continuing. Topics under discussion in the Working Party include agriculture, preshipment inspection, intellectual property issues, and services, among other things. The Working Party has also been focussing on a Draft Report and Protocol of Accession.

Saudi Arabia's population is almost 20 million. This is expected to double in less than 25 years. In the meantime, the Saudi leadership would have to make the necessary structural changes to ensure that problems such as declining per capita income, high unemployment, a single-resource economy, etc. are no longer threats to the kingdom's political stability.

Whether this will be done remains to be seen, but Crown Prince Abdullah has frequently commented upon the importance of creating a more dynamic and diversified economy. Nevertheless, observers point out that there is a big gap between what the Saudi Arabian ruling superstructure regards as globalisation, and the Western-style democracy and free market system seen by many as the end result of globalisation. Yet Prince Abdullah has recently taken a bold initiative over peace with Israel, offering full normalisation of relations in return for a full Israeli withdrawal to pre-1967 borders. If this vision materialises, once again the region could change - this time in favour of Saudi Arabia and many other Arab countries (see following pages).

Saudi Arabia still functions in two "time zones". One time zone is that which is visible to the public eye - of oil wealth, extensive infrastructure and a relatively good social welfare system. The other time zone is the one behind which the ruling superstructure operates. The functioning of the latter time zone is based on the relationship between the House of Saud and the Sunni Wahhabi hierarchy. This relationship is part of a covenant forged around 1730 AD between Ibn Saud and Shaikh Mohammed Ibn Abdel Wahhab, the founder of the Wahhabi doctrine, on the basis of which the kingdom was founded.

The covenant between the House of Saud and Wahhabism remains the pillar on which the stability of the kingdom is based, and if the partnership is challenged or undermined, it effectively means that the kingdom would be destabilised. These two time zones have increasingly clashed since the mid-1990s. The clash was seen through a series of bomb attacks against US interests in the kingdom, and stepped up rhetoric against the royal family by radical Wahhabi ulema, which occurred at a time when Islamist militancy was peaking in other parts of the Arab World, like Algeria, Egypt and through the Taliban in Afghanistan. The regime managed to bring this under control.

However, it received a major shock on Sept. 11, 2001, when 19 hijackers - 15 of whom were identified as Saudis by the US - took control of civilian aircraft and plunged them into the World Trade Centre in New York and the Pentagon. The resultant outcry has put the kingdom under the Western spotlight. For the first time, the Wahhabi doctrines and the political structure in the kingdom are coming under continued scrutiny in the Western (mainly US) media.

From the perspective of the royal family, the difficult balancing act between the two time zones have become even harder. It cannot be seen to be succumbing to Western pressure on questions like education and social mores - key issues that underpin the covenant with Wahhabism. On the other hand, the royal family cannot afford to let the tribal and religious aspects of the superstructure to overwhelm the modern aspects, brought about by immense oil wealth in the past decades. Maintaining the equilibrium between the two time zones is bound to be the main pre-occupation of the House of Saud in the coming years. For Saudi Arabia, this will be the main challenge to be posed by globalisation.