The Dispensable Nation: American Foreign Policy in Retreat (34 page)

Qatar took a leading role in brokering a truce between Lebanon’s bickering factions in 2008, averting open conflict there. More recently, Qatar played a key role in Arab League deliberations over whether to push for intervention in Libya and Syria. That sort of regional engagement is attractive to Washington. Doha, America thinks, has the cash and the desire to move policy. But that is a risky proposition. Should America trust a small country that may have the will to make its voice heard diplomatically but lacks the diplomatic and military capacity to see its favored policies through to completion?

Nor are Qatar’s power plays always in line with U.S. objectives. A small fish that wishes to swim beside a whale may know a few tricks, but does it have the stamina to swim against the tide? In a region awash with anti-Americanism, Qatar has decided to balance its close ties with Washington with hedging on the other side. It was not until al-Jazeera broadcast images of the Arab Spring to the world that Washington found something to like about the network. Over the years, al-Jazeera has consistently criticized American policy—and on many occasions deservedly so. In return, Washington has blocked its broadcast on American cable channels, and it was perhaps a convenient coincidence that in both Iraq and Afghanistan American firepower zeroed in on the al-Jazeera bureaus. The network’s anti-American slant was fine with the al-Thanis and their lieutenants, who pointed to it in order to reject charges that they were U.S. stooges.

Qatari hedging does not end with al-Jazeera, however. The emirate has also lent support to Islamist forces (both the Muslim Brotherhood and, more worryingly, Salafis) in Libya, Egypt, and Syria.
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Qatar Airways announced a deal with Iran to take over a fifth of that country’s domestic airline industry at a time when a lack of spare parts and rising air accidents rooted in American sanctions were causing ordinary Iranians much angst.
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The Persian Gulf monarchies have not made it past the dangers that the Arab Spring represents, and indeed are particularly vulnerable to
them. The UAE’s decision to close the offices of the National Democratic Institute (a pro-democracy organization backed by the U.S. government) in March 2012 betrayed an awareness of this. The Persian Gulf’s ruling elites are eager for American military protection, but not for American values.

Saudi Arabia in particular is vulnerable to Arab Spring aftershocks. The House of Saud was quick both to jack up domestic entitlement spending and to urge the region’s other monarchies not to give in to protesters.
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The kingdom’s rulers have pumped billions into the economies of Bahrain, Egypt, Jordan, Morocco, and Yemen. The dole has bought Saudi Arabia some relief—bolstering ruling regimes in Bahrain and Jordan, and strengthening the military’s hand in Egypt while giving Yemen a soft landing after Saleh’s exit.

That has worked for now, but the fundamentals are not in favor of long-run authoritarian stability. As we have seen, the region’s monarchies are now more dependent on oil than at any other time in their history, and soon they may be more dependent on the flow of oil from the Persian Gulf into world markets than their thirsty customers.

Saudi financial support to its fellow monarchs is not a one-time intervention. Absent real reform, Arab economies are going to remain bottomless money pits, and Saudi Arabia cannot afford to keep them all serviced amply enough to maintain its influence on the shape of Arab political life. The Middle East is not Europe, and Saudi Arabia (or even the whole collection of Arab petromonarchies) is not Germany. Certainly Abdullah bin Abdulaziz cuts no Angela Merkel–like figure. The notion that America can expect the Middle East to manage its own financial crises the way Europe does is misplaced and dangerous.

We cannot think with glee of getting off Middle Eastern oil and seeing energy prices drop, but then continue to rely on the Persian Gulf’s oil monarchies to realize our security and diplomatic goals in the region. If oil prices fall sharply, Saudi Arabia runs into big trouble. We might not shed many tears for the Saudi princes and their religious policemen, but can we think that cataclysmic change in the Persian Gulf will somehow not affect us?

Oil experts estimate that risk accounts for at least a fifth of the current price of oil—jittery buyers paying a premium to hedge against
future supply cutoffs. Our policy in the region, threatening war with Iran, contributes to that premium. If we were to free ourselves of Middle East worries or somehow find our way to peace with Iran, the biggest losers would be Saudi Arabia and Russia, each of which has an economy that is dangerously dependent on high oil prices.

If the Chinese and Indian economies slow down over the coming decade, the Persian Gulf will face a precipitous drop in the price of oil. If fracking and other new fossil-fuel extraction technologies do around the world what they are doing in America, the resulting fall in energy prices could produce a Persian Gulf that is in deeper economic and social trouble and with fewer prospects for recovery than its larger Arab neighbors in the Levant and North Africa. Saudi Arabia could then be in worse shape than Egypt—it will have a harder political landing, and worse yet, the Saudi economy and labor force would not be in the position to pick up the pieces by attracting foreign investment to manufacture goods for export and integrate happily into the world economy. The Persian Gulf will not be able to do as Southeast Asia did after the financial crisis of 1998.

There is a lot of talk around the Persian Gulf region of “life after oil.” Dubai and Bahrain have experimented with building financial sectors and every emirate is investing in tourism. As yet, however, there is no sustainable model—the non-oil economy still needs oil revenue to survive. The smaller emirates have built sovereign wealth funds that will provide income long into the future. That is a cushion to protect against dropping oil revenues, but only if the population feeding off that income does not grow inordinately. Despite rising oil wealth, Saudi Arabia’s per capita income ($20,000) has not changed since the 1980s.
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If its population keeps growing at the current rate of 2 percent annually—which means that Saudi Arabia’s population will double in fewer decades than it should—then GDP per capita may start to decline.

A larger question is whether a youthful populace living off a sovereign wealth fund will remain satisfied with idleness and lack of productivity and not turn to political activism. Can the appeal of Xbox always be counted on to exceed the appeal of Tahrir Square? Despite expensive investments the Saudi educational system is not producing skilled labor. Much of the productive work is still done by foreign guest workers while
locals hold do-nothing government jobs or occupy themselves with religious activities. Saudi Arabia is awash with holders of doctorates in religious subjects.

There has been a buzz about the new King Abdullah University for Science and Technology (KAUST), a Saudi version of MIT intended to turn out world-class scientists and engineers who will build the kingdom a highway into the future. Billions have gone into the new venture, luring leading American universities to partner with KAUST. But the project remains a white elephant, disconnected from the rest of the Saudi educational system, the prospects for realizing its goals uncertain as of yet. Like many other megaprojects in the Persian Gulf, the emphasis is on audacity rather than substance. What the region needs is change that is built from the ground up.

Already there are too many frustrated unemployed and underemployed youth in Saudi Arabia, spending too much time watching al-Jazeera and networking on Facebook or Twitter to remain immune to the lure of change on display in Tunisia, Egypt, or Syria. Forty percent of young Saudi men are unemployed—and their ranks will swell in the coming years—and a staggering 40 percent of all Saudis are under the age of fifteen.
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Protests could easily return to the kingdom, and if Bahrain erupts again, then protests could take on a sectarian cast, triggering agitation among Saudi Arabia’s own Shias.

Jacked-up entitlement spending has poured oil on the troubled waters for now, but it cannot correct worrisome long-term trends. If oil prices do not keep pace with the country’s current standards of living, the only alternative would be to whittle down entitlement programs and wean the economy off oil. The Saudi state could not accommodate that change easily if at all.
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It could crack, and if it survives it would be only after becoming more representative.

To avoid a crisis point the Saudi economy and society will have to undergo fundamental structural change. The rulers are not ready for anything so drastic, but are experimenting with new ways of doing things. One approach is to educate women and give them more freedom in hopes that they will become more gradual change agents. There are now more women in universities—at some schools they outnumber men—and they are winning new rights: to drive, to vote (albeit in what are still
fairly meaningless elections, since they account for only a minority of council seats), and to hold previously forbidden executive positions. But the social impact of this change is as yet unclear. The Saudi economy cannot create enough jobs for men; it will be hard-pressed to furnish enough for legions of new female applicants. Having more men pushed into unemployment, moreover, will not bode well for social and political stability.

Over the past decade, Islamic finance—whose compatibility with sharia law both in terms of banning interest and keeping the sexes apart in bank branches accounts for much of its attraction—has employed a growing number of women. Islamic financial institutions have developed banking and financial services for women, becoming a source of what in the West would be called “pink-collar” jobs. Some Saudi women are now crossing over to regular banking and elbowing men out of white-collar jobs. One senior male Saudi banker told me, “Women are more diligent, work harder, and stay at the office until the work is done. In short, they are better employees. I would much rather hire women than men, and I expect I will be hiring more [women] in the future.” Educated Saudi women will continue to create new workplace pressures that the current Saudi system is ill equipped to address.

Since 9/11, America has encouraged reform in Saudi Arabia. First we thought reform would stem the rising tide of extremism; now we think it may ensure the kingdom’s stability. But there is no soft landing for Saudi Arabia. Its political system is too rigid, too dependent on the hard-line cabal of influential Wahhabi clerics, and too dominated by the large class of princes of the House of Saud to be able to change. If it tries to change, it will break. Saudi Arabia’s rulers know this; they know their youth want economic prosperity and political empowerment, and that is why they have positioned their country squarely against the Arab Spring.

And it is not just the youth who are restless. I have often thought about a conversation I once had regarding Saudi Arabia’s future. It was 2007, and I was in the country to give some talks. Iraq was then in the grip of sectarian violence, and everyone I met in Saudi Arabia seemed worried about the Shia-Sunni conflict and the rising tide of Iranian influence. Saudi Arabia has a significant Shia minority, concentrated in the country’s vast oil-rich Eastern Province.
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Since the Iranian revolution of
1979 first raised the specter of sectarianism in the region, unrest among Shias has been a sensitive topic in the kingdom.
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One afternoon, I went to a date plantation outside the city of Dammam in the heart of the Eastern Province to meet community leaders. The plantation belonged to a local Shia leader, and he gathered several of his friends and colleagues to talk about the impact of Iraq and the challenges facing Saudi Shias. I asked them what they wanted of their government. A well-educated middle-aged engineer who had worked for decades at the Saudi oil giant ARAMCO replied, “It is not true that we want to break away from Saudi Arabia, we just want the right to practice our faith.” I asked him, “If that is all you want, then why are you such a threat to the kingdom?” He leaned forward in his chair and said:

The fanatical Wahhabi warriors, the so-called brothers or
ikhwan
who won the Arabian Peninsula for the Saudi clan at the end of World War I, were particularly hard on the Shia. Many were put to the sword, but the pogrom failed to subdue the Shia. They have remained the one Muslim community to successfully resist Wahhabi hegemony—and their continued presence means the standing possibility that they will push for a modicum of pluralism.

In addition to religion, there is the factor of regionalism. The Hejaz was once a separate kingdom with its own far-flung ancient trade routes, a long Red Sea coastline, a Turkish- and German-built railroad to Damascus, and the great religious centers of Mecca and Medina to lend
it towering spiritual prestige. In fact, the Hejaz is the cradle of Islam, and it was where the trade wealth, the high culture, and the political power of the Arabian Peninsula were focused. The Hejaz’s dominant position changed only when the House of Saud (a clan from the high-desert province of Najd to the east) and its Wahhabi armies conquered the region and bested its Hashemite rulers (the ancestors of today’s king of Jordan) after World War I. Hejazis have a proud cultural heritage and resent the cultural domination of Najd enshrined in the Saudi state.