Saudi Vision With ‘Winner’ Written on It

Saudi Arabia, the country that called forth the greatest military effort since World War II, is enjoying a business boom.

Companies of all shapes and sizes, from the United States and around the world, are here examining opportunities for joint ventures with the Saudi government or private companies. And the opportunities are not just in oil and gas but in agriculture, manufacturing and services.

The Saudis are determined in the aftermath of war to develop as much industry as they can at home, to give their people careers and occupations--and so build a modern nation that is productive and hard working, even though extraordinarily rich.

It may not be easy. The roughly 10.5 million Saudis, who inhabit their vast land along with 4.5 million foreign workers, were a poor, pre-industrial people until a few decades ago. That’s when oil rose in price and Saudi Arabia became super-rich.

The money so far has brought the Saudi people a better life--free education and medical care, subsidized housing, subsidized industry. It has also created the image of Saudi Arabia as the overflowing bowl, “the philanthropic society,” as one official puts it, “the Saudi government as nursing mother.”

In recent years, with oil revenue down, the government has run deficits and borrowed to support that philanthropy, as it will borrow to fund the massive costs of the recent war.

But now the Saudi leadership wants to cut back the government’s 60% share of the Saudi economy and encourage the development of diverse private businesses, able to provide challenging jobs and technological abilities to Saudi Arabia’s young people.

The way one Saudi official after another expresses that determination is fascinating: “We don’t want to become another Kuwait,” they say. They mean that they don’t want to play the role of the idle rich.

And that sentiment in turn reflects a great truth that has dawned upon the world since last August’s Iraqi invasion of Kuwait: Wealth does not lie in money alone but in industrial skills and mastery of modern technology. Where Saudi Arabia and Kuwait were once held in awe as paragons of wealth, it is Japan, Taiwan and South Korea, with their technological abilities, that are the paragons today.

Americans should be encouraged. Saudi economic plans will mean fresh opportunities for U.S. companies. And, of course, there are bigger stakes. Whatever the desert kingdom does to foster its own development--and that of the violent Middle East--is of critical importance if the world’s armed forces, including 500,000 U.S. troops, are to be spared a return to action in the region.

The Saudis these days are confident because the world responded to the Iraqi threat. “This is the most secure place in the world right now,” a top government official says. But they’re chastened and bitter that neighbors such as Jordan and Yemen, which had enjoyed Saudi foreign aid, turned against them.

So the Saudis are pushing ahead with ventures in agriculture, irrigating their parched land to produce wheat and dairy products and cattle. “We are 100% sufficient in milk now,” declares Hussein Sejeni, deputy minister of planning.

Sure, the Saudis could probably import food and most other products more cheaply than they can grow or make them. But politically, that sounds too much like Kuwait, which lived off investments and foreign labor until Saddam Hussein contended that the Kuwaitis had no right to their land because they hadn’t worked it.

Economically, too, mere importing would be shortsighted. That would leave the industrial skills for others and the Saudi people simply as traders and retailers.

The Saudi vision, a government official says, is to achieve a petroleum-based but diversified economy, with its people filling management jobs at all levels--technical staffs and supervisors.

The plans also call for more people. Thanks to an informal policy of encouraging large families, having four and five children is in vogue even among well-to-do urban couples.

There are stumbling blocks. Saudi office workers get high pay and generous benefits--double what skilled Egyptians and Pakistanis make for comparable work. Private industry here already is complaining about laws requiring that foreigners be replaced by Saudi nationals not famed for devotion to hard work.

Also, there could be tensions over religious practices as foreign joint ventures increase. Saudi Arabia strictly observes Islamic laws on the veiling of women. Religious police accost women, including non-Muslim Westerners, who show even a bare arm in public. Tensions, not surprisingly, have worsened in recent decades as economic development has brought more of modern life.

But don’t sell the Saudis short. They do a good job of running oil and petrochemical operations, and they have spanned their country with good roads and installed an up-to-date telecommunications network.

Yes, Saudi Arabia has been blessed by oil riches. But other countries--Iran, and especially Iraq--have been similarly blessed but have not come as far.

It could be that a thousand years of coping with the harsh environment of the unforgiving desert has prepared the Saudis for the challenges of the modern world.