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East-West Debt may 2005 news, update : SAUDI ARABIA
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We are pleased to present another issue of East-West Debt news update on the debt situation in the world. International events influence the solutions for solving overdue trade and bank debts. East-West Debt can offer our readers attractive financial solutions for solving non-performing trade and bank debts ... | ... thanks to the expertise of our international network of experts. East-West Debt is an international financial company specialised in the recovery of overdue debt. To be successful to our clients, we give the highest priority to attractive creativity, quality and integrity for solving overdue debts in high risk countries. |
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banks, governments, and insurance companies in solving overdue debts in high-risk
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Saudis are Taking Small Steps towards Change
Saudi Arabia, the oil colossus run by one of the Arab world’s most conservative and autocratic regimes, is facing unprecedented economic, social and political upheaval. No other county, analysts say, is so rich and yet so poor. Saudi Arabia has 25% of the world’s oil reserves, but the average Saudi woman has six children, and state funds have not kept pace with the population boom. Incomes have fallen by about two-thirds since the Eighties, and unemployment is up to 30%. An army of youngsters is simmering with frustration. Women and children beg at traffic lights, a sight unthinkable just a few years ago. Concentrating on oil, the government has done little to stimulate private enterprise.7000 Princes
Meanwhile, up to 7,000 princes live lavishly at state expense and millions of ‘guest workers’ from Asia, often treated like servants, keep the country running. Many employers, Saudi and foreign alike, insist they are cheaper and work harder and can be dismissed without all the bureaucracy attendant on a Saudi. It is not all bad news. The government’s domestic debt may be over 100% of gross domestic product, but its external debt is zero. If Saudi Arabia chose to tap the international capital markets, economists agree, demand for Saudi debt would be almost insatiable. But, to the more conservative of the al-Saud ruling family in particular, borrowing from foreigners is anathema. Corruption dominates and distorts the entire Saudi system; some estimate that 25% of Saudi GDP goes towards the support of the royal family and its patron-age network. Much is written in the West about splits within the family, as well as challenges from reformers, fundamentalists and even the United States.
But talk of the collapse of the House of Saud seems premature. While internal differences within this huge structure exist over relations with the West, or political and economic liberalization, the family is united in its desire to maintain control. And it would be wrong to overlook the fact that the royals have many loyal supporters within the kingdom.
Bomb Attacks
After the 11 September attacks Saudi Arabia came in for harsh criticism from the US, for tolerating a milieu where perpetrators of bombings could live unchecked. American pressure on the government to crack down on Islamic charities, change the orthodox, inadequate school curriculum and democratise political life increased.The leadership was reluctant to act, but a series of suicide bomb attacks within their own borders appeared to convince the government that action is needed on two fronts: a crackdown on militants and the first tentative reforms. Crown Prince Abdullah, who rules Saudi Arabia in place of his sick half-brother King Fahd, seems to be committed to reform. He has done much to discourage royal extravagance – even forcing the many other princes to pay for their own airline tickets – and is slowly beginning to modernize this devoutly Islamic country. Saudi Arabia is even taking a step towards democracy, with municipal elections, the first since the creation of the state in 1932. Reforms granting women more rights have already been introduced, and laws are being re-written to encourage women to start businesses and to invest capital. Ten years ago, hardly any women worked.
Own Pace
However, Prince Abdullah is not in an easy situation. While most people accept the need for change, they want it to happen at their own pace, not at one dictated by the West. Saudi Arabia, with its mixture of autocratic rule and puritanical Wahabi Islam, has been a breeding ground for militancy for more than a decade, and Western and Saudi intelligence experts believe there are still several thousand extremists within the kingdom who are prepared to use violence. Many Saudis supported the events of September 11, and a majority at least felt a degree of satisfaction that America was suffering. Another problem is that the Crown Prince’s brothers have power bases independent of him. Some of them support the very religious bigots Abdullah is now fighting. This renders the government ineffective. The arrest in March 2004 of a number of reformers demonstrated the fragility and sensitivity of the process. The next few years will be crucial. Saudi Arabia needs major change and a real government to prevent the country sliding into chaos, but Abudallah will have to carefully seek out a path between the demands of the reformers and those of the hardliners, while moving at a pace the cautious Saudis will accept.
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East-West Debt has made every effort to ensure the accuracy of this publication. Neither the company nor any contributor can accept any responsibility for -including but not limited to- errors, omissions, opinions or advice given. This publication is not a substitute for professional advice and all information is for guidance only.
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