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Saudis' Quicksand of Poverty

In a land of fabulous riches and extravagance, the middle class is withering and the hopes of the young are sinking beyond reach.

May 16, 2003|Kim Murphy | Times Staff Writer

RIYADH, Saudi Arabia — This kingdom's riches, fueled by the largest oil reserves in the world, are almost beyond dreaming.

Dozens of palaces are under construction here. Even the average businessman is likely to have a huge home with silk draperies, secluded fountains and crystal chandeliers. Malls are stocked with imported designer fashions. When ailing King Fahd vacationed in Spain last year, he took 50 black Mercedeses, 350 attendants and a 234-foot yacht, and had $2,000 worth of flowers and 50 cakes delivered each day.

But for an increasing number of citizens, that Saudi Arabia is a land of fable and memory. This country with pockets once so deep that it bought billions of dollars of U.S. weapons and helped finance U.S.-led military campaigns in Iraq, Afghanistan and elsewhere, is now deep in debt. Its younger generation is at pains to find jobs and houses in the suburbs, let alone palaces.

The dozen years since the Persian Gulf War have seen slums grow up on the outskirts of Jidda and Riyadh, the capital. Beggars hawk bottles of water at intersections. Penniless women huddle in strips of shade outside their crumbling mud-brick houses, begging for money. Many families in the capital are so poor they can't afford electricity. Raw sewage runs through parts of Jidda.

The suicide attacks against foreign residential compounds in the Saudi capital this week point up one of the most potent concerns U.S. officials have in a country seen as one of the United States' most reliable allies in the Arab world: The increasingly perilous economic situation that all in Saudi Arabia but the royalty face today may be a big factor in recruiting young Saudis to terrorist groups such as Al Qaeda.

Chronic joblessness, diminished incomes and difficulty in collecting enough money to marry and start families are all issues that can evoke anger -- whether directed at the Saudi royal family, seen by many in the kingdom as spendthrift and corrupt, or at the millions of foreigners who hold high-paying jobs not available to young Saudi men.

"The problem in Saudi Arabia is that the middle class is shrinking," said Turki Hamad, a Saudi political scientist. "And the more poverty you have, the more fundamentalism you have."

While the kingdom's economic problems are complicated, he said, "I think there is no choice any longer. It is a kind of imperative. Either you change the essence of our political culture or you just vanish."

The suicide bombings struck an expatriate community in Saudi Arabia that already had sent many families home in the weeks before the war in Iraq. Now the new attacks could cause the employees themselves to pack up and leave -- a scenario that could threaten everything from banking to pumping oil.

Saudi Arabia's problems have been decades in the making. In the early 1980s, the nation's per capita income was $28,000 in current dollars, on a par with that of the United States. Since then, the U.S. per capita income has grown to $34,100, while Saudi Arabia's has slipped to $7,230.

Not since the early 1980s has Saudi Arabia experienced the kind of oil-price boom that had turned the kingdom from a desert backwater to a modern nation of office towers, freeways, state-of-the-art hospitals and space-age industrial cities. The oil-price crash of the 1980s and the $55 billion in debt accumulated during the 1991 Persian Gulf War left the kingdom struggling with substantial deficits through much of the 1990s.

Even now, the oil boom brought on by the war in Iraq is providing only a temporary fix for an economy that is growing far slower than the number of Saudis sharing the wealth.

These economic numbers spell out the U.S. government's concerns over the stability of its most important oil supplier in the Persian Gulf -- and, possibly, help explain the Bush administration's determination to establish a stable free-market economy next door in Iraq.

"Actual poverty has been endemic in Saudi Arabia now for the last six or seven years. I think I would not be exaggerating if I said people under the line of poverty would be 20% or 30%," said Saad Fagih, head of the Movement for Islamic Reform in Arabia, a London-based group critical of the Saudi government.

"If you go to the south or the very eastern part of Riyadh, or to at least seven or eight [districts] in Jidda, you would imagine yourself in the middle of the Congo," Fagih said. "Extremely poor, and people are living with crime, living with drugs, living with all types of social disintegration."

Saudi Arabia's population has increased 300% since 1973, to 23 million. So many have moved to the kingdom's three largest cities, Riyadh, Jidda and Dammam, that they are now home to nearly 80% of the population. At nearly 600 square miles, Riyadh alone is larger than Los Angeles.

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