Editor’s Note:

Frank talk. That’s what today’s item of interest from SUSRIS is about. Khaled Almaeena, Editor-in-Chief of Arab News and resident of Jeddah, has written an extraordinary letter to Prince Khaled Al-Faisal, Govenor of Makkah. In it he describes the anguish of the people of Jeddah in the aftermath of last month’s catastrophic flood that claimed over 100 lives in the Red Sea port city. He echoes much of the criticisms that have poured out in the weeks since the flood including a call from King Abdullah that “we cannot overlook the fact that there are errors or omissions from certain quarters” that must be “disclosed and dealt with firmly.” Almaeena, in his letter, cites the King’s call for transparency and accountability in dealing with the “degree of corruption, greed, nepotism and apathy in certain offices and institutions” that is said to have contributed to the lack of infrastructure and preparedness to deal with the deluge. He asks the Governor to lead a task force; calls for good governance; and challenges media to serve as a watchdog for “transparency and accountability and serving as a bridge between the government and the people.”

Letter to Makkah Governor
Khaled Almaeena

Your Royal Highness, this letter comes to you in a spirit of humility, deep regard and from a citizen’s sincere desire to help and assist his fellows. My wish is that you accept the letter and its contents in the same spirit in which it is written. We know that God has honored you by your appointment as governor of Makkah region. It is, as we know, the most sacred spot on the planet and one which was much beloved by your late father, King Faisal. In his life he accomplished much, which has lasted through the years. Among the accomplishments for which he is remembered and revered are the founding of the Organization of the Islamic Conference (OIC) and the Islamic Development Bank (IDB), which are still with us long after his martyrdom. Just as your father left his indelible stamp upon the region, so we hope for the same from you as the son of a great king.

The Makkah region strives to have modern, well-organized cities with a bureaucracy to serve the people and put the public good as its highest aim. At the moment, the people of Jeddah and the surrounding areas are hurt, sad, anguished and in both physical and mental pain. For people to lose their loved ones in front of their eyes, to see them snatched by swirling waters and disappear caused misery and trauma. What explanation can we give for these losses? How can we explain to the orphans, the widows, the widowers and the families of the missing?

Rains are meant to be a blessing but in our case here in Jeddah, they were a bane, surely the worst and most destructive we have seen for decades. Some loss of life and destruction of property were to be expected — but not on the scale that expands and worsens with each passing day. For long, we in Jeddah blamed everything for our problems but ourselves. It was as if we were totally oblivious to what was going on — and to what should have been going on. We were proud to call our city “Bride of the Red Sea” but we did nothing to make the bride safe, healthy and worthy of our love and esteem. We became a society wanting to be seen here and there, wearing our “bishoots” and expensive clothes, alighting from luxurious cars and posing for newspaper photographs. Whenever a new senior official was appointed, we rushed to offer our congratulations and throw lavish parties. We were concerned with ourselves and our vanities, forgetting the dangers that were being planted in and around the city.

The rains came and the floods exposed us all. They also exposed and laid bare the degree of corruption, greed, nepotism and apathy in certain offices and institutions. And sadly, by and large we in the media had been quiet; we had failed to report what was really happening. In his first reaction to the tragedy, however, Custodian of the Two Holy Mosques King Abdullah issued a wake-up call to the Kingdom. He also added two new words to our Saudi lexicon — transparency and accountability. In the light of this, there is only the truth to be told. South Africa had its Truth Commission, the United States its Warren Report and Britain its White Paper. What our investigative bodies find must be made known and publicized within the framework of our government and society. Just as King Abdullah’s words have been a balm to the people, this report and its findings should ease the minds of those who suffered and even those who were not directly affected by the tragedy. Those who are responsible in any way should be named and if they have a conscience, they will surely be deeply shamed. We cannot allow those who blatantly transgress rules and disregard morality for their own personal gains to be unpunished victors. Having said this, we must not rush madly into a witch-hunt or a blame game. Being able to fix blame is important — but does it necessarily solve a problem or ease the pain of those who lost family and friends? Far better to correct what was wrong so that it does not happen again. Jeddah at the moment is buzzing with rumors about who, what, why, how much and when. Transparency and accountability will go a long way toward dispelling the rumors and replacing them with facts and solutions.

Let us now look to the future. Let us admit that many of our local companies failed (for whatever reason) to provide the world-class projects that they were supposed to provide. In addition, many institutions and government departments did not rise to the occasion and perform as they should have done. I suggest that it may be time for us to ask and learn from others and take advantage of their experience and expertise. There is no shame in this; the shame would be in doing nothing. We can learn from others — for example from Singapore’s Disaster Management Center, its civil defense and city management. Their problems are similar to ours and they have dealt with them successfully. Let us follow their example.

A task force under your command — with powers transcending bureaucracy should be formed. The task force should be composed of concerned citizens and the youth. Yes, let us not forget the young men and women who went out and provided immediate relief to those in distress. They organized themselves, rolled up their sleeves and got down to the job of helping the distressed and homeless. They did not wait to be asked; they acted on their own initiative and showed us all they could do and what they were capable of. Many of them are also qualified to offer advice and expertise that will help in rebuilding the flood-damaged areas. These young people are an invaluable asset and they do not want to accept corruption as the normal way of life. What is needed is something similar to the Marshall Plan that helped rebuild Europe after the destruction of World War II.

But all this needs good governance. Efficient and trusted government mechanisms must do their part to provide not only an economic miracle but a social one as well. We need a partnership involving the bureaucracy, society at large, NGOs and the media. Such a partnership could provide solutions to the challenges we face — and there are many. To highlight those challenges, we need a strong, professional, responsible media that act as a watchdog. Of course, the media must be critical but simply being critical is not enough; it must also offer constructive criticism and new ideas. There is increasing recognition that healthy media are the key to maintaining transparency and accountability and serving as a bridge between the government and the public. It is of the greatest importance that the media uphold values and ethical standards. For it to do less is serious failure and amounts to abdication of its most important responsibility. Credibility is the media’s greatest asset and should not be lost or sacrificed.

Your Royal Highness, as I said earlier, many of our people are in pain. They are patient; they are loyal and they have waited. They now look to you to solve these problems, which have such a great impact upon their lives, their property and the future of their children. They see other societies traveling at full speed and they too want to be travelers on the highway of life and progress. They have been bystanders long enough. They have had enough. They look to you to inspire the changes that will produce a reformed society and lead us all into a new age.

Source: Arab News

About Khalid Al-Maeena

Khalid Al-Maeena is the Editor-in-Chief of Arab News, the largest English daily in the Middle East, for over fifteen years. He first joined the newspaper as Editor-in-Chief from June 1982 to February 1993 and rejoined as of March 1, 1998. He was an anchor on Saudi Television (STV) and hosted popular talk shows. He has also worked as a radio announcer and TV program director.

Editor’s Note:

The largest assembly of world leaders in United Nations history, 119, arrived in Copenhagen, Denmark to tackle the challenge of global warming at the 15th Framework Convention on Climate Change (COP15) this week. The convention wrapped up this morning with the parties “taking note” of the Copenhagen Accord and the lingering question of how many countries will sign on. The COP15 faced a breakdown until the accord, an eleventh hour non-binding agreement, was reached among the US, China, India, Brazil and South Africa. U.S. President Barack Obama praised the Accord, “For the first time in history, all major economies have come together to accept their responsibility to take action to confront the threat of climate change.” The Accord calls for a mitigation target to limit warming to not more than two degrees Celsius, which Obama noted was nonbinding but a first step.

The lack of a non-binding agreement was not the only important story to come out of Copenhagen. Oil producing countries had been expected to press their concerns that limitations on fossil fuels would cause them economic damage, but the failure to forge a stronger agreement appears to have muted those voices. Today Patrick Ryan provided perspective on those concerns in a posting on the SUSRIS Blog — a new venue which you should check out if you have not yet looked over the offerings of articles, videos and other resources available there.

Copenhagen and Oil

What a difference a week can make in Copenhagen. On December 11th, Spencer Swartz writing in the Wall Street Journal (”Oil Producers Worry About Carbon Deal“) checked the pulse of countries like Saudi Arabia as the world prepared to sit down in the interests of global climate health and hammer out restrictions that would dent fossil fuel demand.

“With some of the world’s fastest-growing oil consumers under pressure to cut carbon emissions, big petroleum-producing states are beginning to fret over a long-term drop in crude-oil revenue. For years, oil-producing states have worried about rich nations such as the U.S. cutting back on energy consumption through conservation or turning to nonoil alternatives such as ethanol and other biofuels. But Saudi Arabia and other big Gulf states now fear that emerging markets like China — the biggest driver behind the growth in world oil consumption — may also cut crude demand .. Those fears and the potential impact on future government revenue could erode Gulf Arab states’ support for any deal in Copenhagen, Gulf officials said.”

There were a number of markers laid out in advance of the conference. Remember “Climate-gate” — the revelation of emails at a British university that fueled climate change skeptics. The head of Saudi Arabia’s Copenhagen delegation seized on the emails as the Kingdom prepped for the conference. The Australian’s “Saudis rain on summit’s parade” summed up the brouhaha:

“Saudi Arabia has long been reluctant to agree to any action to reduce carbon emissions and has only recently gone along with the 192 other governments attending the Copenhagen talks in accepting scientific evidence of man-made climate change. But its chief Copenhagen negotiator, Mohammad al-Sabban, suggested in an interview with the BBC yesterday that there was now no longer any point in seeking an agreement to reduce emissions. ‘It appears from the details .. that there is no relationship whatsoever between human activities and climate change,’ he said. ‘Climate is changing .. but for natural and not human-induced reasons. So whatever the international community does to reduce greenhouse gas emissions will have no effect on the climate’s natural variability.’ His government might be prepared to take ‘no cost’ measures to control emissions but more drastic and painful action would be out of the question until there was ‘new evidence’ about what was causing climate change, he said.”

You may have missed the report in October that Saudi Arabia was pressing for “special financial assistance” if a new climate pact calls for substantial reductions in the use of fossil fuels. Sabban, quoted in an AP report (archived on SUSRIS.org) said OPEC’s calculations showed Saudi Arabia would lose $19 billion a year starting in 2012 under a new climate pact.

Earlier this month SUSRIS asked Daniel Yergin (Pulitzer Prize winning author of “The Prize: The Epic Quest for Oil, Money & Power”) at the Arab Global Forum in Washington about the concept of compensating oil producers who might be impacted by emission restrictions adopted at Copenhagen. Yergin said, “The notion of transferring resources to oil exporting countries, were there to be a global climate change regime, not high on the agenda there. On the other hand they ought to put it on the agenda.”

COP 15 (15th United Nations Climate Change Conference) ended, however, with pledges but no solid commitments for limitations on greenhouse gas emissions. What was achieved? Here’s the BBC’s take on it:

“The Accord, reached between the US, China, India, Brazil and South Africa, contains no reference to a legally binding agreement, as some developing countries and climate activists wanted. Neither is there a deadline for transforming it into a binding deal, though UN Secretary General Ban Ki-moon said it needed to be turned into a legally binding treaty next year. The accord was merely “recognised” by the 193 nations at the Copenhagen summit, rather than approved, which would have required unanimous support. It is not clear whether it is a formal UN deal.”

The result of a binding agreement left Swartz to ponder “What Ever Happened to OPEC’s Roar?” in his WSJ blog yesterday: “The world’s biggest oil producers in OPEC turned out to be among the quietest of the several hundreds of groups attending Copenhagen. What happened to public demands for many billions of dollars in financial compensation from consumer nations for using less oil down the road, a possibility prior to the conference? Not a whimper here.”

Saudi delegate Sabban was “pushed into the shade” and was virtually silent, according to Swartz. He suggested that failure at Copenhagen to reach a “bold pact” may have “made it a lot easier for OPEC officials to stay mum and even to apparently muzzle some who’d been the loudest prior to the conference.”

The Copenhagen Accord will be reviewed by 2015, after the next Intergovernmental Panel on Climate Change assessment of the global climate. Plans for post-Copenhagen 2009 reviews led Swartz to ominously warn that “OPEC will face the music at some point of a new, comprehensive and legally binding pact for capping carbon-emissions.”

Editor’s Note:

In November, Saudi Arabia became involved in the Houthi insurgency when rebels attacked and killed border guards precipitating a strong military response from the Kingdom. The conflict is documented on SUSRIS, in a special section, and on the SUSRIS Blog. Today we provide for your consideration an essay by George Joffe of the Department of Politics and International Studies at the University of Cambridge, courtesy of Bitterlemons. The Bitterlemons.org Web site is an excellent source for essays, interviews and articles on the Palestinian-Israeli conflict and related regional developments. You can find more at Bitterlemons-International.org including this week’s edition with the other articles on the topic.

Yemen troubles could stir wider confrontations
George Joffe

Just six short months ago, a sense of guarded euphoria spread through Europe and the Middle East in the wake of President Barack Obama’s Cairo speech. It seemed as if, at long last, an American president had understood the crying need for action over regional problems and the terrible damage done by years of abuse and neglect. Now, in the wake of the president receiving the Nobel Peace Prize–awarded, apparently, for what he is going to do rather than for what he has done–things look very different.

During this time, existing crises in the Middle East and North Africa–continuing violence in Iraq, tensions over Iran’s nuclear program or Jordanian King Abdullah’s “arc of Shi’ite extremism”, as well as the crisis in Palestine–have been joined by new ones that seem much more immediately threatening. Thus the domestic crisis in Iran has generated an intensified intransigence over the country’s nuclear program and corresponding American and Israeli impatience, now increasingly backed up by European states, the United Nations and even China and Russia. An attack on Iran, for instance, which seemed so remote in June is now back on the agenda. The crisis in Afghanistan and Pakistan–Obama’s “war of necessity”–is ever more threatening as western confidence in victory ebbs away.

In Iraq–even if the violence of the past has been dramatically reduced with only 122 deaths throughout the country in November, the lowest number since the American invasion in 2003–the long-running sore of the future status of Kirkuk, as part of Iraq or the capital of Iraqi Kurdistan, is bubbling toward a climax as the security forces of both the Kurds and the federal government in Baghdad confront each other. And in North Africa, Morocco is becoming increasingly irritated by Algerian insistence on a referendum for self-determination in the Western Sahara, while Algeria and Egypt square up over the issue of football. The ritual mutual vituperation there is intense, diplomatic links have been put in the deep freeze and Egyptian investment in Algeria is threatened.

Yet, surprisingly, none of these issues, except perhaps the crisis in Gaza, has as much potential for real violence in the immediate future as the situation in Yemen. There the veteran government of Ali Abdullah Saleh faces two rebellions; a recent recrudescence of separatist sentiment in the south that is shaping up as a real threat to the regime and the long-standing al-Houthi rebellion in the north of the country. It is the al-Houthi rebellion that increasingly seems to have the potential to become a cause of regional conflagration, bringing the two regional hegemons, Saudi Arabia and Iran, into conflict.

The rebellion began in June 2004, pitting a former parliamentary deputy, Husayn Badr Ed-Din al-Houthi and a few thousand supporters from the Sa’ada area, against the government. Al-Houthi was ferociously opposed to both al-Qaeda extremism because of its treatment of Shi’ites in Afghanistan and to the pro-American policies of the Saleh regime because of his intense distrust of both the United States and Israel. He created a new political movement called the Sha’ab al-Muminin (the Young Believers), acquiring significant religious status among the Za’idis of northern Yemen because of the fusion of Za’idi doctrine into his political beliefs.

Al-Houthi himself was killed the following September but, by then, the rebellion had grown and taken on a sectarian character because of Za’idi resentment of the repressive violence of the Yemeni army, which they saw as a predominantly Shafi organization even though the president himself is a Za’idi. The growth in support had also been driven by Yemeni dislike of America’s “war on terror” in which the Yemeni government was now enmeshed. As a result, in March 2005, rebellion broke out anew under the leadership of al-Houthi’s father, a Za’idi mullah.

Since then, the rebellion has smoldered on, repeatedly erupting in periods of intense violence that government forces are increasingly unable to control. Mediation in 2007 by the head of the al-Hashid tribal confederation (Yemen’s largest), who is also head of the Islah opposition in parliament, has been unsuccessful. Two similar attempts by Qatar in 2007 and 2008 also failed, while tens of thousands of residents in the Sa’ada area have been forced from their homes. The latest explosion occurred last May and still continues, with 150,000 persons displaced and the rebels now promising to extend the struggle into the north and the south of the country. In November, al-Houthi elements are said to have infiltrated across the Saudi border, bringing intense Saudi military retaliation to force them back, although nobody knows whether this will be permanently effective.

It is this that has given the conflict inside Yemen its increasingly threatening regional character. The Yemeni government, with little evidence, has long insisted that Iran has been behind the rebellion, providing it with material support. Now Saudi Arabia is hinting that this is the case, while Iran has suddenly begun to take an interest in the plight of the Za’idis, as fellow Shi’ites. All that is needed now is for Iran to decide to provide the material support that it has been long accused of doing, something the Ahmadinezhad government might well be tempted to do, to divert domestic opinion. Saudi Arabia would be bound to respond, as part of its wider challenge to Iranian radicalism throughout the “Shi’ite arc of extremism”. The al-Houthi rebellion, in short, is now set to become a metaphor for a much wider Middle East confrontation.- Published 17/12/2009 © bitterlemons-international.org.

George Joffe is affiliate lecturer at the Department of Politics and International Studies at the University of Cambridge.

[Reprinted with permission of "bitterlemons"]

Editor’s Note:

This week leaders from the six member states of the Gulf Cooperation Council met in Kuwait for the organization’s 30th Summit. Dr. Joseph Kechichian, in a Gulf News op-ed today, called the summit “yet another search for security and stability, both of which hang by a bare thread.” He noted that the “oft-repeated ‘one Gulf, one destiny, one nation’ slogan sounds good, but everyone knows that there are several Gulfs, fates and nations in the area, whose interests coincide as much as they diverge.” He added, “To assume that member-states are on the same wavelength would be optimistic, and it remains to be determined whether those attending the summit will manage to implement palpable new decisions.”

As we review the results of the Summit we are reminded of a thoughtful essay by Dr. Christian Koch of the Gulf Research Center published by Khaleej Times on the eve of the summit which sounded concerns about the effectiveness of the Council similar to those addressed by Dr. Kechichian. Koch questioned the record of accomplishments noting results did not match the “lofty statements about common challenges, mutual traust and good neighborliness.” He noted that King Abdullah of Saudi Arabia, during the 2006 summit acknowledged that more needed to be done by the group, “What has been achieved so far is still far below the expectations of our people.” Koch calls for the Council to undertake an assessment to define the way forward with a “bolder and more concrete strategic vision.”

Today we provide for your consideration Dr. Koch’s essay, “What about the GCC itself?” and thank him for permission to share his perspectives with you.

What about the GCC itself?

Regional security concerns predominate but the focus should be on developing the GCC

Christian Koch
Director of International Studies
Gulf Research Center

On December 14, 2009, the leaders of the six-member Gulf Cooperation Council (GCC) will gather for their annual summit meeting this time hosted by Kuwait. While the leaders will gather with much fanfare and press attention will be significant, much of the outcome of the meeting is predetermined. In fact, the final communiqué will almost certainly include references to the need for Iran to abide by its international commitments regarding its nuclear program and criticism of the failure of Israel to effectively engage in the peace process; it will almost certainly voice support for the fight against terrorism, as well as stress the right of Saudi Arabia to protect its border with Yemen and to take action against possible al-Houthi incursions there. In fact on all internal and regional issues, there exists a basic agreement among the GCC member states about the nature of the challenges being faced. This, in turn, allows the organization to display a common and united front.

What will be missing, however, is a clear agenda and agreement about the steps needed to face those challenges and resolve them. And this points to a fundamental problem. For what is certainly going to be missing from the summit communiqué is a focus on the internal development of the GCC as an organization and how institutional mechanisms can be implemented which ensure that the GCC is a responsive multilateral body ready to contribute effectively to conflict resolution and management in its immediate neighborhood.

After nearly 30 years of existence, the GCC has in fact failed to develop institutionally. Ever since its establishment in 1981, there have been numerous lofty statements about common challenges, the need for mutual trust, and good neighborliness. But this stands in contrast to the actual progress being achieved on the economic, political as well as security fronts. To be sure, important decisions have been made with regard to the implementation of a GCC customs union, a common market, a common currency, a Gulf Defense Pact, and an agreement on counter-terrorism cooperation, just to name the most important announcements. There has also been a greater frequency of meetings and exchanges of views among GCC ministers at all levels in recent years, thus allowing for greater convergence of ideas and generally more common positions.

Yet, it cannot be claimed that announcements have been followed by effective implementation. The customs union still does not function properly after seven years, how the Gulf Defense Pact is to be operationalized remains a big question, a planned counter-terrorism center has failed to receive the necessary backing, the GCC common currency currently only includes four members and even here it is not clear when the Gulf dinar is to come about, and political relations are conducted in personal ways rather than on a more permanent institutional level.

If one were thus to draw a balance sheet concerning the accomplishments of the GCC, the outcome of the assessment would be meager at best. While things look good on paper and appear to be moving in the right direction, implementation at all levels has lagged considerably behind the stated intentions of GCC leaders. Overall, GCC decisions continue to be defined by quantity more than quality. This was acknowledged by King Abdullah of Saudi Arabia during the 2006 summit meeting when he stated that: “What has been achieved so far is still far below the expectations of our people.”

More importantly, what appears to have been lost in the last two decades is the sense of purpose and spirit of the early 1980s that brought the Arab Gulf countries together. When the GCC was formed, it was not only a reaction to the regional turmoil that engulfed the region at the time which included the Iranian Revolution, the Soviet invasion of Afghanistan and the outbreak of the Iran-Iraq War in September 1980. In fact, a process had been in motion prior to these events that had resulted in such achievements as the Gulf Ports Union, the Gulf Organization of Industrial Consultancy (GOIC) and the Gulf Federation of Chambers of Commerce and Industry, among others. In essence, there existed a growing realization that joint action was the way forward and there was a broad spirit among all leaders to promote greater Gulf unity. That spirit, however, is now missing.

All of this should provide some pause for thought. More than holding annual summit meetings that follow a pre-determined agenda, it would be much more important to undertake a serious assessment of the GCC as an institution and define more clearly the forward path for cooperation. What is required is a bolder and more concrete strategic vision that outlines the steps necessary to achieve truly effective integration and allows the GCC as an organization to gain more power and relevance. For the moment, it is simply not very clear what value is being added by the GCC.

Curiously, there appears to be an opposite process in place with regard to the GCC when compared to that of the European Union. In the GCC states, the population firmly supports the further move towards closer cooperation while the leadership has so far refrained from carrying these aspirations forward. In the EU, the political will for integration exists but it often finds its obstacle in popular opinion. Given these circumstances, it would appear as even more imperative that GCC leaders take a time-out and assess the real progress and development that has been achieved and map out the way forward so that the GCC in the near future begins to reflects the needs of its people.

Naturally, one needs to be realistic and understand that the move towards integration is a process that needs to be organic and homegrown. Nothing can be imposed. Yet, it would make sense to convene an intergovernmental conference that discusses the ways and means to strengthen the GCC Secretariat, increase its capacity and make its functioning more effective. Such an intergovernmental conference should be convened prior to the 30th anniversary of the GCC in 2011. Further, as part of the process of self-evaluation, it might be worthwhile to consider forming a working group of GCC intellectuals that can undertake an independent review with the objective of making concrete policy recommendations. Such a review will likely acknowledge that the numerous security challenges that the annual GCC summit now concerns itself with not only make closer cooperation among its members more urgent than ever but also would be more amenable to a resolution if there is a common and united GCC policy in place. As a result, the sooner the process of a review is started, the better.

(Originally published in Khaleej Times, December 13, 2009)

Reprinted with permission of the author.
About Dr. Christian Koch:

Dr. Christian Koch is the Director of International Studies at the Gulf Research Center located in Dubai, UAE. Prior to his appointment, he worked as Head of the Strategic Studies Section at the Emirates Center for Strategic Studies and Research, Abu Dhabi. Dr. Koch received his Ph.D. from the University of Erlangen-Nürnberg, Germany with a thesis on the role of voluntary association in the political development of Kuwait. He also studied at the American University in Washington, D.C. and the University of South Carolina. Dr. Koch has published on various issues related to Middle East political development and Gulf strategic issues and is a regular contributor to regional newspapers and media. He is the editor of Unfulfilled Potential: Exploring the GCC-EU Relationship (Dubai: Gulf Research Center, 2004) and of the Gulf Yearbook (2005 to 2008 Edition) as well as co-editor of Gulf Security in the Twenty-First Century (Abu Dhabi: ECSSR, 1997) and A Window of Opportunity: Europe, Gulf Security and the Aftermath of the Iraq War (Dubai: Gulf Research Center, 2005). He has contributed numerous chapters to edited volumes including Elections in Asia: A Data Handbook (Oxford University Press, 2001); Der Irak: Ein Land zwischen Krieg und Frieden (Palmyra, 2003) und Der Islam in der Gegenwart (München: C.H. Beck, 5. Auflage, 2006). Dr. Koch also serves as a contributor to Jane’s Sentinel Publications on Gulf issues. He is a member of the advisory board of the German Orient Foundation since January 2007.

About the Gulf Research Center:

The Gulf Research Center (GRC) is an independent research institute located in Dubai , United Arab Emirates (UAE). The GRC was founded in July 2000 by Mr. Abdulaziz Sager, a Saudi businessman, who realized that in a world of rapid political, social and economic change, it is important to pursue politically neutral and academically sound research about the Gulf Cooperation Council (GCC) countries and disseminate the knowledge obtained as widely as possible. The GRC seeks to provide a better understanding of the challenges and prospects of the GCC countries.

187 Oud Metha Tower,
11th Floor, 303 Sheikh Rashid Road,
P.O.Box : 80758, Dubai. UAE.
Tel. No : +971-4-324 7770
Fax. No : +971-4-324 7771
Email: info@grc.ae

Editor’s Note:

The Saudi Gazette reported December 11, 2009 that Sheikh Ahmed Al-Ghamdi, head of the Hai’a, in Makkah – the Commission for the Promotion of Virtue and Prevention of Vice in the Kingdom – spoke in support of the “mixing of the sexes.” His comments came in the wake of the highly publicized firing of a senior cleric who challenged the coeducational policy at the Kingdom’s newly opened, showcase postgraduate campus, the King Abdullah University of Science and Technology at Thuwal. The KAUST campus’ coeducational studies policy is a concept not previously permitted in public institutions in the Kingdom. Today we provide for your consideration a report on the controversy.

Coed Saudi Campus is Focus of Reform Controversy
By Patrick Ryan
Published December 12, 2009

Two years ago King Abdullah broke ground on a world-class postgraduate research university along the Red Sea Coast north of Jeddah that would bear his name and spelled out his vision for what he considered to be the modern House of Wisdom, or Bayt Al-Hekma, an intellectual landmark of the “Golden Age of Islam.” He called for the King Abdullah University of Science and Technology, or KAUST, to become a bridge between cultures and nations, adding, “We hope that the university carries out its noble humanitarian message in a pure and clean atmosphere, taking the help of God and then that of enlightened intellectuals all over the world, without any bias or discrimination.”

This September King Abdullah presided over the inauguration of KAUST and of more breaking ground — the introduction of a coeducational campus in the conservative Kingdom. Men and women at KAUST working together on the high-tech campus without restrictions are contrary to the interests of traditional elements in the religious establishment. “Coeducation is a sedition and an absolute evil,” said Sheikh Sulaiman Al-Douish in a communiqué following KAUST’s opening. His condemnation was echoed by fellow cleric Sheikh Abdul Aziz Al-Toraifi, according to Habib Trabelsi, writing in SaudiWave.com. Al-Toraifi called gender mixing at the campus “an evil act.” Trabelsi said the reaction was cast by some as a war between the “guardians of virtue” and the “agents of America,” the religious establishment hardliners versus the “liberal current.”

The war of words grew increasingly vicious within days with positions being staked out on web sites, columns and television interviews. One such appearance by Sheikh Saad Al-Shithri, a recent appointee of King Abdullah to the influential Council of Senior Scholars stoked the controversy. Al-Shithri called for the separation of the sexes at KAUST in an appearance on an “Islamic” channel called “Al Majd,” according to Faisal Abbas on Huffington Post, saying mixing “is not allowed as it could lead to greater sins and vice.” Abbas noted the senior cleric said sexual harassment, rape and blackmailing were examples of the evils that could occur in a mixed environment.

The cleric’s criticisms of the King’s university drew a sharp response from the editor of the Saudi daily Al Watan, Jamal Khashoggi according to Abbas. Khashoggi accused Al-Shithri of attempting to interrupt “the progress of the nation,” and, Abbas reported, providing ammunition for those who reside in the “caves of Afghanistan” who have labeled the country’s leadership as “infidels.” Khashoggi said of Al-Shithri and the hardliners, “This is a strategy for the conservatives to control the university or at least to have a major say in it. This is the old trick for them to have the upper hand to sabotage reforms.” Other articles in the Saudi press criticized Al-Shithri’s views, some pointing out that mixing was not inconsistent with the teachings of Islam.

On October 4th the Saudi Press Agency reported that Al-Shithri was out, sacked from the Council of Senior Scholars by King Abdullah. The abrupt and very public disposition of the cleric was a move calculated to send a message, according to Thomas Lippman, author and adjunct scholar at the Council on Foreign Relations. He told SUSRIS the King wanted to make sure the religious scholars, the Ulema, understand they “are employees of the state and therefore had better toe the line.”

This week Sheikh Ahmed Al-Ghamdi, head of the Hai’a, in Makkah – the Commission for the Promotion of Virtue and Prevention of Vice in the Kingdom – spoke in support of the “mixing of the sexes” during an Okaz interview cited by the Saudi Gazette. “Mixing was part of normal life for the Ummah and its societies.. ..The word in its contemporary meaning has entered customary jurisprudential terminology from outside.” Al-Ghamdi said, “Those who prohibit the mixing of the genders actually live it in their real lives, which is an objectionable contradiction, as every fair-minded Muslim should follow Shariah judgments without excess or negligence. In many Muslim houses – even those of Muslims who say mixing is haram – you can find female servants working around unrelated males.” Al-Ghamdi went on to praise KAUST as an “extraordinary move and huge accomplishment to be added to the Kingdom of Saudi Arabia’s record and the history of the Islamic Ummah. It is a great step which the Ummah can look up to in recapturing its role in civilization and its scientific honor.”

Talking about the surprising position taken by a leading Hai’a figure, historian Robert Lacey, author of “Inside the Kingdom: Kings, Clerics, Modernists, Terrorists and the Struggle for Saudi Arabia,” told SUSRIS: “The cynics will say, of course, that after decades of enforcing excessive segregation, this is a fine time for the religious police to discover that the social mixing of the sexes is okay, after all. But it is better late than never, in my opinion. And this is how the Kingdom works: the King takes the lead and the elite follow. The larger question is whether the message will be accepted at the grass roots. The logic of what Sheikh Al-Ghamdi is saying is that all Saudi campuses should now allow social mixing, but I am not sure that will happen any time soon. A lot of the traditionalist websites have come out very strongly against Al-Ghamdi’s statement and he is being denounced as a traitor – or that ultimate insult ‘a government sheikh’.”

The message transmitted by Al-Shithri’s sacking appears to have been received, at least in some quarters but certainly not universally among the clerics. “Despite his position, the Sheikh is not, in fact, a heavyweight religious figure,” said author Lacey. “He is no Salman Al-Awdah. He is following a trend not setting it. But I think his change of direction is significant. Sometime ago he and his men were involved in quite a notorious ‘sting’ operation to send out a message that the religious police were intent on enforcing segregation. Now he seems to be giving out a contrary message, so it shows the way that a certain wind is blowing – and it clearly heralds a bitter division in the conservative religious ranks that is likely to grow.” Lacey said the arguments by the Sheikh and the other religious scholars who have spoken out in support of KAUST, were more significant in that they shadowed the tactics the King used to outflank the conservatives.

According to Lacey, King Abdullah is not saying, “‘Mixing of sexes on campus is the modern way.’ He is saying, ‘This is the traditional way, derived from the best precedents in the Islamic past.’ He is playing the fundamentalists at their own game – as he has done with his entire KAUST campaign, arguing that he is not so much building a 21st century university as going back to the great old days of the Bayt al-Hekma, the House of Wisdom, and the finest traditions of Islamic learning.”

The launch of KAUST may have provided the venue for the current skirmish but as Lippman told SUSRIS, “The issue with KAUST is not really about the university, it’s about who is going to set the agenda for the country – the royals or the Ulema. We now have the answer, which has been the same answer since the battle of Sibila,” referring to the decisive defeat of religious rebels by Saudi Arabia’s founder, King Abd al-Aziz, in 1929.

The pace and breadth of reform will likely continue to prove controversial and as Lacey noted, “It is a very profound battle for the allegiance of Saudi Arabia, and we shall have to see whose interpretation of history prevails.”

Editor’s Note:

Today we provide for your consideration an evaluation of the impact of Dubai World’s announced debt “standstill” on the Saudi economy provided by Jadwa Investment of Riyadh on December 8, 2009. We thank Jadwa Head of Research Mr. Paul Gamble and Chief Economist Brad Bourland for sharing this important assessment with SUSRIS.

Saudi Arabia unaffected by Dubai debt woes

The debt problems in Dubai will have little impact on Saudi Arabia. Saudi banks have minimal exposure to the affected companies in Dubai and the direct impact on the Saudi economy will be small. Confidence about the unique dynamics of the Saudi economy meant that the stock market was largely unscathed.

On the first day of trading since Dubai World announced a standstill on its debt repayments, the TASI fell by only 1.1 percent, albeit on very low volumes. On Sunday, the TASI rose before falling back on Monday after another sharp fall on the Dubai stock market. Saudis are permitted to invest in the Dubai stock market and vice versa. It is therefore possible that some Emirati investors cut their holdings of Saudi shares to cover losses at home. However, this would not be significant enough to have an impact on the market as their holdings are small (non-Saudi GCC investors accounted for 1.2 percent of total trade by value on the Saudi stock market in November). Non-Emirati GCC investors were responsible for just over 5 percent of total trades by value on the Dubai Financial Market in September (latest data).

Saudi banks have very little exposure to Dubai World. The SAMA governor put the exposure at just 0.2 percent of total assets. Of Dubai World’s total liabilities of $59 billion, only those of its property companies, Nakheel and Limitless (worth a combined $26 billion) are being restructured. It is possible that some Saudi banks hold the sukuk issued by Nakheel, but this will only be a very small proportion of their total investment portfolios.

We do not expect serious direct fallout on the Saudi economy. Companies working on projects in Dubai may see some impact and questions are likely to be raised about the projects that Dubai government-backed enterprises are working on in the Kingdom. The only project being undertaken by one of the affected real estate companies is Limitless’ $12 billion Al Wasl real estate development in north Riyadh, which is currently at the infrastructure construction stage. UAE developer Emaar, while owned by the government of Dubai, is not part of Dubai World. We therefore do not think that work on the King Abdullah Economic City, being undertaken by its local subsidiary, Emaar Economic City, will be affected. Other Emaar projects in the Kingdom (Khobar Lakes and Jeddah Gate, both in early stages of construction) are potentially more vulnerable to developments in the UAE real estate market.

No data is available on Saudi real estate ownership in Dubai. Anecdotally, we do not think that Saudi investors are heavily exposed. Furthermore, investors in individual units have already seen property prices fall sharply and therefore almost certainly suffered the bulk of their losses before the debt standstill. The same applies for those Saudi companies that financed developments in Dubai.

More generally, Saudi businesses in Dubai will be exposed to a likely renewed downturn in the local economy. Prior to the standstill there had been signs that confidence was returning (notably, property prices had risen and the exodus of expatriate workers during the summer was far lower than had been expected), but this process has been set back. As a result of the renewed troubles in Dubai, the IMF has said it is likely to revise down its real GDP growth forecast for the UAE as a whole from 3 percent to around 2 percent.

A final potential implication of what happened in Dubai for Saudi companies is in the sukuk market. Saudi companies have been looking at sukuk as an alternative source of finance, given the reluctance of commercial banks to lend. A $3.5 billion sukuk issued by Nakheel, due to mature in mid-December, is set to be the first major sukuk default. This will provide a serious test for the mechanism for resolution of legal issues around sukuk and if not handled smoothly and equitably could complicate sukuk issuance for local companies. Investors will also insist on clarity of government support for part- or fully-owned government companies after the government of Dubai distanced itself from the debts Dubai World, contrary to the assumption of many investors.

For comments and queries please contact the author:

Paul Gamble
Head of Research
pgamble@jadwa.com

or:
Brad Bourland
Chief Economist
jadwaresearch@jadwa.com
Phone +966 1 279-1111
Fax +966 1 279-1571

P.O. Box 60677, Riyadh 11555 
Kingdom of Saudi Arabia

Editor’s Note:

Today we provide for your consideration the November bulletin from Jadwa Investment in Riyadh. It provides solid insights into the performance of the Saudi Stock Exchange, or Tadawul (TASI); a revised forecast for the Kingdom’s budget — expected to see a record surplus; an overview of Saudi economic performance; an insightful explanation of the change in the formula for oil pricing and a brief look at the oil market. We thank Jadwa Chief Economist Brad Bourland for sharing this valuable report with SUSRIS readers. [The Jadwa Monthly Bulletin for November was released prior to Dubai's announcement of a $60 billion debt "standstill."]

Jadwa Investment – Monthly Bulletin

TASI continues to lag

The TASI continues to underperform global markets despite reasonable third quarter results and improving economic conditions. Annual earnings per share growth in the third quarter fell by 33.8 percent, the largest decline since the final quarter of last year. In quarter-on-quarter terms earnings growth also deteriorated, to -18.9 from 11.7 in the second quarter. This decline reflects seasonal factors, given that the third quarter includes the peak holiday season, very hot weather and, at present, Ramadan. Nonetheless, since the end of October the TASI has underperformed the US S&P 500 and the MSCI emerging markets index by around 5 percentage points.

Only three sectors recorded year-on-year earnings per share growth: insurance, utilities and retail. The large growth in the insurance sector reflects the expansion of operations and move into profitability of many of the new insurance companies that have been launched over the last few years. The utilities sector is dominated by the Saudi Electricity Company, which generally has a strong third quarter, as the summer is the peak time for energy consumption, notably by air conditioners. For retail the growth in part reflects a reduced burden from inflation, which was rapidly eroding consumers’ disposable incomes in the third quarter of 2008, though the growth is concentrated in two companies; others recorded large declines in earnings.

Petrochemicals was the worst performing sector, owing to the impact of the global recession on demand and prices. Ethylene prices were 30 percent lower in the third quarter of this year than in the third quarter of 2008, when they hit an all-time high. Profits at Sabic were down by 50 percent in year-on-year terms, though this was better than most analysts’ expectations. With the prices of most petrochemical products well above their levels for the fourth quarter of last year, the sector is likely to be one of the fastest growing in the final quarter. The two smallest sectors on the TASI, hotels and resorts and media and publishing were the second and third worst performers in the third quarter.

Earnings per share in the third quarter were 18.9 percent lower than in the second quarter. The worst performing sector was hotels and tourism. While this sector benefits from the seasonal trend, it was affected by one company booking large revenues from a one-time land sale in the second quarter. The sharp decline in earnings per share by cement companies is because this industry is more affected than most by seasonal conditions given that hot weather makes cement difficult to work with (as it sets very quickly) and affects the working hours for those operating outdoors. The best performing sectors on a quarterly basis were the same as those that reported the strongest year-on-year results.

Initial market response to the third quarter results was favorable and the TASI maintained its upward momentum during the first three weeks of October (when the bulk of the results were announced). Subsequently the market has fallen back and has again failed to respond to an upward trend in global markets. We think the following factors are currently holding back the Saudi market:

• Tough credit environment: Concerns about the fallout from high profile financial difficulties at two local businesses remain. Banks increased provisioning for bad debts by SR1.7 billion in the third quarter and remain cautious about lending; credit to the private sector was up in September, but only by 0.5 percent.
• Corporate selling: We think that some companies have taken advantage of recent gains in the market to sell in order to raise funds. Corporations were large net buyers in October, with total purchases of SR4.17 billion versus total sales of SR2.36 billion, but we have questions over the comprehensiveness of this data. Furthermore, publically available data show that some large shareholders are gradually reducing stakes in listed companies.
• Weak dollar: Low US interest rates and the prospect of currency gains are encouraging international investors to borrow in dollars to finance investments in higher yielding assets, including many emerging market stock markets, but the exchange rate peg and restrictions on foreign investment mean these flows are having little impact on the Saudi market. In addition, dollar weakness has reawakened concerns about inflation in the Kingdom.
• Tensions with Yemeni rebels: The TASI has moved sideways since an armed incursion into Saudi territory by Yemeni rebels in early-November. Although the tensions are not notably affecting the operations of listed companies or the economy in general, it seems likely that they have unsettled some investors.

A lack of confidence continues to hold back the Saudi market. At present, the market has a far greater response to falls than rises on global markets. Economic conditions are improving, but without greater investor confidence the market will struggle to make significant gains over the remainder of the year.

Economy watch: Budget surplus expected this year

With around a month of the year left and oil prices (WTI) holding above $75 per barrel, we have nudged up our forecast for oil prices this year. As a result, we now expect the Kingdom to record a budget surplus and smaller than previously expected current account deficit.

So far this year WTI has averaged $60 per barrel. With WTI above $75 per barrel for the past month and likely to remain around this level for the remainder of the year, we have raised our oil price forecast and adjusted our economic forecasts accordingly. Based on the assumption that WTI averages $75 per barrel for the remainder of the year, we have increased our oil price forecast to $62 per barrel from $58 per barrel (for Saudi crude the rise is to $60.8 per barrel from $55.7 per barrel, in part reflecting a lower discount to WTI).

The key change to our forecast caused by the higher oil price is that we now expect a budget surplus (of SR46 billion; 3.4 percent of GDP), compared to a budgeted deficit of SR65 billion. We estimate that the budget was based on an oil price of $48 per barrel and production of 8.1 million barrels per day. Oil prices are much higher than this assumed level yet the surplus is only expected to be relatively small. We think this is because spending is running well ahead of target. It is important to note that not all public sector spending is captured in the budget numbers. For example, spending by Aramco reduces the amount of oil revenues transferred to the government budget and is not classed as government spending.

Although we expect the government to have greater revenues, we have not altered our projection for government spending. This is because the government was already spending very aggressively in order to stimulate the economy and was comfortable financing this by drawing down reserves, if necessary. The additional revenues we are anticipating are not large enough to impact on the five-year spending program the government is currently pursuing. Government spending has been the main stimulus to the economy so far this year, but activity outside of those firms directly benefitting from this has been sluggish owing to problems accessing credit.

Higher oil export revenues have improved the outlook for the current account. Nonetheless, we still expect a slight current account deficit this year (of 0.8 percent of GDP). This will be the first deficit since 1998, but at such a small size it does not pose a problem for the Kingdom. A modest downward adjustment to our import forecast has also contributed to the slimmer current account deficit forecast. Imports were down by 16 percent over the first eight months of the year compared with the same period of 2008. For August alone, the decline was 29 percent; the largest monthly import total of last year was recorded in August, largely due to very high commodity prices. Non-oil exports are down by 22 percent over the first eight months of the year compared with January to August 2008.

We have also lifted our oil price forecast for 2010 to $75 per barrel from $70 per barrel, reflecting the higher base. As a result of this higher forecast we now expected the current account to be in surplus and a budget surplus of over 8 percent of GDP.

In brief: Economy

Year-on-year inflation is likely to have hit its bottom for the year of 3.5 percent in September. The current rate is the lowest since June 2007 and September was the tenth month out of the last 12 in which the inflation rate fell. We expect inflation to pick up in the coming months owing to the impact of the plunge in commodity prices and the fall in the dollar on the annual comparison. For example, although food prices (as measure by the IMF index) are 26 percent below their peak of last year, they are 2 percent above their level of one year earlier. The same trend, although of a different magnitude, is also true for transportation costs and the dollar (and therefore import prices).

Exchange rate forwards (which measure what the market expects the exchange rate to be in one year) recently hit their highest level in over a year. This may be an early sign of renewed pressure on the exchange rate peg. Some of the arguments used by those betting against the peg in late-2007 and early-2008 are again becoming more relevant. Notably, the US has consistently emphasized that interest rates will remain exceptionally low for a sustained period. In contrast, the Saudi economy is strengthening and will pick-up further next year, creating a divergence in interest rate needs between the Kingdom and the US. In addition, recent dollar weakening is adding to inflationary pressures. If pressure against the peg does materialize it will probably not be until the second half of next year. We do not foresee any change to the riyal’s peg to the dollar.

Although SAMA net foreign assets fell again in September, the Kingdom’s overall reserve position was broadly unchanged. Movements in SAMA net foreign assets are generally determined by oil revenues. However, last month they slipped by $1.9 billion to $380.5 billion despite healthy oil prices. This was the result of the deposit of funds at the IMF. Since the end of July the Kingdom has subscribed to two new allocations of special drawing rights (SDRs; the IMF’s unit of account) undertaken to raise the value of funds the IMF has to lend. These have increased the Kingdom’s holdings of SDRs to $11 billion from $748 million in July. SDRs are categorized as official reserves rather than SAMA foreign assets.

Rising remittance outflows illustrate that the number of expatriate workers in the Kingdom has continued to increase. Pakistan is the only country of the Kingdom’s main labor suppliers that breaks down remittance receipts by country of origin. Remittances into Pakistan from Saudi Arabia for the first 10 months of the year averaged $141 million per month, 20 percent higher than in the same period of last year. Data is available for the Philippines, but not broken down by country. This shows that the growth in total expatriate remittances to the Philippines has fallen significantly this year, to just 3.7 percent in the first eight months compared with the same period of 2008, versus a rise of 13.7 percent for the whole of 2008.

Oil market watch: Kingdom changes oil pricing formula

The Kingdom has modified its oil pricing formula. The move is technical and will not have a notable impact on total oil revenues. However, it may reduce modestly the volatility of oil revenues and should assist with the pricing strategy of Saudi Aramco.

Saudi Arabia does not sell its oil exports at a single price. Rather, 17 different prices are charged, depending on the grade of crude and where the consumer is based. Saudi Arabia sells five different grades of crude oil. Furthermore, it prices its oil to benchmark prices in four locations: North America, North West Europe, Mediterranean and the Far East (though one grade is only sold to the Far East).

In each case discounts or premiums to a benchmark price are set around three weeks in advance for sales that take place the following month. The Kingdom announced earlier this month that from January it will change its pricing benchmark for sales to North America from WTI, which it has been using since 1994 to the Argus Sour Crude Index (ASCI; which was launched in May 2009). This reflects a variety of issues afflicting WTI that have become more problematic in recent years.

Although WTI is one of the most widely used oil price benchmarks, it is a light sweet (meaning low sulfur content) crude oil and its price is just the price of light sweet oil delivered at Cushing, Oklahoma, a key oil supply hub. This leaves the WTI price vulnerable to factors specific to that location. Recently, WTI has been affected by a shortage of storage and pipeline capacity and refinery maintenance, which have periodically altered its relationship with other crude benchmarks such as Brent. WTI generally trades at a small and reasonably consistent premium to Brent, but over the past 18 months the premium has been volatile. With Aramco setting its pricing formula in advance, this volatility complicates pricing strategy. In addition, a lack of physical storage space has at times caused a sharp divergence to open between spot and forward prices.
Another rationale for changing the benchmark is that the bulk of Saudi crude now sold to North America is sour. ASCI is comprised of a basket of three US Gulf Coast sour crudes, while WTI is a sweet crude and therefore less representative of the Saudi export blend. Previously, Aramco had to include a projection for the differential between the price of sweet and sour crudes when setting its prices.

Finally, WTI futures contracts are the most active financial instrument for oil and the investment flows it attracts may introduce additional volatility. Derivatives contracts are not yet available on the ASCI (though several are planned), so changing the benchmark could potentially reduce the impact of financial flows on the price Saudi Arabia receives for its oil.

Using the new benchmark will eliminate some of volatility caused by local developments at Cushing and perhaps by investor use of financial contracts on WTI. The Kingdom sells around 1 million barrels against the new benchmark out of current production of 8.2 million barrels per day and global consumption of 85 million barrels per day. It will not have a noticeable impact on international oil prices and we have not altered our oil revenue forecasts.

In brief: Oil market

Oil prices have stabilized over the past month at just below the 13-month high of over $80 per barrel they hit in late October. Supply (both from Opec and non-Opec) and demand have both risen and the dollar has been relatively stable (as oil prices are denominated in dollars, investors buy oil to preserve the value of their dollars when it is falling against other currencies). We anticipate that all these trends will continue over the remainder of the year and accordingly have revised up our oil price forecast (WTI) for 2009 to $62 per barrel from $58 per barrel.

Oil demand continues to pick up in line with the improving global economy. According to the International Energy Agency, oil demand rose in the third quarter, the first quarterly rise since the third quarter of 2007, and is set to go up further in the fourth quarter, resulting in the first year-on-year growth in demand since the second quarter of 2008. Asia (particularly China) and the Middle East remain main source of demand growth. For the whole of 2009, the IEA projects oil demand of 84.8 million barrels per day, a decline of 1.5 million barrels per day on 2008 (in April the IEA was projecting a decline of 2.6 million barrels per day).

The Kingdom’s oil production has continued to gradually rise. Unofficial estimates put it at 8.2 million barrels per day in October, up from a seven-year low of 8 million barrels per day in April. Production has been creeping up throughout Opec (compliance with agreed quotas was around 65 percent last month) though this has yet to affect oil prices, which have been in excess of the $75 per barrel level considered “fair” by the Kingdom for virtually all of the last five weeks. Aramco has indicated to some customers in Asia that it will increase shipments in December, pointing to a further increase in production. However, we do not expect a formal change to Opec’s production quotas at its late-December meeting in Angola.

Oil and oil product stocks have generally fallen slightly, but remain high on an historical basis. Stocks in the OECD dropped to 60 days in September from 60.9 days in August, though this places them 3.8 days higher than in September 2008. US data, which is more up to date, show that crude and gasoline stocks are broadly unchanged since the end of September and distillate stocks have slipped marginally from their long-term high of early-October. The high level of stocks remains a concern to Opec and has the potential to weigh on prices should other factors become less supportive.

For comments and queries please contact the author:

Paul Gamble
Head of Research
pgamble@jadwa.com

or:

Brad Bourland
Chief Economist
jadwaresearch@jadwa.com
Phone +966 1 279-1111
Fax +966 1 279-1571
P.O. Box 60677, Riyadh 11555
Kingdom of Saudi Arabia

http://www.jadwa.com

Editor’s Note:

This week as millions of Muslims are in Saudi Arabia for the Hajj we are pleased to provide a series of articles that provide background information and perspective on the annual pilgrimage. This article which originally appeared in the online edition of The Christian Science Monitor, is part four of a five part Hajj “diary” series by reporter Faiza Saleh Ambah. You can find more articles, links and resources at a SUSRIS Special Section on “Hajj 2009.”

The Reluctant Pilgrim’s Grudging Return Home
By Faiza Saleh Ambah
Part 5

MECCA, SAUDI ARABIA – At the goodbye circling of the Grand Mosque, the final rite of the hajj, a Jordanian woman holding hands with her husband turns around for a last look at the Kaaba. Tears fill her eyes.

I know how she feels.

“Is that it? Aren’t there any more rites we can do?” I ask my cousin Allal. He laughs, but he understands.

In the middle of our final walk around the Kaaba, the geographic and spiritual center of Muslim prayers the world over, my cousin Allal succumbs too.

“God you are the Generous. God you are the Mighty. God, you who are capable of all things, help us defeat our enemies. Help us defeat our laziness. Strengthen our faith and bring us back soon to visit your house,” he says before his voice breaks from emotion.

I repeat after Allal, but my mind and eye wander, distracted by the colors, smells, and languages around me. In the mass of circling pilgrims, I see two Sufis in white turbans, their eyes closed, chanting in Turkish accents, “God is Great, God is Great, God is Great.”
Tradition says that the Kaaba was built by Adam and rebuilt by Abraham and the descendants of Noah. It is known as the House of God and is the center of our circumambulations. At one point, the crowd circling the large cube slows as we make our way around four Lebanese women causing a traffic jam. They have stopped to pray, kneeling on the marble skirt that surrounds the Kaaba, and just in front of a shrine that contains the footsteps of Abraham. Their husbands are standing and holding hands, forming a human chain around them.

On my left a group of Malaysians in purple and white outfits perform their Tawaf [the circling of the Kaaba] prayers in a singsong of heavily-accented Arabic, shuffling their feet to the rhythm. I join in with them, but Allal turns around and gives me a “keep up with me” look as we finish the last of our seven turns. Am I missing the point? I wonder. Isn’t being a spoke in this colorful wheel of humanity part of the point?

An hour later, squeezed in the back of the car returning to Jeddah, everyone around me is sleeping. But I am too scared to nod off. I have become very comfortable in this sanctified world of the past five days. I’ve been free of worries about money, how I look, jealousy, and envy. I don’t want to expose my self to the real world again.

When we arrive at my parents house, there’s a goat running around the garden. “You haven’t slaughtered it yet?” Allal asks the driver, and I look away from the goat with a splotch of green dye on its head, knowing it will be sacrificed soon.

The sacrifice represents the lamb with which Abraham’s son Ishmael was replaced at the last moment. We will dine on part of it, and the rest will go to feeding the poor.

Allal joins us for dinner and my sisters and I appear in our jeans and T-shirts. It’s the first time our hair has been uncovered since last Friday.

The television in the living room is broadcasting a scene from Mina in front of the Jamaraat pillars, and Allal can’t help but give a final lecture. “Do you realize the importance of stoning the devil? The 70 stones we threw at the devil mean the next 70 times he tries to whisper in our ear he’s already defeated.”

I smile because I’ve got 100 whispers from the devil to go before he reaches me; I was throwing pebbles in bunches on the third and final day.

A quarter of the sacrificial lamb is set at the dinner table but I don’t have any. Though I’m not a vegetarian, I’m disturbed by the sacrifice.

“It is symbolic of following God’s orders, whether or not you know what’s behind them, because God’s words always have wisdom behind them that we don’t understand,” my sister Reem says.

“In the sacrifice, it’s not the meat nor the blood that reaches God, but our piety, explains Taghreed.

It feels strange to sit around with my sisters, Reem’s long wavy hair still wet from washing, looking just like we did a week ago, but feeling that we’re not the same.

“What did you get out of the hajj?” I ask

“It made me realize that we are only here on this earth temporarily. Our real destination is the hereafter,” says Reem. “If you have fun going out with men, or to New Year’s parties, you want to have more parties and you forget God. But the hajj made very clear to me that we’re in transit. I want to prepare, from now, for the hereafter. Some people use drugs, or relationships in their search for God, but there’s a more direct way. Praying and continuously remembering Him.”

“Is the hajj something you can take with you?” I ask.

“We can leave the hajj with the experience of it inside us. We now know that being close to God works and makes you feel at peace,” says Taghreed. “We barely slept, we were up at dawn everyday praying, but the presence of God was energizing, instead of tiring.”

Alone in my room I stare at the mirror. I’m still not sure why we had to go around the Kaaba seven times, or the significance of reenacting Hagar’s search for water between the hills of Safa and Marwa. But I do feel different – more than the sum of my appearance, job, money, and education. I feel more centered and balanced, my backbone straighter. My inner space is larger and richer.

I want something to mark and remind me of this feeling, something I can wear or keep with me. I fumble around in my purse looking for a way to keep the hajj with me. I find only the badge which let me in and out of our camp in Mina and consider wearing it like a necklace, but discard the idea. I guess I won’t be able to use props. I’m going to have to remind myself – with a little help from above.

Last in a series.

Previously published by the Christian Science Monitor and reprinted with permission.

Editor’s Note:

“The Sun Never Sets on Dubai World” according to the banner across its Web site home page, but on Wednesday an eclipse darkened the skies over “Dubai’s flag bearer in global investments.” The holding company announced a $60 billion “standstill” asking for a six-month delay in repaying debt.

The announcement shocked the global financial nervous system sending markets into declines by Friday over renewed fears that economic recovery could be hurt by a further credit squeeze. Banking analyst David Williams at London’s Fox-Pitt Kelton told AP, “What we need for the economic momentum to continue is for banks to feel confident about lending, and clearly what has happened in the last 48 hours is not a step in the right direction.”

Analysts and investors seemed to catch their breath by later in the day Friday. AP reported Raymond James’ chief investment strategist Jeffrey Saut as saying, “People will dig into this over the weekend, but I think balance sheets have healed enough to withstand a shock like this.” On Sunday the UAE central bank announced it would stand behind Dubai banks providing a “liquidity facility” to reassure investors. The short term impact of the Dubai debt announcement may have been partially obscured by the long holiday weekend for U.S. markets and it will not be apparent until Monday. “The consequences of the financial crisis are going to play out for a while,” according to CEO Mohamed El-Erian of global bond trading leader Pimco. He told the New York Times, “Dubai could be the beginning of a series of sovereign debt issues or crisis.. ..What Dubai is going to do is make people think more intensely about the lagging implications of last year’s crisis. It’s going to be a wake up call to the people who thought that the financial crisis was just a flesh wound.”

What does the Dubai World shockwave mean for the financial profile of the Gulf region and, of particular interest to SUSRIS readers, of Saudi Arabia? Today we are pleased to present answers to that question and more from John Sfakianakis, Chief Economist Banque Saudi Fransi – Credit Agricole Group. We thank Mr. Sfakianakis for sharing his analysis “Dubai: after the plunge” with SUSRIS.

Dubai: after the plunge

Summary

• Concerns about Dubai’s potentially crippling default on enormous debts to global creditors have rattled investor confidence across the oil-exporting Gulf region.
• Dubai’s reputation has been impacted in a major way and it will be difficult for the emirate to recover from the negative backlash in the medium to long term.
• However, we believe that Abu Dhabi will come to the rescue.. ..but like all rescues it would have a price. In that case it may well be first of all a political price.
• Abu Dhabi is bound to suffer from the contagion from Dubai for the short term, but we expect the UAE capital will be in a position to overcome any risk profile pressure.
• Credit quality deterioration simply is not an issue in Saudi Arabia, Abu Dhabi and Qatar and we expect that in the short term, investors will calm down and begin to differentiate between “good” and “bad” bets in the Gulf region.

Assessing the regional fallout of Dubai’s credit disaster

Concerns about Dubai’s potentially crippling default on enormous debts to global creditors have rattled investor confidence across the oil-exporting Gulf region, prompting corporate issuers in the region to postpone or cancel bond issuances (e.g. Gulf Investment Bank) in the wake of the news.

We estimate Dubai’s debt upward of $80 billion. At the heart of the issue is whether state-run Dubai World, which holds more than $50 billion in liabilities, will be able to pay back its creditors. The conglomerate that runs flagship Dubai companies such as DP World, asked banks this week for a “standstill” agreement as it negotiates to extend maturities of debt, including the $3.52 billion in Islamic bonds due next month from Nakheel, the famed palm tree island developer. The bond at the centre of Dubai’s restructuring efforts, the December 2009 Islamic bond from Nakheel, has lost a third of its value since the announcement, the price having collapsed to 72 points from 111 beforehand.

Dubai’s announcement, which happened on Wednesday, sent shockwaves through European equity markets on fears that many banks could face massive writedowns on Dubai debt. Currency and bond markets across the globe were also exposed to developments that have become the source of the biggest destruction of confidence in Dubai’s history. To make matters more interesting the ports operator, DP World announced that it will be excluded from the debt standstill and restructuring of Dubai World and its subsidiaries. The company, the world’s fourth-largest ports operator, is 77% owned by Dubai World. DP World is considered the best asset within Dubai World. We think this move is clearly to differentiate the good assets of Dubai from the bad ones, and DP World is a good asset.

Credit default swaps across the region rose, including in Saudi Arabia, Qatar and Abu Dhabi which, unlike Dubai, hold rich hydrocarbon reserves. Dubai’s five-year CDS spreads are at three-month highs and there is further upside risk. Dubai, with sparse oil reserves, built its fortunes on real estate and financial services in recent years, borrowing heavily to finance megaprojects including three man-made islands shaped as palm fronds.

Regional bond sales have been impacted as spreads have widened. Gulf Investment Bank, owned by the Saudi Arabian Monetary Agency (SAMA) and the Public Investment Fund of Saudi Arabia, have decided to postpone the dollar bond sale. We are informed that other corporates in the region were preparing to tap the international bond market. We think that there will be a temporary lull but renewed activity will begin in the first quarter of 2010 as risk is readjusted for the entire region.

Credit quality deterioration simply is not an issue in Saudi Arabia, Abu Dhabi and Qatar and we expect that in the short term, investors will calm down and begin to differentiate between “good” and “bad” bets in the Gulf region. The Dubai debt debacle comes shortly after Qatar, the world’s top exporter of liquefied natural gas, sold $7 billion in bonds this month, subscribed mainly by investors in the United States and the United Kingdom. Orders for the bond issue, described as the largest by an emerging-market government, topped $28 billion – underpinning the genuine faith many international investors have in the region.

We think that in the future, global investors will need to differentiate between those Gulf economies that are debt-burdened and those whose leverage levels are incredibly low by global standards. Saudi Arabia, the world’s biggest oil exporter, has among the lowest levels of public debt in the G20, with domestic debt levels at 13.4% of GDP last year, compared with 81% in India and 50% in the United States. It also holds enormous foreign assets of SR1.46 trillion at the end of October, most of which is invested in low-risk, liquid investments.

Differentiating regional risk profiles

In view of these nuances, the region is often wrongly sold to the world as uniform when in fact the six states comprising the Gulf Cooperation Council (GCC) followed very different development models. Even within the UAE, Dubai and capital Abu Dhabi – holder of the majority of the state’s crude oil reserves – had followed two extremely different development paths this decade. Dubai built its economy using high leverage, with revenue streams that were tenuous. Dubai’s volatile real estate and services sectors did well during the boom years but fell victim to the global financial crisis, which triggered a slump in asset values, especially real estate. It should not be ignored that Dubai was above all an interesting real estate play which benefited the early entrants but turned out to be a bubble that burst. This approach differs heavily from Abu Dhabi, which was bringing in hundreds of billions of dollars in surpluses during this decade’s oil boom, but investing it in a more calculated, moderate pace that has mainly avoided the creation of asset bubbles. Despite the real estate development story in Abu Dhabi the authorities did not permit the development of a bubble. Dubai is now in a bind as its debt is more than nine time its 2008 revenues. That pattern is unsustainable.

Once the dust settles, we believe that there will be a flight to quality, with foreign funds favouring Saudi Arabia, Qatar and Abu Dhabi. Abu Dhabi is bound to suffer from the contagion from Dubai for the short term, but we expect the UAE capital will be in a position to overcome any risk profile pressure. Abu Dhabi controls 90% of the UAE’s oil reserves which are the fourth largest in the world. Despite the global financial crisis, the Abu Dhabi Investment Fund is one of the world’s largest sovereign wealth funds. Clearly, we think Abu Dhabi’s investment program and low key leadership offers reasonable reassurances about the country’s direction to avoid far fewer excesses.

The fate and handling of Dubai’s sovereign risk is impacting the way international markets perceive GCC sovereign risk. The Saad-Algosaibi debt default saga in Saudi Arabia, while shaking the credibility of regional borrowers, did not bring lending to Saudi entities in general to a halt. Rather, the situation forced creditors to reassess the risks involved with lending to different entities and categorise them accordingly. Corporates that are showing signs of transparency will begin to reap the benefits of finance from within the region and outside. However, state entities will continue to receive the bulk of trust from international lenders. In a similar way, Dubai’s debt problems will compel creditors to re-categorize sovereign risk. Dubai entities will have to work hard to bring back confidence in the state-enterprise model of Dubai which was based on high leverage and constraint income.

If there is anything we have learned so far from the global financial crisis is that leverage and debt without a strong revenue base cannot sustain an economy. We find Saudi Arabia to be leading the pack in terms of sovereign strength despite the corporate saga that lingers. Moreover, Saudi Arabia and Abu Dhabi never witnessed the real estate excesses that have punished Dubai in the past year.

There was never a real estate bubble in Saudi Arabia and if anything the property market is severely undersupplied. The government has made sure to pay down government debt during the boom years and budgetary spending has been counter-cyclical – careful during periods of high oil prices and aggressive during cycles of depressed oil prices.

We view Qatar as being equally strong as a sovereign, with a solid revenue base to back up its expansion. The excesses witnessed in the property sector were far more contained and used far less leverage, with most, if not all was locally generated. Hence we see very little risk that Qatar can generate going forward.

After the dust settles: what’s next for Dubai

Dubai’s reputation has been impacted in a major way and it will be difficult for the emirate to recover from the negative backlash in the medium to long term. The lack of transparency surrounding how the emirate plans to pay back debts reaching maturity has compounded investors’ perception of risk. Until the Dubai World announcement, investors had expected Abu Dhabi would provide Dubai with adequate funds to pay back its creditors. Just an hour before the debt restructuring news, Dubai announced it had sold $5 billion in bonds to two banks in Abu Dhabi in which the government holds substantial stakes. But the government quickly clarified these funds had nothing to do with the Dubai World debt restructuring.

Earlier this year, the UAE central bank, based in the UAE capital, subscribed for $10 billion in Dubai sovereign bonds, a portion of which went toward enabling state-linked developers pay outstanding dues to contractors. That move eased investor worries about a potential default by Dubai, but also raised questions about what Abu Dhabi would demand in return. The two emirates, although being part of the same federation, are run by separate ruling families.

The entire debt repayment scenario has now been thrown into question. The Nakheel bond is, after all, the most high-profile of Dubai’s debts and was regarded by many as a litmus test for how effectively Dubai – and Abu Dhabi – would treat maturing debts. Markets, puzzled about why the $5 billion raised by Dubai this week was not going to Nakheel bond creditors, will be watching for news on how the debt restructuring develops and what conditions Abu Dhabi could set for providing funds to pay outstanding loans.

Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum, also prime minister of the UAE, removed this month key executives who helped shape modern Dubai, including replacing the governor of the Dubai International Financial Centre, Omar bin Sulaiman, and removing the chairmen of Emaar Properties, Dubai World and Dubai Holding from the board of the Investment Corporate of Dubai, a body charged with managing the emirate’s wealth. At the newly reshuffled board of ICD, two of the ruler’s sons were brought in as directors. The change of guard will have to be tested and the results and management style would be watched closely by the international investor community. Moreover, the larger question of succession would be kept at the back of the international investors’ minds.

There has been little public announcement about the conditions attached to Abu Dhabi aid to Dubai and what level of autonomy the emirate would have to forego in exchange for the financial bailout. We believe that in the end, Abu Dhabi will be willing and able to provide adequate funds to enable Dubai to meet its debt obligations. We are not of the view that Abu Dhabi wants to have a “sick cousin” that would jeopardize the well-being of the Federation. Abu Dhabi wants to see Dubai’s economy return to a healthier state as many Abu-Dhabi based businessmen have invested in the property sector and the economy of Dubai at large. Abu Dhabi will have three avenues to pursue: pay, buy and bail out. This funding, however, will come at a cost not measured in money. Politics in this region is more powerful than simple monetary transactions. But in the end, Dubai will not be able to cover its debts on its own and the de-leveraging process could last not a few months but a few years.

Bailing out Dubai could be good for the Federation but nothing is for free. Will Abu Dhabi ask for additional control over Dubai? Will this make Dubai less autonomous? As there is no free lunch and all services have to be paid back the price that Dubai might have to pay back to Abu Dhabi is some of its autonomy. Dubai would have to yield to the conditions of its rich neighbour in order to save face among global creditors. It is very difficult for Dubai not to prevent Abu Dhabi from gaining additional influence, both at the level of the Federation as well as bilaterally. And the Dubai leadership’s language has changed and become more supportive of the Federation. The most vivid of all was the comments of Dubai’s ruler who said in earlier in November that people who speculated about relations between Dubai and Abu Dhabi should “shut up,” at an investors’ conference in Dubai. The ruling lines of both emirates are “the same family, not only that but the same tribe, the Bani Yas tribe,” he said. They “ruled many many tribes in the Arabian Peninsula for hundreds and hundreds of years.” It is important to note that it was only in 1996 that Dubai integrated its armed forces into the UAE’s military command. The sense of Dubai’s autonomy was also evidenced after the UAE’s establishment in 1971 where there were border check points, for many years, between Abu Dhabi and Dubai even if both were part of the Federation.

Dubai’s economy, meanwhile, is poised to face another backlash from the debt troubles, which are likely to shake investor confidence in its real estate sector once again and send prices that have already halved in the last year down further. Although Dubai’s property developers, controlled by the state, are trying to control real estate prices by holding back the release of additional apartment units onto the market it could be that prices could very well depreciate further. The emirate could also be forced to introduce further delays to infrastructure projects currently in the pipeline.

We think that Abu Dhabi plays a key role in supporting debt-ridden Dubai. Dubai’s leveraged property play has come to an abrupt and crashing end. Going forward Dubai needs to show resolve but also willingness to admit to greater transparency. Dubai also needed to better time the announcement of its the debt restructuring. Dubai is in dire straits and Abu Dhabi will come to the rescue but like all rescues it would have a price. As for the international investor base, it should become apparent to them that Dubai is not core of the GCC and there is far greater depth to the region that remains untapped.

John Sfakianakis, Chief Economist BSF – Credit Agricole Group
Johns@alfransi.com.sa

Certification:
The views expressed in this report accurately reflect the personal views of the undersigned analyst(s). In addition, the undersigned analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report.

John Sfakianakis

Calyon – Credit Agricole CIB

Editor’s Note:

This week as millions of Muslims are in Saudi Arabia for the Hajj we are pleased to provide a series of articles that provide background information and perspective on the annual pilgrimage. This article which originally appeared in the online edition of The Christian Science Monitor, is part four of a five part Hajj “diary” series by reporter Faiza Saleh Ambah. You can find more articles, links and resources at a SUSRIS Special Section on “Hajj 2009.”

A Hajj Diary: Pelting the Pillars, Again
Faiza Saleh Ambah
Part 4

MINA, SAUDI ARABIA – Our walk around the Kaaba Sunday night signals the end of our sanctified state, but not of the hajj. We perform dawn prayers Monday at the Grand Mosque in Mecca and head back to Mina for the two days of stoning the pillars representing the devil.

My sisters change into their regular clothes under their black abaya robes. I find myself clinging to the sanctity my white robes represent, but add a black and white head scarf.

Sunday’s deaths at the pillars give us pause. We want to continue our rites, but spend the day at the camp, waiting for the crowds to ease.

Monday evening, my sister Reem runs into our tent waving a set of pens and exclaims: “We won. We won.”

After sunset prayers, religious quiz contests are held in the men’s and women’s prayer rooms. Her team came second. Reem’s winning answer: a quote by the Prophet about what to say after prayers.
About an hour before midnight, my cousin Allal storms into our tent’s living room. “Get up, girls. Get ready. It’s time.”

Like soldiers preparing for battle, we put on our face masks, strap on our waist pouches, and count our pebbles – we need 21 today, seven for each of the Jamaraat pillars.

We’re told that tradition dictates that we go from the smallest obelisk to the largest. They represent the devil’s three appearances before Abraham. Pilgrims throw pebbles to send away Satan in the same way Abraham is said to have done.

There’s a sense of excitement and adventure and danger as we move slowly behind a camp employee carrying a banner with the name of our camp, The House of Faith. “If he drops the banner, I’ll pick it up and continue walking,” jokes Reem. “You guys just follow me.”

It’s close to midnight when we arrive at the bridge, lit up with fluorescent lights where we will stone the pillars at the second open-air level. Pilgrims with small red and white Turkish flags stitched on their vests speed by us trying to stay with a group led by a man shouting through a bullhorn. By the side of the bridge eight Albanians strike a pose like soccer players for the camera.

I feel a thrill when we get close to the first pillar. I spot a narrow opening in the crowd, grab the hand of my nephew Saleh, and move in. The crowd in front of me is four meters deep. I say, “In the name of God,” and jump up to free my arm so I can throw a pebble. After the third throw my pouch is empty. My pebbles must have fallen out while I was jumping. Saleh is out of ammo too, and starts picking up pebbles from the ground, and I join him.

We hurry to the second pillar, weaving through the crowd. I get so close my stomach is pressing against the wall surrounding the pillar. I can see the pilgrims on the ground level throwing their stones. Yesterday, my stones hit people in the back of the head. Today, it’s my turn to be pelted. I smile. I am happy I’ve gotten this close.

I push my way out of the crowd and meet up with Reem and Taghreed. We’re all smiling, as if our team’s just won the stoning championships. “We got him,” I say, referring to the devil.

We head back to our camp, pushing against the tide moving toward the pillar area. The main road is packed with vehicles. A bus stops across from the stairs that lead to the pillars, blocking a motorcycle and a police car accompanying a V.I.P. in a Mercedes with tinted windows.

Two policemen on the street start hitting the bus with their hands. “Move. Move now. ” It doesn’t budge.

I wait to see what happens. Such displays of defiance of authority are rare in Saudi Arabia.

“I’m discharging pilgrims,” the bus driver shouts back. I’ll move when they get out.”

I smile at his determination and walk off to join my sisters.

We’re strolling along beside people sleeping under trucks, in the baggage compartment of buses, under plastic sheeting, and in one-man pup tents. We move forward, and almost step on a man and his wife sitting on floor mats, chatting and sipping tea. About a dozen Filipinos are eating dinner – noodle soup with coconut shavings – on mats spread out on the road. A file of young men with long beards walks past chanting, Allah akbar (God is great). We’re across the street from them but Taghreed joins in, chanting until they pass.

I look at her as she watches their receding backs. Though everyone here is going about their business, I sense that we are all connected by the experience.

Reem stops by a stall selling long robes and buys one for Saleh. I buy some prayer beads. Taghreed asks for cigarettes but can’t find any.

She bites into her apple. “That was really fun. I feel exhilarated. I feel as if a huge load’s been lifted off my shoulders.”

I’m not sure if it’s the disjointed sleep, or the changed eating habits, or being in the same tight space as 2 million praying pilgrims, but I, too, have started to feel lighter, with an unexpected warmth in my chest.

Next: Our last trip to Mecca

Previously published by the Christian Science Monitor and reprinted with permission.

Editor’s Note:

This week as the Hajj is about to begin we are pleased to provide a series of articles that will provide background information and perspective on the annual pilgrimage in Saudi Arabia. This article originally appeared in the online edition of The Christian Science Monitor. This article is part three of a series that will be provided in SUSRIS over the coming days as we mark this year’s Hajj in Saudi Arabia. You can find more articles, links and resources at a SUSRIS Special Section on “Hajj 2009″.

A Hajj Diary: A Pilgrim Fends Off Temptation with Pebbles and Prayers
By Faiza Saleh Ambah
Part 3

MINA, SAUDI ARABIA – I haven’t listened to music, watched television, or read a novel since last Thursday. My hajj so far has been three days of sermons, lectures, and rites; a bit like religion camp.
After dawn prayers Saturday in Mina, the 10 of us squeeze into the four-wheel drive heading for Arafat, where we will spend the day in prayer until sunset. We’re seated in the back and I ask my sisters Reem and Taghreed if, like me, they find our guide attractive. Reem’s answer is a smile. She intones the Talbiya (the oft-repeated hajj prayer): “Here I am God. Here I am. Answering your call. Here I am, God, at your service..”

“What? You mean I shouldn’t even think that?” I ask.

“You can think it, but then take it out of your mind,” Taghreed says. “And not share it,” adds Reem.

I look out the window. The three-lane road from Mina to Arafat is covered with men and women in white walking, riding double-decker buses, or sitting on top of buses where the baggage is supposed to go. Cops in fluorescent vests and face masks keep traffic circulating and huge police tow trucks are parked at intervals.

The line of people moving toward Arafat stretches as far as I can see and the five-mile journey takes us a little over an hour and a half.
The Plain of Arafat is where Adam and Eve were reunited after leaving Eden. This is meant to be the apogee of the hajj. We are to spend the day supplicating God and begging for His forgiveness. By the end of the day, all our sins will be forgiven.

At the camp in Arafat, our tents are the real thing – cloth, pitched in sand, with rugs on the floor and low cushions lining the walls. In keeping with the spirit of things, minarets are printed on the inside of the tent.

My nephew Saleh and I go exploring. Men in the back of a large truck are tossing off boxes of free water and free meals. A couple of adolescents are calling out “Sabeel ” (charity), and offering apples and tangerines. A Pakistani pilgrim makes a beeline for a handicapped African man on crutches and slips money into his hand.

An old woman sits on a collapsed cardboard box begging in the middle of the road.

I walk behind a group of women with small Iraqi flags sewn on the back of their white head scarves. Hajjis From Iraq is stitched underneath it in black.

We head for the Namira Mosque, where the prophet gave his last sermon. It’s so crowded with people that the two- or three-block walk takes us half an hour.

The Day of Arafat is officially over at sunset, and so shortly before the last rays paint the sky everything comes to a halt. People lay their mats on the road and start praying, their hands in the air. The rows of petitioners spread out on the asphalt road are so tightly packed that even walking past them is difficult.
Saleh and I navigate our way back with the help of the three huge balloons flying several hundred yards in the sky marking the three largest camps.

I go with my sisters to the prayer tent where a Saudi scholar is giving that day’s sermon and prayer session.

“Today is the day to ask God for everything you want, in detail, nothing is too small or too insignificant. He hears everything you say. He will answer all your prayers. He has promised. He loves you. He wants to make your every wish come true but He wants you to ask.”

A chorus of “amens” goes up as many of the women raise their hands in supplication. Some are crying.

“There are three conditions,” she continues. “You must be patient. Your hajj should not be made with money gained unlawfully or sinfully. And you must believe in His good intentions. You must have faith in Him.”
She tells the story of a woman who tried to conceive through artificial insemination 19 times. On the Day of Arafat, she spread her prayer rug and insisted. “God, I want a child. I want to be a mother. You are going to give me a baby because I’m asking you here in Arafat, on the day of Arafat.”

The lecturer starts weeping when she gets to the part about the woman becoming pregnant several months later. I, too, am crying, touched by the idea of a God who loves us. So is my sister Taghreed and all the other women in the tent.

I’m still weeping when the sermon ends. I want so much to believe everything this woman is saying but something stubborn inside me gets in the way. Maybe it’s the devil whispering in my ear. But I’m getting ahead of myself, that’s the next stage of the journey.

After sunset prayers the whole procession moves to Muzdalifah. We spend some time under the stars, eating, praying, and picking up stones the size of chick peas for the stoning of the pillars. This ritual commemorates Abraham’s stoning of Satan when the latter tried to tempt him to disobey God.

By two in the morning, we’ve reached Mina and the area with the three pillars, which are under a bridge. It’s getting crowded. A group of Egyptian pilgrims is chanting the Talbiya, their voices echoing under the steel beams. A group of about 50 follows a pilgrim guide carrying a large blue banner, a smaller group follows an old man carrying a stick with an orange scarf tied at the end. I see a woman coming in the opposite direction separated from her group. “China’s Pilgrims” is written on her colored skirt.

Hundreds of pilgrims have died in stampedes here – in 2001, 1998, and 1994 – and as we get closer to the large pillar we will stone, the crowds get tighter, and tenser. I know this is the most dangerous part of the hajj. The sound of a distant ambulance echoing under the bridge scares a group of Malaysians, and they start running towards the pillar.

Reem and I do some of our own pushing and get as close to the pillar as we can.

“In the name of God. God is great,” we say and fling our first pebble. I cringe as my stone lands on the back of the head of a pilgrim in front of me. There’s no room to move my arm to throw. So do the next two. I jump up to free my arm for the next tosses and the last four fall in the general area of the pillar.

We push back through the throng, and return to our tent in Mina to sleep for a few hours. Sunday morning I’m awakened by my cell phone – my mother is calling to see if we are OK. It’s the first of many urgent calls. Family and friends tell us the news: 244 people were crushed to death in a stampede near the pillars six hours after we left. Fifty-four Indonesians and 36 Pakistanis are among the dead, we hear later in the news reports.

I feel a deep sadness and find myself asking God to be kind to them. But I feel it’s so unfair that they should die this way.

To control the size of the crowds, in recent years the Saudi government has set quotas for the number of pilgrims from each country. There were 10,000 security forces on duty in the area. But it wasn’t enough.
“God chose for them to die during hajj. Their time had come. They will go straight to heaven,” Reem tells me.

After sunset prayers Sunday a former Egyptian movie star turned preacher gives that day’s religious sermon in the women’s prayer room.

“You are all newborns today. All your sins have been erased. You have been given a miraculous chance and should try to maintain this pure state. From now on you should live according to God’s orders. Not your husband’s, not your children’s, not your workplace. On the day of judgment, nothing will count except your relationship with God.”

Later, alone in my room, I get a call on my cell phone from a male friend. He starts to flirt. I find myself going cold and changing the subject. I’ve never been in a sanctified state before and I find, to my surprise, that I don’t want to lose it. There’s something very pleasant about it. Something more attractive than even my friend. I feel a lightness, a sense of security, a warm feeling. Maybe this is what if feels like to start a relationship with God. And if everybody here is to be believed, it lasts longer than marriages, kids, work, beauty, youth, and money.

Tomorrow: We circle the Kaaba.

Previously published by the Christian Science Monitor and reprinted with permission.

Editor’s Note:

This week as the Hajj is about to begin we are pleased to provide a series of articles that will provide background information on the annual pilgrimage in Saudi Arabia. This article, from VOA News, provides perspective on the pilgrimage from an American viewpoint, as about 12,000 are making the Hajj this year. Also check the SUSRIS Special Section “Hajj 2009″ on the SUSRIS web site.

Thousands of American Muslims Travel to Saudi for Hajj
VOANews.com

One of a Muslim’s duties, according to the five pillars of Islam, is to make a pilgrimage to the holy city of Mecca at least once during his or her lifetime. An estimated three million Muslims have traveled to Mecca to perform the Hajj. This year, 12,000 American Muslims are performing this particular pillar of Islam.

Millions of Muslims, including thousands from the US, are making the annual pilgrimage to Mecca, called the Hajj.

American Muslims start their journey by chanting their commitment to the pilgrimage.

“We say, ‘here I am Allah, here I am Allah, at your service.’ So whatever Allah wants us to do, is what we want to do and we want to use this as a way to commit ourselves to Allah the rest of the year and the rest of our lives as well,” Safi Khan, a Pakistani American, explains.

His wife Samira is a medical technician. She says, for her, pilgrimage is a way to move closer to God. “It is very uplifting spiritually to see all the people from different backgrounds getting together focusing on one thing, that is to worship one God,” she said.

During the Hajj, the pilgrims will circle the Kaaba, considered by Muslims the house of God. Muslims believe that God ordered the Prophet Abraham to build a house of worship on this site.

Baqir Imrani is a high school teacher performing the Hajj for the fifth time. This year he is praying for a universal cause.

“My prayer is: world peace for every one especially the Muslims, because they seem to suffer the most now,” he said. “So hopefully we will wake up and take the right steps to bring peace in our own lands and contribute to bring the world peace.”

The journey requires elaborate preparation as well as documents, a good amount of money and vaccinations.

Saudi authorities say that because the Hajj is a religious event, they are not banning anyone because of the H1N1 flu. But they have urged countries to follow precautions, such as age restrictions and vaccinations.

Adel El Farmawani is a travel agent for Muslim pilgrims in the U.S. He says some pilgrims will stay in double rooms, others in rooms that accommodate four.

“The average cost for the five star Hajj program is about eight thousand dollars and the four star program is about 5,000,” he said.

Sheikh Irfan Kabeer Eldin is the group’s religious leader. He instructs the pilgrims on how to perform the Hajj. “I give talks to tell them how to do each step of the Hajj,” he said.

As they board the plane, the pilgrims continue to chant. When they approach their destination, the airport at Jeddah, the women will be wearing white dresses and head covers, while the men will be wearing two pieces of unsewn white cloth to reflect human equality and unity before God.

After the pilgrimage, American Muslims will join Muslims around the world in Eid Al Adha, the four day feast celebrating the end of the Hajj.

Source: VOA

Editor’s Note:

This week as the Hajj is about to begin we are pleased to provide a series of articles that will provide background information and perspective on the annual pilgrimage in Saudi Arabia. This article originally appeared in the online edition of The Christian Science Monitor. This article is part two of a series that will be provided in SUSRIS over the coming days as we mark this year’s Hajj in Saudi Arabia. You can find more articles, links and resources at a SUSRIS Special Section on “Hajj 2009″.

A Hajj Diary: On Hajj, Battling Sin and Doubt
By Faiza Saleh Ambah
Part 4

FRIDAY, JAN. 29, MINA, SAUDI ARABIA – For the next five days I’m asked to concentrate only on God. “We’re not going to talk about guys, or gossip or anything,” Reem warns me. “I’m going to take advantage of the next five days and I don’t want the two of you to distract me,” she says, but I think she means mainly me.

Consider hajj a short board meeting, says my cousin Allal. “Concentrate on prayers and God and trying to be a better person during the next five days and forget everything else.”

As we head to our rooms to get ready for ihram (state of hajj-related sacredness; also the pilgrims’ garb), she looks closely at my hands. “Is that nail polish? And on your feet too?” She shakes her head in consternation and fetches cotton and nail polish remover.

“Hurry up, we don’t have much time.”

As I pass the cotton over my nails, I try to get into the right frame of mind. Alone in my room, I pack my purse, removing my lipstick, perfume, and blush. Then I cut my nails, bathe, and wash my hair. As I go through my ihram preparations I try purposefully to shed the worldly and concentrate on the Godly.

I look in the mirror as I put on my white head scarf, T-shirt, pantaloons, and white robe and talk myself into a spiritual immersion to accompany the physical transformation.

Suddenly the smile of a man I recently had dinner with comes to mind. I shoo the image away but continue to trip over my thoughts as I try to clear my mind of everything but God.

“It’s all right,” says Reem. “Just do your best and try to get your thoughts back on track.” Soon it’s time for the hajj intention prayer before we set off. “You remember how, don’t you?” she asks.

I don’t answer and she lays out a prayer rug in front of us. “Repeat to yourself what I say out loud.”

The Koranic verses are as familiar to me as the voice of my mother and father. But the prostrations are not. With a sideways glance, I follow Reem’s choreography closely, checking to see whether she will go down halfway, her hands on her knees, or if it’s time for us to prostrate fully with our forehead on the floor.

I make it without major mistakes.

The sun is gentle as we set off for Mina, where we will spend the night. On the way, I see cars and buses and pickup trucks loaded with men in the ihram. I feel close to those strangers, and it reminds me of the feeling of belonging when I was a child and we would go to the beach with my uncles in a caravan of five cars. We reach Mina several hours later and are led to our first-class accommodation; luxurious prefabricated structures with open tent-like awnings for ceilings and portable bathrooms with sink, shower, and toilet. With my cousin and his wife’s family there are 10 of us sharing four rooms and a living room with a computer, television, telephones, and Internet access. But these lodgings are atypical.

A dozen pilgrims often share one room and many sleep outdoors on mats if the weather permits. After a nap, I decide to go out exploring with my nephew. Taghreed, a heavy smoker who left her cigarettes behind on purpose, gives me money when I head out. “Marlboro Lights please,” she says, then gives me a ‘Don’t cross me’ look.

My nephew Saleh and I put on our badges, which get us back into our camp and help us find it if we get lost, and head off. The tiny city of Mina, a valley partly enclosed by a range of mountains, is like a huge picnic ground. There’s a festive air to the city, which comes alive one week out of the year, as cars compete for space on the roads and bridges and highways with the huge crowds. Families spread colored mats on the sidewalks and other open areas as they read, relax, sleep, and eat. A man on a bicycle sells blue face masks, which a lot of the police officers and hajjis are wearing this year. A peddler hawks Hajj Mats with Inflatable Pillow Made in China to passersby. I hear Urdu, Hindi, Turkish, Arabic, and English as we stroll.

After sundown prayers, mosques around the city are broadcasting Koranic verses, sermons, and information about the hajj. The message: If you make it through the next three to five days without sinning or harming yourself or anyone, you will have accomplished a successful hajj. There’s an aura of anticipation in our camp; tomorrow everyone will get a chance to have their sins forgiven and have their prayers answered, and they want to get it right. In the women’s lecture room, in a tent near ours, the Islamic scholar is asked about cigarettes. Harmful, she says. And men who look at you? Try to avoid their gaze, she advises.

Back in my room, I hear a preacher talking over the loudspeakers about the meaning of the Day of Standing Together Before God, or Yawm al-Wukuf, which takes place the next day. “God will forgive us all our sins. We will be as sinless as the day we were born,” are the last clear words I hear before he breaks down weeping. Soon I hear a second broadcast from another mosque.

I ask Taghreed what she’s going to pray for the following day, but I can hardly hear her for the cacophony of the competing sermons blaring from the loudspeakers.

The lectures are over after the final evening prayers and Taghreed finishes her list of names of family and friends she wants to pray for. Reem, who’s already done, contemplates what she’s going to ask for herself. “Tomorrow I’m going to forgive everyone who has ever harmed me because I expect God to forgive me everything,” she says.

An Egyptian sheikh comes over to talk to us and I ask him about the significance of the Day of Standing Together Before God. “This is God’s favorite time and place. He has asked us to come to Him with our prayers at Mount Mercy in Arafat on the ninth day of this month. He has said he will forgive all our sins on this day.”

“Why?” I ask. “What’s so special about tomorrow?”

“When you love someone, you do as he says, and we love God and follow what he asks us to do. We don’t have to understand before we do it, we will understand later. It’s a matter of putting faith over curiosity and human nature.”

The sheikh’s answer sounds familiar. You will only know once you believe.

I am hoping that despite my doubts and curiosity, I will be considered enough of a believer to reap rewards at the plain of Arafat, though I’m not sure exactly what. As an outward sign of my good intentions, I refuse to kill the large mosquitoes that are sticking their noses through my robe and biting my calves, so that I don’t break my ihram.

Previously published by the Christian Science Monitor and reprinted with permission.

Editor’s Note:

This week as the Hajj is about to begin we are pleased to provide a series of articles that will provide background information and perspective on the annual pilgrimage in Saudi Arabia. This article originally appeared in the online edition of The Christian Science Monitor on January 30, 2004. This article is part one of a series that will be provided in SUSRIS over the coming days as we mark this year’s Hajj in Saudi Arabia. You can find more articles, links and resources at a SUSRIS Special Section on “Hajj 2009″.

The Pilgrimage to Mecca: One Woman’s Journey
A Saudi journalist prepares to participate in a 1,300-year-old Muslim ritual
By Faiza Saleh Ambah
[Part 1 of 5]

JEDDAH, SAUDI ARABIA – Tomorrow, I leave to perform a central pillar of Islam, the five-day hajj. But I must confess that as Saudis go, I’m not particularly religious.

Spending a week with two million Muslims from more than 120 countries, performing rituals more ancient than Islam itself, in the largest single gathering at one place for one purpose in the world, appeals more to the journalist than the Muslim in me.

I am wary of, but no less excited by, the idea of an appointment in the desert with God. Pilgrims performing the hajj, which starts Jan. 30 (the eighth day of the last month of the Muslim lunar year), seem to be answering a call, keeping a promise. “Here I am lord, at your service, here I am,” is the chant that announces the start of the pilgrimage.

As a Muslim with more questions than certainties, I wonder at the meaning of the daily rituals that make up the pilgrimage: the seven circuits around the Kaaba (the cube-shaped stone structure in the middle of the Grand Mosque) in Mecca, the reenactment of the search for water by Ishmael’s mother Hagar, the march to and from the desert, and the vigil on Mount Mercy on the plains of Arafat, where the last verses of the Koran were revealed.

My sisters Reem and Taghreed, devout and practicing Muslims for years, don’t share my uncertainties. “We don’t know the exact reasons for everything. But we don’t have to. God told us to perform those specific rituals so we do them,” Reem tells me. They both ask me to keep an open mind and perform the hajj with sincere intentions, which should erase all my sins and leave me as pure as the day I was born.

Taghreed – a perennial student living in Paris – is very devout, but wants to get closer to God and is hoping that the strenuous and physically demanding hajj will boost her faith. “God said following my orders will bring us closer. And he’s asked us to perform the hajj if we’re able to.”

Reem, a divorcée with her own business in Dubai, has a more checkered past and wants to consolidate a new, more devout persona.

She looks critically in the mirror as she tries on the white head scarf and long white robe she will wear, checking to ensure that the contours of her body are not showing.

“I want a fresh start. Performing the hajj properly will erase all my sins and give me a clean slate.” She smiles and puts out her cigarette. “It’s like going through a detoxification program, and going to the hajj will motivate me to stay clean.”

Before we set off, we will bathe, wear our special ihram clothes, state our intention to perform the hajj at one of the five entry points into the sanctified area where the rituals are performed, and enter a sanctified state called ihram. During the ritual, which reenacts the pilgrimage made by Muhammad in 632, sexual abstinence is imposed, and killing or even harming anyone or anything, including insects and plants, is forbidden.

As an outward sign of this state of consecration, women usually wear white scarves and long robes and are banned from beautifying themselves or trying to attract male attention. Men wear white towels, one around the waist and one slung over the left shoulder, leaving the right shoulder exposed. They must also be bareheaded and unshod, but slippers and sandals are acceptable. The reason, says my cousin Allal – a businessman who has studied with Islamic scholars – is that all men will be equal before God physically as well as spiritually. Over dinner he give us a lecture about the meaning of hajj. This is also a dress rehearsal for the day of judgment, he warns. “Like a quiz before the test, to prepare us. Those who are not there will not be prepared.”

In preparation for this journey, which every able-bodied Muslim is supposed to perform at least once in his or her lifetime, I am reading “One Thousand Roads to Mecca” an anthology of 10 centuries of travelers writing about the hajj, edited by Michael Wolfe.

The appearance of the hajj has changed dramatically, with jets flying people in, buses and cars replacing camels, and Internet access and surveillance cameras set up all over the four cities in which the hajj is performed. Yet the actual ritual has remained unchanged in more than 1,300 years.

The past few nights, I’ve drifted to sleep with the tales of various accounts by converts, Arab Muslims, spies, and fake- Muslim adventurers in my head. I’m starting to realize that though hajj is a community ritual, it is also a very personal journey, and like almost everything else in life, you get out of it only as much as you put in.

For that reason, I will try to perform these rituals with an open mind and an open heart. I might not share my sisters’ devotion, but I will at least try to grasp and convey it.

Next: My first day on the hajj

Editor’s Note:

This week as the Hajj is about to begin we are pleased to provide a series of articles that will provide background information and perspective on the annual pilgrimage in Saudi Arabia. “The Hajj and Its Impact on Saudi Arabia,” by David E. Long, was originally provided in SUSRIS’ on-line companion the Saudi-American Forum and is reprinted here as the Hajj begins in Saudi Arabia. We thank Dr. David Long — diplomat, scholar and author — for sharing his expertise with our readers. You can find more articles, links and resources at a SUSRIS Special Section on “Hajj 2009″.

The Hajj and Its Impact on Saudi Arabia and the Muslim World
David E. Long

Executive Summary

Each year, 2 million Muslims perform the Hajj, or Great Pilgrimage to Makkah. One of the Five Pillars of Islam, the Hajj is required of all believers once in their lifetimes provided they are physically, mentally and financially able.

For the duration of the Hajj and the traditional visit to al-Madinah afterward, the Saudi government must insure that the Hajjis are provided with adequate housing (mainly in tents), food, water, health and sanitation, ground transportation, and public safety and security.

The government has spent billions of dollars on Hajj infrastructure from the two special Hajj air terminals which are the largest structures under a single roof in the world, to the extensive preventative and curative health and sanitation facilities at all the major Hajj locations. The Saudi government has also maintained a strict policy banning political activity so that militants do not desecrate this peaceful and joyous occasion. It is a task of almost unimaginable proportions.

Each year, 2 million Muslims perform the Hajj, or Great Pilgrimage to Makkah, the birthplace of the Prophet Muhammad and where the Qur’an was first revealed to him. One of the Five Pillars of Islam,1 the Hajj is required of all believers once in their lifetimes provided they are physically, mentally and financially able. Sura (Chapter) 3: 90-91 of the Qur’an states: “And the Pilgrimage to the Temple (the Hajj) is an obligation to God from those who are able to journey there.” Although it is not technically a part of the Hajj, most Hajjis then visit al-Madinah, 450 kilometers to the north. In 622 AD, Muhammad and his followers fled to al-Madinah from mounting persecution in Makkah. The flight, known as the Hijrah, marks the beginning of the Muslim, or Hijriyyah calendar.2 Many of the chapters (suras) of the Qur’an were written down in al-Madinah.

Although many religions have pilgrimages, the Hajj is virtually unique in its worldwide participation and sheer size. It is hard for anyone who has not been in the Kingdom during the Hajj to appreciate its full scope. How can a country with a relatively small population such as Saudi Arabia maintain such a good record in administering it each year? The following is a brief overview of administrative, political, economic, and social significance of the Hajj on Saudi Arabia and indeed the entire Muslim world. But first, for those not familiar with the rites of the Hajj, it would be instructive follow the pilgrims through the rites.

The Religious Significance of the Hajj

The Hajj takes place each year during the month of Dhu al-Hijja, the last month of the Muslim calendar. It is virtually impossible to describe the deep emotions generated during the Hajj, even by watching it on Saudi television which annually records it. Each rite has a special significance. The principal rites are Ihram, Tawaf, Sa`y, Wuquf, Nafrah, Rajm, and the `Id al-Adha:3

Ihram is a ritual cleansing and consecration and declaration of intent to perform the Hajj, performed before entering Makkah. Afterwards, pilgrim don special Irham garb of white terrycloth representing the equality of all believers before God, regardless of race, gender, age or social standing. Men wear two coverings for the upper and lower body, and women wear white robes but need not cover their faces.

Tawaf, performed on arrival in the great Haram Mosque in Makkah, is completed by circling seven times around the Ka`bah, located in a great open area in the Haram Mosque. The Ka`bah is considered the spiritual and geographical center of Islam, toward which Muslims face in prayer. Tradition has it that the Ka`bah, a dark stone structure, was originally built by the Prophet Ibrahim (Abraham) and his son Ismail (Ishmael) as a place of worship of the one true God, and symbolizes monotheism which is at the heart of Islam. Each year just before the Hajj, the Ka`bah is covered with a new black velvet and gold drape called the Kiswah. Following the Arrival Tawaf, pilgrims say prayers at the Maqam Ibraham, a station near the Ka`bah, and also drink water from the holy well of Zamzam. Tradition has it that God created the well by striking a stone so that Hajar (Hagar) and Ismail might drink when they were about to die of thirst.

Sa`y consists of seven laps on foot between two elevations formerly adjacent to the mosque but now a part of the mosque complex. It commemorates Hagar’s frantic search for water. Sa`y and Tawaf together are called the Umrah (Lesser pilgrimage) and can be performed any time during the year but do not meet the obligation of Hajj.

Wuquf is performed in a ceremony of “Standing” on the Plain of Arafat, about 20 kilometers east of Makkah beginning at noon on the ninth day of Dhu al-Hijjah, called Yawm al-Wuquf, “Standing Day.” The favored spot to stand is Jabal al-Rahma, the Mount of Mercy, a rocky hill rising about 150 feet above the plain and crowned by a tall white stone obelisk. According to Islamic tradition, the Wuquf is the Hajj – the supreme hours. Everyone must literally be present at `Arafat at maghrib (sunset) or the Hajj is forfeited.

Nafrah: The word literally means “the Rush” in Arabic. As the sun finally disappears over the horizon, in its wake some 2 million Hajjis surge forth from `Arafat to Mina, some 17 kilometers away. They travel by bus, car, truck, and for many as an act of piety, by foot. With so many people, the Nafrah is one of the most chaotic and stressful exercises in this or any other religious observance. The first stop is Muzdalifa about seven kilometers west, where Sunset and Evening prayers (Salat al-Maghrib and al-`Isha) are traditionally said, and a special prayer can be said at a roofless mosque called al-Mash`ar al-Haram (the Sacred Grove). Because of the great crowds, now only the earliest to depart `Arafat usually arrive in Muzdalifa in time for Maghrib prayer, and many say them before leaving Arafat. After midnight and saying Early Morning prayer (Salat al-Fajr), the Hajjis travel on to Mina, a small town about ten kilometers farther west, where they will stay for three days.

Rajm: In Mina, Hajjis perform Rajm over the next three days, the ritual throwing of seven stones at three pillars, called Jamras which represent Shaytans (devils). The tenth through the twelfth of Dhu al-Hijja is also the `Id al-Adha (the Feast of the Sacrifice) which includes the sacramental sacrifice of a blemishless animal, usually a sheep. The `Id is celebrated not only at the Hajj but also throughout the Muslim world where it is a joyous time to visit family and friends.

On the thirteenth, Hajjis return to Makkah for a Farewell Tawaf and are free from all Ihram restrictions. At that point, the Hajj is technically over, and Hajjis are free to travel home or on to visit al-Madinah. There the pace is more relaxed and people can take more time to see the sights, principally the Prophet’s Mosque.

The Impact of the Hajj on Saudi Public Administration

Due to tremendous advances in transportation and communications technology, the Hajj has changed more in the past eight decades since Saudi Arabia formally became guardians of the Holy Places in 1926 than it had in the previous 1300 years of Islamic history.4 In 1927, an estimated 300 to 350 thousand attended with only about 150,000 from outside the Kingdom. In 1972, there was a total of 1,042,007 Hajjis, including 353,460 Saudis, 209,208 non-Saudi residents, and 479,339 from abroad. Today, an estimated 2 million perform the Hajj.

The unprecedented increase in the numbers of pilgrims has greatly increased the complexity of Hajj administration. Just to make room for foreign Hajjis, the Saudi government has restricted attendance by Saudis, many of whom formerly often attended every year, to once every five years, and has negotiated visa quotas for foreign Hajjis with their countries of origin.

Another huge logistical problem is how to dispose of the remains of the thousands of sheep annually sacrificed at Mina. For years, families were allowed to keep only what they consumed during the `Id and the rest was buried in huge pits. In recent years, however, an abattoir has been constructed to preserve the meat, and Hajjis may now purchase a sheep from an Islamic bank to be sacrificed in accordance with Islamic practice, with the meat then distributed to the poor throughout the Muslim world. Increasing numbers of Hajjis are choosing this option, which combines piety with charity.

Providing Zamzam water for so many Hajjis is a major task. Traditionally, the Zamzamis roamed the Haram Mosque providing water to all who asked. But with so many pilgrims today, they must now store the water well in advance, replenish portable containers and paper cups in numerous, strategically located places around the mosque, and continuously refill them as needed. A charitable foundation also bottles Zamzam water for sale throughout the world.

To meet these administrative needs, the Saudi government has established a combination of public services and government regulated privately administered Hajj services:

The Hajj Private Service Industry

For centuries, Hajj administration was largely in the hands of ancient, family-organized guilds that arranged for food, lodging and transportation, and also guided pilgrims through the Hajj rites: Wakils, or Agents, who guided them to Makkah, usually from the nearby port city of Jiddah; the Mutawwifs (from the word Tawaf), who guided Hajjis through the Hajj rites; Zamzamis, who distributed Zamzam water; and Dallils, or Guides, who guided visitors to al-Madinah. Lacking the resources to take over these tasks, King Abd al-Aziz (“Ibn Saud”) left them in the hands of the guilds. As the Hajj was the backbone of the economy of the Hijaz, the guilds had traditionally charged literally whatever the Hajj traffic would bear. However, the Saudi government, which takes its responsibility as custodian of the Two Holy Places very seriously, strictly regulates the guilds in order to insure that the Hajjis not be overcharged. Today, the guilds function much as public utilities. To the present day, the principal responsibility for providing personal services to the Hajjis rests with the Mutawwifs, who act essentially as religious tour guide companies for designated countries of origin. They are responsible for looking after the Hajjis under their care from the time they leave home for Saudi Arabia until they return home again.

The Hajj service industry also includes other regulated private sector enterprises. Overland bus transportation is provided by a combination of foreign and Saudi public and private companies. Of the 11,5000 buses in service in the 2002 Hajj, the Saudi Transportation Syndicate, made up of several private companies, provided 7,000, and the Saudi Arabian Public Transportation Company (SAPTCO) provided 600. SAPTCO is a publicly traded, government-managed company whose board of directors is chaired by the Undersecretary of Communications. It was created 24 years ago to provide bus scheduled intercity and international service and chartered service for the Hajj and Umrah. The rest of the buses come from foreign countries.6

In 1945, Saudi Arabia established Saudi Arabian Airlines (Saudia) as a national air carrier. In addition to providing domestic and international air service, it was also given the mission to provide service “for Moslems on pilgrimage to the Holy Cities of Islam in Saudi Arabia.”7 In the 2003 Hajj, Saudia plans to carry 893,702 Hajjis on 1,754 flights from 70 international destinations.8 Most Hajjis will enter the Kingdom at Jiddah, the main Hajj port of entry, where two special Hajj air terminals await them, the largest structures under a single roof in the world.

Public and private Islamic foundations also are involved in operations such as providing and distributing sacrificed meat and Zamzam water. The Ministry of Awqaf (Islamic foundations; sing. Waqf) also acts as a repository for those who wish to donate charitable contributions as a part of their Hajj experience.

Hajj Public Services

In addition to government-regulated and government-owned Hajj service companies, Saudi Arabia must also provide extensive direct government services for the Hajj. Overall services are coordinated by the Hajj Ministry and the inter-agency Central Hajj Committee. Public safety, public security and traffic control are provided by the Ministry of Interior, and were a special crisis to arise, it can also call on the National Guard. It is responsible for regulating entry and exit from the Kingdom at all land, sea and air ports of entry, and insuring their safe overland travel to and from Makkah and al-Madinah. For the most part, overland traffic is spread out over a number of weeks, but during the Nafrah, all 2 million Hajjis set out at the same time for the same place. It has become one of the greatest traffic gridlocks in the world. Despite Herculean efforts by the traffic police, supplied with the most up-to-date equipment; the journey from Arafat to Mina can take over 12 hours. By comparison, consider a dozen Super Bowl games getting out at the same time and place, everyone all heading in the same direction.

Public health is another Herculean task. Modern health services were originally created in the 19th century because of fear in Europe and America over the spread of cholera. Asian Hajjis brought cholera to Makkah, and North African Hajjis spread it from there to Europe and America. The Western powers pressured the Ottoman sultan to create an international organization called the Paris Office of Hygiene to oversee the health and sanitation aspects of the Hajj. After World War II, the newly formed World Health Organization assumed this responsibility after absorbing the Paris Office. In 1956, the Saudi Ministry of Health assumed responsibility for Hajj health and sanitation and now operates extensive preventative and curative health and sanitation facilities at all major Hajj locations.9 The Saudi Red Crescent Society also participates, operating first aid and other facilities.

Of lesser magnitude but equally important, personnel in Saudi Embassies and Consulates abroad must be augmented each year to process foreign Hajj visa applications. At home, the Foreign Ministry also plays host to VIPs making the Hajj, including cabinet ministers, heads of state and other important personages.

Hajj Infrastructure

The government has also spent billions of dollars on Hajj infrastructure. This has included major expansions of the two holy mosques in Makkah and al-Madinah. The Haram Mosque can now comfortably accommodate a million worshipers, and during the Hajj, twice that number pack into it. There are also two new levels to increase capacity for performing the Sa`y. The Prophet’s Mosque in al-Madinah has also been expanded, although the crowds are smaller there during the Hajj.10 In Mina, the space for throwing stones at the three Jamras has been increased to three tiers.

To accommodate overland transportation at the Hajj, the Saudi government has constructed hundreds of miles of all weather, four lane highways, particularly between Arafat and Mina. It has also installed created a fully computerized traffic control system. Each year, portable tent cities are set up at `Arafat and Mina to provide housing, food, water, health and sanitation, transportation, telecommunications, public safety, banking facilities, markets – indeed all amenities of a city of 2 million people. All in all, nearly every Saudi government agency and ministry becomes involved one way or another in making the Hajj an administrative success.

The Political Significance of the Hajj

The Saudi government has always maintained a strict policy banning political activity under the pretext of attending the Hajj, welcoming Muslims regardless of their political persuasion. Nevertheless, over the years there have been a number of political activists that have tried to use the occasion to press their political agendas. During the height of Arab socialism, radical Arab nationalists made periodic attempts to embarrass the Saudi regime by disrupting the Hajj, but none of them were successful. In an attempt to challenge Saudi Arabia’s role of leadership in the Muslim world and discredit its custodianship of the Islamic holy places, the Khomeini regime in Iran sent provocateurs to disrupt 1982 Hajj in an attempt. Tensions mounted in subsequent years, until 1987 when 400 people were killed and Saudi security services had to be called in to quell violent agitation by Iranian Hajjis.11 Muslims throughout the world condemned the agitation as a desecration of the Hajj.

Since then, the Hajj has remained a peaceful and joyous occasion as it was intended to be. However, in the wake of the attacks on September 11, 2001, the threat of violent political activity has increased as militant Muslims put forward the claim that anti-American and anti-Zionist demonstrations would be in the name of Islam, not politics.

The Economic Impact of the Hajj

Prior to the oil era, the Hajj was the economic backbone of the Saudi economy. With vast oil wealth, the government no longer depend on Hajj revenue, but it is still a major source of income for the private sector. In addition to the Hajj service industry, the Hajj is a major season for the consumer retail season as well, somewhat analogous to the Christmas season in the United States. Hajjis from third world countries in particular buy items that are hard to get or highly taxed at home, such as medicines and luxury items such as perfumes and jewelry. For the 2003 Hajj, about 1500 young Saudis have been hired and trained to accompany the Hajjis on their sacred journey. According the project director, the aim of the project is to create employment for Saudi youth while helping guests and serving in the worship of God.12

In recent years, Islamic religious tourism has been expanded far beyond the Hajj. Many Muslims from all over the world now perform the Umrah year round. The fasting month of Ramadhan is particularly busy season, as many Saudi residents also flock to the Holy Places. At the month draws to an end, Muslims celebrate the anniversary of the first revelation of the Qur’an. On this lailat al-qadir, or “night of power,” some three million people perform tarawih prayers in the Haram Mosque, more than at the Hajj.13

With year round visits now to the two Holy Places, there are no published figures that break out gross revenues generated by the Hajj, but they are estimated to be in the billions of dollars, including annual government expenditures.

The Social Impact of the Hajj

In its size and global scope, the Hajj is the greatest single ritual celebration, not just of Islam, but of any religion anywhere. As one of the Five Pillars of Islam, it is an obligation for one-fifth of world’s population. During the month of Dhu al-Hijjah, virtually the entire population of Saudi Arabia is intimately touched by the Hajj, whether directly in its administration, its service industry, as a purveyor of personal goods and services, or indirectly by observing it on television. The `Id al-Adha, observed at the end of the Hajj, is celebrated throughout the Muslim world as a time of worship and fellowship with family and friends.

Unlike the impact of the Hajj on many foreign visitors, whose journey is a mystical, once in a lifetime experience, the Saudi experience while visiting the Islamic Holy Places, during the Hajj or at any other time of year, is a local, accessible reality. The sites are the physical and geographical manifestation of the birth of Islam. This blending of the highly sacred and the familiar commonplace has permeated Saudi society to such an extraordinary degree that it can be felt in virtually every human endeavor from politics to business to simple recreation.

Notes:

1. The other pillars are the Shahada, or Profession of Faith: “There is no god but God and Muhammad is the Prophet of God”; Salah: regular prayer five times a day while facing Makkah; Zakat: charitable giving; and Sawm: fasting from sunup to sundown during the Muslim month of Ramadhan.
2. The Muslim, or Hijriyyah calendar, designated “AH,” began on July 16, 622. Its lunar years are eleven days shorter than the solar year, resulting in the Hajj beginning earlier each solar year.
3. It is important to note that this description is highly abbreviated. The actual rites are somewhat more complicated and include numerous variations and details.
4. The Saudis were actually in control of Makkah in 1925, and allowed to perform the Hajj, though numbers were greatly reduced.
5. Long, The Hajj Today, p. 135. Figures are derived from collating multiple sources.
6. The Saudi Arabian Information Resource, 18 December 2002,
(http://www.saudinf.com/main/y5068.htm ).
7. Saudi Arabian Airlines, “The Story of Saudi Arabian Airlines,” (pamphlet, 1970), pages unnumbered.
8. Ibid. 6 January 2003, ( http://www.saudinf.com/main/y5159.htm ).
9. See David E. Long, The Hajj Today, (Albany, NY: SUNY Press, 1979), pp. 76-87.
10. Greg Noakes, “The Servants of God’s House,” Aramco World, January/February 1999, pp. 48, ff.
11. John L. Esposito, “The Iranian Revolution: A Ten Year Perspective,” in John L. Esposito, ed., The Iranian Revolution: Its Global Impact, (Miami: Florida International University Press, 1990), pp. 34-35.
12. Saudi Arabian Information Resource, 14 January 2003, ( http://www.saudinfo.com/main/y5204 )
13. Noakes, Loc. cit.

About the Author:

David E. Long is a consultant on Middle East and Gulf affairs and international terrorism. He joined the U.S. Foreign Service in 1962 and served in Washington and abroad until 1993, with assignments in the Sudan, Morocco, Saudi Arabia, and Jordan. His Washington assignments included Deputy Director of the State Department’s Office of Counter Terrorism for Regional Policy, a member of the Secretary of State’s Policy Planning Staff, and Chief of the Near East Research Division in the Bureau of Intelligence and Research Bureau. He was also detailed to the Institute for National Strategic Studies of the National Defense University in Washington, 1991-92, and to the United States Coast Guard Academy, 1989-91, where he served as Visiting Professor of International Relations and in 1990-91 as Acting Head of the Humanities Department.

A native of Florida, he received an AB in history from Davidson College, an MA in political science from the University of North Carolina, an MA in international relations from the Fletcher School of Law and Diplomacy and a Ph.D. in International Relations from the George Washington University.

In 1974 -1975, Dr. Long was an International Affairs Fellow of the Council on Foreign Relations and concurrently a Senior Fellow at the Georgetown University Center for Strategic and International Studies. While on leave of absence from the State Department, he was the first Executive Director of the Georgetown University Center for Contemporary Arab Studies, 1974-1975. In 1982-1983, he was a Senior Fellow of the Middle East Research Institute and Adjunct Professor of Political Science at the University of Pennsylvania, and in 1987-1989, he was a Diplomat in Residence and Research Professor of International Affairs at Georgetown.

Dr. Long has been an adjunct professor at several Washington area universities, including Georgetown, George Washington and American Universities and the Johns Hopkins University’s School of Advanced International Studies. He has also lectured extensively in the United States and abroad on topics relating to the Islam, the Middle East and terrorism.

His publications include The Government and Politics of the Middle East and North Africa (co-editor with Bernard Reich, 4th ed. 2002), Gulf Security in the Twenty-First Century (co-editor with Christian Koch, 1998), The Kingdom of Saudi Arabia (1997), The Anatomy of Terrorism (1990), The United States and Saudi Arabia: Ambivalent Allies (1985), Saudi Arabian Modernization (with John Shaw, 1982), The Hajj Today: A Survey of the Contemporary Makkah Pilgrimage (1979), Saudi Arabia (1976) and The Persian Gulf (1976, revised 1978).

Editor’s Note:

The word “Hajj” means “to set out for a place.” Three million people are setting out for a place next week. That would be the holy city of Mecca in Saudi Arabia to perform pilgrimage rituals that form one of the five pillars of Islam — a religious duty of every able bodied Muslim to accomplish at least once in a lifetime.

SUSRIS has been pleased in past years to bring you the insights and perspectives of many writers about the Hajj including Dr. David Long — diplomat, scholar and author of “The Kingdom of Saudi Arabia” — who said of the Hajj: “Although many religions have pilgrimages, the Hajj is virtually unique in its worldwide participation and sheer size. It is hard for anyone who has not been in the Kingdom during the Hajj to appreciate its full scope. How can a country with a relatively small population such as Saudi Arabia maintain such a good record in administering it each year?”

This week SUSRIS will provide a collection of articles and interviews on the Hajj to help answer that question and more, including the challenges posed by security issues, the spread of the H1N1 virus and increased tensions with Iran. These SUSRIS items and other resources will be compiled in a new SUSRIS Special Section called, “Hajj 2009″ [links below]. Today we start with reports from various agencies on Hajj preparations.

• Top Saudi cleric warns against politicising hajj – France24 – [Oct 31]

“Saudi Arabia’s top cleric has warned against politicising the hajj amid a war of words between Riyadh and Tehran over the annual pilgrimage to the holy city of Mecca .. Iranian President Mahmud Ahmadinejad and Supreme Leader Ayatollah Ali Khamenei alleged that Saudi Arabia, a predominantly Sunni Muslim country, might abuse the mainly Shiite Muslim pilgrims from Iran during the hajj .. Ahmadinejad warned that Tehran would “take the appropriate measures” if Iranian pilgrims are restricted, while Khamenei raised the issue of alleged “insults and mistreatment against some Shiite Muslims”..”

• 956,697 Pilgrims Arrived in Saudi Arabia – SaudiEmbassy.net – [Nov 14]

“The Director-General of Passports Maj. Gen. Salem Al-Blaihed reported today that 956,697 pilgrims have arrived in Saudi Arabia from abroad as of Friday evening. Of those, 903,741 pilgrims arrived by air, 39,323 by land, and 13,633 by sea..”

• Foreign Gunmen Posing as Haj Pilgrims Arrested [Nov 16]

“The Saudi armed forces have arrested gunmen, who attempted to infiltrate into Saudi territories together with a group of Al Houthi rebels, posing as Haj pilgrims. These gunmen, caught in their Ihram dress, belong to Afghanistan, Ethiopia and Somalia.. ..A huge cache of weapons and ammunition was seized from them following a shootout,” they said adding that the gun claimed that they were pilgrims heading for Makkah to perform the annual pilgrimage of Haj..”

• World Muslims to mark climax of hajj on Nov. 26 – al Arabiya – [Nov 18]

“As Muslims prepare for the annual pilgrimage, or hajj, season, Saudi Arabia’s Supreme Court announced late Tuesday that Arafat Day, when pilgrims stand in prayer on Mount Arafat marking the climax of Hajj, will fall this year on Nov. 26. The court ruled that a number of people had witnessed the Zul Hijjah crescent and “as a result, Nov. 18 will be the first day of Zul Hijjah .. while Eid al-Adha will be on Nov. 27.”..”

• Buses to Makkah With Fewer Than 25 Pilgrims Banned – GulfNews – [Nov 19]

“Vehicles with fewer than 25 Haj pilgrims will be prohibited from entering Makkah, in a new measure adopted by Saudi Arabia. The decision is aimed at increasing road safety and reducing congestion during this year’s pilgrimage..”

• Reality Check: The Hajj – Foreign Policy – [Nov 20]

“It’s the greatest yearly pilgrimage on Earth. But these days, the annual trek to Saudi Arabia’s holy sites is as much about politics as it is religion.. ..Throughout the 1980s, Iranian pilgrims tried to use the hajj as an opportunity to propagate Islam à la Khomeini. That conflict culminated in full-scale riots in 1987, when Saudi security forces opened fire on demonstrators. The clashes resulted in 402 deaths, not to mention some 600 wounded. That’s a nightmare that the Saudis, presumably, would do anything to avoid..”

• Hajj pilgrims unfazed by swine flu threat – Dawn.com – [Nov 21]

“Days before a forecast three million Muslim pilgrims pack Mecca to begin the holy ritual of the hajj, the spectre of a possible outbreak of swine flu seems to be fazing few of them. There might be posters in the streets, plastered on hotel facades and in their lobbies warning about the (H1N1) flu, but not many of the hundreds of thousands of pilgrims already jamming Islam’s holiest city are wearing face masks and many say they are not worried..”

• Swine flu kills first hajj pilgrims in Saudi Arabia – Dawn.com – [Nov 22]

“Swine flu has killed four pilgrims in Saudi Arabia for the annual hajj, health authorities said on Saturday only a few days before the massive Muslim gathering reaches its peak..”

Editor’s Note:

The 18th annual Arab-US Policymakers Conference (AUSPC) was held in Washington, D.C. on October 15-16, 2009. The conference addressed a host of issues under the theme, “Fresh Visions, Old Realities, New Possibilities: The Impact of Leadership Change on Arab-U.S. Relations.” Among the panels was the “Ambassador’s Roundtable” which featured remarks from U.S. Ambassador to Saudi Arabia James Smith, and five former American ambassadors to the Kingdom, as well as Saudi Ambassador to the United States Adel Al Jubeir. Today we are pleased to present a transcript of Ambassador Smith’s remarks, provided by the National Council on U.S.-Arab Relations, for your consideration.

Ambassador James Smith
Ambassador of the United States to the Kingdom of Saudi Arabia
18th Arab-U.S. Policymakers Conference
Washington, DC

Well I’m the new guy, I know that because I am still an optimist. I want to thank Dr. Anthony for the opportunity to come meet you. I’ve been at post a month. I flew in Tuesday night. I’m leaving on the ten o’clock tonight. It is getting very close to my bedtime but I will get through this.

I was particularly intrigued with the theme of the conference “Fresh Visions, Old Realities, and New Possibilities.” Because in the run up to going to post, I had about three or four months of study time, and in that time I had consultations with all of the previous ambassadors going back to about 1988, including Ford Fraker who is not here today. I must tell you I have great respect for this group of gentlemen to my left, they were generous both with their time, their thoughts, and their ideas. And one thing that I found that was very intriguing was that each of them was there at a unique time. The last fifteen years every two to three years has been marked by an era of its own. I’m going to limit my comments this morning to defining what I see this era like, the era I am stepping into.

The first thing I would tell you is that it is not 2001. It is not 2003. And it is not 2004. So if you are an American and you formed an opinion about Saudi Arabia or Saudis in the aftermath of 9/11, it is time to rethink your position. If you are a Saudi and you formed an opinion about the United States and Americans in the aftermath of 9/11 it is time to rethink your opinion. That was eight years ago.

Ours is an era of hope and expectation. Admiral Fallon, I think, was spot on when he defined the window of opportunity created by President Obama. It’s also a window of opportunity created by His Majesty King Abdullah who led the Arab Peace Initiative, the Inter-Faith Dialogue, a whole range of modernization initiatives culminating with the inauguration of KAUST. If you were not there last month you missed something because it was stunning — not just the optics but the image of what this represents as a top-end graduate degree granting institution in Saudi Arabia.

This is an era of hope and opportunity. President Obama is probably the only person in the world who could have gone to Cairo and given the speech he did. He went through one by one the geostrategic challenges of the day. We have to think of the words that our President used which are listen, respect, trust. Because this is a much more nuanced, complicated and, I would argue, more important relationship than it has ever been in the past. But someone said it’s just a speech, you have to deliver on the promise of Cairo. And whose responsibility is that? It is mine, and it is yours.

I say yours because as you come to visit me as a business man, as an educator, or as a think tank individual, I will share that responsibility with you. If you are trying to work a business opportunity I will describe the King’s vision of where he is trying to take this economy and create jobs. We will help him solve his problem as we are trying to build the relationships between our two peoples. And I will share that responsibility with you and together we will figure out how to deliver on the promise of Cairo.

But there are unique challenges that we face in the diplomatic presence in Saudi Arabia. It is the byproduct of what happens when you build walls — because we have been building walls since 9/11 — physical walls. Saudi Arabia has been an unaccompanied post for five years. So you come on one year rotations and it takes you four months to learn your job and then you do it for six months and then you rotate out. You continue to build walls and fences. You were there to represent the American people to the people of Saudi Arabia and you find yourself migrating into only three cities. And in fact you migrate into single buildings in individual cities instead of everywhere. And it is actually worse than that, because of the single year rotation policy you migrate into single sections of individual buildings in three cities.

We have got to figure out how to start taking down walls. I see my biggest challenge over the next two years is how to figure out developing friendships without fences, relationships without barriers, even if you can’t change the physical dynamic we have got to get out and represent the American people to the people of Saudi Arabia. I would argue that this description of our diplomatic presence is a microcosm of the relationship between our people and until we can increase the number of students going back and forth, increase the number of businessmen forming relationships, increasing the trade missions, then you will have people who formed an opinion in 2001 that hasn’t changed and it is wrong. Thank you.

Source: NCUSAR.org

Editor’s Note:

The Middle East Institute recently released a special edition of “Viewpoints” addressing the “important developments in Saudi Arabia’s domestic and external affairs since” the watershed year of 1979. It was that year, according to Thomas Lippman in a “Viewpoints” essay, that “Saudis now remember .. as a difficult year because of distressing political events at home and overseas: the Iranian Revolution, the extremist takeover of the Great Mosque in Mecca, Shi‘ite rioting in the Eastern Province, and the Soviet invasion of Afghanistan.

The compilation of insights on these developments is a great service by MEI to those who follow Middle East affairs in general and the US-Saudi relationship in particular. We are pleased today to provide information about the “Viewpoints” Special Edition, including the introduction and the table of contents. A link to the complete report and related material are also provided for your consideration.

Link: Complete “Viewpoints”

The Kingdom of Saudi Arabia, 1979-2009: Evolution of a Pivotal State
The Middle East Institute
October 14, 2009

Taken together, the events of 1979 both inside and outside the Kingdom were harbingers of things to come — of an economy still heavily dependent on oil rents; a social contract anchored in lavish subsidies and welfare services that are increasingly difficult to sustain; deeply conservative religio-cultural mores that cannot be insulated from the forces of globalization; and the vexing issues of managing domestic political dissent while maintaining a “special relationship” with the United States in the face of a diffuse radical Salafist movement worldwide and the expansion of the Islamic Republic of Iran’s regional power and influence. This collection of 21 essays, the fifth of six special editions of MEI Viewpoints commemorating the momentous events of 1979, seeks to shed light on some of the important developments in Saudi Arabia’s domestic and external affairs since then.

The year 1979 was among the most tumultuous, and important, in the history of the modern Middle East. The Middle East Institute is marking the 30th anniversary of these events in 2009 by launching a year-long special series of our acclaimed publication, Viewpoints, which offers perspectives on these events and the influence that they continue to exert on the region today. Each special issue of Viewpoints will combine the diverse commentaries of policymakers and scholars from around the world with a robust complement of statistics, maps, and bibliographic information in order to encourage and facilitate further research.

The Kingdom of Saudi Arabia, 1979-2009: Evolution of a Pivotal State – “Viewpoints” Special Edition – Middle East Institute – Oct 14, 2009

Though its national origins date from the mid-18th century, the current (third) Kingdom of Saudi Arabia is relatively new. Its establishment in 1932 marked the culmination of several decades of successful military and political efforts led by the Kingdom’s founder, ‘Abd al-‘Aziz bin ‘Abd al-Rahman Al Saud.

Popular misconceptions of Saudi Arabia abound. They are marked by static, sometimes distorted images of the country and its people: the varied Saudi landscape misrepresented in sharp dichotomous snapshots of oil rigs and vast stretches of empty desert; the diverse Saudi population miscast either as backward camel herders and desert dwellers or portly princes luxuriating in opulent palaces; and the misidentification of Wahhabism and contemporary jihadism, and thus the mischaracterization of Saudis as terrorists or as purveyors of terrorism.

Most people other than Saudis themselves are unaware of — much less able to fathom — the magnitude of the changes that have occurred inside the Kingdom, and the stunning rapidity with which they have occurred. Much of this change has taken place over the past three decades — not all of it the handiwork of Saudis themselves, and by no means all of it positive.

Today, the Kingdom of Saudi Arabia has a population of more than 28 million, 82% of whom live in urban areas. The Kingdom dominates the Arabian Peninsula economically, politically, and militarily. The Saudi presence and influence radiates across the region and throughout the world in the form of investment capital, media, foreign aid, the championing of Muslim causes, and the conduct of diplomacy. Saudi Arabia, which possesses about 20% of the world’s petroleum reserves, is the largest petroleum exporter and plays a leading role in OPEC.

The breathtaking pace of Saudi Arabia’s modernization and ascent on the world stage has come at a cost. It has unleashed social forces that cannot easily be controlled. And it has fuelled fears and grievances that have proved impossible to ignore, yet difficult to manage.

The year 1979 is an important marker. The clutch of events that took place in the wider region during that year — the Iranian Revolution, the signing of the Camp David Treaty, the second “oil shock,” the launching of General Zia ul-Haq’s Islamization program in Pakistan, and the Soviet invasion of Afghanistan — profoundly shaped Saudi Arabia’s subsequent regional and international role, and fed back into Saudi social and political relations in ways that continue to be felt.

The year was not without momentous events within Saudi Arabia’s borders as well. On November 20, 1979, Juhayman Sayf al-‘Utaybi and several hundred armed Salafists — including Saudis, Egyptians, Kuwaitis, Yemenis, and Iraqis — seized the al-Masjid al-Haram (Grand Mosque) in Mecca, the holiest site in Islam, as thousands of worshippers were gathering for the dawn prayer. The same month, Shi‘ite protests erupted in the oil-rich eastern region of the country. The disturbing simultaneity of these challenges to the legitimacy of the Saudi system of rule led, among other things, to the restructuring of relations between the political leadership and the ‘ulama’ and to the securitization of the state.

Taken together, these events both inside and outside the Kingdom were harbingers of things to come — of an economy still heavily dependent on oil rents; a social contract anchored in lavish subsidies and welfare services that are increasingly difficult to sustain; deeply conservative religio-cultural mores that cannot be insulated from the forces of globalization; and the vexing issues of managing domestic political dissent while maintaining a “special relationship” with the United States in the face of a diffuse radical Salafist movement worldwide and the expansion of the Islamic Republic of Iran’s regional power and influence.

This collection of 21 essays, the fifth of six special editions of MEI Viewpoints commemorating the momentous events of 1979, seeks to shed light on some of the important developments in Saudi Arabia’s domestic and external affairs since then.

The Kingdom of Saudi Arabia, 1979-2009: Evolution of a Pivotal State – “Viewpoints” Special Edition – Middle East Institute – Oct 14, 2009

The Kingdom of Saudi Arabia, 1979-2009: Evolution of a Pivotal State
A Special Edition of “Viewpoints”

I. Media, Culture, and Society

The Rise of a Media Kingdom, by Noha Mellor

Diwaniyyas, Intellectual Salons, and the Limits of Civil Society, by Toby Matthiesen

A Rentier Social Contract: The Saudi Political Economy since 1979, by Steffen Hertog

The Freedoms Saudi Women Really Want, by Natana J. DeLong-Bas

Obstacles to Equality for Saudi Women, by Eleanor Abdella Doumato

II. Religion, Politics, and the State

Tawhid or Jihad: What Wahhabism Is and Is Not, by David E. Long

Saudi Arabia’s Religious Counter-Terrorist Discourse, by Roel Meijer

Liberal Enclaves: A Royal Attempt to Bypass Clerical Power, by Andrew Hammond

The Neo-Reformists: A New Democratic Islamic Discourse, by Saud al-Sarhan

Saudi-Shi‘ite Political Relations in the Kingdom, by Toby Jones

Reforming the Judiciary in Saudi Arabia, by Joseph A. Kéchichian

Tribes and the Saudi Legal System: An Assessment of Coexistence, by Sebastian Maisel

From Generation to Generation: The Succession Problem in Saudi Arabia, by Nabil Mouline

III. Regional and International Relations

Saudi Arabia: Victim or Hegemon? by George Joffé

Saudi Arabia and Iran: Less Antagonism, More Pragmatism, by Paul Aarts and Joris van Duijne

How Salafism Came to Yemen: An Unknown Legacy of Juhayman al-‘Utaybi 30 Years On, by Laurent Bonnefoy

Saudi-Russian Relations: 1979-2009, by Mark N. Katz

Cooperation under the Radar: The US-Saudi Arabian Joint Commission for Economic Cooperation (JECOR), by Thomas W. Lippman

Saudi-American Relations, by F. Gregory Gause, III

Saudi Wahhabi Islam in the Service of Uncle Sam, by Askar H. Enazy

The United States and Saudi Arabia: Challenges Ahead, by Rachel Bronson

The Kingdom of Saudi Arabia, 1979-2009: Evolution of a Pivotal State – “Viewpoints” Special Edition – Middle East Institute – Oct 14, 2009

About The Middle East Institute

The mission of the Middle East Institute is to promote knowledge of the Middle East in America and strengthen understanding of the United States by the people and governments of the region.

For more than 60 years, MEI has dealt with the momentous events in the Middle East — from the birth of the state of Israel to the invasion of Iraq. Today, MEI is a foremost authority on contemporary Middle East issues. It provides a vital forum for honest and open debate that attracts politicians, scholars, government officials, and policy experts from the US, Asia, Europe, and the Middle East. MEI enjoys wide access to political and business leaders in countries throughout the region. Along with information exchanges, facilities for research, objective analysis, and thoughtful commentary, MEI’s programs and publications help counter simplistic notions about the Middle East and America. We are at the forefront of private sector public diplomacy. Viewpoints is another MEI service to audiences interested in learning more about the complexities of issues affecting the Middle East and US relations with the region. The views expressed in these Viewpoints are those of the authors; the Middle East Institute does not take positions on Middle East policy.

To learn more about the Middle East Institute, visit the website at http://www.mei.edu.

Editor’s Note:

The turn around of the world economy from global recession was marked in September by the Organization of Economic Cooperation and Development (OECD) which said there were “clear signs of recovery” in all seven of the leading Western economies as well as in each of the “BRIC” (Brazil, Russia, India and China) countries. Leaders at the Group of 20 Summit in Pittsburgh in late September signaled the transition from crisis to recovery has been made but warned that a sense of normalcy should not lead to complacency and that repairs to the global economy remain incomplete.

In its September Monthly Bulletin Jadwa Investment in Riyadh noted the Saudi economy was “on the brink of recovery” and expected a “sustainable recovery to take hold in the fourth quarter.” It also noted that “as the external environment began to improve local business confidence was set back by high-profile troubles at two local companies,” a reference to the problems at the Saad and Ahmed Hassan al-Gosaibi groups — a situation discussed in Jadwa’s July Monthly Bulletin.

Today we provide for your consideration the recent Jadwa bulletin which provides an update on the improving Saudi economic situation and the lingering effects of a high visibility deal to repair the problems with the “troubled local company.” SUSRIS thanks Jadwa Chief Economist Brad Bourland for sharing these important bulletins with our readers.

Jadwa Investment – Monthly Bulletin
October 2009
Paul Gamble

Debt deal boosts banks

An improving global economy, rising oil prices and stimulatory government policy provide a healthy backdrop for the Saudi economy, but the private sector has not fully benefitted from this owing to weak bank lending and a broader lack of confidence. Short-term economic prospects appear brighter as a deal between a troubled local company and its local commercial bank creditors appears to have provided a much needed boost to confidence. The TASI has responded favorably and rising share prices will have a positive effect on consumer and business sentiment. Furthermore, the agreement has removed a source of uncertainty from local banks and could encourage a revival in lending. However, the apparent exclusion of foreign creditors from the deal is a setback to restoring the willingness of foreign financial institutions to lend to the Saudi private sector.

Leading economies across the world have started growing in response to unprecedented government stimulus and growth in emerging markets is also picking up. This healthier economic outlook has helped to lift oil prices to over $80 per barrel. Within the Kingdom, government spending appears to have been very strong and interest rates remain extremely low. Despite these highly supportive conditions economic performance has been subdued this year, in part due to a lack of bank lending. Commercial bank credit to the private sector went up in only two of the eight months to August. While declines in lending for up to three consecutive months have been recorded before, the length of this weakness is exceptional.

It is clear that lending has been effected by two distinct factors. For the months following the intensification of the financial crisis in September 2008, banks were more concerned with shoring up their balance sheets and were far less inclined to lend, not only to private sector companies but also to other banks. This was reflected by the large spread between the interbank rate (the rate that banks lend to one another) and the reverse repo rate (the rate that SAMA pays commercial banks for deposits). This spread stabilized in February and all things being equal we would have expected lending to recover in the second quarter. However, it was then that problems at two local companies became public, which caused banks to adopt a very cautious attitude to lending to the private sector (see the July Monthly Bulletin).

Latest data show that bank lending to the private sector jumped in August. The 1.9 percent increase was the highest since September 2008. However, the bulk of this new lending was for an individual project (the Rabigh independent power project) so we do not think the gain suggests a more generalized improvement in lending.

While total outstanding lending to the private sector is up by only SR8 billion over the first eight months of this year, deposits have grown by SR53 billion (new government deposits account for SR43 billion of this total). As a result, the loan-to-deposit ratio has been around 80 in the past few months, compared with over 90 in September 2008. Banks currently have SR67 billion in non-statutory deposits at SAMA earning just 0.25 percent and have built up their net foreign assets by SR48 billion so far this year. With this liquidity available, the lack of recent lending reflects banks being unwilling rather than unable to lend.

We think that the recent debt deal is likely to make banks more inclined to lend. No details of the deal have been released publically. All that is known for certain is that around the same time as reports of the agreement emerged, stock exchange data reveal that the owner of the troubled company cut his stake in local bank Samba from 7.8 percent to below 5 percent (the level at which individual holding have to be disclosed). The same day, the Public Pension Agency raised its stake in Samba by 2.6 percentage points.

The deal had a positive impact on stock market perceptions of the health of the banking sector. Banking shares jumped by 7.9 percent the first day the market was open after rumors of the deal emerged (September 26) and the banking sector has outperformed the market by 3 percentage points from that date. The TASI as a whole has outperformed both global emerging and developed markets over the same period, after many months of underperformance (the TASI’s 9.5 percent gain compares to a rise of 3.4 percent for the US S&P 500 and 6.6 percent for the MSCI emerging markets index).

This positive sentiment has been reinforced by the generally encouraging results reported by the banks for the third quarter. Profits rose in comparison with the third quarter of last year for six of the nine banks that have reported despite a rise in provisions. Only Saudi Hollandi Bank and Sabb recorded double-digit declines in profits. With many consumers and private sector business heavily invested in the stock market and retail investors dominating activity, rising share prices should lift confidence and encourage greater spending and investment.

While we think that a modest turnaround in domestic bank lending may now occur, lending from foreign banks is likely to remain constrained. Foreign banks became more risk averse after the financial crisis and have generally cut back their positions throughout the region. Many were unsettled by the high-profile troubles at two local businesses and were apparently excluded from the debt deal. Foreign bank credit is essential as local banks do not have large enough balance sheets to finance the vast amount of projects planned and underway in the Kingdom. There is a clear differentiation in credit markets now, with some top tier names still having fairly easy access to lending. For example, Aramco and French oil company Total recently had more than 30 expressions of interest from banks for the financing of a $12.8 billion refinery.

In brief: Economy

Food prices jumped in August in line with their usual trend in the first month of Ramadan. Food prices were up by 1 percent in August compared with an annual average monthly fall of 0.4 percent in the previous seven months of the year. Over the past eight years food prices have risen more than five times faster in the first month of Ramadan than the average rise for the other months of the year. In year-on-year terms food price inflation remaind relatively subdued, also at 1 percent. Overall inflation hit a two-year low of 4.1 percent in August before picking up to 4.4 percent in September, the month that the bulk of Ramadan occurred during.

Point of sales transactions (the closest approximation to retail sales available and an important guide to the health of consumers) showed encouraging growth in August. After two successive months of decline in year-on-year terms, point of sales transaction rose by 2.2 percent in August compared to August 2008. While this is very low when compared with the first three quarters of 2008 (when year-on-year growth averaged 34 percent), we think future months will see further gains in line with rising share prices and a gradual improvement in confidence.

Import volumes through the Kingdom’s ports were down by 14.8 percent over the first eight months of the year compared with the same period of last year. Import volumes are an important indicator of economic activity in the Kingdom, as raw materials, machinery, technology and consumer goods are all mostly imported. Part of the drop in import volumes is because stocks built up during the second half of last year are being drawn down (for example, imports of construction materials are 28 percent lower). Nonetheless, the decline reaffirms our view that economic growth will be much lower than last year.

The volume of non-oil exports through the Kingdom’s ports was 2.6 percent lower over the first eight months of the year than in the first eight months of 2008. Lower exports of refined products and “other products” account for the decline. In riyal terms, non-oil exports were down by 22 percent over the first seven months of the year compared to the January to July 2008 total. The difference between the two measures is the result of lower commodity prices.

Oil market watch: Oil prices hit new high for the year

Oil prices have hit new highs for the year owing to improvements in the global economy and a weakening dollar. WTI touched $81 per barrel on October 21, its highest level for almost exactly a year and 13 percent up on the end-September figure. Oil prices are now over 75 percent above their level at the start of the year. If they remain unchanged for the reminder of the year it would be their second largest annual gain since the 1970s (only 1999 was higher).

In part, the strengthening of the oil price reflects an upturn in the global economy. Growth has resumed and emerging markets that account for the main source of oil demand growth (notably China) are performing particularly well. The International Energy Agency has raised its projection for global oil demand for 2009 over the past few months, from a low of 83.3 million barrels per day in May to 84.6 million barrels per day in October.

Opec producers were clear that the health of the global economy would determine their near-term policy direction in the communiqué that accompanied their decision to hold production quotas unchanged at their mid-September summit in Vienna. Opec is happy with oil prices at their current level though it acknowledged that setbacks to the economic recovery could lead to a sharp fall given the role that financial investors (who can quickly withdraw their money) play in determining prices.

It is notable that Opec did not call for greater discipline from its members in adhering to existing production quotas, as it has done after all of its other meetings this year. Production had been edging up across Opec without seeming to affect prices, but it fell in September for the first time in four months according to independent estimates, due to lower output from Iran. Oil production has been rising modestly in Saudi Arabia. It was unofficially estimated at 8.2 million barrels per day last month, up from 8 million barrels per day in April.

While global economic conditions have improved, there are still large inventories and the rise in prices does not appear to reflect the fundamentals. Rather, investment demand seems to be playing an important role in pushing up oil prices. Oil prices (and those of several other commodities) are benefitting from a renewed weakening of the dollar. A strong inverse relationship has developed in recent years between oil prices and the dollar, with investors buying oil (a dollar-denominated asset) to offset weakness in the value of the dollar. Although this relationship broke down during the extreme turbulence of late last year and early this year, it has reasserted itself in the last few quarters.

Movements in oil prices are also currently relatively strongly correlated with stock markets, other commodities and indicators of financial conditions, even though historically there has been no relationship. These relationships reflect continued uncertainty among investors in an environment of high liquidity and very low interest rates and some analysts have raised concerns about the potential for new asset price bubbles. WTI is on target to average near $60 per barrel this year, the annual average was last at this level in 2005, when the global economy grew by 4.5 percent.

In brief: Oil market

Crude oil stocks have declined in recent months, but remain at high levels. Data from the US put oil stocks in mid-October at 10 percent below the 19-year high they reached in May. The decline is in line with the historical pattern and reflects greater consumption during the US driving season. Nonetheless, stocks are 8.5 percent higher than their five year average for mid-October. Stocks for the whole of the OECD fell to 60.7 days of future demand at the end of August from 61.4 days one month earlier and their recent peak of 61.8 days earlier this year. They are 3.7 days (6.4 percent) higher than in August 2008.

Unlike crude, stocks of oil distillate, which is used in heating and for machinery, have continued to rise in the US. Distillate stocks are up by 25 percent so far this year and are 40 percent higher than they were in mid-October of last year owing to the weakness of industrial production in the US. There has been a modest increase in distillate demand in the past few months in line with a rebound in industrial output, but the high inventories for both distillate and crude illustrate the fragility of oil market fundamentals.

Price differentials between heavy and light crudes produced by Saudi Arabia remain around their long-term lows. This is because Saudi Arabia and other Opec producers have concentrated their production cutbacks on heavy crude, which is generally less sought after than light crude as it is more expensive to refine. However, more refineries have been configured to handle heavy crude in recent years, so lower supply has caused prices to hold up relative to other blends of crude. The chart to left shows the difference between the discount or premium over WTI that Saudi Aramco charges to clients in North America for Arab Light and Arab Heavy; the lower the value on the graph, the smaller the differential.

New data published by the US Commodity Futures Trading Commission (CFTC) gives a more detailed picture of who holds oil derivatives, which could eventually determine the influence that investors have on oil prices. Rather than a simple breakdown of commercial and non-commercial holders of futures and options contracts, the new disaggregation features swap dealers and money managers (the latter category includes hedge funds). Data for October 13 shows that producers and users were net short on oil meaning that they were anticipating price falls, while all other holders were net long. It also shows that producers and users hold 37 percent of total contracts. CFTC plans to release back data at a similar level of detail, which should give a clearer indication of positions during the exceptionally sharp rise and then fall of oil prices in recent years.

Stock market watch: TASI rally could have further to go

Improving confidence and healthy company results have lifted the TASI. The market is up by 15.1 percent since the end of August after four months of moving sideways. Over this period it missed out on a sustained rally in global emerging and developed markets and it now looks reasonably attractively valued on a global basis. We therefore think that the TASI has the potential to narrow the performance gap with other markets over the remainder of the year, though we are cautious on the scale of the possible rise given that many emerging markets appear overvalued.

The revival in the TASI began in the final few weeks of Ramadan as investors responded to rapidly rising stock markets elsewhere in the world, amid signs that the global economic outlook was improving, and higher oil prices. As we note elsewhere in this report, the debt deal between a troubled local company and its local bank creditors helped bolster the market immediately after Eid. Now, generally positive third quarter results for listed companies (profits at Sabic came in well ahead of consensus estimates and profitability improved at most of the banks) are lifting the TASI.

Despite the recent rise, the TASI has underperformed other stock markets by a significant margin. Since the middle of May, when the high-profile news of troubles at two local businesses began to emerge, the TASI has climbed by only 11 percent, compared to a gain of 22.3 percent for the US S&P500 and 36.7 percent for the MSCI emerging markets index. This divergence is particularly notable given the close correlation in moves between these markets over the previous nine months.

On a valuation basis the TASI now looks relatively attractive against these markets. It is currently trading on a price-to-earnings ratio of 17.5, on a par with the S&P 500. Given the strong potential earnings prospects for Saudi companies, we think that a better comparison is with fast growing Asian economies. China, India, Indonesia Malaysia all currently trade on higher P/Es than the TASI, which is broadly in line with the emerging market average. It is still the most expensive market in the GCC, followed by Kuwait (with a P/E of 16.2) and Dubai (14.3), but this is in line with long-term trends given the home bias of the large local investor base. Furthermore some regional markets have also been held back by uncertainties in the financial sector owing to exposures to troubled businesses.

The recent gains have taken the TASI above our end-year fair value projection of 6,200. The TASI tends to overshoot fair value and we are not concerned about the sustainability of the recent rise. Indeed, the ongoing improvement in sentiment can lift the market further over the remainder of the year. The greatest risk to the rally appears to come from a correction in global stock markets. Emerging markets have experienced large investment inflows owing to the ability of many to better withstand the recession than developed countries. The MSCI emerging markets index is more than double its low of March this year. However, the forward P/E for emerging markets is well above its five year average, a crude indication that they may be overvalued, especially as the earnings environment is still not that attractive.

Source: Jadwa Investment

For comments and queries please contact the author:

Paul Gamble
Head of Research
pgamble@jadwa.com

or:

Brad Bourland
Chief Economist
jadwaresearch@jadwa.com
Phone +966 1 279-1111
Fax +966 1 279-1571
P.O. Box 60677, Riyadh 11555
Kingdom of Saudi Arabia

http://www.jadwa.com

Editor’s Note:

The 18th annual Arab-US Policymakers Conference (AUSPC) was held in Washington, D.C. on October 15-16, 2009. The conference addressed a host of issues under the theme, “Fresh Visions, Old Realities, New Possibilities: The Impact of Leadership Change on Arab-U.S. Relations.” Among the panels was the “Ambassador’s Roundtable” which featured remarks from U.S. Ambassador to Saudi Arabia James Smith, and five former American ambassadors to the Kingdom, as well as Saudi Ambassador to the United States Adel Al Jubeir. Today we are pleased to present a transcript of his remarks, provided by the National Council on U.S.-Arab Relations, for your consideration.

H.E. Adel A. Al Jubeir
Ambassador of the Kingdom of Saudi Arabia to the United States
18th Arab-U.S. Policymakers Conference
Washington, DC
October 15, 2009

Thank you, Peter. [Introduction by Dr. Peter Gubser]

I was thinking about how we could get through the program with the distinguished panel we have. We have three options: we can speak fast, we can say very little, or we can do both. So I want to start out by saying thank you to John Duke Anthony and the National Council for hosting this wonderful event. Thank you, Peter, for the kind introduction, and thank you also to my colleagues the former U.S. ambassadors to Saudi Arabia. I am humbled to be speaking with such distinguished individuals at the podium with me.

I’ll try to make my remarks brief and I’ll try to speak not too quickly. The relationship between our two countries is a historic one. Last year we celebrated the 75th anniversary of formal ties between the Kingdom of Saudi Arabia and the United States. Our relationship began in the 1930s with the discovery of oil on a commercial basis. It evolved in the 1940′s with the first meeting between our two heads of state, the late King Abdulaziz and the late Franklin Delano Roosevelt aboard the USS Quincy at the Great Bitter Lake in Egypt. And the relationship took on a military dimension in the 1950s when the U.S. military sales program to Saudi Arabia was first established.

When we look at the history of our relationship, we see that with every passing decade the relationship grows broader, deeper, stronger, and it becomes more multi-faceted. If you allow me to skip to the present, when we look at our relationship today, we see exceptionally strong ties in counter-terrorism and terror financing. We have very strong commercial investment ties and strong political ties. We have institutional links between our two countries in a way that has not existed in the past.

Referring often to the power of accurate numbers, Ronald Reagan used to say “facts are stubborn things.” When we look at the amount of investment and trade between our two countries and peoples, and when we look at the volume of visitors to Saudi Arabia from the United States or visitors to the United States from Saudi Arabia, the numbers are at historic highs.

The number of Saudi students in the U.S. is in excess of 21,000 as we speak and growing. This is a testament to the strength of the relationship. It testifies also to the fact that it is these young men and women who will carry the relationship forward over the next three or four decades.

When you look at the interests that we have in the region — when you look at the challenges we face in Pakistan, Afghanistan, with Iran’s nuclear program, in Iraq and Lebanon, with the Israeli-Palestinian conflict, in Yemen, in the Horn of Africa, in Sudan; when you look at the challenges we face involving piracy and terrorism, the international financial crisis, energy situations and levels of trade and investment — I believe it is clear that the interests of our two countries to date, at this moment, are as aligned as they have never been before.

We speak to each other frankly, we consult with each other intensely, and we try to engage others in this dialogue in order to resolve problems. The Kingdom of Saudi Arabia has a history of trying to seek stability and security and peace in our region and in the world. It was King Abdullah’s peace initiative which became the Arab Peace Initiative in 2002 that set the stage for the resolution of the Arab-Israeli conflict. I believe that today there is a unanimous view among Arabs, Muslims, and millions of people from other countries the world over that the Arab Peace Initiative is the basis upon which the Israeli-Palestinian conflict will be resolved, God willing.

We appreciate and thank the Obama administration for its early and robust engagement in trying to resolve the Arab-Israeli conflict, and we look forward to working with it, helping to move it forward, and putting an end to this long-standing tragic conflict.

When we look at the issue of combating extremism, the Kingdom of Saudi Arabia has been in the forefront of countries trying to counter the mindset of extremism that seeks to hijack a noble faith and encourage people to use it to justify violence. Our religious scholars have taken very strong and public positions to counter this radicalism and it has had an impact. We believe we will continue to have an impact, God willing, in trying to eliminate this mindset from our midst.

The Custodian of the Two Holy Mosques launched an interfaith dialogue that involved different religions and cultures in order to use the universal values that are enshrined in all religions to promote understanding, co-existence, and peace because at the end of the day the universal values enshrined in all faiths are very similar. They have to do with compassion, with mercy, with peace. They have to do with co-existence, being honest, and taking care of the needy. The inter-faith dialogue is an attempt to try to use those universal values in order to build bridges between and among different people on our little planet rather than use religion in order to be divisive.

The King Abdullah University of Science and Technology, which is a new major research university, was recently inaugurated in Saudi Arabia – it represents an additional attempt to build bridges with the rest of the world. It is an institution whose students and faculty hail from almost sixty countries. It is an open research facility. It is connected to a large number of distinguished universities and research institutions around the world with which it shares research, professors, and students. This university is another way to connect with the rest of the world in line with the Kingdom’s vision of trying to establish and sustain international linkages that promote peace and stability and security.

To return to where I started, when we look back at the 75 years in which our two countries have had formal ties, I believe that the relationship today is very strong. I hope that the relationship, God willing, will continue to grow stronger for the benefit of both of our countries. And before I stop, I want to say that I hope I have not spoken too fast, or too long.

Thank you for this opportunity. I look forward to the discussions.

Source: NCUSAR.org

About Ambassador Adel A. Al Jubeir

Adel A. Al-Jubeir was appointed by the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz as Ambassador to the United States on January 29, 2007. Ambassador Al-Jubeir presented his credentials to President George W. Bush at the White House on February 27, 2007.

Mr. Al-Jubeir was born February 1, 1962 in Majma’ah (Riyadh Province), Saudi Arabia, and attended schools in the Kingdom, Germany, Yemen, Lebanon, and the U.S. He obtained a B.A. summa cum laude in political science and economics from the University of North Texas in 1982, and an M.A. in international relations from Georgetown University in 1984.

In 1987 Mr. Al-Jubeir was appointed into the Saudi Diplomatic Service and posted to the Royal Embassy of Saudi Arabia in Washington, DC, where he served as Special Assistant to the Ambassador. In 1990-91, he was part of the Saudi team that established the Joint Information Bureau at Dhahran during Operation Desert Shield/Desert Storm. He was a member of the GCC delegation to the Madrid Peace Conference in October 1991, and a member of the Saudi delegation to the Multilateral Arms Control Talks in Washington, DC in 1992. In December 1992 he was dispatched with the Saudi Armed Forces to Somalia as part of Operation Restore Hope.

Mr. Al-Jubeir was appointed Director of the Saudi Information and Congressional Affairs Office in Washington in 2000, and was named Foreign Affairs Advisor in the Crown Prince’s Court in the fall of 2000. In August 2005, the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz appointed Mr. Al-Jubeir to the position of Advisor at the Royal Court.

Mr. Al-Jubeir was Visiting Diplomatic Fellow at the Council of Foreign Relations in New York, 1994-95. He has lectured at universities and academic institutions in the U.S. and appeared frequently in the media. In 2006, he received an Honorary Doctorate in Humane Letters from the University of North Texas.

Source: Saudi Embassy

Editor’s Note:

The National Council’s annual Arab-US Policymakers Conference (AUSPC) was held in Washington, D.C. on October 15-16, 2009. The 900-plus conferees addressed a host of issues under the theme, “Fresh Visions, Old Realities, New Possibilities: The Impact of Leadership Change on Arab-U.S. Relations.” On Friday afternoon Ambassador Chas Freeman provided the conference finale with his presentation on the way forward in the relationship between the United States and the Arab world.

Source: NCUSAR.org

Recalculating the Obvious
Chas. W. Freeman, Jr.

Remarks at the 18th Annual Arab-U.S. Policymakers Conference
Washington, DC
October 16, 2009

When you look back, some years can be seen as having inflected history, moving men and events along paths they would otherwise not have taken. 2001, the year of 9/11 was such a time. This year is shaping up as another, not just for the decisions that will be made but for those that most likely will not be.

The second President Bush bequeathed his successor a set of thoroughly broken policies in the Middle East and the near total estrangement of the United States from former allies and friends in the Arab and Muslim worlds. President Obama has responded with rhetorical change we, or at least five Norwegians, can believe in. In his speech at Cairo, he clearly signaled that he recognizes the imperative of solving the Israel-Palestine conflict and repairing American relations with Arabs and Muslims if the United States is to enjoy peace abroad and tranquility at home. Still, to date, in the Middle East and elsewhere his administration has made only minimal changes to longstanding American policies that are conspicuous failures. The short-term stakes in getting these policies right are large. The long-term stakes are vastly larger.

When U.S. interrogators asked Khalid Sheikh Mohammed, the confessed mastermind of the 9/11 atrocities, why al Qa`ida had done the terrible things it did that day, he gave a straightforward answer. He said that the purpose was to focus the American people on the atrocities that America is committing by supporting Israel against the Palestinian people and America’s self-serving foreign policy that corrupts Arab governments and leads to further exploitation of the Arab Muslim people. In Osama Bin Laden’s annual address to the American people this September 11, he reiterated: “We have demonstrated and stated many times, for more than two-and-a-half-decades, that the cause of our disagreement with you is your support to your Israeli allies who occupy our land of Palestine.”

There is nothing at all ambiguous or unclear about these explanations of 9/11 by its planners and perpetrators. Few abroad dispute their essential validity. Yet here in America, they remain completely unreported outside the Internet. Any public reference to U.S. backing for Israel as a grievance that motivated the atrocities in New York and Washington eight years ago is vigorously disputed and suppressed as politically incorrect. This has created a large national blind spot to the seriousness of Arab Muslim reaction to a core American policy. It has left our country unable effectively to analyze the very real threat to our domestic tranquility that intermittent terrorist attacks represent. By leaving terrorist attacks on the United States and Americans abroad unexplained and disconnecting them from the trends and events in the Middle East that helped inspire them, this self-imposed mental block has distorted our threat perceptions and greatly hampered the development of a realistic national security strategy.

So it is necessary to begin by recapitulating the obvious. The 9/11 assault on the United States was carried out by Muslim extremists motivated in large measure by their resentment of U.S. support for Israel and its actions. The need to avenge 9/11 and deter a repetition of it led directly to the American invasion of Afghanistan. The so-called global war on terrorism that this invasion inaugurated provided a spurious but politically sufficient justification for the occupation of Iraq in 2003. Our labeling of Hamas as a “terrorist organization” inspired the joint U.S.-Israeli effort to reject and overturn the results of the 2006 elections in the occupied territories, even though these elections were universally judged to be free and fair. A similar view of Hezbollah caused the U.S. to encourage Israel in its savage mauling of Lebanon and to protect it from the huge international backlash against its more recent assault on Arab civilians in Gaza. Determination to avoid another 9/11 remains the strategic rationale for the ongoing war in Afghanistan and adjacent areas of Pakistan. Meanwhile, the insolent cruelties of the West Bank occupation and the siege of Gaza continue to inflame Arab and Muslim opinion.

Taken together, these developments have caused a growing number of Arabs and Muslims to posit a broad American crusade to humiliate them and their religion. Their estrangement from the United States and other non-Islamic societies has deepened. Al Qaeda has discredited itself through its excesses, but Islamic extremism has continued to metastasize. In Gaza, for example, political forces far more fanatical than Hamas are beginning to emerge from massive suffering. What began as a conflict between Jewish colonists and indigenous Arabs has become a worldwide struggle between Jews, Muslims, and their respective allies. As Israelís sole protector, the United States has become the target of sustained asymmetric warfare by terrorists who espouse extremist Muslim agendas. Governments allied with the United States or dependent on it, especially governments in Arab and Muslim countries, are targets too. The threat we Americans now face derives less from al Qa`ida than it does from widening Muslim rage at continuing humiliation and injustice.

A just and durable peace in the Holy Land that secures the state of Israel should be an end in itself for the United States. But the fact that the conflict there enfevers and radicalizes the Islamic body politic worldwide should make the achievement of such a peace an inescapable, central task of United States strategy. This is why it was right for President Obama to take time this June to deliver a message of reconciliation to Arabs and Muslims at Cairo. Despite all the other urgent tasks before him, he has focused on resolving the Israeli-Palestinian conflict. He has repeatedly expressed determination to stabilize Israelís relations with its Arab neighbors through a “two-state” solution. The Obama Administration’s initial efforts have, however, met with contemptuous rejection from Israel, feckless dithering from the Palestinians, and skepticism from other Arabs. This should not surprise us. It does not augur well.

The current government of Israel rejects trading land for peace. It sees itself as on the verge of achieving a level of colonization of Palestinian Arab land that will make anything resembling a Palestinian state physically impossible. In the exclusively Jewish state of Israel that its leading figures envisage, only Jews will be full citizens. Some Arabs will have limited rights but most will live in an archipelago of checkpoint-ringed ghettos. They will be free, should they wish, to call these ghettos a ‘state’ but once they leave Palestine, Israel will not allow them to return. Given this Israeli vision, the American attempt to arrange a settlement freeze so that negotiations can create a Palestinian state is, from the Israeli government point of view, at best an unwelcome distraction and at worst a hostile act. Mr. Netanyahu does not fear pressure from the United States to change course. He is confident that his American lobby will arrange for Congress to punish the president if the president tries to punish Israel for its intransigence.

An Israeli cabinet-directed assassination campaign has long focused on ensuring that there is no one to talk to on the Palestinian side. With a little help from their Israeli conquerors and us Americans, surviving Palestinian politicians remain hopelessly divided. Israel has not presented a proposal for peace to the Palestinians. Sadly, if it now did so, there would be no one with the authority to accept on behalf of the Palestinian people. The United States, meanwhile, is seeking to ease Palestinian suffering in ways that improve the political standing of collaborators with the Israeli occupation authorities. Will Palestinian leaders emerge who are willing to take whatever they can get from Israel and who are able somehow to call off the resistance to it? That seems to be the hope, if not the plan. It is not, of course, the trend.

The Obama administration is unwilling, at least for now, to put pressure on Israel. Instead, it has fallen back on the use of diplomacy as psychotherapy for Israel’s political pathologies. It is trying to induce better Israeli behavior by arranging Arab gestures that appease Israeli apprehensions and signal Arab acceptance of the Jewish state in their midst even before its borders are fixed or the status of both its captive Arab population and those who fled to the refugee camps in neighboring countries is resolved. American diplomats see these gestures as down payments on the normalization of relations with Israel that the Arab League proposed at Beirut in 2002 in the so-called “Arab Peace Initiative.” But the Arabs premised their willingness to accept Israel on Israel’s reaching an acceptable agreement with the Palestinians. With Israel now neither doing nor promising anything that might lead to an acceptable status for the Palestinians, the Arabs see no reason to appease it. Nor do they any longer feel obliged by friendship to accommodate what they judge to be ill-considered American requests.

Adding poignancy to the impasse are two dreadful ironies. The state of Israel was established to provide the world’s Jews with a homeland in which they might safely enjoy the pursuit of happiness free from continuing persecution by Gentiles. But the Jewish state has become the most dangerous place on the planet for Jews to live. And, with anti-Semitism now universally rejected in its traditional Christian heartland, Israelís actions and policies have become the only significant stimulus to anti-Jewish animus there and elsewhere. Meanwhile, the replacement of Zionist idealism, humanism, and secularism with the cynicism, racism, and religiosity of contemporary Israeli politics has precipitated a mounting moral crisis and loss of confidence among many committed to the Jewish state.

Although some settlers continue to arrive, one-fifth of Israel’s now reside abroad. Jewish emigration is accelerating. Meanwhile, the Arab population of Israel and the occupied territories continues to grow, as does the size of the Palestinian Diaspora. By 2015, barring mass deportation, half the people in Israel and the occupied territories will be Arabs. Thereafter, Jews will be a declining minority. The international community, including I daresay most of the Jewish Diaspora, does not accept the settler propositions that Jews can and should by divine right entrench their rule over the Arabs of the Holy Land or define them as morally inconvenient and deport them. An anti-apartheid-style campaign of ostracism, boycott, and disinvestment against this version of a Jewish state has already begun.

In combination, current trends portend the perpetuation of violent struggle by the Palestinians against their Israeli overlords, even as the Jewish state is isolated from without and corrodes from within. These trends lead to escalating antagonism between the United States and the Arab and Muslim worlds. Given the self-identification of many Jews with the state of Israel, these trends also risk a rebirth of anti-Semitism and a spillover of violence to the Jewish Diaspora.

So where does this leave the Obama Administration’s peace project? In Israel’s own estimation and that of the region, the Jewish state is at a turning point. Time is running out on the prospects for peaceful engagement between it, the Palestinians, other Arabs, and non-Arab Muslims. No peace is conceivable without the full use of American moral and economic leverage to bring Israel to the negotiating table. A decision by the Obama Administration to compel Israel to make the choices necessary to achieve mutually respectful coexistence with the Palestinians and other Arabs would, however, lead to immediate political crises in both Israel and the United States. The Administration speaks with determination but is it really prepared to risk this? It is too early to say.

Peace with the Palestinians would enable Israel for the first time to be accepted by 340 million Arabs and 1.2 billion non-Arab Muslims as a legitimate part of the Middle East. It would end the conflict in the Holy Land. It is the key to deradicalization of the Arab and Muslim worlds and to ending their violent backlash against the West. It is the prerequisite for the restoration of peace within the realm of Islam.

The alternative is the current Israeli government’s effort to impose a Jewish dominated state dotted with little Arab ghettos. This is a success that Israelis would almost certainly come bitterly to regret. Would a Jewish state seen by the world as embodying racism and religious bigotry retain the support of the Jewish Diaspora? Would the United States continue indefinitely to guarantee its security? The safety of such an Israel and its citizens would depend on the so-far undemonstrated ability of intimidation, ruthlessly sustained, to grind Arab resistance into acquiescence. Cairo and Amman would have to be kept within a Camp David framework that Egyptians and Jordanians, if allowed to vote, would even now overwhelmingly repudiate. Israelís right to exist as a state in the Middle East would almost certainly be reviewed in intermittent tests of arms, conducted, as in the case of the Crusader kingdoms in Palestine over decades, if not centuries. Israel would have to sustain military hegemony in perpetuity over larger, ever more populous and ever more modernized Arab and Muslim neighbors. If these conditions were not met, as they almost certainly could not be, this unilaterally imposed outcome would be an invitation to protracted Arab and Muslim struggle against Israel and its supporters abroad.

It is hard to see this as a formula that leads to anything but eventual disaster for Israel and its foreign backers, now essentially limited to the United States. Israel’s nuclear doctrine, based as it is on an amalgam of Armageddon with the heroic suicide at Masada, seems to recognize this. On the whole, for sensible people in Israel and for Americans, the peaceful emergence of a viable Palestinian state in the occupied territories and Gaza looks like a much better bet than self isolation.

In the meantime, the region presents other challenges even if none of them has the transformative potential of a peace or continued warfare in the Holy Land. Let me now turn briefly to these.

It is good that the end of the American misadventure in Iraq is in sight. But its termination is not likely to repair the injury it did to the standing of the United States in either the international or Muslim communities. The surge averted disaster; the withdrawal may yet deliver it. The post occupation order in Iraq is unlikely to emerge smoothly or without further stressing regional stability. In the land between the two rivers, the United States will leave behind a battleground of grievances. The Kurdish and Sunni Arab minorities, among others, must likely undergo still more suffering before things settle down. There will be no harvest of goodwill from the carnage in Iraq.

The same seems likely to be true of our eight-year intervention in Afghanistan. We began it with simple and straightforward goals: the apprehension of al Qaeda and the chastisement of its Afghan hosts. But these goals have been buried in a barrage of competing ideological and special interest objectives. The result is combat in a political vacuum, a war whose only apparent theme is now Western hostility to militant Islam. This has destabilized Pakistan and nurtured a particularly virulent form of terrorism there and in the Pakistani Diaspora. It has spurred a recent surge in financial contributions to the Taliban as an apparently heroic resistance to infidel trespasses on Islam.

What then to do about Afghanistan, where everyone admits the most likely outcome is now failure? If you ask a religious scholar or ideologue, you will hear a sermon. From an economist, expect a development scheme. Ask an NGO and prepare to receive a program proposal. People come up with the solutions they know how to put together. Ask a general what must be done, and you will get a crisp salute and the best campaign plan military science can devise.

The Obama Administration is now pondering yet another military-proposed campaign plan. This one features a pacification effort extending over as much as another decade. But al Qa`ida has relocated to Pakistan from Afghanistan. Neither the Taliban leadership nor anyone else in Afghanistan seems to want it back. The proposed pacification campaign is called a strategy but it is not. It strains to find a military way to transform Afghanistan, even though its authors, who are very smart soldiers, recognize there is none. Our civilian leadership finally shows signs of taking charge of policy rather than, in a strange evasion of civilian control of the military, delegating its formulation to the generals. What we need is a strategy backed by force, not the use of force as a substitute for strategy.

This brings me, at last, to Iran. Tehran had nothing to do with the assault on America on 9/11, but no nation has benefitted more from the American reaction to it than the Islamic Republic. Its revolution seemed to be flickering out when 9/11 happened. In short order, its greatest enemy, the United States, then eliminated its other enemies in both Kabul and Baghdad and embarked on a military rampage through the Islamic world that estranged Americans from our traditional allies there. But, wait! It gets even better from the Iranian point of view.

In Afghanistan, the Iranians have been able to sit on the sidelines and watch us exhaust ourselves in inconclusive warfare. In Iraq, Iran is the dominant foreign influence in Iraq’s newly sectarian politics. Of course, no one can say whether Baghdad will continue its de facto alliance with Tehran after the United States withdraws. Israel and the United States brushed aside efforts by Damascus to dilute its longstanding dependence on Tehran, thus cementing rather than eroding Iran’s influence in Syria. The 2006 Israeli savaging of Lebanon drove Iran’s client movement, Hezbollah, onto the commanding heights of Lebanese politics. This reduced Tehran’s need to go through Damascus to affect events in Lebanon or to reach northern Israel. Israeli and American efforts to ostracize and overthrow the elected Hamas government in Palestine meanwhile left it nowhere to go but into the arms of Iran. Assertively Shiite Iran has, for the first time, acquired the Sunni Arab following it had long sought. Current American policy seems clueless about how to reverse these Iranian gains.

Meanwhile, Tehran seems on track to acquire the ability to field its own deterrent to the threats of nuclear attack Iranians have serially heard from Saddam’s Iraq, successive Israeli governments, and George Bush’s America. David Ben Gurion wrote the book on how to build a clandestine nuclear weapons capability. He skillfully appeased President Kennedy’s passion for non-proliferation even as his government subverted and circumvented it. The ayatollahs have read and absorbed the Israeli playbook, minus, one hopes, the bit about Masada. Israelis, better than anyone, know how this script ends. It does not end in a war that secures Israelís nuclear monopoly in its region. It is time to start thinking about how to mitigate the undeniable dangers of an Iranian as well as an Israeli nuclear arsenal.

I must not close without a brief mention of the longstanding Arab friends of the United States and the West in the Gulf and Red Sea regions. Despite welcome new activism on the part of Saudi Arabia, Egypt and the countries of the Gulf Cooperation Council have to a great extent been bystanders as a strange combination of American diplomatic default and military activism has dismantled the regional order that once protected them. Iraq no longer balances Iran. The United States no longer constrains Israel, which has never behaved more belligerently. Iran has acquired unprecedented prestige and influence among Arabs and Muslims. The next stage of nuclear proliferation is upon the region. For the first time ever, Shi`ism dominates the politics of Arab states traditionally ruled by Sunnis. Islamist terrorism menaces Egyptian and Gulf Arab domestic tranquility as well as that of the West. The United States, once attentive to Arab security and other concerns, is now obsessed with our own issues and objectives in the region.

The Gulf Arabs have the financial resources but neither the institutions nor the will to mount the unified effort needed to cope with these challenges. They are adrift; not sailing to a new strategic strong point. The drift is taking them away from their traditional reliance on America and toward new partners. These are mainly the so-called BRIC countries of Brazil, Russia, India, and China, plus South Africa. But Egypt and the Gulf Arab states seem destined to remain on the strategic sidelines, not in the game. They will not step forward to take the lead in addressing the disputes of which I have been speaking. Hence the need for continuing American leadership.

So what is to be done? In the case of Israel-Palestine, a failure to decide is in fact a fateful decision. The avoidance of choice risks future tragedy for America as well as Israel and the Arabs.

The best thing the United States could do for Iraq now is to engage its neighbors. All should share our interest in supporting non-violent Iraqi solutions to Iraqi problems. We need to work with Turkey and Arab allies to enlist Syria, Iran, and others in this task and hold them to it.

In the region as a whole, the American effort to build a coalition of opposition to Iran has failed. We must now join our allies and friends in offering those who have come to depend on Tehran alternatives to doing so. Iran is a proud country that will not surrender to threats. Iranians remain obsessed with the affront they believe we pose to their national identity, independence, and honor among nations. Without a parallel normalization of US-Iranian relations, there is no hope of resolving the nuclear issue in a way that mitigates its menace. President Obama’s several messages to the Iranian people have opened a path to respectful Iranian-American dialogue that might lead to this. We must persist in inviting Tehran to walk this path with us.

Finally, in Afghanistan, we need a comprehensive strategy, not another campaign plan. We must leverage religious and tribal realities rather than seek to overturn them. Our objective should be to consolidate the exclusion of al Qa`ida from Afghan territory. To do this, we must work with Pakistan and in partnership with friendly Arab and Muslim countries, not at cross purposes with them, and we must support, not undercut, the Pashtun tribes. This, not a Western military presence on Afghan soil, is how we helped Afghans expel the Soviets from their homeland. This, ratified by a reconvened Loya Jirga and supported with generous economic assistance, is how we can keep al Qa`ida out of Afghanistan while we work to expel it from Pakistan.

President Obama’s message to the world’s Muslims at Cairo last June illuminated a different way forward than the road we appear to be on. We can yet take that way forward. It is time to do so.

About The Honorable Chas W. Freeman, Jr.

The Honorable Chas. W. Freeman, Jr. − Chairman of the Board, Projects International, Inc., a Washington, DC-based business development firm specializing in international joint ventures, acquisitions, and other business operations for its American and foreign clients; formerPresident, Middle East Policy Council; former Assistant Secretary of Defense for International Security Affairs (1993-94), earning the Department of Defense’s highest public service awards for his roles in designing a NATO-centered post-Cold War European security system and in reestablishing defense and military relations with China; former U. S. Ambassador to Saudi Arabia (during Operations Desert Shield and Desert Storm); Principal Deputy Assistant Secretary of State for African Affairs during the U.S. mediation of Namibian independence from South Africa and Cuban troop withdrawal from Angola; and author of The Diplomat’s Dictionary (Revised Edition) and Arts of Power: Statecraft and Diplomacy.

Editor’s Note:

In our exclusive interview with David Hamod today we talked about the launch of the King Abdullah University of Science and Technology in Saudi Arabia on September 23, 2009. Mr. Hamod, President and CEO of the National U.S.-Arab Chamber of Commerce, was among the invited guests for the inauguration of this landmark institution. While in the Kingdom he shared his thoughts on the commercial prospects for the cutting-edge technologies expected to result from KAUST research and development in this op-ed. We thank Mr. Hamod for permission to share it with you.

KAUST: A Catalyst for Small Business Growth?
David Hamod

In my travels around the Kingdom since the recent launch of the King Abdullah University of Science and Technology (KAUST), I have encountered considerable enthusiasm for this new “House of Wisdom” on the shores of the Red Sea. Saudis and non-Saudis alike recognize that this extraordinary experiment, made possible through the vision of the Custodian of the Two Holy Mosques, has the potential to transform the Kingdom into one of the world’s top destinations for academics looking to conduct scientific research at the graduate level.

What few have apparently realized, however, is that KAUST could also play a leading role in fostering partnerships between entrepreneurs around the world and Saudi Arabia’s business community.

The biggest obstacles for most small companies worldwide are two-fold: access to research facilities and access to capital. The former is essential for start-ups looking to develop cutting-edge technologies, and the latter is vital for production, market penetration, and commercial growth. KAUST, and investors in Saudi Arabia, offer access to all of these.

For small businessmen and businesswomen, particularly those leading early-stage technology start-ups, KAUST’s Innovation Clusters look like a dream come true. On a competitive basis, at little cost to these entrepreneurs, KAUST offers state-of-the-art research laboratories and offices.

But that’s just for starters.

KAUST also offers a business incubator designed to convert high tech research projects into commercial entities that will offer practical applications for the benefit of society. The incubator will assist with business plans, local service providers, accommodations, and other services intended to make the transition to KAUST as worry-free as possible.

Moreover, through the KAUST Industrial Collaboration Program (KICP), the university will introduce these start-ups to such world-class companies as Boeing and IBM — firms that are well positioned to help match up fledgling technologies with global applications. KICP promises to promote collaboration to foster pilot projects, create consequence companies, and build capacity in cooperation with some of the world’s best recognized business entities.

Access to such expertise is essential, but it represents only part of the equation. The other vital element needed is funding.

For worthy start-ups with a good track record, KAUST has established a Seed Fund that may invest up to $250,000. This is a remarkable contribution by any standard, but it pales in comparison to funding that should become available through Saudi Arabia’s private sector.

The Kingdom’s business community is known for its investment savvy but, historically, there were very few “pipelines” in Saudi Arabia that methodically carried entrepreneurs to local investors. With the establishment of KAUST, this may be about to change.

One can imagine a scenario in which chambers of commerce like mine, working in cooperation with the Council of Saudi Chambers of Commerce and Industry, help to identify entrepreneurs overseas who are good candidates for research & development opportunities at KAUST.

These same chambers, working with their member companies, would also be well positioned to provide more substantial seed money in support of those technologies that have promising commercial applications. Such funding is especially important now – at a time when banks around the world have largely shut off the supply of capital to small businesses and entrepreneurs.

KAUST is doing its part to recruit the best and the brightest from Saudi Arabia and around the world to engage in scientific research. With business community collaboration, converting such research to commercial applications for the marketplace holds the potential to create new cutting-edge companies, generate home-grown jobs, and help the Kingdom move toward the knowledge-based society envisaged by King Abdullah.

David Hamod, President & Chief Executive Officer of the National U.S.-Arab Chamber of Commerce, attended the opening of KAUST on September 23, 2009.

About NUSACC:

The National U.S.-Arab Chamber of Commerce (NUSACC), established 40 years ago, is America’s longest serving organization dedicated to U.S.-Arab business. NUSACC is widely regarded as the voice of American business in the Arab world and the premier portal to the United States for Arab commercial enterprises. With offices in New York, Houston, Los Angeles, and its headquarters in Washington DC, NUSACC is well positioned to fulfill its mission to “promote, support, and strengthen U.S.-Arab business and economic cooperation.”

Editor’s Note:

On the bookshelf this month is Anthony Cordesman’s latest contribution to our understanding of Saudi Arabia’s defense and security challenges, in the form of “Saudi Arabia: National Security in a Troubled Region.” Dr. Cordesman, the Arleigh A. Burke Chair in Strategy at the Center for Strategic and International Studies (CSIS), has written over 60 books including a four volume series on the lessons of modern war. At CSIS, Cordesman has been director of the Gulf Net Assessment Project, the Gulf in Transition study, and principle investigator of the Homeland Defense Project. He directed the Middle East Net Assessment Project, acted as codirector of the Strategic Energy Initiative, and directed the project on Saudi Arabia in the 21st century.

Readers here have benefited from the numerous articles, interviews and reports that he has shared through SUSRIS and we look forward to reading his latest offering. Today for your consideration we provide the CSIS release about the new book and provide links to the many SUSRIS articles contributed by Dr. Cordesman.

Saudi Arabia: National Security in a Troubled Region
Anthony H. Cordesman

Anthony H. Cordesman

Saudi Arabia: National Security in a Troubled Region provides a comprehensive, up-to-date analysis of Saudi Arabia’s strategic security efforts, both within the country and as a stabilizing regional presence. In this meticulously researched book, acclaimed geopolitical scholar Anthony Cordesman, well-known for his role as ABC News’s national security analyst, takes readers inside the Saudi security structure for an unprecedented look at its internal and external forces, policymaking, and careful balancing of regional and East/West relationships.

In Saudi Arabia, Anthony Cordesman shows how the Kingdom is responding to an unstable Iraq, a potentially nuclear Iran, the needs of its fellow Southern Gulf states, and the ongoing threat of terrorism inside its borders. Cordesman also considers a number of socioeconomic and demographic factors that could bring dramatic changes within the Kingdom in the near future. Nonpartisan, unbiased, and based on the author’s unparalleled access to high-profile Saudi officials, the book offers a level of expertise and insight no other consideration of the subject can match.

Source: CSIS

Book Info: “Saudi Arabia: National Security in a Troubled Region” – Anthony H. Cordesman – Amazon.com

***

About Anthony H. Cordesman

Anthony H. Cordesman holds the Arleigh A. Burke Chair in Strategy at CSIS and acts as a national security analyst for ABC News. He is a recipient of the Department of Defense Distinguished Service Medal. During his time at CSIS, he has completed a wide variety of studies on energy, U.S. strategy and defense plans, the lessons of modern war, defense programming and budgeting, NATO modernization, Chinese military power, the lessons of modern warfare, proliferation, counterterrorism, armed nation building, the security of the Middle East, and the Afghan and Iraq conflicts. (Many of these studies can be downloaded from the Burke Chair section of the CSIS Web site at http://www.csis.org/program/burke-chair-strategy.) Cordesman has directed numerous CSIS study efforts on terrorism, energy, defense panning, modern conflicts, and the Middle East. He has traveled frequently to Afghanistan and Iraq to consult for MNF-I, ISAF, U.S. commands, and U.S. embassies on the wars in those countries, and he was a member of the Strategic Assessment Group that assisted General Stanley McChrystal in developing a new strategic for Afghanistan in 2009. He frequently acts as a consultant to the U.S. State Department, Defense Department, and intelligence community and has worked with U.S. officials on counteterrorism and security areas in a number of Middle East countries.

Before joining CSIS, Cordesman served as director of intelligence assessment in the Office of the Secretary of Defense and as civilian assistant to the deputy secretary of defense. He directed the analysis of the lessons of the October War for the secretary of defense in 1974, coordinating the U.S. military, intelligence, and civilian analysis of the conflict. He also served in numerous other government positions, including in the State Department and on NATO International Staff. In addition, he served as director of policy and planning for resource applications in the Energy Department and as national security assistant to Senator John McCain. He had numerous foreign assignments, including posts in the United Kingdom, Lebanon, Egypt, and Iran, as well as with NATO in Brussels and Paris. He has worked extensively in Saudi Arabia and the Gulf.

He is the author of a wide range of studies on energy policy, national security, and the Middle East, and his most recent publications include (CSIS, 2010), Iraq and the United States: Creating a Strategic Partnership (CSIS, 2010), Saudi Arabia: National Security in a Troubled Region (Praeger, 2009), Iranian Weapons of Mass Destruction: The Birth of a Regional Nuclear Arms Race? (Praeger, 2009), Withdrawal from Iraq: Assessing the Readiness of Iraqi Security Forces (CSIS, 2009), and Winning in Afghanistan: Creating Effective Afghan Security Forces (CSIS, 2009).

Source: CSIS

***

Full List of Anthony Cordesman’s Publications (Source: CSIS) [LINK HERE]

***

Articles and Interviews on SUSRIS by and with Anthony Cordesman

• U.S. Strategy in the Gulf – Cordesman – SUSRIS – Apr 18, 2011
• Understanding Saudi Stability and Instability – Cordesman – SUSRIS – Mar 1, 2011
• AUSPC Panel: Defense Cooperation – SUSRIS – Oct 26, 2010
• US-Saudi Security Cooperation, Impact of Arms Sales – Cordesman – SUSRIS – Sep 17, 2010
• The New Saudi Arms Deal – Cordesman – SUSRIS – Sep 17, 2010
• Reality in the Gulf – Cordesman – SUSRIS – Jul 22, 2010
• Saudi Arabia and Gulf Security – Cordesman – SUSRIS – May 18, 2010
• Saudi Arabia: National Security in a Troubled Region – Anthony H. Cordesman – SUSRIS – Oct 10, 2009
• Gulf Threats, Risks and Vulnerabilities: Terrorism and Assymetric Warfare – Anthony H. Cordesman and Adam C. Seitz – SUSRIS – Aug 31, 2009
• Regional Defense: A Need for Credibility, Effectiveness and Transparency (AUSPC 2008)- Anthony Cordesman – SUSRIS – Dec 8, 2008
• Saudi National Security and the Saudi-US Strategic Partnership By Anthony Cordesman – SUSRIS – Dec 4, 2008
• Security Cooperation in the Gulf – SUSRIS – Nov 22, 2008
• The US, Israel, the Arab States and a Nuclear Iran – Cordesman – SUSRIS – Oct 10, 2008
• Conventional Armed Forces in the Gulf – Cordesman – SUSRIS – Aug 23, 2008
• President Bush’s Trip to the Middle East – Briefing by Anthony Cordesman and Jon Alterman of CSIS – SUSRIS IOI – May 14, 2008
• Security Challenges and Threats in the Gulf – SUSRIS – Mar 28, 2008
• The Gulf Arms Sales: A Background Paper – Anthony H. Cordesman – SUSRIS IOI – Feb 5, 2008
• Security Cooperation in the Middle East – Anthony Cordesman – SUSRIS IOI – Nov 27, 2007
• Saudi Military Modernization – A Conversation with Anthony Cordesman – Interview – Nov 23, 2007
• Weapons of Mass Preservation – Anthony H. Cordesman – SUSRIS IOI – Aug 20, 2007
• Iran, Oil, and the Strait of Hormuz – Anthony H. Cordesman – SUSRIS IOI – Mar 27, 2007
• Global Energy Security – Anthony H. Cordesman – SUSRIS IOI – Nov 15, 2006
• The Impact on Saudi Regional Stability – Anthony H. Cordesman – SUSRIS IOI – Aug 2, 2005
• Saudi Arabia and the Struggle Against Terrorism by Dr. Anthony Cordesman – SUSRIS IOI – Apr 11, 2005
• Why Reforge the U.S. and Saudi Relationship? An Interview with Anthony Cordesman – SUSRIS IOI – Sep 28, 2004
• The Prospects for Stability in 2004 — The Issue of Political, Economic and Social Reform – Anthony H. Cordesman – Part 1 – SUSRIS – Feb. 23, 2004
• The Prospects for Stability in 2004 — The Issue of Political, Economic and Social Reform – Anthony H. Cordesman – Part 2 – SUSRIS – Feb. 23, 2004
• The Prospects for Stability in 2004 — The Issue of Political, Economic and Social Reform – Anthony H. Cordesman – Part 3 – SUSRIS – Feb. 23, 2004
• The 9/11 Commission Report: Strengths and Weaknesses – Anthony H. Cordesman – SUSRIS – Jul. 29, 2004
• Developments in Iraq at the End of 2003: Adapting U.S. Policy to Stay the Course,” by Anthony H. Cordesman, GulfWire Perspectives, January 7, 2004
• “Four Wars and Counting: Rethinking the Strategic Meaning of the Iraq War,” by Anthony H. Cordesman, GulfWire Perspectives, December 5, 2003
• “Iraq: Too Uncertain to Call,” by Anthony H. Cordesman, GulfWire Perspectives, November 18, 2003
• Saudi Redeployment of the F-15 to Tabuk – Anthony H. Cordesman – SUSRIS – November 1, 2003
• “Iranian Security Threats and US Policy: Finding the Proper Response,” by Anthony H. Cordesman, GulfWire Perspectives, October 28, 2003
• “What is Next in Iraq? Military Developments, Military Requirements and Armed Nation Building,” by Anthony H. Cordesman, GulfWire Perspectives, August 22, 2003
• Saudi Government Counterterrorism: Counter Extremism Actions – Anthony H. Cordesman – SUSRIS -August 4, 2003
• “Saudi Arabia: Don’t Let Bin Laden Win!”, by Anthony H. Cordesman, Saudi-American Forum Item of Interest, May 16, 2003
• “Postwar Iraq: The New Old Middle East,” by Anthony H. Cordesman, GulfWire Perspectives, April 16, 2003
• “Iraq’s Warfighting Strategy,” by Anthony H. Cordesman, GulfWire Perspectives, March 11, 2003
• “Reforming the Middle East: President Bush’s Neo-Con Logic Versus Regional Reality,” by Anthony H. Cordesman, GulfWire Perspectives, February 27, 2003
• “The Great Iraq Missile Mystery,” by Anthony H. Cordesman, GulfWire Perspectives, February 26, 2003
• “Iraq Security Roundtable at CSFS: A Discussion With Dr. Anthony Cordesman,” Center for Strategic and Future Studies, GulfWire Perspectives, January 28, 2003
• “A Coalition of the Unwilling: Arms Control as an Extension of War By Other Means,” By Anthony H. Cordesman, GulfWire Perspectives, January 25, 2003
• “Is Iraq In Material Breach? What Hans Blix, Colin Powell, And Jack Straw Actually Said,” By Anthony H. Cordesman, GulfWire Perspectives, December 20, 2002
• “Saudi Arabia: Opposition, Islamic Extremism And Terrorism,” by Anthony H. Cordesman, GulfWire Perspectives, December 1, 2002
• “Planning For A Self-Inflicted Wound: U.S. Policy To Reshape A Post-Saddam Iraq,” by Anthony H. Cordesman, GulfWire Perspectives, November 24, 2002
• “The West And The Arab World – Partnership Or A ‘Clash Of Civilizations?’” By Anthony H. Cordesman, GulfWire Perspectives, November 12, 2002
• “Strategy In The Middle East: The Gap Between Strategic Theory And Operational Reality,” by Dr. Anthony H. Cordesman, GulfWire Perspectives, October 22, 2002
• “A Firsthand Look At Saudi Arabia Since 9-11,” GulfWire’s Interview With Dr. Anthony Cordesman In Saudi Arabia, GulfWire Perspectives October 10, 2002
• “Escalating To Nowhere: The Israeli And Palestinian Strategic Failure,” By Anthony H. Cordesman, GulfWire Perspectives, April 8, 2002
• “Reforging The U.S. And Saudi Strategic Partnership,” by Dr. Anthony H. Cordesman, GulfWire Perspectives, January 28, 2002

[GulfWire Articles are being added to SUSRIS. Please check Dr. Cordesman's SUSRIS page for updates.]

Editor’s Note:

King Abdullah of Saudi Arabia traveled to Damascus on Wednesday for a two-day summit with Syrian President Bashar Assad for discussions on international and regional issues and their bilateral relationship in his first visit to Syria since becoming King in 2005. He was accompanied by intelligence chief Prince Muqrin, Labor Minister Ghazi Al-Gosaibi, Finance Minister Ibrahim Al-Assaf, Culture and Information Minister Abdul Aziz Khoja and State Minister for Foreign Affairs Nizar Madani.

Diplomats in Damascus, according to Arab News yesterday, said an understanding between the Saudi and Syrian leaders could help forge a wider Arab stance helpful to boosting Middle East peace, promoting formation of a new government in Lebanon and assuaging Arab fears on Iran, an ally of Syria.

Today we provide for your consideration an article that appeared in Arab News today outlining the results of the summit, including agreement on backing a unity government in Lebanon as well as other diplomatic, political and economic cooperative measures.

Kingdom, Syria call for a unity govt in Lebanon
Arab News

RIYADH: Saudi Arabia and Syria called Thursday for the formation of a national unity government in Lebanon. They also backed the Yemeni government in its ongoing efforts to reinforce peace and stability across the country.

“With regard to Lebanon, the two sides emphasized the importance of achieving the unity and stability of the country through the strengthening of consensus among its groups and speeding up the formation of a national unity government,” said a joint communiqué issued at the conclusion of the state visit of Custodian of the Two Holy Mosques King Abdullah to Damascus.

The communiqué urged joint Arab and Islamic action to stop the continuous Israeli aggression on the Palestinians. The two sides stressed the need to lift the Israeli siege on Al-Aqsa Mosque and confront the measures taken by Israel to Judaize Jerusalem, it added.

Saudi Arabia and Syria stressed the need for ensuring the unity and Arab identity of Iraq and opposed interference in its internal affairs. They supported Yemen’s efforts to end an insurgency that has been threatening the country’s unity and security.

King Abdullah returned to Riyadh on Thursday at the end of a two-day visit. He held a final round of talks with Syrian President Bashar Assad before leaving Damascus, with discussions focusing on major regional and international issues.

“King Abdullah received President Assad at his residence in Ash-Shaab Palace in Damascus on Thursday and the two leaders completed their discussions, which they began Wednesday, on a number of topics,” the Saudi Press Agency said, adding that the talks were attended by Prince Abdul Aziz bin Abdullah, the king’s adviser.

The two countries agreed to strengthen political, cultural and media cooperation as well as hold a meeting of the Saudi-Syrian Joint Commission as early as possible. They also agreed to expand economic, commercial, customs and investment cooperation, the communiqué added.

A meeting of the Saudi-Syrian Businessmen’s Forum will be held in the first quarter of next year to boost joint ventures while the capital of the Saudi-Syrian Company for Industrial and Agricultural Investment will be increased.

King Abdullah arrived in Damascus on Wednesday at the head of a high-level delegation in what analysts said a historic visit by the Saudi leader to improve ties. The visit saw the signing of an agreement between the two countries to prevent double taxation and avoid tax evasion.

Finance Minister Ibrahim Al-Assaf, who signed the accord with his Syrian counterpart Muhammad Al-Hussein, said it would reduce tax burden on investors and businessmen in both countries.

Al-Assaf held a meeting with Al-Hussein on Thursday to discuss prospects of expanding economic cooperation between the two countries. “The two ministers agreed on studying the issue of fees imposed on Saudi and Syrian trucks that carry goods to both countries or pass by them,” said an official statement after the meeting.

Al-Assaf and Al-Hussein also explored prospects of cooperation in banking and insurance including establishment of a Saudi-Syrian bank and a joint insurance firm in Syria. They said the volume of trade, now only $2 billion a year, would begin growing in the coming days.

“We have decided to remove the hurdles to commercial exchanges, notably the taxes recently imposed by Syria on products exported to Saudi Arabia,” such as olive oil and ceramics, Hussein was quoted as saying. For his part, Al-Assaf spoke of Abdullah’s visit, his first after becoming the king in 2005, as “very important for strengthening economic relations.” The two leaders underlined their “commitment to pursue coordination and consultations at all levels on matters that interest both peoples,” the Syrian news agency SANA said, adding that they wanted to “remove the obstacles that have hindered their relations.” Analysts said the royal visit would have great impact on the region’s peace and stability. “It was a positive visit and the talks were held in an amiable atmosphere. Both the Syrian and Saudi sides expressed their satisfaction with the talks,” said Waddah Abd-Rabbo, the editor of the semi-official Syrian paper Al-Watan.

“The Saudi monarch’s visit is expected to open up new horizons between these two influential countries, who play an important role in the region and on the international level,” Abd-Rabbo said.

Assad’s political and media adviser Bouthaina Shaaban said Syrian-Saudi relations were making excellent progress. “There is a strong need to create an Arab atmosphere that can utilize the Arab capabilities to raise the voice of Arabs on regional and international forums.”

Source: Arab News

Editor’s Note:

Today we provide for your consideration the Arab News interview with author Robert Lacey on the opening of the King Abdullah University of Science and Technology last week. Lacey, who wrote about Saudi Arabia in “The Kingdom” (1981), is author of “Inside the Kingdom: Kings, Clerics, Modernists, Terrorists, and the Struggle for Saudi Arabia, set for release in October. SUSRIS thanks Arab News for sharing this interview with you.

The level of scientific research will improve: Robert Lacey
Siraj Wahab | Arab News

THUWAL: Among a galaxy of world leaders, Nobel laureates and well-known professors and scientists at Wednesday’s opening ceremony of King Abdullah University of Science and Technology (KAUST) was the British historian Robert Lacey. A distinguished journalist with a fascination for history, he is known very well in the Kingdom for his meticulous research on events that have shaped Saudi Arabia’s history.

He is an author of a number of international bestsellers, including “Majesty” and his earlier book on Saudi Arabia, “The Kingdom.”

Lacey’s new book, “Inside the Kingdom: Kings, Clerics, Modernists, Terrorists and the Struggle for Saudi Arabia,” will be published next month in London and New York.

In an interview with Arab News on the sidelines of the KAUST opening, Lacey said KAUST would undoubtedly raise the level at which scientific research is conducted in this country. Following are excerpts from the interview:

ARAB NEWS: What are your first impressions of KAUST?

LACEY: When I first saw KAUST from the highway, shimmering on the desert coast like a mirage beside the sea, the place seemed almost dream-like — and it is, of course, the product of one man’s dream.

ARAB NEWS: How will the creation of this university help in promoting educational reforms?

LACEY: Educational reform depends on the people who shape education — from the minister and his officials to the teacher in the classroom, and to every parent who wants better schools for their children and should try to make their voices heard. The king has shown the way. Now the question is — will everyone follow?

ARAB NEWS: How will this help raise the stature of King Abdullah?

LACEY: King Abdullah has already attained considerable international stature and respect: the interfaith dialogue, the domestic program to curb extremism, the national dialogues; the Arab Peace Initiative, membership of the World Trade Organization, the introduction of human rights organizations to the Kingdom, and now a standard-setting scientific university of international standard, built and staffed in record time. After the debacle of 9/11, the king has been the saving of Saudi Arabia’s reputation in the world.

ARAB NEWS: You have followed the developments in the Kingdom for a long time. Where does the Kingdom stand at the moment? Would it be right to say that the creation of KAUST marks a paradigm shift in the government’s thinking?

On the day following the KAUST opening, i.e. Thursday the Kingdom will be represented by the foreign minister at the G20 summit in Pittsburgh — the gathering of the world’s Top 20 economic powers.

That shows the growing stature of Saudi Arabia in the world. As for “a paradigm shift in the government’s thinking” — the Saudi government is not just the Council of Ministers. It is also the Shoura Council, the Grand Ulema Council, the local governors, the municipal councils, and all the judges and civil servants as well. Have all those people really “got it”? Have they understood? Do they agree? And do they sincerely support what King Abdullah is trying to achieve? Only history will tell.

ARAB NEWS: Will KAUST lead to substantial changes in way research is done in the Kingdom? Will this university help better the level of education at other universities, such as King Abdulaziz University in Jeddah and King Saud University in Riyadh?

LACEY: KAUST will undoubtedly improve the level at which scientific research is conducted in this country. Saudi researchers will have the unparalleled opportunity to work alongside and to learn from some of the finest scientists in the world. Let us hope that the lessons will be learned and spread widely.

ARAB NEWS: What were the expectations when King Fahd University of Petroleum and Minerals (KFUPM) in the Eastern Province was launched? Were those expectations met?

LACEY: I am afraid that I don’t have the information to answer this.

ARAB NEWS: How do you think KAUST will be different from KFUPM?

LACEY: Let us hope that the two universities will work together. KFUPM is already the highest-ranked Saudi college in the international league tables of higher education. The chance now exists for bright graduates from KFUPM to go on to KAUST, and for KAUST graduates to come back to teach at KFUPM, thus enriching both institutions.

ARAB NEWS: Since you have known the Kingdom better than almost any other foreign observer, what will be your message to those coming from outside and watching the creation of this university?

LACEY: I’d say, “Look out, Saudi’s cookin’!”

ARAB NEWS: What will you say to the skeptics, both within and without, who feel that KAUST will have no major impact on the attitude of the local population?

LACEY: They could be right.

Source: Arab News

About Robert Lacey:

Robert Lacey is the author of “Majesty,” the classic biography of Queen Elizabeth II. A distinguished journalist with a love of history, he wrote the series “Great Tales from English History,” and was co-author of the best-selling Year 1000. In 1979, he moved with his family to Saudi Arabia for eighteen months to research “The Kingdom,” his penetrating study of the country’s complex and often paradoxical culture, which was banned in Saudi Arabia. For the past three years, Robert has been based in Jeddah and Riyadh, gathering material for this sequel — a completely new book which relates the Saudi role in the years of terror.

KAUST Fact Sheet:

King Abdullah University of Science and Technology (KAUST) is being built in Saudi Arabia as an international, graduate-level research university dedicated to inspiring a new age of scientific achievement in the Kingdom that will also benefit the region and the world. KAUST will be merit-based and will recruit men and women from around the world.

About The Campus:

KAUST’s core campus, located on the Red Sea near Rabigh, will sit on more than 36 million square meters, encompassing a marine sanctuary and research facility around a unique coral reef ecosystem. The campus and surrounding community will incorporate a distinctive blend of traditional regional architecture and modern styles and amenities. Key features include:

• World-class research labs and facilities
• Seaside town with a wide variety of shops, apartments and single-family homes
• Parks, playgrounds, schools for children; golf course, yacht club, marina for adults
• Minimal environmental footprint

About Research:

KAUST will focus on research that applies science and technology to the problems of human need, social advancement, and economic development. Rather than organizing around academic disciplines, four strategic research thrusts will build KAUST’s research agenda:

• Resources, Energy and Environment
• Biosciences and Engineering
• Materials Science and Engineering
• Applied Mathematics and Computational Science

About Research Centers:

To support these thrusts, KAUST will establish multi-disciplinary Research Centers.

About Scholarships and Awards:

The KAUST Discovery Scholarship:

The KAUST Discovery Scholarship provides financial support to highly talented students from Saudia Arabia around the world.

About Faculty and Students:

KAUST will be a truly international school, recruiting the best professor and student researchers.

• Faculty will be non-tenured, with renewable or rolling two- to five-year contracts.
• Students will compose a diverse, international body representative of the highest standards of academic excellence.

Source: KAUST

Editor’s Note:

This week world leaders were in New York City for the opening of the 64th session of the United Nations General Assembly. Saudi Arabia was among the countries that participated in the UN festivities, as well as in the G-20 Summit in Pittsburgh on Thursday and Friday. Saudi Arabia issued a statement that opened with congratulations to the incoming General Assembly President Dr. Ali Abdussalam Treki of Libya.

The statement, which is provided today for your consideration, issues a call for cooperation in the spirit of the UN Charter in the face of a “multitude of issues, the plethora of dangers and.. ..successive crises” and to use the criterion of “international legitimacy, international law and universal justice.”

It discussed the Israeli-Palestinian conflict and addressed the prospects for the Arab Peace Initiative as a “collective comprehensive proposal to end the conflict” but also criticized Israel’s occupation, the treatment of Palestinians and the attempt “to impose normalization of relations on the Arabs before the completion of withdrawal and the establishment of peace.”

The Saudis complimented the Obama Administration for “commendable efforts.. ..to further the peace process” but offered that it was disappointed that more “tangible results” were not achieved. It asked “how can we be optimistic” given the efforts made by the United States and the international community to “include Israel to honor the commitments to which it previously bound itself.”

The statement went on to blame the “blind eye” given to Israel’s nuclear weapons program for other states justifying non-compliance with international resolutions by claiming a double-standard, and called for a Middle East free of nuclear weapons and other weapons of mass destruction.

Saudi Arabia, it said, contributed to cooperation in countering terrorism through its organizing of an international conference and called for joint work to create an environment that will make defeating terrorism possible. Furthermore the statement offered that King Abdullah’s pursuit of interfaith dialogue was an effort to build understanding and led to a UN General Assembly meeting last year to promote that objective.

In the global efforts to combat the economic crisis Saudi Arabia, according to the statement, the Kingdom joined in expansionist financial policies to stimulate demand and counter the recession’s effects. It also endorsed efforts “to remedy the flaws in the international financial system” and to protect the interests of developing countries, while mentioning that the UN recognized that Saudi Arabia “headed the list of donor countries funding humanitarian relief operations in 2008.” The Saudi statement also claimed the Kingdom was taking important steps to address climate change, food security and rising prices of basic commodities.

The Kingdom acknowledged the important function of the UN and the community of nations to address the challenges facing the world but called for reforms of the Security Council membership, to “improve geographical representation and promote transparency.”

The statement concluded with a reaffirmation of the Kingdom’s “commitment to the United Nations and the multilateral international order, since [the] international community direly needs to take a unified and mutually supportive stand in order to devise equitable solutions to worsening global problems through diligent respect for the values, traditions and principles enshrined in the conscience of mankind which are conducive to the promotion of constructive cooperation and the achievement of security, peace and prosperity for all nations.”

Statement of the Kingdom of Saudi Arabia at the sixty-fourth session of the
General Assembly of the United Nations September 2009

Mr. President,

I have pleasure in congratulating you on your election as President of the sixty-fourth session of the General Assembly of the United Nations. I am confident that your personal talents, as well as the international standing enjoyed by your country Libya, will be highly conducive to the success of this session.

On this occasion I wish to express my gratitude and appreciation to your predecessor, H.E. Mr. Miguel d’Escoto Brockmann of Nicaragua, for his wise direction of our previous session. I would also like to take this opportunity to emphasize our support and appreciation for the endeavours that H.E. the Secretary-General of the United Nations is making to strengthen the role of the International Organization in today’s world where there is a dire need to uphold the principles of international legitimacy and promote the values of international cooperation and full commitment to the purposes and principles of the Charter of the United Nations.

Mr. President,

Although it is customary for us to meet here every year in the General Assembly of the United Nations to deliver statements detailing the issues of concern to our countries, as well as the endeavours that our Governments have made and their positions on new developments, I hope that you will allow me to depart somewhat from this firmly established tradition.

The multitude of issues, the plethora of dangers and the successive crises that are facing every member of the United Nations should not obscure the fact that we are all in the same boat and the extent of our interrelationship, interdependence and mutual influence is greater than ever before. The time has come, therefore, for us to pause, ponder and reflect. The time has come for us to recall and renew our commitment to the basic purposes underlying the establishment of the United Nations and its Charter. You may recall that the basic purpose of that Charter was to spare humanity the destructive and tragic consequences of wars, and to provide prosperity to all through cooperation within the frame of legitimacy and the supremacy of international law.

The crises, perils, conflicts and issues with which mankind everywhere is currently faced can be solved effectively only on the basis of international legitimacy, international law and multilateral cooperation in meeting the requirements of universal justice. Any other provisional arrangements and partial solutions, which some refer to as “contrived” or “compromise” or “creative” solutions, will lead only to further perils and crises, aggravation of conflicts and failure to resolve issues and meet challenges in a collective and effective manner.

In any issue with which we are confronted, in any conflict that threatens us, and in any crisis that could have fearful consequences and implications for international peace and security, or for global sustainable growth and prosperity, regardless of the complexity of its details and the intricacy of conflicting interests and differing positions, proposed solutions and initiatives must be evaluated, positively or negatively, in the light of a single standard criterion, namely international legitimacy, international law and universal justice. Any deviation from this comprehensive and imperative criterion, regardless of the pretexts put forward to justify it, and regardless of the deceptive promotional halo of publicity with which it is surrounded, would be likely to exacerbate rather than solve the problem, and would seriously undermine our collective ability to effectively address the other problems and crises with which we are all confronted.

Mr. President,

Adherence to this criterion offers the easiest, best and most effective way to settle the Arab-Israeli conflict, which is rightly deemed to pose the most serious threat to peace and security in the Middle East, a strategic region the conflicts and problems of which have an impact on the world as a whole. The fact that this conflict has lasted for more than seven decades and is continuing to have disastrous effects on the entire region is attributable solely to a blatant deviation from the principles of international legitimacy, the rules of international law and the requirements of universal justice.

The Arab World, including the state of Palestine, has done its utmost to achieve a real and lasting peace. The Arab Peace Initiative, which is still on the table, constitutes a collective comprehensive proposal to end the conflict with Israel and conclude a peace agreement that would ensure security, recognition and normalization of relations for all the States of the region. The components of the Arab Peace Initiative are fully consistent with the above mentioned criterion on which they are based and centred, thereby embodying the Arab commitment to peace as a strategic option, and in accordance with the Charter.

Everyone is aware not only of the general outline of the desired solution but also of the reasons why peace has not yet been achieved. Peace cannot, and will not, be achieved as long as Israel continues its massacres and random bombardments of the Palestinian people. Peace will never be achieved through the holding of sham, protracted and fruitless bilateral or multilateral negotiations that discuss everything except the core issues of the conflict. The peace that is being sought will never be achieved by imposing sanctions and preconditions on a people suffering under occupation while, at the same time, exempting Israel from any consequences of its violation of the most fundamental rules and principles of international law. The desired peace will never be achieved by attempting to impose normalization of relations on the Arabs before the completion of withdrawal and the establishment of peace, as though we are expected to reward the aggressor for his aggression in a reverse logic that totally lacks any form of serious credibility.

All the initiatives, proposed solutions and international endeavours in this regard have invariably run up against a wall of rejection, obstruction, bad faith and procrastination on the part of Israel, which is continuing to take unilateral measures that are incompatible with international law and Security Council resolutions. Instead of an honest endeavour to achieve peace, we find that Israel is persisting in its daily humiliation of the Palestinian people and in its construction of settlements, walls and bypass roads, all of which violate international legitimacy, with a view to creating new facts on the ground. These settlements are changing the geographic and demographic nature of the Palestinian territories, especially in and around the city of Jerusalem, in flagrant violation of international law and of all the relevant Security Council resolutions, the commitments provided for in the Road Map and the undertakings made at Annapolis. The settlements that encircle most of the main Palestinian towns in the West Bank also usurp more than half of their water resources.

I had hoped that, at the beginning of this session of the General Assembly, we would be able to express satisfaction, hope and optimism at the achievement of tangible results. Unfortunately, no real results or notable signs of progress have been achieved in spite of the commendable endeavours of the United States of America, the evident personal desire of President Barack Obama and his team to further the peace process, and the ongoing efforts of the International Quartet. If all this international concern, all this international consensus and all these international endeavours have so far failed to induce Israel to honour the commitments to which it previously bound itself under the Road Map, how can we be optimistic?

Mr. President,

Departure from the principles of international legitimacy, the rules of international law and the requirements of universal justice remains the root cause of the risks of proliferation of weapons of mass destruction that are overshadowing the Middle East, including the Gulf region. This is attributable to the fact that, for decades, a blind eye was turned to the Israeli nuclear programme which, far from even being ostensibly designed to generate electric power, produces nothing but weapons of mass destruction. This original sin has motivated some states to push ahead with the development of nuclear capabilities, using the pretext of double standards to justify non-compliance with international resolutions in this regard.

Once again, we find that the easiest, most expeditious and most effective solution lies in declaring the entire Middle East, including the Gulf region, a zone free from all nuclear and other weapons of mass destruction.

Mr. President,

Protection of human rights, the rule of law, dissemination of a culture of peace and initiatives to promote dialogue among cultures and peoples should constitute basic components of any effective strategy to combat terrorism and extremism. Needless to say, respect for United Nations resolutions and the rules of international law is the only way to resolve chronic international conflicts and defuse focal points of tension, thus preventing terrorists from exploiting feelings of despair and frustration brought about by subjection to injustice, aggression and occupation.

With a view to contributing to the furtherance of international cooperation in the field of counter-terrorism, the Kingdom of Saudi Arabia convened an International Counter-Terrorism Conference in February 2005 which was attended by experts and specialists from more than 60 States and international and regional organizations. The “Riyadh Declaration,” which was issued by the Conference, affirmed the unanimous international resolve to oppose terrorism and extremism and made practical recommendations to combat terrorism, cut off its sources of funding, and achieve closer multilateral cooperation in this field.

The tremendous developments that have taken place in the transport, communications and information technology sectors have helped to facilitate and expand contact and interaction among all the peoples of the world with their various religions, beliefs, cultures and languages. As a result, there is no part of the human family, in all its rich diversity and fertile pluralism, which is now living in isolation without affecting or being affected by others. Although these developments have generally improved human life, extremist minorities within every religious and cultural community are seeking to exploit these tremendous technological developments to propagate notions of intolerance, exclusion, racism and hatred. Therefore, we all need to work together in an earnest manner under the auspices of the United Nations in order to create an environment conducive to promotion of the values of dialogue, tolerance and moderation and the furtherance of relations of cooperation and peace among cultures, peoples and States.

For these noble purposes, the Custodian of the Two Holy Mosques launched his sincere universal appeal for the pursuit of dialogue among all the followers of the religions and cultures constituting the heritage of mankind. This initiative adopted a political, as well as socio-cultural, twin-track approach. On the political track, the Extraordinary Islamic Summit convened in Makkah by the Custodian of the Two Holy Mosques reaffirmed the consensus of all the Islamic in rejecting violence, extremism and terrorism, and promoting the values of dialogue, tolerance and mutual respect. The General Assembly of the United Nations subsequently held a high-level meeting during its last session in 2008 with a view to securing the broadest possible political support at the highest level for all initiatives seeking to promote dialogue, mutual understanding and a culture of peace.

On the socio-cultural track, Muslim religious scholars representing all Islamic denominations and schools of thought also met at Makkah where they affirmed the true nature of the Islamic religion and its message based on tolerance, dialogue and peace. This was followed, on 16-18 July 2008, by the World Conference on Dialogue at Madrid which was attended by representatives of all the major religions. Diligent endeavours are currently being made to establish a global centre for dialogue, comprising representatives of all the main religions, which will operate in an independent manner totally free from any political interference.

Mr. President,

It has become evident that the environmental, economic, social and financial issues affect us all and no State can face them alone or single-handedly avoid the dangers and challenges that they pose. No region anywhere in the world has been unaffected by the implications of the US credit crisis, which has had an impact on the international financial system, thereby undermining the world economy and confronting it with serious challenges that have entailed a slow-down in global real growth rates.

As we have seen, concerted international efforts and the adoption of a serious and credible approach to multilateral action have begun to produce fruitful results in which we can discern the first signs of improvement and a return to stability and growth in the world economy. My country has approved the largest governmental budget in its history in which $400 billion have been allocated for investment in development projects over a five-year period with a view to the adoption of an expansionist financial policy aimed at closing the deflationary gap and stimulating demand to counter the repercussions of the global financial crisis.

The best lesson to be learnt from this experience is the overriding importance of making every possible effort to remedy the flaws in the international financial system and reach international agreement on ways to remedy the flaws in the world economy in such a way as to secure a financial system that offers equal opportunities to all the parties while, at the same time, providing appropriate liquidity for the developing countries and safeguarding their monetary reserves from the collapse of any of the major international currencies.

I do not think that it would be an exaggeration for me to say that my country, which is a developing country and, at the same time, a member of the G20 whose leaders recently held an important meeting, is not uttering empty words in this regard since the record clearly shows that its course of action is fully consistent with what it has advocated, and is continuing to advocate, in all international forums.

Notwithstanding the fact that it is a developing country experiencing rapid demographic growth that implies a need for steadily increasing financial resources to cover the costs of human development, infrastructure and indigenous capacity building, the Kingdom has made considerable endeavours to assist other more needy countries to an extent that far exceeds the target set for international development assistance. The report issued by the United Nations Office for the Coordination of Humanitarian Affairs confirms that the Kingdom of Saudi Arabia headed the list of donor countries funding humanitarian relief operations in 2008.

The Kingdom donated $1 billion to the Fund to Combat Poverty in the Islamic World, in addition to its contributions to the capital of 18 international financial bodies and institutions. The non-recoverable aid and soft loans provided by the Kingdom during the last three decades amounts to $100 billion, from which 95 developing countries benefited. This amount represents 4% of the Kingdom’s GNP, which is far higher than the target set by the United Nations.

In keeping with the concern that the Custodian of the Two Holy Mosques is showing for the large-scale promotion of education in the developing countries, the Kingdom announced its allocation of $500 million for education projects in those countries.

With regard to debt relief, the Kingdom has waived more than $6 billion in debts due to it from developing countries and has contributed its full quota to the Heavily Indebted Poor Countries (HIPC) Initiative of the International Monetary Fund. The Kingdom is renewing its appeal to the industrialized developed countries to honour their commitments in regard to direct aid quotas, debt relief in favour of the most needy countries and market access, without unjustifiable restrictions, for the exports of developing countries.

Mr. President,

The urgent issues with which the world is faced, such as climate change, food security and rising prices of basic commodities, necessitate cooperation by all components of the international community in order to devise equitable solutions that take into account the interests of all in conformity with the principle of common but differentiated responsibilities between the developed and the developing countries, as provided for in the United Nations Framework Convention on Climate Change. It would be unfair to burden some beyond their capacities while showing indulgence to others who have been more instrumental in exacerbating the problem and are more capable of bearing the burdens entailed by solutions thereto.

Shouldering its international responsibilities, the Kingdom of Saudi Arabia announced, during the last OPEC Summit in Riyadh, its donation of an amount of US$ 300 million for the establishment of a special fund for research on energy, the environment and climate change. My country has also contributed US$ 500 million to the World Food Programme to meet the rising costs of food, thereby assisting 62 developing countries in all parts of the world. The Kingdom will also be covering the costs of holding the Food and Agriculture Organization’s World Food Summit, which is due to be held on 16 November 2009.

In view of the importance of international cooperation in the energy sector, the Kingdom has diligently sought to build bridges of dialogue between producers and consumers by hosting the secretariat of the International Energy Forum in Riyadh. At the Jeddah Conference of Petroleum Producing and Consuming Countries, held under his patronage, the Custodian of the Two Holy Mosques launched his initiative known as “Energy for the Poor” for the purpose of helping the developing countries to meet the costs of obtaining energy.

In this context, the Kingdom of Saudi Arabia also announced its allocation of US$ 500 million to be made available, in the form of soft loans from the Saudi Fund for Development, for the funding of energy projects in developing countries.

Mr. President,

The far-reaching international changes and the magnitude of the challenges currently facing the international community necessitate a review not only of the working methods of the United Nations but also of the structure and functions of its existing organs, as well as enhancement of its ability to prevent and resolve conflicts and maintain international peace and security. The Kingdom supports the call for reforms to secure broader membership of the Security Council in such a way as to improve geographical representation and promote transparency in its work in a manner consistent with the need to maintain due credibility, avoid double standards and ensure respect for, and compliance with, its resolutions.

The important reforms in this field should include restriction of the use of the right of veto by requiring the Permanent Members to undertake not to avail themselves of this right in order to veto measures designed to ensure the implementation of resolutions previously adopted by the Security Council. There is also a need to achieve an optimal balance between the General Assembly and the Security Council, strengthen the role of the Economic and Social Council, and ensure closer coordination among United Nations funds, programmes and activities. We reaffirm our commitment to the United Nations and the multilateral international order, since our international community direly needs to take a unified and mutually supportive stand in order to devise equitable solutions to worsening global problems through diligent respect for the values, traditions and principles enshrined in the conscience of mankind which are conducive to the promotion of constructive cooperation and the achievement of security, peace and prosperity for all nations.

Source: Saudi Arabian Ministry of Foreign Affairs

Editor’s Note:

Today we provide for your consideration several articles marking the opening of the King Abdullah University of Science and Technology in Saudi Arabia. This article provides comments about the impact the university will have in the Kingdom including reference to US-Arab Tradeline, the newsletter of the National U.S.-Arab Chamber of Commerce. The Chamber’s President and CEO David Hamod was among the guests at the KAUST opening and in the cover note for the Tradeline focusing on KAUST he said he “was very impressed by the vital role that KAUST is expected to play in enhancing Saudi Arabia’s position as a knowledge-based society and in paving the way for generations to come. SUSRIS wishes to thank Arab News for sharing this article with you.

US magazine marks KAUST opening with special issue
Arab News

WASHINGTON: As a clear illustration of growing US-Arab business relations, the National US-Arab Chamber of Commerce (NUSACC) brought out a special edition of its magazine, US-Arab Tradeline, that highlights the opening of King Abdullah University of Science and Technology (KAUST) and emphasizes the growing commercial relationship between Saudi Arabia and the US, according to a press release.

NUSACC was represented at the grand inauguration of the world’s newest graduate-level research university on Wednesday.

“KAUST represents a vital step in Saudi Arabia’s transition to a knowledge-based society,” said NUSACC President and CEO David Hamod. “Saudis will gain access to some of the world’s most sophisticated research and researchers, enabling the Kingdom to tap into state-of-the-art science and technology that has the potential to have a profound impact on the nation’s economic development and quality of life. We congratulate King Abdullah and the people of Saudi Arabia on this remarkable achievement.”

Adel Al-Jubeir, Saudi ambassador to the United States, said: “There is a clear focus on revitalizing every aspect of the Saudi economy — including regulations which make the Kingdom a friendly place to invest and do business and its efforts to provide Saudi citizens with the ability to compete in a global marketplace.”

In a similar vein, US Ambassador to Saudi Arabia James Smith noted: “Small and medium enterprises (SMEs) are one of the main foundations of economic growth and development. I am certain that SMEs will benefit from the new discoveries and innovation undertaken at KAUST.”

With regard to ease of doing business, Amr Al-Dabbagh, Saudi Arabian General Investment Authority (SAGIA) governor, said “regionally, we are ranked No. 1.”

Source: Arab News

Editor’s Note:

Today we provide for your consideration several articles marking the opening of the King Abdullah University of Science and Technology in Saudi Arabia. This article describes King Abdullah’s reference to KAUST as a tribute to his father, King Abdul Aziz and the remarks of Crown Prince Sultan. SUSRIS wishes to thank Arab News for sharing this article with you.

KAUST symbol of loyalty: King
P.K. Abdul Ghafour | Arab News

JEDDAH: Custodian of the Two Holy Mosques King Abdullah on Friday described King Abdullah University of Science and Technology (KAUST) in Thuwal as a symbol of loyalty to his father King Abdul Aziz, the founder of Saudi Arabia.

“I am extremely happy over the inauguration of KAUST on the Kingdom’s National Day when we remember the struggle and resolve of the founder of our modern state,” the king said in a reply cable to Crown Prince Sultan, deputy premier and minister of defense and aviation.

“This university is an appropriate symbol of our loyalty and allegiance to the unifier of our country who had dedicated his life in the way of God,” the king said. “We present this university as one of the fruits of his efforts as a cultural, humanitarian and scientific landmark.”

King Abdullah opened KAUST, a world-class research university, on Wednesday in the presence of several heads of state, global business leaders, Nobel laureates and celebrated academics.

“We have received your cable expressing your noble feelings on the opening of KAUST,” the king told Prince Sultan, who is currently recuperating in the Moroccan city of Agadir following a successful surgical operation.

“We hope that KAUST will become a lighthouse of knowledge, benefiting our people, religion and the humanity at large through a blend of thoughts and knowledge,” the king said.

In his cable, Prince Sultan congratulated the king on the inauguration of KAUST and called it a global scientific achievement.

“The idea of this university has been in your mind as a dream for the last 25 years and you were able to make it a reality in record time,” the prince said.

Prince Sultan said KAUST’s opening ceremony was an honor for all Saudis, adding that it also reflected King Abdullah’s international reputation. “I know you as an ardent lover of the nation, a sincere believer, a strong supporter of the Ummah and a lover of humanity,” he said, praising King Abdullah’s efforts to achieve concord between civilizations and promote justice and tolerance.

“You have worked to present dialogue as a means to end conflicts and opened channels of cooperation between nations. As a result, the world respected you as an inspiring leader, a wise politician, an advocate of peace, a benefactor of the poor, a backer of scientists. You symbolize humanity and mercy and this university came as a result of those efforts.”

The crown prince underscored the university’s main objective of achieving a scientific renaissance in the Islamic world and hoped that its graduates would become messengers of mercy and propagators of goodness and work for the betterment of humanity.

“This university is just a part of your larger national modernization project. You have established several industrial cities, supported research chairs and doubled the number of universities in the country and built knowledge-based economy and invested for the education and training of Saudi manpower in order to take the Kingdom to the level of advanced countries. We have adopted the material resources to become a country in the first industrialized world, and seek God’s support to make it a reality,” the crown prince said, wishing that the Kingdom would make more achievements during the rule of King Abdullah.

Source: Arab News

Editor’s Note:

Today we provide for your consideration several articles marking the opening of the King Abdullah University of Science and Technology in Saudi Arabia. This article by Arab News Associate Editor Shafquat Ali describes the “House of Wisdom” from the Islamic Golden Age and offers that the opening of KAUST is a restoration of “another age of Arab scientific inquiry and discovery.” SUSRIS wishes to thank Arab News for sharing this article with you.

KAUST: The wisdom behind this new ‘House of Wisdom’
Shafquat Ali

Founded by the caliphs Harun Al-Rashid and his son Al-Ma’mun, Bait Al-Hikma or the House of Wisdom served as a library, research center and translation bureau in Baghdad from the 9th to 13th centuries. Acclaimed as an intellectual hub that highlighted the “Golden Age” of Islam by fostering nontraditional dialogue and alliances between those of different backgrounds, it attracted the likes of Jabir ibn Hayyan, Muhammad ibn Musa Al-Khawarizmi and Badi Al-Zaman Ismail ibn Al-Razzaz Al-Jazari.

Ibn Hayyan is known as the father of modern chemistry; Al-Khawarizmi is hailed as the creator of algebra; and Al-Jazari is considered the father of modern engineering.

Other resident scholars made significant contributions in the fields of medicine, navigation, agriculture and astronomy. But the giant strides the Muslim world was making in the pursuit of knowledge and excellence was dealt a body blow when the Mongols invaded Baghdad in A.D.1258 and destroyed the House of Wisdom.

It has taken several hundred years and the vision of a king to try and rekindle the noble virtue of learning that marked the Muslim world in earlier times. Announcing a new “House of Wisdom,” Custodian of the Two Holy Mosques King Abdullah said this was a dream that lived in his heart for 25 years.

If, at that time, the waters of the Tigris indeed ran black for six months with the ink of all the books flung into the river by the Mongolian invaders, with the inauguration of King Abdullah University of Science and Technology (KAUST) on the shores of the Red Sea the clock has been reversed — the tide has turned.

Probably the only postgraduate research university ever built from scratch, KAUST promises to propel the Kingdom into the 21st century by ushering in another age of Arab scientific inquiry and discovery; a new vision for the scientific realm and world change. It is a message that King Abdullah had spelled out at the very onset. Speaking at the groundbreaking ceremony for the establishment of the SR10 billion university in Thuwal on Oct. 21, 2007, he said, “As a new Bait Al-Hikma, KAUST will be a beacon for peace, hope and reconciliation, and shall serve the people of the Kingdom and benefit all the peoples of the world.”

“We hope that the university carries out its noble humanitarian message in a pure and clean atmosphere, taking the help of God and then that of enlightened intellectuals all over the world, without any bias or discrimination,” he added, desiring that the new university serves as a bridge between cultures and nations.

At KAUST, which has only just been born into its academic life on Sept. 5, the king’s message rings clear. Its ramifications on the world stage, all too evident.

Consider the facts. KAUST personnel represent 45 countries. These accomplished research scientists and educators hail from around the world. The top countries of origin are the US (14), Germany (7), Canada (6) and China (6). The university received more than 7,400 applications from potential students. To date, KAUST has accepted 798 students representing 61 countries. Of this group, 374 postgraduate students began classes this month. The rest will enroll at KAUST, beginning in 2010. Incoming students in the inaugural class represent 116 undergraduate institutions from many regions of the world including China (14 percent), Mexico (12 percent), Saudi Arabia (11 percent) and the US (8 percent). By all accounts, KAUST is a unique graduate research university that has brought the world to Saudi Arabia — and Saudi Arabia to the world.

The king’s desire that the new university finds its place as one of the world’s great institutions of research has been realized by his “Three Wise Men” — Chairman of the KAUST Board of Trustees Minister of Petroleum and Mineral Resources Ali Al-Naimi, KAUST President Professor Choon Fong Shih and Interim Executive Vice President Nadhmi Al-Nasr. They have done everything to transform the sleepy fishing town of Thuwal, located 80 km north of Jeddah, to a wellspring of knowledge boasting prolific researchers, innovators and authors, who claim 108 patents, 100 software products/invention disclosures and 64 books or chapters.

Thanks to KAUST’s unique Discovery Scholarship, the cornerstone of the university’s intellectual capital foundation, top minds from around the world have been convened to unlock the greatest mysteries of science and technology. The university’s strategic collaborations and joint research programs with key partners like the US’ Woods Hole Oceanographic Institute, France’s Institut Francais du Petrole, Britain’s Cambridge, the National University of Singapore, the Indian Institute of Technology and Stanford in the United States will help fast track KAUST’s bid to develop new sources of energy in the Kingdom, exploit the desert, develop new crops to be cultivated in hot and arid lands and optimize utilization of the marine environment.

Built on distinctive, interdisciplinary research thrusts that ensure flexibility, growth and relevance, KAUST’s research programs have been defined to leverage the Kingdom’s unique resources and help forge the future of the global economy and industries. As a logical corollary, job creation is at the heart of KAUST’s mission. A mission that also targets Thuwal as the university seeks to build a “Silicon Valley of the East.”

However, as the world-class academic institution develops and spreads its wings, KAUST leadership remains focused to see that it doesn’t lose sight of the larger goal, as outlined by the king i.e. to help bridge the gap between peoples and cultures. To that end, Al-Naimi, Al-Nasr and Prof. Shih have worked hard to make KAUST a place of academic freedom. Openness is essential to KAUST’s success. Accordingly, work and study at the university are open to qualified applicants regardless of nationality, gender or faith. But that’s not all. Freeing it from bureaucratic policies and giving it absolute academic freedom, KAUST is also the first and only educational institution in the Kingdom that is not under the umbrella of the Saudi Ministry of Higher Education.

Now, what remains, is to convert some 60 different cultures and many different backgrounds, races and genders and establish a unique, new culture — the KAUST culture. That is key to achieving the vision set by the king. Integral to this vision is KAUST’s extraordinary mission.

Professor Shih views KAUST’s great potential and mission through a concept he calls “heartware.” He explains: “KAUST’s heartware is the sum of our ideas, our people and our culture. Our ideas are the lifeblood for research and education, innovation and enterprise. Our people — faculty, students, staff — inject a pioneering spirit to our extraordinary endeavor. Our culture infuses our community with purpose and vitality. Our heartware is what gives life to KAUST and what makes KAUST tick.” And tick, indeed, it will. After all, at the heart of the heartware is a noble Islamic message. A message that seeks to rekindle learning and spread knowledge, bridge cultural gaps and benefit all of mankind.

— Shafquat Ali is associate editor at Arab News

shafquat.ali@arabnews.com

Source: Arab News

KAUST Fact Sheet:

King Abdullah University of Science and Technology (KAUST) is being built in Saudi Arabia as an international, graduate-level research university dedicated to inspiring a new age of scientific achievement in the Kingdom that will also benefit the region and the world. KAUST will be merit-based and will recruit men and women from around the world.

About The Campus:

KAUST’s core campus, located on the Red Sea near Rabigh, will sit on more than 36 million square meters, encompassing a marine sanctuary and research facility around a unique coral reef ecosystem. The campus and surrounding community will incorporate a distinctive blend of traditional regional architecture and modern styles and amenities. Key features include:

• World-class research labs and facilities
• Seaside town with a wide variety of shops, apartments and single-family homes
• Parks, playgrounds, schools for children; golf course, yacht club, marina for adults
• Minimal environmental footprint

About Research:

KAUST will focus on research that applies science and technology to the problems of human need, social advancement, and economic development. Rather than organizing around academic disciplines, four strategic research thrusts will build KAUST’s research agenda:

• Resources, Energy and Environment
• Biosciences and Engineering
• Materials Science and Engineering
• Applied Mathematics and Computational Science

About Research Centers:

To support these thrusts, KAUST will establish multi-disciplinary Research Centers.

About Scholarships and Awards:

The KAUST Discovery Scholarship:

The KAUST Discovery Scholarship provides financial support to highly talented students from Saudia Arabia around the world.

About Faculty and Students:

KAUST will be a truly international school, recruiting the best professor and student researchers.

• Faculty will be non-tenured, with renewable or rolling two- to five-year contracts.
• Students will compose a diverse, international body representative of the highest standards of academic excellence.

Source: KAUST

Editor’s Note:

Today is the National Day of Saudi Arabia marking the unification of the country by King Abdul Aziz in 1932. This is the fifth year the date is celebrated as a holiday in the Kingdom. We are pleased to offer for your consideration a report on National Day from P.K. Abdul Ghafour, writing in Arab News, reflecting on Saudi Arabia’s achievements.

National Day of Achievements
P.K. Abdul Ghafour

Saudi Arabia marks its National Day on Wednesday, not only to remember the country’s unification at the hands of King Abdul Aziz but also to celebrate its achievements in the educational, health and economic sectors. Being the world’s largest oil exporter, it has become a member of G20 and is the largest economy in the Middle East.

“The National Day of Saudi Arabia is different from other countries. It is not an occasion to remember liberation from colonialists but rather an occasion to celebrate the unity of our people,” said Prince Abdul Rahman, deputy minister of defense and aviation.

Prince Sultan bin Salman, chairman of the Saudi Commission for Tourism and Antiquities (SCTA), said: “By celebrating this day we are not just remembering the history but we take it as an opportunity to think about what we should do to have a brighter future.”

“Saudi Arabia is a major player on the world economic map, in terms of its contributions to the capital of the World Bank and the International Monetary Fund and (other) development banks and in terms of providing financial assistance to the less-developed countries,” said Finance Minister Ibrahim Al-Assaf.

Labor Minister Ghazi Al-Gosaibi said his ministry had been successful in bringing down the Kingdom’s unemployment rate from 11.2 percent to 9.8 percent. As many as 36,614 Saudis were given employment in the private sector during the first half of this year, he said.

US Secretary of State Hillary Clinton congratulated King Abdullah and the Saudi people on the occasion.

“The United States values Saudi Arabia as a close friend and ally. Ever since King Abdul Aziz and President Franklin D. Roosevelt first met aboard the USS Quincy in 1945, our two nations have united in a durable and dynamic partnership that is based on mutual respect and mutual interest. Over the years, our friendship has deepened and enhanced the security and prosperity of both our countries,” she said in a message. “On this historic occasion, I want to salute King Abdullah for his leadership on key regional and global challenges, from championing the Arab peace initiative to working to respond to the international economic crisis.”

Pakistani Ambassador Umar Khan Alisherzai extended his warmest felicitations to King Abdullah and members of the royal family and the Saudi people. “Saudi Arabia enjoys enormous respect in the comity of nations, particularly in the Islamic world,” he said while praising the king’s initiative to enhancing interfaith dialogue.

Source: Arab News

Editor’s Note:

Today SUSRIS presents for your consideration the last of five selections from a series by Faiza Saleh Ambah entitled, “Ramadan Diary” which chronicles one person’s struggle with fasting and spirituality during the Muslim holy month. This article originally appeared in The Christian Science Monitor in 2004 but it remains as an insightful story of one woman’s experience.

As Fasting Ends, the Lessons of Ramadan Linger
By Faiza Saleh Ambah

Before we began our three-day Eid al-Fitr holiday, marking the end of Ramadan, I came across an article in a Saudi newspaper with a checklist of what makes a successful Ramadan.

First on the list: Recognizing that one can change for the better and acquiring patience and strong will. This month my deficiencies have shone as if spotlights were directed at them.

The article continues: Successful fasting means not only abstaining from food, drink, and lust from dawn to dusk, but also being honest, patient, and forgiving. I lose my temper with my children and argue with my sisters regularly. But, because I’m fasting and conscious of Ramadan’s requirements, I have become aware of that single moment, as quick as a finger-snap, when a person gives themselves the green light to lose their temper.

Be more charitable, says the article.

On Tuesday, I made some quick calculations to figure out my zakat, money for the poor due every Ramadan, which is 2.5 percent of what’s left of my income after I’ve calculated all my expenses. A devout friend, also named Faiza, distributes zakat for herself, her family, and her friends. I collected money from my sisters and joined her.

We drove to a neighborhood called Sabeel, which is mainly populated by illegal immigrants from Somali. We got out of the car to follow a janitor who lives there and who works at the university where Faiza teaches. Children ran after each other in the dark, garbage-strewn alleys. We moved cautiously, sidestepping a thin trail of sewage.

The janitor knocked on an iron door. Inside, children ran around a dirty room. Faiza insisted on entering to make sure the people were truly needy. “Why aren’t you working khala [aunt]?” she asked an old woman surrounded by three small children. “You used to be a janitor at the university, as well.”

“I worked there for 25 years. Then I broke my arm, and they replaced me,” the old woman answered.

“God is with you,” Faiza said and handed her a small envelope. We went from house to house where the stories were different, but the desperation is the same. Another woman’s husband is in prison, and her landlord has thrown her furniture out because she can’t pay her rent.

In the car on the long ride back, I was quiet; the stories and the smells stayed with me. But, Faiza was bubbly, energized by her good deeds. She seemed animated even though I could see only her eyes through the slit in her face veil. “The prophet, peace be upon him, said it makes God laugh with pleasure when we give charity to the poor,” she told me. “Charity can put an adulteress in heaven,” she rattled on, telling me a story recounted by the prophet of a prostitute who went to heaven for giving water to a thirsty dog. “Tomorrow, I’m going to another neighborhood to distribute more zakat, do you want to come with me?”

I shook my head, and she smiled. “Do you know why God prescribed zakat at the end of Ramadan? Because you’ve tasted for a whole month the hunger of the poor, you’ve empathized with them, and now you help them out. It’s Ramadan coming full circle.”

“But the poor are not only hungry and needy during Ramadan,” I said.

“And charity shouldn’t end there either,” she countered. “We don’t worship Ramadan, we worship the God of Ramadan. The God who said he prefers good deeds to be modest and continuous, instead of grand and infrequent.”

“And charity shouldn’t end there either,” she countered. “We don’t worship Ramadan, we worship the God of Ramadan. The God who said he prefers good deeds to be modest and continuous, instead of grand and infrequent.”

As we drove, I heard bits of Koranic verse from mosque loudspeakers at different intervals. The imams go through the whole Koran during the month of Ramadan and for several hours each day verses are broadcast throughout the city.

Three on the checklist: Sensing the unity of Muslims.

Last Monday, I performed another of Ramadan’s regular rituals, the pre-dawn Tahajud prayers that are encouraged but not obligatory. Dozens of women were streaming into our neighborhood mosque as I arrived with my mother and housemaid, Mahbooba, at 1 a.m..

There were close to 500 women there, and we took our place at the end of one of the rows. Ten minutes later, a woman came in and stood shoulder-to-shoulder with me. I felt uncomfortable at her proximity and moved closer to Mahbooba.

We were holding Korans and reading the verses the imam was speaking. But, I was so irritated by this woman who stuck to me that I couldn’t concentrate. I complained to my mother during an interval. “That’s how it’s supposed to be. You’re supposed to stand shoulder-to-shoulder like that.”

“With strangers?”

“You’re Muslims praying together,” she answered. Almost two hours later, we were done, and the imam started the supplication.

“God help us follow your guidance. God help us move closer to you and away from evil.” I heard a sound like ocean waves breaking, but I couldn’t tell what it was “God help us move towards the light and away from sin.” The sound grew more distinct but still eluded me.

“God help our brothers in Palestine, Iraq, Chechnya, and Kashmir regain their occupied lands. Help them defeat their enemies.” The muffled roar took shape; it was a chorus of amens from the men’s section. “God keep our parents healthy and our children healthy,” said the imam, his voice breaking.

“Amen.”

At the end of the 10-minute supplication, women grabbed tissues from boxes in front of them, wiping tears and blowing their noses. The energy in the mosque was clearer, lighter. I felt lifted and at peace, and the woman whose shoulder touched mine no longer seemed like such a bother.

Also, on the Ramadan check list: an increased mindfulness of God’s blessings.

When the crescent moon was sighted Friday, Ramadan ended here. Drinking green tea when I woke up yesterday was a treat that I had been looking forward to, but I still find, strangely enough, that I miss Ramadan. I miss the city’s mass immersion (at least the intention of it) into God and charity and trying to be our best. I miss the guidance of the sun, whose setting permitted me to eat and whose arrival forced me to abstain. And, I miss looking for the companionship of the moon and studying its shape to determine the days left of fasting.

Lastly, the article prescribes drawing closer to Allah. I have become very conscious of God during Ramadan — when I ate, when I drank water, and even when I didn’t. I thought about God every time I wanted to swear or get angry or think negative thoughts, which I came to realize is more often than I expected. And, I think that’s all part of the lesson.

But, the one lesson that I’m still striving to learn is balance. I pray that though Ramadan is over, God remains a presence in my life, not in grand gestures and infrequently, but consistently and in small doses.

Reprinted with permission, The Christian Science Monitor.

Editor’s Note:

A New York Times editorial this morning points out that, “Unless something happens soon, Israelis, Palestinians and other Arabs may squander the best chance for Middle East peace in nearly a decade. President Obama is committed to serious negotiations and, for now, there is a lull in regional violence. But all of the region’s major players are refusing to do what is needed to keep their own people safe and move the peace process forward.” Among the steps the Administration seeks to move the process forward is a freeze on Israeli settlements in the Occupied Territories and “gestures” by countries like Saudi Arabia as confidence building measures. However, Prime Minister Benjamin Netanyahu’s government recently approved hundreds of new building permits in the West Bank and called for completion of 2500 units under construction. This issue was explored in an Arab News editorial, discussed in a SUSRIS Blog posting September 4th, calling on the Obama Administration to pressure Israel on the settlement question, “Simply announcing a resumption of the peace process will not be enough. It has been resumed so many times before to no effect. Without a bold and imaginative step, Arab and Muslim trust in Obama will wither..” A few weeks earlier, as reported in the SUSRIS Blog of August 3rd, Saudi Arabian Foreign Minister Saud Al-Faisal, at a Washington press conference with U.S. Secretary of State Hillary Clinton, said, “Temporary security, confidence-building measures will.. ..not bring peace. What is required is a comprehensive approach that defines the final outcome at the outset and launches into negotiations over final status issues: borders, Jerusalem, water, refugees and security.”

In a July interview Ambassador Chas Freeman shared his assessment of the Saudi view on “reciprocal gestures.” He told SUSRIS, “The Saudis and others feel that they have been repeatedly subjected to blandishments from well-wishers of Israel. Some were sincere efforts toward peace in the Middle East; some were disingenuous. People have said if the Arabs do something nice for Israel this will somehow get you something in terms of an Israeli gesture — progress towards peace between Israelis and Palestinians. In fact absolutely none of the gestures that have been made, including the very important one of the Arab League’s Beirut Declaration of 2002 — the so-called Arab Peace Initiative — has resulted in any positive response from the Israelis. They have been content to pocket whatever has been offered and to do nothing in return. There is no predisposition whatsoever — in fact a lot of predisposition to the contrary — on the Arab side to pay for what Israel, in its own interest, ought to do. Moreover, the matter at issue is much less than Israel pulling settlements out of the Occupied Territories. The United States is now simply asking Israel to stop their expansion. While that would be a very useful first step in getting back into a dialogue or process that could lead to peace, in itself it doesn’t produce peace. It doesn’t undo the damage that Israel has done to the prospects for peace by building settlements all over the place.”

Freeman, who served as U.S. Ambassador to Saudi Arabia among other major diplomatic and national security posts, also noted that Netanyahu and “probably the majority of Israelis as well, do not accept the premises that the United States is putting forward.” This assessment preceded Israeli’s settlement expansion announcement. In the SUSRIS exclusive Freeman said the Saudis, and other Arabs, “have offered what they believe is a very reasonable quid pro quo for peace in the form of a bonus to Israel for reaching an agreement with the Palestinians. They believe that it is in Israel’s interest to do so. The Arabs are not prepared to make down payments, to bargain or to haggle over the details of what the Israeli and Palestinian peace is going to look like.”

Today we add a valuable contribution to this important discussion in the form of Prince Turki Al-Faisal’s op-ed from last week. In it the former Saudi Ambassador to the United States reiterates the position on “gestures” from the Saudi side and calls for removal of “all” settlements from the Occupied Territories before there should be expectations for reciprocal measures from Riyadh.

Land First, Then Peace
Turki Al-Faisal

The United States and other Western powers have for some time been pushing Saudi Arabia to make more gestures toward Israel. More recently, the crown prince of Bahrain urged greater communication with Israel and joint steps from Arab states to revive the peace process.

Saudi Arabia is the birthplace of Islam, the custodian of its two holy mosques, the world’s energy superpower and the de facto leader of the Arab and Muslim worlds — that is why our recognition is greatly prized by Israel. However, for all those same reasons, the kingdom holds itself to higher standards of justice and law. It must therefore refuse to engage Israel until it ends its illegal occupation of the West Bank, the Gaza Strip and the Golan Heights as well as Shabaa Farms in Lebanon. For Saudis to take steps toward diplomatic normalization before this land is returned to its rightful owners would undermine international law and turn a blind eye to immorality.

Shortly after the Six-Day War in 1967, during which Israel occupied those territories as well as East Jerusalem and the Sinai Peninsula, the United Nations Security Council passed a resolution stating that, in order to form “a just and lasting peace in the Middle East,” Israel must withdraw from these newly occupied lands. The Fourth Geneva Convention similarly notes “the occupying power shall not deport or transfer parts of its own civilian population into the territory it occupies.”

Now, Israeli leaders hint that they are willing to return portions of these occupied territories to Arab control, but only if they are granted military and economic concessions first. For the Arabs to accept such a proposal would only encourage similar outrages in the future by rewarding military conquest.

After the Oslo accords of 1993, Arab states took steps to improve their relationships with Israel, allowing for recognition in the form of trade and consular agreements. Israel, however, continued to construct settlements, making its neighbors understandably unwilling to give up more without a demonstration that they would be granted something in return.

Today, supporters of Israel cite the outdated 1988 Hamas charter, which called for the destruction of Israel, as evidence of Palestine’s attitude toward a two-state solution, without considering the illegalities of Israel’s own occupation. Israel has never presented any comprehensive formulation of a peace plan. Saudi Arabia, to the contrary, has done so twice: the Fahd peace plan of 1982 and the Abdullah peace initiative of 2002. Both were endorsed by the Arab world, and both were ignored by Israel.

In order to achieve peace and a lasting two-state solution, Israel must be willing to give as well as take. A first step should be the immediate removal of all Israeli settlements in the West Bank. Only this would show the world that Israel is serious about peace and not just stalling as it adds more illegal settlers to those already occupying Palestinian land.

At the same time, the international community must pressure Israel to relinquish its grip on all Arab territory, not as a means to gain undeserved concessions but instead as an act of good faith and a demonstration that it is willing to play by the Security Council’s rules and to abide by global standards of military occupation. The Arab world, in the form of the Arab peace initiative that was endorsed by 22 countries in 2002, has offered Israel peace and normalization in return for Israeli withdrawal from all Arab territories including East Jerusalem — with the refugee issue to be solved later through mutual consent.

There have been increasing well-intentioned calls for Saudi Arabia to “do a Sadat”: King Abdullah travels to Israel and the Israelis reciprocate by making peace with Saudi Arabia. However, those urging such a move must remember that President Anwar el-Sadat of Egypt went to Israel in 1977 to meet with Prime Minister Menachem Begin only after Sadat’s envoy, Hassan el-Tohamy, Sadat’s envoy, was assured by the Israeli foreign minister, Moshe Dayan, that Israel would withdraw from every last inch of Egyptian territory in return for peace. Absent a similar offer today from Israel to the leaders of Palestine, Lebanon and Syria, there is no reason to look at 1977 as a model.

President Obama’s speech in Cairo this summer gave the Arab and Muslim worlds heightened expectations. His insistence on a freeze on settlement activity was a welcome development. However, all Israeli governments have expanded settlements, even those that committed not to do so.

No country in the region wants more bloodshed. But while Israel’s neighbors want peace, they cannot be expected to tolerate what amounts to theft, and certainly should not be pressured into rewarding Israel for the return of land that does not belong to it. Until Israel heeds President Obama’s call for the removal of all settlements, the world must be under no illusion that Saudi Arabia will offer what the Israelis most desire — regional recognition. We are willing to embrace the hands of any partner in peace, but only after they have released their grip on Arab lands.

Prince Turki al-Faisal is chairman of the King Faisal Centre for Research and Islamic Studies. He has been director of Saudi intelligence and ambassador to Britain, Ireland, and the United States.

Editor’s Note:

A New York Times editorial this morning points out that, “Unless something happens soon, Israelis, Palestinians and other Arabs may squander the best chance for Middle East peace in nearly a decade. President Obama is committed to serious negotiations and, for now, there is a lull in regional violence. But all of the region’s major players are refusing to do what is needed to keep their own people safe and move the peace process forward.” Among the steps the Administration seeks to move the process forward is a freeze on Israeli settlements in the Occupied Territories and “gestures” by countries like Saudi Arabia as confidence building measures. However, Prime Minister Benjamin Netanyahu’s government recently approved hundreds of new building permits in the West Bank and called for completion of 2500 units under construction. This issue was explored in an Arab News editorial, discussed in a SUSRIS Blog posting September 4th, calling on the Obama Administration to pressure Israel on the settlement question, “Simply announcing a resumption of the peace process will not be enough. It has been resumed so many times before to no effect. Without a bold and imaginative step, Arab and Muslim trust in Obama will wither..” A few weeks earlier, as reported in the SUSRIS Blog of August 3rd, Saudi Arabian Foreign Minister Saud Al-Faisal, at a Washington press conference with U.S. Secretary of State Hillary Clinton, said, “Temporary security, confidence-building measures will.. ..not bring peace. What is required is a comprehensive approach that defines the final outcome at the outset and launches into negotiations over final status issues: borders, Jerusalem, water, refugees and security.”

In a July interview Ambassador Chas Freeman shared his assessment of the Saudi view on “reciprocal gestures.” He told SUSRIS, “The Saudis and others feel that they have been repeatedly subjected to blandishments from well-wishers of Israel. Some were sincere efforts toward peace in the Middle East; some were disingenuous. People have said if the Arabs do something nice for Israel this will somehow get you something in terms of an Israeli gesture — progress towards peace between Israelis and Palestinians. In fact absolutely none of the gestures that have been made, including the very important one of the Arab League’s Beirut Declaration of 2002 — the so-called Arab Peace Initiative — has resulted in any positive response from the Israelis. They have been content to pocket whatever has been offered and to do nothing in return. There is no predisposition whatsoever — in fact a lot of predisposition to the contrary — on the Arab side to pay for what Israel, in its own interest, ought to do. Moreover, the matter at issue is much less than Israel pulling settlements out of the Occupied Territories. The United States is now simply asking Israel to stop their expansion. While that would be a very useful first step in getting back into a dialogue or process that could lead to peace, in itself it doesn’t produce peace. It doesn’t undo the damage that Israel has done to the prospects for peace by building settlements all over the place.”

Freeman, who served as U.S. Ambassador to Saudi Arabia among other major diplomatic and national security posts, also noted that Netanyahu and “probably the majority of Israelis as well, do not accept the premises that the United States is putting forward.” This assessment preceded Israeli’s settlement expansion announcement. In the SUSRIS exclusive Freeman said the Saudis, and other Arabs, “have offered what they believe is a very reasonable quid pro quo for peace in the form of a bonus to Israel for reaching an agreement with the Palestinians. They believe that it is in Israel’s interest to do so. The Arabs are not prepared to make down payments, to bargain or to haggle over the details of what the Israeli and Palestinian peace is going to look like.”

Today we add a valuable contribution to this important discussion in the form of Prince Turki Al-Faisal’s op-ed from last week. In it the former Saudi Ambassador to the United States reiterates the position on “gestures” from the Saudi side and calls for removal of “all” settlements from the Occupied Territories before there should be expectations for reciprocal measures from Riyadh.

Land First, Then Peace
Turki Al-Faisal

The United States and other Western powers have for some time been pushing Saudi Arabia to make more gestures toward Israel. More recently, the crown prince of Bahrain urged greater communication with Israel and joint steps from Arab states to revive the peace process.

Saudi Arabia is the birthplace of Islam, the custodian of its two holy mosques, the world’s energy superpower and the de facto leader of the Arab and Muslim worlds — that is why our recognition is greatly prized by Israel. However, for all those same reasons, the kingdom holds itself to higher standards of justice and law. It must therefore refuse to engage Israel until it ends its illegal occupation of the West Bank, the Gaza Strip and the Golan Heights as well as Shabaa Farms in Lebanon. For Saudis to take steps toward diplomatic normalization before this land is returned to its rightful owners would undermine international law and turn a blind eye to immorality.

Shortly after the Six-Day War in 1967, during which Israel occupied those territories as well as East Jerusalem and the Sinai Peninsula, the United Nations Security Council passed a resolution stating that, in order to form “a just and lasting peace in the Middle East,” Israel must withdraw from these newly occupied lands. The Fourth Geneva Convention similarly notes “the occupying power shall not deport or transfer parts of its own civilian population into the territory it occupies.”

Now, Israeli leaders hint that they are willing to return portions of these occupied territories to Arab control, but only if they are granted military and economic concessions first. For the Arabs to accept such a proposal would only encourage similar outrages in the future by rewarding military conquest.

After the Oslo accords of 1993, Arab states took steps to improve their relationships with Israel, allowing for recognition in the form of trade and consular agreements. Israel, however, continued to construct settlements, making its neighbors understandably unwilling to give up more without a demonstration that they would be granted something in return.

Today, supporters of Israel cite the outdated 1988 Hamas charter, which called for the destruction of Israel, as evidence of Palestine’s attitude toward a two-state solution, without considering the illegalities of Israel’s own occupation. Israel has never presented any comprehensive formulation of a peace plan. Saudi Arabia, to the contrary, has done so twice: the Fahd peace plan of 1982 and the Abdullah peace initiative of 2002. Both were endorsed by the Arab world, and both were ignored by Israel.

In order to achieve peace and a lasting two-state solution, Israel must be willing to give as well as take. A first step should be the immediate removal of all Israeli settlements in the West Bank. Only this would show the world that Israel is serious about peace and not just stalling as it adds more illegal settlers to those already occupying Palestinian land.

At the same time, the international community must pressure Israel to relinquish its grip on all Arab territory, not as a means to gain undeserved concessions but instead as an act of good faith and a demonstration that it is willing to play by the Security Council’s rules and to abide by global standards of military occupation. The Arab world, in the form of the Arab peace initiative that was endorsed by 22 countries in 2002, has offered Israel peace and normalization in return for Israeli withdrawal from all Arab territories including East Jerusalem — with the refugee issue to be solved later through mutual consent.

There have been increasing well-intentioned calls for Saudi Arabia to “do a Sadat”: King Abdullah travels to Israel and the Israelis reciprocate by making peace with Saudi Arabia. However, those urging such a move must remember that President Anwar el-Sadat of Egypt went to Israel in 1977 to meet with Prime Minister Menachem Begin only after Sadat’s envoy, Hassan el-Tohamy, Sadat’s envoy, was assured by the Israeli foreign minister, Moshe Dayan, that Israel would withdraw from every last inch of Egyptian territory in return for peace. Absent a similar offer today from Israel to the leaders of Palestine, Lebanon and Syria, there is no reason to look at 1977 as a model.

President Obama’s speech in Cairo this summer gave the Arab and Muslim worlds heightened expectations. His insistence on a freeze on settlement activity was a welcome development. However, all Israeli governments have expanded settlements, even those that committed not to do so.

No country in the region wants more bloodshed. But while Israel’s neighbors want peace, they cannot be expected to tolerate what amounts to theft, and certainly should not be pressured into rewarding Israel for the return of land that does not belong to it. Until Israel heeds President Obama’s call for the removal of all settlements, the world must be under no illusion that Saudi Arabia will offer what the Israelis most desire — regional recognition. We are willing to embrace the hands of any partner in peace, but only after they have released their grip on Arab lands.

Prince Turki al-Faisal is chairman of the King Faisal Centre for Research and Islamic Studies. He has been director of Saudi intelligence and ambassador to Britain, Ireland, and the United States.

Editor’s Note:

Today SUSRIS presents for your consideration the fourth selection from a series by Faiza Saleh Ambah entitled, “Ramadan Diary” which chronicles one person’s struggle with fasting and spirituality during the Muslim holy month. This article originally appeared in The Christian Science Monitor in 2004 but it remains as an insightful story of one woman’s experience.

Waging ‘Inner Jihad’ on an Empty Stomach

As Ramadan enters its final days, a Muslim reporter goes to Mecca and Medina and grapples with the double standard for female pilgrims

By Faiza Saleh Ambah

After struggling with my first fast during Ramadan, Islam’s holiest month, my sister Reem arrives from overseas, and we decide to visit both Mecca and Medina, in spite of the fact that close to 2 million Muslims are expected in the holy cities this month.

We arrive in Medina Tuesday morning before dawn prayers. Pilgrims are walking down the dark streets, silently and in ever-increasing numbers as they approach the Prophet’s mosque as if hypnotized. Long crenelated minarets pierce the skies. The mosque, brightly lit from within, glows in the night. I can make out the singular green dome which marks the area where the Prophet is buried.

Later in the day, before the sunset prayers end the daily fast, my cousin, already in Medina, and I walk to the mosque. It’s packed with women sitting in line on the red carpets praying, sleeping, reading the Koran, or just chatting. We squeeze in between a group of Tunisian pilgrims. My cousin takes out a prayer book, and we huddle together and recite out loud, “God, let there be light in my heart, light in my hearing, light in my tongue, light before me, light behind me.”

Someone taps me on the shoulder and I look up. An elderly woman speaks in Urdu. I smile and shake my head. A few minutes later, she spreads out a plastic sheet. An Egyptian woman hands out free cups of yogurt while a Moroccan pilgrim on the other side hands out whole wheat brioche. It’s considered a blessing to feed someone fasting during Ramadan and by the time the call to prayer rings out, we have water, dates, and bread in front of us.

We recite the prayer for the occasion, “God, for you I have fasted and on your bounty I break my fast.” We dig in. At the end of sunset prayers, the imam asks the congregation to perform more prayers for the soul of someone who’s being prayed over at the mosque that day. “We’re going to pray for a stranger?” I ask my cousin.

“You recite the opening verse of the Koran, and then you pray for his forgiveness.”

“What if he was a bad person?”

“He was a Muslim,” she says by way of explanation.

I want to visit the prophet’s burial chamber and the Rawda, described by the prophet as a small stretch of heaven on earth beside his pulpit, but my cousin warns me there are long queues because women are allowed access to those sites for only a limited period. After two days in Medina, she’d been only once, while her husband had gone more than three times. “They act as if God is for men only, and it’s not,” she says.

Her words remind me of my visit to the Grand Mosque in Mecca last Saturday. My sister and I had gone for a minor pilgrimage, or umra, which during Ramadan is equal to, but does not take place of the hajj, one of the five pillars of Islam. While praying on the marble skirt that surrounds the Kaaba, the cube-shaped structure in the direction of which the world’s Muslims turn in their five daily prayers, a group of women veiled in black from head to toe and sporting mosque badges stood in front of us and clapped their hands. “Pilgrim, pilgrim, over there, over there.”

With my head on the cold marble floor, I was remembering the words of a Muslim preacher, “You are never as close to God as when you have your forehead on the floor in supplication.”

One of the women stands in front me and claps her hands again to get my attention. “Pilgrim, over there,” she orders.

I stand up. “Why?”

“No women allowed here.”

“Why not?” I ask, with an edge to my voice. “Who said?”

“Orders.”

One of her colleagues comes to me. “Don’t break your fast by fighting. Sit by the stairs, and I’ll try to find you a place on the skirt,” she tells me. I’m not mollified.

What has struck me most with fasting is that the challenge has been neither thirst nor hunger, but trying to make it through the day in the Ramadan spirit; without getting angry, getting into arguments, or thinking bad thoughts.

“This is inner jihad,” says my other sister, Taghreed. “You struggle with yourself. You practice reining in your negative impulses during this month and hopefully it stays with you for the rest of the year.”

Late Wednesday, we debate whether to eat at home or go out for suhoor, our last meal of the evening, when Reem walks into the living room. “It’s the first night of the last 10 days of Ramadan. Tonight could be the Night of Power. Instead of going to Caspar & Gambini’s [restaurant], it’s better to stay home and pray.”

The night of power was when the first verses of the Koran were revealed to the prophet Muhammad, and on this night, according to the Koran, “Therein come down the angels and the spirit by God’s permission on every errand.” Nobody knows what day in Ramadan coincides with the Night of Power, only that it is during the last 10 days. According to his biographers, the prophet said, “One who spends the Night of Power in worship, one’s motive being faith and devotion, will have all one’s previous sins forgiven.”

Chastised, we decide to stay home. We eat a light meal of fava beans and feta cheese with tomatoes, then everyone heads out. Just in case tonight coincides with the Night of Power I make a prayer. “Peace of mind, God,” I pray. “Peace of mind.”

Reprinted with permission, The Christian Science Monitor.

Editor’s Note:

Today SUSRIS is providing a a report ["A Review of the Saudi Economy: On the Brink of Recovery"] on the Saudi economy in which Jadwa Investment forecasts a sustainable recovery will take hold in the fourth quarter “barring any other major public financial events at family businesses.” This SUSRIS IOI provides an update to the major family business financial event that was the source of trouble referred to in the Jadwa report last week and discussed at length in July.

Saad, Algosaibi debts no threat to Saudi banks
Adnan Jaber

RIYADH: Muhammad Al-Jasser, governor of Saudi Arabian Monetary Agency (SAMA), said [Sep 1] that the debts of business conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros did not pose any major threat to Saudi banks.

“There is no systemic risk on the Saudi banking system from the debts of these two firms. Profitability, however, could be affected,” Al-Jasser told reporters.

Saad and Algosaibi are embroiled in a legal battle in the United States after defaulting on debts, with some bankers warning the total cost of write-downs may hit $22 billion and affect around 120 banks.

The comments are Al-Jasser’s first on the issue since the two groups’ problems came to light in late May when SAMA froze the accounts of Saad’s Chairman Maan Al-Sanea, a decision that he has never confirmed or commented upon.

“The government has taken a decision since these two firms may affect the business sector in the Kingdom, and its reputation and position,” Al-Jasser said. “The government has set up a special committee to look into the two firms, follow the situation of these two firms and take appropriate action.”

The committee is submitting its reports to “the higher authorities in the government,” he added.

He did not provide any additional information.

“These two firms are family-owned, they are not banks licensed by the central bank or the Capital Market Authority. So it is not up to us to deal with the issue of these two firms,” Al-Jasser added. Algosaibi is suing Al-Sanea for fraud in a case involving allegations of $10 billion in loan irregularities.

“Within the Kingdom, we have not noticed any financial irregularities. We are not responsible for what happens outside the Kingdom,” Al-Jasser said.

The SAMA governor said he expected “a minor decrease” in profits of Saudi banks in the third quarter of this year.

Source: Arab News

Editor’s Note:

In July SUSRIS provided a report from Jadwa Investment which highlighted the impact of problems at the Saad and Ahmed Hassan al-Gosaibi groups on economic recovery in the Kingdom. Although most businesses in Saudi Arabia were showing signs of overall business and revenue growth in the second half of 2009, according to a report from SABB, there was a drag on the economy in the form of increased caution among lenders. Last week Jadwa updated its economic forecast calling for a “sustainable recovery to take hold in the fourth quarter” based on the assumption that external conditions will continue to improve, “barring any other major public financial events at family businesses.”

Today we provide for your consideration the current Jadwa Investment bulletin which addresses the Saudi economy and the prospects for recovery and growth. We wish to thank Mr. Brad Bourland, Jadwa’s Chief Economist, for sharing this valuable report with SUSRIS readers.

Jadwa Investment Monthly Bulletin – September 2009

Saudi economy: On the brink of recovery

It has been a tough year for the Saudi economy. Global recession hit hard through the early part of 2009 and as the external environment began to improve local business confidence was set back by high-profile troubles at two local companies. Recent data suggest that the worst is now over for the economy and based on our assumption that external conditions will continue to get better, then barring any other major public financial events at family businesses, we expect a sustainable recovery to take hold in the fourth quarter.

Government spending is the key source of dynamism within the economy. Expenditure seems to be above budget and is likely to pick up further as implementation of those projects recently signed or retendered begins. In contrast, many private sector businesses face problems accessing finance. Given the caution within commercial banks only modest growth in lending is expected over the near-term. SAMA has made the environment conducive to lending once banks become less risk averse and interest rates are expected to stay very low. With oil prices likely to be in excess of the budgeted level, we expect only a very small budget deficit despite the anticipated overspending. The deficit on the current account will be larger, but is not a concern.

Inflation has fallen sharply this year as the external factors behind its surge over the previous few years have all reversed. Food and commodity prices have dropped, bottlenecks have eased and exchange rate movements have been favorable. There is sufficient slack in the economy to prevent domestically-driven inflation outside of the rental market for some time, but with commodity prices rising and the dollar slipping as global economic growth resumes, we do not expect inflation to fall much lower than its current level of 4.2 percent over the remainder of the year.

The difficult economic environment has hit the financial performance of listed companies. Earnings per share for the first half of the year were 24.3 percent lower than for the same period of 2008. Earnings growth should be positive over the second half of the year owing to the improved economic situation and the very weak performance in the final quarter of last year. Stronger earnings should lift the TASI. After a period of moving in line with global markets broke down in mid-May, the market has traded sideways, missing out on the gains most other emerging and developed markets have recorded. We expect the market to break out of its current range and move higher in the final quarter and maintain our fair value projection for the TASI of 6,200 at the end of the year.

Economic growth

Data for the year to date make clear that it has been a difficult period for the Saudi economy. Although there are some contradictions in the data, the themes that emerge are the weakness of consumers and private sector businesses, the essential role played by government spending and a lower contribution from the oil sector. While recent data suggests that the worst may be over, we do not yet see consistent signs of improvement and think that problems with some family business have pushed back the prospect of recovery into the fourth quarter.

The Saudi economy can be broken down into three sectors; the oil, non-oil government and non-oil private. Assessing the performance of the first two of these sectors is reasonably straightforward. Growth in the oil sector is largely determined by oil production. Oil production averaged just over 8 million barrels per day (b/d) in the first eight months of this year, compared to 9.3 million b/d in the same period of last year, a decline of 13.4 percent. Production has risen modestly in the last few months, but with Opec not expected to adjust output quotas this year, it is likely to remain well below the elevated levels of last year. The non-oil government sector has grown by around 3 percent per year for the last decade irrespective of what has been happening elsewhere in the economy and we see no reason for this to change in 2009.

To estimate the performance of the non-oil private sector we look at the following data:

• SAMA net foreign assets fell by $56 billion over the first seven months of the year. Deposits in foreign banks were down by $42 billion and investments in foreign securities were $15 billion lower. The government is drawing down its foreign reserves in part to finance spending, but the extent of the decline is surprising (see Government Finances). Over June and July SAMA net foreign assets fell by $13.3 billion, even though oil prices were well in excess of the level we estimate is required to balance the budget.
• Cement sales are up by 17 percent in the first six months of 2009 compared to a year earlier. This points to a greater volume of work taking place on construction projects. Growth picked up in recent months due to the conditional lifting of the export ban; in June cement sales were up by 21 percent in year-on-year terms.
• Imports via the Kingdom’s ports over the first five months of 2009 were 18 percent lower than in the same period of last year. Imports of construction materials fell the most, by 29 percent; those of consumer goods were down by 12 percent. In month-on-month terms imports through the ports rose by 0.7 percent in May.
• Exports via the Kingdom’s ports, excluding oil and gas, were down by 1 percent over the first five months of the year compared to the same period of last year, with only petrochemicals showing growth. Exports of all other goods were down by over 30 percent. The month-on-month data also shows a continued fall, with total exports through the Kingdom’s ports down by 0.9 percent compared with April, and non-oil and gas exports down by 1.8 percent. Lower exports reflect the impact of the global recession on Saudi exporters.
• Bank lending to the private sector has declined in four of the first seven months of the year and in absolute terms is SR6 billion below its end-December level. Lending rose in June and July, but in year-on-year terms it is at a nine-year low.
• Point of sale terminal data is the closest approximation to retail sales. Annual growth in the value of point of sale transactions was 6.9 percent over the first seven months of the year. The growth rate has declined in five of the seven months, but rebounded from -11.7 percent in June to -0.9 percent in July (seasonal spending trends distort the month-on-month comparisons). Note that there was an 11 percent increase in the number of point of sale terminals in the year to July.
• The value of commercial and personal cheques cleared by local banks is down by 9 percent over the first seven months of 2009 compared with the same period of last year. The July total was the highest so far this year and the year-on-year decline was just 1.6 percent.
• Government contracts worth around $140 billion have been awarded so far this year, of which around $110 billion were for non-oil projects. There is generally a significant time lag between the award of a project and the commencement of work on that project, so we think these commitments will have little immediate impact on the economy. Similarly, the $75 billion of private sector projects cancelled or put on hold so far this year will have minimal impact as it is unlikely that many of these had got beyond initial plans.
• The number of employment visas issued in the first half of Hijri year 1430 (corresponding to December 28, 2008 to June 23, 2009), was down by 29 percent. With 52 percent of visas issued for workers in the building and construction sector, this suggests the growth in the pace of project implementation has slowed compared with last year. Data on those exiting the country is not available, but it seems likely that there was a large net inflow in the first half.

The picture is clearly one of an economy that has slowed. Virtually all indicators show that the private sector was weaker in the first half of this year than one-year earlier. The clear bright spot is the contribution of the government. Government spending looks to have been well above target, which is providing a vital boost for some private sector contractors. Government activity is not stimulating the import of raw materials because stockpiles that have built up since the final quarter of last year are being drawn down. Private sector operators that do not have government contracts are being affected by a lack of access to finance, export-oriented manufactures are having a particularly tough time and consumer-led sectors such as retail are also suffering.

There is a lack of clear signs of recovery in recent data. This is despite the fulfillment of the following key preconditions for a revival in the economy; improvements in the global economy, oil prices more than double their recent lows (and above $60 per barrel since mid-May) and share prices up around 40 percent from their March lows. We think this is because of concerns about the financial health of family businesses. Problems at one prominent local family business and an associated businessman have been highly publicized and it seems that several other family groups are stressed financially. Owing to worries about family business and their own exposures, banks have become more cautious in extending credit to the whole of the private sector (see our July 2009 Monthly Bulletin for more information).

Business activity traditionally slows during the summer and Ramadan (although consumer spending picks up notably during the latter) and we think that the economy is in the midst of a period of consolidation during which confidence should improve. Government has been aggressive in its policy response to the slowdown and the increasing visibility of new infrastructure and construction projects should help to boost sentiment. Provided external conditions continue to get better (the global recovery gains traction, oil prices hold above $60 per barrel and share prices make modest gains) then barring any other major public financial events at family businesses, we expect a sustainable economic recovery to emerge in the fourth quarter. Real GDP growth is forecast at -1.0 percent this year, with real private sector non-oil GDP slipping to a 10-year low of 2.3 percent.

Outlook for the global economy

Growth has resumed in much of the global economy, albeit at a very sluggish pace and reliant on unsustainable government stimuli. Confidence is rising and growth should pick-up modestly over the remainder of the year. A move to a stronger, more sustainable pace of growth is not expected in 2009 and there are many challenges ahead for the global economy.

The economies of Japan, Germany and France all grew in the second quarter and the US is expected to return to growth in the third quarter. Growth in key emerging markets, particularly those in Asia, has also bounced back. While this is clearly encouraging, there are some concerns about the quality of this growth, which was primarily driven by government stimulus policies that are not sustainable over the long term as they are unaffordable and risk stoking inflation. Private sector consumption and investment generally continues to fall.

Nonetheless, we anticipate a modest pick-up in growth over the remainder of the year. Movements in consumer and business confidence have generally been positive and there are encouraging indicators that the US housing market has bottomed and labor market conditions are improving. Health is also returning to parts of the financial sector, though serious issues remain.

The recovery will be fragile and vulnerable to setbacks. With consumers likely to continue to reduce debt, rather than spend, unemployment is expected to stay high for some time. In addition, great care will be required in withdrawing stimulus programs in order for this process not to undermine the recovery. We therefore do not expect that the recovery will precede a rapid return to a growth rate in line with the long-term trend.

Inflation

Inflation has fallen sharply this year as the external factors behind its surge over the previous few years have all reversed. Food and commodity prices have dropped, bottlenecks have eased and exchange rate movements have been favorable. Rents remain the main source of inflation, though they have also slipped owing to the provision of more housing and lower building material costs. With commodity prices picking up and the dollar weakening, we do not expect inflation to fall much lower over the remainder of the year.

Year-on-year inflation averaged 5.8 percent over the first seven months of the year and stood at 4.2 percent in July, its lowest level since July 2007. Inflation in each of the components of the cost of living index has fallen so far this year. The most pronounced decline was for foodstuffs, where inflation stood at 1 percent in July compared to 11.3 percent in December. Rental inflation stood at 13.5 percent in July. While this remains very high, it has fallen in each of the last 12 months after hitting a high of 19.8 percent in July 2008.

The following factors explain the fall in inflation so far this year:

• Lower food prices: International food prices plunged from record highs in the middle of last year owing to a combination of the global recession, much better than expected harvests and the relaxation of some barriers to food exports introduced earlier in the year by some countries. In July, food prices were 24 percent lower than their peak last June, as measured by the IMF food price index. This decline has not been fully passed on by retailers in Saudi Arabia—the food price component of the inflation basket is down only 5 percent from its high—but this is likely to reflect retailers rebuilding margins, as they did not pass the full extent of the food price rises during the previous two years on to consumers either.
• Stronger exchange rate: The financial crisis triggered a dramatic strengthening of the US dollar as investors slashed their risky bets and instead put money in the relatively safety of the large and liquid US financial market. Given the riyal’s peg to the dollar, this appreciation cut the cost of imports from outside of the US in riyal terms.
• Lower transportation costs: Fuel prices and the volume of global trade have fallen significantly since the world fell into recession, with the Baltic dry freight index down by over 70 percent over the year to date compared with the same period of 2008. Given the Kingdom’s reliance on imports, these reduced costs have made a helpful contribution to lowering inflation.
• Lower inflation in the Kingdom’s trading partners: A study by the IMF found that inflation in trading partners was the key determinant of inflation in Saudi Arabia. According to IMF data, average inflation among advanced economies is forecast to fall to just 0.1 percent this year from 3.4 percent in 2008.
• Lower demand: The economic slowdown has allowed bottlenecks to ease and lowered prices. Prices of construction raw materials dropped quickly as private sector activity eased, causing stockpiles within the Kingdom, ultimately resulting in lower prices. The seizing up of projects elsewhere in the region reduced the cost of skills and equipment needed for infrastructure and industrial projects. The effect of these changes is clear in wholesale prices, which fell by 2.5 percent in year-on-year terms in the first quarter of 2009 (latest data) compared to an average rise of 10.9 percent in year-on-year terms over the first three quarters of last year. More recent data show that local steel prices were 55 percent lower in June than one year earlier, for cables, wood and cement the declines were 37 percent, 28 percent and 7 percent, respectively.

We do not think that inflation will fall much further this year. Commodity prices have risen and the riyal has weakened in recent months owing to signs that the global economy is starting to recover. In addition, the positive impacts of plunging prices in the final quarter of last year will drop out of the annual comparison. For example, the IMF food price index is currently 24 percent below its peak of June 2008, but is actually 10 percent above the average for the final quarter of last year. Ramadan will also push up food prices. Over the past seven years the rise in food prices in the first month of the Gregorian calendar that Ramadan falls in has been over four times greater than the average monthly rise in food prices for the rest of the year.

In normal circumstances, the large monetary and fiscal policy stimulus being injected into the economy would stir inflationary pressures. At present we do not think this will be the case. The government has taken these measures to stimulate the economy and to revive confidence in the private sector, but the response has so far been sluggish. Even when bank lending picks up and activity in the private sector accelerates, there is sufficient slack in the economy to prevent domestically driven inflation for some time. Rental inflation is the exception. An ongoing shortage of accommodation will keep rental inflation well into double digits for the reminder of the year.

External sector

The external position has worsened this year in line with much lower oil export receipts. Non-oil exports and imports are both down so far this year because of lower commodity prices and reduced demand. It is likely that the services deficit has narrowed as a result of decreased payments for imported professional services. While all are likely to pick up as the economic recovery gains traction in the final quarter, we nonetheless expect the current account to fall to a deficit of 6.1 percent of GDP from an all-time high surplus in 2008.

With oil accounting for around 90 percent of export revenues, the decline in oil prices and production in comparison with last year has caused a substantial fall in oil export receipts. Over the first eight months of the year we estimate that oil revenues were 57 percent below their total for the same period of last year. Non-oil exports totaled $10.4 billion in the first five months of 2009, compared with $13.4 billion in the same period of last year (a decline of 22.2 percent).

Large declines were recorded across all categories of exports. Petrochemical, plastics and minerals account for around two-thirds of non-oil exports and in each case revenues have fallen notably owing to lower prices (in volume terms petrochemical exports were up). By far the largest decline (in both percentage and absolute terms) was recorded by re-exports. Re-exports are goods that enter through the Kingdom’s ports and are then transported to other countries in the region. The decline reflects the problems the global slowdown has caused to some neighboring countries.

Outlook for oil prices

Oil prices have been strong this year given the exceptionally weak state of the global economy. With global economic conditions set to improve, but oil output also likely to tick up as Opec member compliance with agreed production cuts slips further, we expect oil prices to fluctuate between $60 per barrel and $80 per barrel over the remainder of the year. We therefore forecast an annual average price for WTI of $58 per barrel (equivalent to $55.7 per barrel for Saudi oil).

WTI averaged $55 per barrel over the first eight months of the year. This is higher than the average for 2004 to 2006 when the global economy was growing at over 5 percent per year. Oil prices have broadly moved in line with gyrations in sentiment on the health of the global economy over the past months and WTI hit a peak for the year of $73.7 per barrel on August 24, more than double its January low.

Lower supply from Opec has contributed to the relative strength of prices. Opec production is set to be down by around 3.5 million b/d compared with last year (the International Energy Agency expects non-Opec to rise by 200,000 b/d this year). In contrast, the IEA forecasts that global demand will fall by 2.35 million barrels per day this year. This is the largest decline since 1981 and means that oil demand this year will be at its lowest level since 2004. Oil stocks in the OECD were at a 16-year high at the end of July, though those in the US have declined sharply in recent weeks.

It also appears that investment flows have again been an important factor driving prices up. Improved investor sentiment about the health of the global economy, reflected in gains in global stock markets, has supported the rise in prices. In addition, the renewed fall in the dollar appears to be attracting financial flows into oil (as it did during 2007 and much of 2008) and a closer relationship has been reestablished since May.

All indications are that Opec will not change its production quotas this year. Saudi Arabia has said that it considers $75 per barrel a fair price for oil, but this is a goal rather than a short-term target. With oil prices approaching this level in very difficult economic circumstances, we do not see any scope for lower output, particularly as it could hit the global economy and damage Opec’s reputation. While the strengthening global economy makes it likely that Opec’s next move will be to raise production, uncertainty over the vitality of the recovery means that we do not anticipate any formal hikes this year, though adherence to quotas is likely to slip further.

Imports have fallen across all categories, though the decline in total imports over the first five months of the year was less pronounced than that for exports; to $36.4 billion from $41 billion (11.2 percent).

The drops are largest for minerals and food products, as prices are sharply lower. Imports of machinery and equipment and transportation equipment are only slightly down from last year, consistent with our view that government project spending has increased.

Data on other components of the balance of payment is not available, but we think the following assumptions are reasonable:

• Lower service payments: Reduced costs, less use by the private sector and a growing domestic skill base will cut spending on imported professional services. In addition, fewer imports and lower fuel prices will cut transportation costs.
• Lower investment income: With the bulk of government foreign assets believed to be invested in US government debt, lower interest rates on these instruments will result in reduced investment income.
• Higher remittances: Saudi Arabia has not seen the major exodus of expatriate workers experienced elsewhere in region. While the number of new entrants has declined, we think there has been a large net inflow of expatriates this year and expect economic difficulties in home countries to mean a larger outflow per expatriate worker.

These trends are expected to continue, reducing the deficit on the services, incomes and transfers component of the current account. Imports are likely to pick up over the remainder of the year as the economy revives and work commences on more government projects. Non-oil exports should benefit from the recovery in commodity prices. Similarly oil export revenues will be higher in the second half of the year based on our assumption of higher prices and production creeping up. Nonetheless, with oil revenues expected to be down by almost 60 percent for the year as a whole, we forecast a current account deficit of $21 billion (6.1 percent of GDP). This will be the first deficit since 1998.

Government finances

We forecast that the government will run a budget deficit this year, though it will be smaller than that projected in the 2009 budget. Both revenues and expenditures are set to be comfortably above the level projected in the budget.

The 2009 budget was based on revenue of SR410 billion and expenditure of SR475 billion, resulting in a deficit of SR65 billion. We estimate that oil production of 8.1 million barrels per day at a price for Saudi oil of $44 per barrel is consistent with the oil revenue projection in the budget. With Saudi oil averaging around $54 per barrel to date and production broadly in line with our projection, revenues are likely to have been in excess of the budgeted level (oil accounts for 80-90 percent of total revenue).

We are confident that expenditure has also exceeded its target, though we are not certain about the extent of the overspending. Spending has been greater than the projection in the budget in each of the last 10 years, by an average of 19 percent. Current spending (mainly wages and salaries), the largest component of total expenditure, is likely to be on target to rise by around 8 percent this year. A 5 percent government pay rise was awarded and the number employed by the public sector employment should continue to rise (though by less than the 8 percent it rose by last year).

Capital spending is less easy to track and the data are contradictory. As we outlined in the Economic Growth section of this report, a large number of new government contracts have been awarded, but it is unlikely that there has been much spending related to these projects. Similarly, many contracts announced last year were retendered to take account of much lower raw material prices, so again there will have been little actual government spending on these. In addition, the Public Investment Fund and other government agencies are taking a greater role in financing projects and their expenditure is not captured in the central government budget.

Nonetheless, we do think that government project spending has gone up so far this year. The size of the reduction of net foreign assets appears to suggest spending in excess of the budgeted level and higher capital spending seems the most likely source of additional spending. Cessation of work on many projects elsewhere in the region has freed the necessary technology and expertise and the government is clearly committed to pressing ahead with its capital spending program. A draw down of local stocks built up since the fourth quarter of last year accounts for the fall in imports of construction materials.

Where have the government foreign assets gone?

A huge stock of foreign assets was amassed during the years of high oil prices. Between the end of 2003 and the end of 2008 net foreign assets at SAMA rose by $378 billion to $438 billion as oil receipts greatly exceeded government spending. Drawing down these assets during the current period of lower oil prices allows the government to continue with spending programs that are vital to supporting the economy given the weakness of the private sector. It is therefore not a surprise that net foreign assets have fallen over the first seven months of the year. What has surprised us is the size of the fall.

Over the seven months of the year, we estimate that government receipts amounted to $88 billion (based on oil revenues of $74 billion and non-oil revenues of $14 billion). Assuming that government spending is split equally between each month of the year and that it has exceeded its target by 19 percent (the historical average) then spending over the seven months was also $88 billion. Over the same period, net foreign assets dropped by $56 billion. In July alone, they fell by $7.1 billion, even though Saudi oil averaged $64.3 per barrel a level well in excess of the $50 per barrel we estimate is required to balance the budget.

While the relationship between the budget balance and the change in foreign assets is not tight, the sharp divergence is puzzling. Part of this discrepancy can be accounted for by government activity. Between January and July government deposits in the local banking sector rose by $14 billion and the government paid off $9 billion of bills and bonds that were held by commercial banks. In both cases these actions make funds available for the banks to lend.

Nonetheless, this still leaves a large gap. We do not think that losses on investments contributed as there is not a relationship between asset price moves and SAMA net foreign assets (largely because of what are thought to be large holdings of foreign government bonds). Similarly, exchange rate effects appear insignificant (the dollar index was little changed between the end of December and end-July).

It seems likely that a combination of the following factors account for a further proportion of the reduction in net foreign assets:

• Government spending is well above the budgeted level.
• Spending at state oil company Saudi Aramco is higher than we had anticipated, so less oil revenue is being transferred to the budget (all oil revenue is earned by Aramco and only the that remaining after Aramco spending is accounted for is transferred to the government budget).
• Large transfers have been made that are not captured in the budget. For example, there is a commitment to inject $7 billion into the Real Estate Development Fund over the five years from 2008. Net lending by the specialized credit agencies (the Saudi Agricultural Bank, Saudi Credit and Saving Bank, Public Investment Fund, Saudi Industrial Development Fund and the Real Estate Development Fund) soared last year and is likely to have risen further this year.

Government spending growth is expected to pick up over the remainder of the year, as implementation of those projects recently signed or retendered begins. We also anticipate a rise in revenues due to higher oil prices. For the whole of 2009 we expect a budget deficit of SR7 billion. This can comfortably be financed by the drawing down of foreign assets or deposits at domestic banks.

Monetary policy

SAMA has continued to implement an appropriately loose monetary policy. Interest rates have been cut further this year and are expected to remain at their current exceptionally low levels for the remainder of the year. While lower interest rates and other policy measures have brought down interbank rates, they have yet to stimulate a sustained revival in commercial bank lending.

There have been three interest rate cuts so far this year. In mid-January, SAMA lowered the repo rate (the rate it charges for lending to commercial banks) to 2 percent from 2.5 percent and the reverse repo rate (the rate it pays for deposits) from 1.5 percent to 0.75 percent. The reverse repo rate was then cut to 0.5 percent in mid-April and to 0.25 percent in mid-June, while the repo rate has been left unchanged.

Given the exchange rate peg and the absence of capital controls, it is usual for interest rates in Saudi Arabia to broadly shadow those in the US, but all of the reductions so far this year were done independently of US rates. This is partly because there is effectively no scope for US rates to go any lower; the Fed funds rate has been at 0-0.25 percent since mid-December. In addition, SAMA has judged that the succession of interest rate cuts in the final quarter of last year have has not been sufficient to effectively stimulate the economy.

The reductions to the reverse repo rate appear designed to encourage a resumption of commercial bank lending, which would be a key sign that economic conditions were improving. Bank caution caused deposits at SAMA in excess of the statutory requirement to surge from SR0.9 billion in October to a peak of SR88.9 billion in April (they had fallen back to SR79 billion in July but this was not reflected in higher lending). Reducing the reserve repo lowers the return on these deposits and potentially encourages banks to lend, rather than hoard, these funds. Other policy steps taken during the year, such as reducing the issuance of treasury bills and holding the price at which the bills were issued below the interbank deposit rate, have also been designed to free funds for banks to lend.

While the supportive monetary policy has not yet contributed to a recovery in bank lending, it has helped push interbank rates (the rates at which banks lend to one another) to all-time lows. The three-month Saudi interbank offer rate (SAIBOR) current stands at 0.65 percent down from 2.51 percent at the end of last year. Lending and particularly deposit rates have also fallen notably (an additional reason for the last cut in the reverse repo was that it was above short-term deposit rates, meaning that SAMA was paying out more to the banks than it needed to).

We do not expect a change in interest rates over the remainder of the year. The US Fed funds rate is likely to remain at its current level over this period (the market is pricing in a rate hike next March) and we do not anticipate SAMA taking further independent moves. We think that SAMA has done what it can to make the environment conducive to lending and that it is risk aversion rather than lack of liquidity that is discouraging banks from lending. Provided there are no major new shocks from family businesses and the improvement in external conditions continues, lending is likely to pick up in the final quarter of the year.

Exchange rate

The riyal has depreciated modestly against the currencies of Saudi Arabia’s main trading partners so far this year, though it generally remains much stronger than its mid-2008 levels. Owing to its peg to the US dollar, it has fluctuated in line with market views on the health of the global economy, weakening with signs of improvement and vice versa. There has been no pressure on the exchange rate this year, though longer-term questions about the position of the dollar in the global financial system have been raised.

For the bulk of the year movements in the dollar (and therefore the riyal) have been driven by investor perceptions about the health of the global economy. The dollar surged in the final quarter of last year as investors rushed into safe haven US assets. After a sharp fall and then rise around the turn of the year, the dollar has gradually slipped as signs of improvement in the global economy have allayed investor caution.

In recent weeks there are signs that US economic fundamentals are playing a greater role in determining the direction of the dollar. Indications that the US economy is set to grow faster than other leading global economies over the near term have caused the dollar to strengthen whereas for most of the year the dollar would have weakened as investors became less cautious and moved assets out of the US. The consensus view is that the dollar will stay broadly flat over the remainder of the year as these two forces offset each other.

Despite the recent decline, the riyal generally remains well above where it was in the middle of last year. The table below looks at the riyal’s movements against the currencies of its main trading partners. It shows that the riyal is currently nearly 10 percent stronger than it was against the euro, the currency of the Kingdom’s main trading partner, at the end of June 2008. At the moment exchange rate is playing an important role in moderating inflation, though this will cease to be a factor in the final quarter given the surge the previous year.

Questions raised about the dollar’s global role

Concerns have been raised in recent months about the role of the dollar in the global economy. The dollar is the global reserve currency. It accounted for 65 percent of global foreign exchange reserves at the end of the first quarter and is the currency used to settle the bulk of global trade. Questions over the dollar’s status have arisen because the vast economic stimulus in the US involves the creation of a huge number of new dollars, which has the potential to seriously undermine its value. Some major emerging economies that have large dollar-denominated reserves have been particularly vocal in calling for an alternative.

However, new reserve currencies cannot be established overnight. Previous changes in reserve currencies (such as from the pound to the dollar) have taken decades. At present there is not another currency that provides assets with the safety, liquidity and returns available in US financial markets. Small shifts in reserve holdings in some countries may be taking place, but over the near term we do not see any change to the dollar’s predominance.

There has been no pressure on the riyal’s peg to the dollar this year. Since the onset of the global recession, some of the key arguments for dropping the peg (desynchronization of economic cycles between Saudi Arabia and the US, inappropriateness of interest rate policy and the contribution of currency weakness to inflation) have lost their relevance, at least in the short term. The global recession has realigned the economic cycle of Saudi Arabia with that of the US, interest rates are at an appropriate level and a strengthened dollar is supporting the decline in inflation. One-year exchange rate forwards, which measure what the market expects the exchange rate to be in one-year’s time, point to no change for the riyal against the dollar.

Stock market

The TASI has climbed by 17 percent so far this year. For much of the first half of the year it fluctuated in line with movements on global markets, touching a near five-year low in the process. In recent months it has been held back by concerns surrounding family businesses. Financial performance of listed companies has been disappointing so far this year. We think it will improve in the second half, but maintain our projection for end-year fair value for the TASI of 6,200.

Market movements so far this year fall into the following three phases:

• To mid-March the TASI was on a downward trend, falling by 14 percent to a near five-year low of 4,130 on March 9.
• Between mid-March and mid-May the TASI recovered strongly, rising by 48 percent to its high for the year to date of 6,101 on May 23.
• Subsequently, the TASI has drifted sideways and currently stands at 8 percent below its peak.

The first two of these phases were closely aligned with moves in global stock markets. Owing to restrictions on foreign investment, the Saudi market historically had little correlation with global markets, but after the dramatic intensification of the global financial crisis last September the TASI and the US S&P 500 moved virtually in lockstep until the middle of May. The close correlation was common to many markets across the world. The downward move reflected concern about the economic outlook, which was followed by a strong rally owing to an improvement in confidence amid indications that economic conditions were improving and growth would resume later in the year.

Since the middle of May, the relationship with global markets has broken down. Many markets have continued upwards in recent months, but the TASI has slipped. This is because investors are concerned about the lack of transparency surrounding the problems at the Saad and Gosaibi groups and their potential impact on listed companies (notably the banks) as well as the financial health of other family businesses within the Kingdom. Were it not for these concerns, we think the market would currently be around 500 points higher.

Unlike elsewhere in the region, the primary market has remained active during 2009. There have been eight new listings so far this year (raising a total of SR3.7 billion), compared to just three elsewhere in the GCC. Each recorded sizeable gains on their first day of trading (an average of 253 percent; 35 percent if the four insurance companies are excluded) and all are currently trading well in excess of their offer price.

Trading volumes have moved in line with market sentiment. They fell over the first three months of year, picked up strongly in April and May and have then slipped back from June. While individual Saudi investors still dominate stock market trading (accounting for 92 percent of all trades by value in August), it is notable that institutional investors are increasing their holdings. Mutual funds and local corporations have been net buyers every month from March onwards and foreigners buying via swap agreements were only net sellers during June over that period.

Listed company earnings have been affected by the weak local and global economies. Earnings per share for the first half were 24.3 percent lower than the same period of 2008. The petrochemicals sector recorded the sharpest decline, down by just over 70 percent, owing to the collapse in product prices in the final quarter of last year. Real estate was the next worst performer owing to lower land prices and property sales caused by the economic difficulties. Earnings in the building and construction sector also fell by over 35 percent, with losses in the value of raw material inventory and lower property sales the main causes.

Insurance and hotels and tourism were the only sectors where earnings grew in the first half in comparison to the first six months of last year. In the case of the latter, it was because one company booked large revenues from a one-time land sale. For the former, it reflects the move into profitability of some of the recently licensed companies. The telecoms sector recorded the smallest decline in earnings per share as tougher competition reduced margins amid a continued rise in sales.

We think the second quarter results were in general fairly disappointing. Earnings per share were down by 26 percent in year-on-year terms, compared to an annual fall of 22.8 percent in the first quarter. Compared with the first quarter, earnings per share were up by 7.1 percent. This is despite strong recoveries in oil prices (and to a lesser extent petrochemical prices) and the stock market and a generally better economic environment than the first quarter.

With earnings falling and share prices rising, the TASI has got more expensive on a valuation basis. It is now trading on a 12-month trailing price-to-earnings ratio of 15.1, compared to 9.7 at the end of last year. The price-to-book ratio has moved up to 1.88 from 1.65 at end-December. Both ratios are below the historical average and also slightly below those for global emerging markets with similar growth prospects. As tends to be the case given the home bias of the large local investor base, valuations are higher in Saudi Arabia than elsewhere in the GCC.

Earnings growth is expected to return to positive territory for the second half of the year. In part this reflects the low base for the comparison; a very poor fourth quarter of 2008 will make the year-on-year performance look exceptionally strong in the final quarter of this year. It also reflects the improvement in the economy, both local and global, that we are anticipating. Nonetheless, for the year as a whole we expect earnings per share to decline by around 6 percent.

We see the earnings outlook for the major sectors as follows:

• Banks: We now expect banks to record negative earnings per share growth this year, largely because of greater provisioning for bad loans. No local bank has released details of its exposures to the troubled Saad and Gosaibi groups, but for the whole of the local banking sector it will run into several billions of dollars. Banks may also increase provisions if they are concerned about their exposures to other family groups. Total new funds set aside to provision for bad debts amounted to SR1.4 billion in the second quarter. Greater provisioning is inevitable over the remainder of the year. Bank lending will also be lower than we had anticipated, partly because of uncertainty around family businesses. Lower lending rates and brokerage revenues will add to pressure on profitability.
• Petrochemicals: Petrochemical prices have improved more than expected and demand will pick up in the second half of the year in line with the recovering global economy. Given the collapse in earnings in the final quarter of last year, we expect a strong rebound in the last two quarters of 2009.
• Telecoms: All telecoms operators will be affected by the tough competition within the sector, though domestic demand for new technologies and services will remain strong. We expect Mobily’s financial performance to continue to outperform that of STC, whose foreign operations have been hit by the global recession. Both of the other two operators are still building up their operations and neither is expected to record profits this year.

Based on our earnings projections for the remainder of this year, we think that the TASI is currently trading on an end-2009 P/E of 15.6. We have revised up our projection for an end-year fair value P/E for the market to 17.5. This in line with valuations in emerging markets with comparably strong growth prospects over the remainder of the year (principally countries in Asia). Valuations in these comparable markets have gone up much faster than we were anticipating as a result of rapid gains in share prices caused by improved sentiment about the economic outlook.

After examining quarterly performance and prospects, we maintain our view that fair market value for the TASI is 6,200 at end-2009. This is just over 10 percent above its current level. Markets often trade out of line with fair value and we think the TASI is more likely to overshoot than undershoot fair value over the remainder of the year. It has not rallied as much as other stock markets around the world owing to recent concerns about family businesses and if these are allayed then the market has the potential to catch up with some of the gains elsewhere. Global market movements will also play an important role in determining where the TASI ends the year; the consensus view is that there will be a further modest rise in US markets this year, though there is a large divergence in opinion.

Editor’s Note:

Since the holy month of Ramadan began two weeks ago SUSRIS has shared stories of personal reflection of spirituality and fasting by Faiza Saleh Ambah. Today we provide the third selection from her “Ramadan Diary” for your consideration. This article originally appeared in The Christian Science Monitor.

Halfway through the Ramadan Fast
Faiza Saleh Ambah

I started a week late, due to a toothache. But now that I’m completing my first week of fasting, I feel as if I’m still searching for Ramadan, like a person waiting for the kettle to boil. I wonder what I’m doing wrong, and go looking for my Saudi sister Taghreed.

She tries to fast every day, but fails sometimes because of her craving for cigarettes.

“How do you feel at the moment you choose cigarettes over God?” I ask her on our way to break the fast Wednesday evening with my brother’s Harley Davidson bikers’ group and their families.

“I feel miserable when I’m not fasting. And miserable when I’m fasting,” she says and turns away.

Although I was raised in a Muslim home, my three siblings have been far more devoted to the practice of Islam than I. But I’m sincere in wanting to understand Islam better, and write about it, so have decided to fast for the first time.

In the middle of Tuesday night, I wake up thirsty, but am not sure whether the time for the last meal before dawn, or suhoor, has passed. According to the Koran, Muslims must start their fast when they’re able to distinguish white thread from black thread. I open my window. All dark, all clear.

My craving for water started when our Yemeni driver Izzy took me out for a walk Monday. “You can’t spend the day in your room reading and sleeping,” he says. “You have to wake up early, get out, exercise. You have to feel the thirst and hunger. Otherwise it doesn’t count.”

Izzy and I hit the walking track near the sea an hour before sunset. It is almost deserted. The weather is cool and above the sun is a huge ball of melon sorbet. On the other side I spy the moon, almost full. “It’s not even the middle of the month. How is that possible?” I ask Izzy.

“The crescent signals the beginning of Ramadan. The full moon means we’re halfway through and then when it disappears again, Ramadan ends,” he says. I feel silly that I didn’t know that. We pass the two-kilometer mark and head back. “Are you thirsty?” Izzy asks expectantly. “Hungry?”

“No, not really.” I look back up at the moon and then the sun, closer to the water now. Almost time for iftar, the breaking of the fast, and it seems strange to me that since I started fasting my day has become intertwined with the heavens, as if it’s been lifted from its worldly moorings.

On the way home, we stop at a red light near a low-rise building that houses a wedding hall, Chinese restaurant and a mosque. I notice a long tablecloth spread out on the sidewalk with about 80 people, mainly laborers from the Indian subcontinent, sitting around it.

“It’s a free iftar,” explains Izzy. “It’s a great blessing when you feed someone [needy] iftar,” he says.

Most people break their fast with dates, the way the prophet Muhammad did. But arriving home, I grab a bottle of water. Halfway through I remember to say the prayer for the occasion. “Allah, for you I have fasted, and on your bounty I break my fast,” I recite, before gulping down the rest.

The next day my 14-year-old daughter wants to go to Mecca for a minor pilgrimage, or umra, with her girlfriends. An umra during Ramadan, according to Islamic scholars, is the equivalent of, but does not take place of, hajj, one of the five pillars of Islam. More than 1.5 million Muslims are expected to converge on Mecca this Ramadan.

My daughter has already gone twice to the mosque to attend the nightly Taraweeh prayers. Is this the same teenager who was bikini-shopping in the States three weeks ago? I agree to let her go after a protracted discussion. But I can’t tell if she’s rebelling against her mother’s relative secularism, is serious about Islam, or just wants to spend more time with her friends.

On Tuesday night, I go to a lecture on Ramadan at the home of an Islamic researcher. About 15 men and seven women are seated in a large living room with a small fountain in the middle. Two partitions separate the men from the women. Some of us move one partition aside to get a better view. Two women, who veil their faces, sit behind the remaining partition.

I listen, and pay 300 riyals ($80), fulfilling an earlier pledge to give someone in need iftar. But I leave the lecture feeling despondent. Then it occurs to me that maybe I am the one who’s acting out. Maybe, when it comes to God, most of us are rebellious teenagers, pushing and pulling in different ways, looking for attention and the assurance that we are loved.

Wednesday evening my sister Reem surprises us with a visit from her home in Dubai. I confide in her that I’m having a hard time finding the spirit of Ramadan.

“The only way to experience Ramadan is to let go,” she says gently. “Don’t sit there and wait for something to happen. Ramadan is a great teacher. It brings you face to face with yourself and highlights your weaknesses. Every time I gossip, or think bad thoughts about someone, or crave a drink, I know it’s not the devil, because this month he’s chained up; it’s all me. Ramadan gives us the opportunity to see ourselves as we really are and to clean up our inner junk, and it only comes once a year. Don’t let it pass you by,” she urges.

She turns to Taghreed. “You too.”

The moon is half full. We have two weeks left.

Reprinted with permission, The Christian Science Monitor.

Editor’s Note:

The King Abdullah University of Science and Technology, or KAUST, was chartered in December 2006 as “an international, graduate-level research university dedicated to inspiring a new age of scientific achievement” in Saudi Arabia. According to KAUST it is “the realization of a decades-long vision” of King Abdullah. Today we provide for your consideration P.K. Abdul Ghafour’s article from Arab News providing an overview of the university and reporting on the arrival of the first students at KAUST.

KAUST to receive 1st batch of students
P.K. Abdul Ghafour

JEDDAH: King Abdullah University of Science and Technology (KAUST) will receive on Saturday its first batch of 400 students selected from different parts of the world ahead of its official opening on Sept. 23, which falls on the 79th anniversary of Saudi Arabia’s National Day.

Custodian of the Two Holy Mosques King Abdullah has invited several world leaders to attend the grand opening of the SR10 billion ($2.6B) international research university — a dream project of the visionary king. It is located in Thuwal, a village on the Red Sea, about 80 km north of Jeddah.

KAUST offers master’s and doctoral degrees in applied mathematics and computational science, bioscience, chemical and biological engineering, chemical science, computer science, earth science and engineering, electrical engineering, environmental science and engineering, marine science and engineering, materials science and engineering, and mechanical engineering.

The M.S. degree offered by the university will take 18 months to complete, and will be offered to both traditional full-time students and part-time students including industry-sponsored students on semester-long company leaves. The Ph.D. degree, which is a three- to four-year post-master’s degree, involves original research at a KAUST research center.

KAUST, which focuses on scientific research and technological development, has highly qualified and experienced faculty members from 80 countries. Its students come from Saudi Arabia and other Gulf and Arab states, Europe, America, East Asia and South Africa.

King Abdullah first announced his plan to establish the world-class university during a reception given to him by the people of Taif on July 23, 2006. “The establishment of this university has been a living idea in my mind for more than 25 years and I thank God for helping us to realize it,” the king said during KAUST’s groundbreaking ceremony.

Speaking at the ceremony on Oct. 21, 2007, Abdullah exuded optimism, saying the new university would serve as a bridge between cultures and nations and a lighthouse of knowledge. He said KAUST would help Saudi Arabia have a world-class independent scientific research center. It would, he added, act as a scientific base as well as a driving force for the national economy.

“As a new ’Bayt Al-Hekma’ (House of Wisdom), KAUST will be a beacon of hope and reconciliation and will serve the people of the Kingdom and benefit all the peoples of the world in keeping with the teachings of the Holy Qur’an, which explains that God created mankind in order for us to come to know each other,” the king said.

Abdullah expressed hope that KAUST’s benefits would be enjoyed by all of humanity. “We hope that the university carries out its noble humanitarian message in a pure and clean atmosphere, taking the help of God and then that of enlightened intellectuals all over the world, without any bias or discrimination,” he said.

Abdullah said an endowment has been set up to meet the university’s expenses, following a system that was prevalent in the golden age of Islam. KAUST would support the Kingdom’s strategy of developing itself into a knowledge economy.

The university has four research centers that focus on the industrial, economic, social and environmental requirements of Saudi Arabia. It takes care of talented students and researchers in the Kingdom and abroad to make use of their capabilities for the benefit of the whole world. It also offers an attractive atmosphere for scientists and researchers to engage in innovative studies.

Managed by the Kingdom’s oil giant, Saudi Aramco, the university is spread over an area of 36 million square meters along the Red Sea. The university has advanced research and laboratory facilities in addition to mosques, housing units, playgrounds, tennis courts, restaurants and recreational facilities.

Source: Arab News

KAUST Fact Sheet:

King Abdullah University of Science and Technology (KAUST) is being built in Saudi Arabia as an international, graduate-level research university dedicated to inspiring a new age of scientific achievement in the Kingdom that will also benefit the region and the world. KAUST will be merit-based and will recruit men and women from around the world.

About The Campus:

KAUST’s core campus, located on the Red Sea near Rabigh, will sit on more than 36 million square meters, encompassing a marine sanctuary and research facility around a unique coral reef ecosystem. The campus and surrounding community will incorporate a distinctive blend of traditional regional architecture and modern styles and amenities. Key features include:

• World-class research labs and facilities
• Seaside town with a wide variety of shops, apartments and single-family homes
• Parks, playgrounds, schools for children; golf course, yacht club, marina for adults
• Minimal environmental footprint

About Research:

KAUST will focus on research that applies science and technology to the problems of human need, social advancement, and economic development. Rather than organizing around academic disciplines, four strategic research thrusts will build KAUST’s research agenda:

• Resources, Energy and Environment
• Biosciences and Engineering
• Materials Science and Engineering
• Applied Mathematics and Computational Science

About Research Centers:

To support these thrusts, KAUST will establish multi-disciplinary Research Centers.

About Scholarships and Awards:

The KAUST Discovery Scholarship:

The KAUST Discovery Scholarship provides financial support to highly talented students from Saudia Arabia around the world.

About Faculty and Students:

KAUST will be a truly international school, recruiting the best professor and student researchers.

• Faculty will be non-tenured, with renewable or rolling two- to five-year contracts.
• Students will compose a diverse, international body representative of the highest standards of academic excellence.

Source: KAUST

Editor’s Note:

The Burke Chair in Strategy, held by Dr. Anthony H. Cordesman, at the Center for Strategic and International Studies released a briefing on Gulf security that will be of great interest to SUSRIS readers. “Threats, Risks and Vulnerabilities in the Gulf: Terrorism and Asymmetric Warfare,” authored by Dr. Cordesman and Adam Seitz, provides a comprehensive understanding of the threats in the Gulf that challenge U.S. and Saudi defense and security establishments. We commend it for your review and addition to your Gulf information resource bookmark list. This SUSRIS item provides the introduction and link to the complete report, an update to a report circulated earlier this year.

Gulf Threats, Risks and Vulnerabilities: Terrorism and Assymetric Warfare
Anthony H. Cordesman and Adam C. Seitz

While much of the world has focused on Iran’s missile developments and possible nuclear capabilities, this is only one of the risks that threaten the flow of petroleum products from the Gulf – a region with some 60% of the world’s proven conventional oil reserves and 40% of its natural gas. Far more immediate threats have emerged in terms of asymmetric warfare, terrorism, piracy, non-state actors, and other threats.

The Burke Chair at CSIS has developed a new briefing that provides an overview of these threats, showing current trends and highlighting the strategic geography involved. This brief looks beyond Gulf waters and examines the problems created by Iran’s ties to other states and non-state actors throughout the region. It highlights Iran’s capabilities for asymmetric warfare, but it also examines the threat from terrorism and the role it can play in nations like Yemen. It looks at the trends in piracy and in the threat in the Gulf of Aden, Red Sea, and Indian Ocean.

The key issues addressed are:

• Terrorism;
• Asymmetric Warfare;
• Maritime and Border Security;
• Combating Piracy;
• Critical facilities and Infrastructure;
• Role of Chokepoints; and
• Role of State and Non-State Actors

Countermeasures include:

• Prepare for all types of threats, and full spectrum of terrorism and asymmetric warfare;
• Jointness and inter-ministry cooperation;
• Regional and international cooperation
• Focus on both active and passive defense;
• Broad, non-compartmented situational awareness with real world operational response – critical value of IS&R and C4I;
• Intelligence Cooperation
• Gaming and “red teaming”
• Design civil and commercial facilities and infrastructure for deterrence and defense.

This briefing is entitled Gulf Threats, Risks and Vulnerabilities: Terrorism and Asymmetric Warfare, and can be found on the CSIS web site [click here].

This report is the third report in a series of three. The two previous reports in the series are available on the CSIS website:

“Iran Status Report: Iran and the Challenges to US Policy” [click here]

“GCC-Iran: Operational Analysis of Air, SAM and TBM Forces” [click here]

Additional work on Iran’s military and nuclear capabilities and the threats they pose to regional security are available at [click here]

In addition, a new CSIS/Praeger book on Iranian military forces and Iran’s missile and WMD programs, entitled “Iranian Weapons of Mass Destruction” will be published in September, 2009.

***

Anthony H. Cordesman

About Anthony H. Cordesman

Anthony H. Cordesman holds the Arleigh A. Burke Chair in Strategy at CSIS and acts as a national security analyst for ABC News. He is a recipient of the Department of Defense Distinguished Service Medal. During his time at CSIS, he has completed a wide variety of studies on energy, U.S. strategy and defense plans, the lessons of modern war, defense programming and budgeting, NATO modernization, Chinese military power, the lessons of modern warfare, proliferation, counterterrorism, armed nation building, the security of the Middle East, and the Afghan and Iraq conflicts. (Many of these studies can be downloaded from the Burke Chair section of the CSIS Web site at http://www.csis.org/program/burke-chair-strategy.) Cordesman has directed numerous CSIS study efforts on terrorism, energy, defense panning, modern conflicts, and the Middle East. He has traveled frequently to Afghanistan and Iraq to consult for MNF-I, ISAF, U.S. commands, and U.S. embassies on the wars in those countries, and he was a member of the Strategic Assessment Group that assisted General Stanley McChrystal in developing a new strategic for Afghanistan in 2009. He frequently acts as a consultant to the U.S. State Department, Defense Department, and intelligence community and has worked with U.S. officials on counteterrorism and security areas in a number of Middle East countries.

Before joining CSIS, Cordesman served as director of intelligence assessment in the Office of the Secretary of Defense and as civilian assistant to the deputy secretary of defense. He directed the analysis of the lessons of the October War for the secretary of defense in 1974, coordinating the U.S. military, intelligence, and civilian analysis of the conflict. He also served in numerous other government positions, including in the State Department and on NATO International Staff. In addition, he served as director of policy and planning for resource applications in the Energy Department and as national security assistant to Senator John McCain. He had numerous foreign assignments, including posts in the United Kingdom, Lebanon, Egypt, and Iran, as well as with NATO in Brussels and Paris. He has worked extensively in Saudi Arabia and the Gulf.

He is the author of a wide range of studies on energy policy, national security, and the Middle East, and his most recent publications include (CSIS, 2010), Iraq and the United States: Creating a Strategic Partnership (CSIS, 2010), Saudi Arabia: National Security in a Troubled Region (Praeger, 2009), Iranian Weapons of Mass Destruction: The Birth of a Regional Nuclear Arms Race? (Praeger, 2009), Withdrawal from Iraq: Assessing the Readiness of Iraqi Security Forces (CSIS, 2009), and Winning in Afghanistan: Creating Effective Afghan Security Forces (CSIS, 2009).

Source: CSIS

***

Full List of Anthony Cordesman’s Publications (Source: CSIS) [LINK HERE]

***

Articles and Interviews on SUSRIS by and with Anthony Cordesman

• U.S. Strategy in the Gulf – Cordesman – SUSRIS – Apr 18, 2011
• Understanding Saudi Stability and Instability – Cordesman – SUSRIS – Mar 1, 2011
• AUSPC Panel: Defense Cooperation – SUSRIS – Oct 26, 2010
• US-Saudi Security Cooperation, Impact of Arms Sales – Cordesman – SUSRIS – Sep 17, 2010
• The New Saudi Arms Deal – Cordesman – SUSRIS – Sep 17, 2010
• Reality in the Gulf – Cordesman – SUSRIS – Jul 22, 2010
• Saudi Arabia and Gulf Security – Cordesman – SUSRIS – May 18, 2010
• Saudi Arabia: National Security in a Troubled Region – Anthony H. Cordesman – SUSRIS – Oct 10, 2009
• Gulf Threats, Risks and Vulnerabilities: Terrorism and Assymetric Warfare – Anthony H. Cordesman and Adam C. Seitz – SUSRIS – Aug 31, 2009
• Regional Defense: A Need for Credibility, Effectiveness and Transparency (AUSPC 2008)- Anthony Cordesman – SUSRIS – Dec 8, 2008
• Saudi National Security and the Saudi-US Strategic Partnership By Anthony Cordesman – SUSRIS – Dec 4, 2008
• Security Cooperation in the Gulf – SUSRIS – Nov 22, 2008
• The US, Israel, the Arab States and a Nuclear Iran – Cordesman – SUSRIS – Oct 10, 2008
• Conventional Armed Forces in the Gulf – Cordesman – SUSRIS – Aug 23, 2008
• President Bush’s Trip to the Middle East – Briefing by Anthony Cordesman and Jon Alterman of CSIS – SUSRIS IOI – May 14, 2008
• Security Challenges and Threats in the Gulf – SUSRIS – Mar 28, 2008
• The Gulf Arms Sales: A Background Paper – Anthony H. Cordesman – SUSRIS IOI – Feb 5, 2008
• Security Cooperation in the Middle East – Anthony Cordesman – SUSRIS IOI – Nov 27, 2007
• Saudi Military Modernization – A Conversation with Anthony Cordesman – Interview – Nov 23, 2007
• Weapons of Mass Preservation – Anthony H. Cordesman – SUSRIS IOI – Aug 20, 2007
• Iran, Oil, and the Strait of Hormuz – Anthony H. Cordesman – SUSRIS IOI – Mar 27, 2007
• Global Energy Security – Anthony H. Cordesman – SUSRIS IOI – Nov 15, 2006
• The Impact on Saudi Regional Stability – Anthony H. Cordesman – SUSRIS IOI – Aug 2, 2005
• Saudi Arabia and the Struggle Against Terrorism by Dr. Anthony Cordesman – SUSRIS IOI – Apr 11, 2005
• Why Reforge the U.S. and Saudi Relationship? An Interview with Anthony Cordesman – SUSRIS IOI – Sep 28, 2004
• The Prospects for Stability in 2004 — The Issue of Political, Economic and Social Reform – Anthony H. Cordesman – Part 1 – SUSRIS – Feb. 23, 2004
• The Prospects for Stability in 2004 — The Issue of Political, Economic and Social Reform – Anthony H. Cordesman – Part 2 – SUSRIS – Feb. 23, 2004
• The Prospects for Stability in 2004 — The Issue of Political, Economic and Social Reform – Anthony H. Cordesman – Part 3 – SUSRIS – Feb. 23, 2004
• The 9/11 Commission Report: Strengths and Weaknesses – Anthony H. Cordesman – SUSRIS – Jul. 29, 2004
• Developments in Iraq at the End of 2003: Adapting U.S. Policy to Stay the Course,” by Anthony H. Cordesman, GulfWire Perspectives, January 7, 2004
• “Four Wars and Counting: Rethinking the Strategic Meaning of the Iraq War,” by Anthony H. Cordesman, GulfWire Perspectives, December 5, 2003
• “Iraq: Too Uncertain to Call,” by Anthony H. Cordesman, GulfWire Perspectives, November 18, 2003
• Saudi Redeployment of the F-15 to Tabuk – Anthony H. Cordesman – SUSRIS – November 1, 2003
• “Iranian Security Threats and US Policy: Finding the Proper Response,” by Anthony H. Cordesman, GulfWire Perspectives, October 28, 2003
• “What is Next in Iraq? Military Developments, Military Requirements and Armed Nation Building,” by Anthony H. Cordesman, GulfWire Perspectives, August 22, 2003
• Saudi Government Counterterrorism: Counter Extremism Actions – Anthony H. Cordesman – SUSRIS -August 4, 2003
• “Saudi Arabia: Don’t Let Bin Laden Win!”, by Anthony H. Cordesman, Saudi-American Forum Item of Interest, May 16, 2003
• “Postwar Iraq: The New Old Middle East,” by Anthony H. Cordesman, GulfWire Perspectives, April 16, 2003
• “Iraq’s Warfighting Strategy,” by Anthony H. Cordesman, GulfWire Perspectives, March 11, 2003
• “Reforming the Middle East: President Bush’s Neo-Con Logic Versus Regional Reality,” by Anthony H. Cordesman, GulfWire Perspectives, February 27, 2003
• “The Great Iraq Missile Mystery,” by Anthony H. Cordesman, GulfWire Perspectives, February 26, 2003
• “Iraq Security Roundtable at CSFS: A Discussion With Dr. Anthony Cordesman,” Center for Strategic and Future Studies, GulfWire Perspectives, January 28, 2003
• “A Coalition of the Unwilling: Arms Control as an Extension of War By Other Means,” By Anthony H. Cordesman, GulfWire Perspectives, January 25, 2003
• “Is Iraq In Material Breach? What Hans Blix, Colin Powell, And Jack Straw Actually Said,” By Anthony H. Cordesman, GulfWire Perspectives, December 20, 2002
• “Saudi Arabia: Opposition, Islamic Extremism And Terrorism,” by Anthony H. Cordesman, GulfWire Perspectives, December 1, 2002
• “Planning For A Self-Inflicted Wound: U.S. Policy To Reshape A Post-Saddam Iraq,” by Anthony H. Cordesman, GulfWire Perspectives, November 24, 2002
• “The West And The Arab World – Partnership Or A ‘Clash Of Civilizations?’” By Anthony H. Cordesman, GulfWire Perspectives, November 12, 2002
• “Strategy In The Middle East: The Gap Between Strategic Theory And Operational Reality,” by Dr. Anthony H. Cordesman, GulfWire Perspectives, October 22, 2002
• “A Firsthand Look At Saudi Arabia Since 9-11,” GulfWire’s Interview With Dr. Anthony Cordesman In Saudi Arabia, GulfWire Perspectives October 10, 2002
• “Escalating To Nowhere: The Israeli And Palestinian Strategic Failure,” By Anthony H. Cordesman, GulfWire Perspectives, April 8, 2002
• “Reforging The U.S. And Saudi Strategic Partnership,” by Dr. Anthony H. Cordesman, GulfWire Perspectives, January 28, 2002

[GulfWire Articles are being added to SUSRIS. Please check Dr. Cordesman's SUSRIS page for updates.]

Editor’s Note:

The holy month of Ramadan — a special time of prayer and fasting — began last week in Saudi Arabia. Today SUSRIS presents for your consideration the second selection from a series by Faiza Saleh Ambah entitled, “Ramadan Diary.” We will present additional parts in the coming days. This article originally appeared in The Christian Science Monitor.

[Part 1 - Spirituality Not Hunger: Understanding Ramadan - SUSRIS IOI - Aug 25, 2009]

A Month of Fast and Feast
While all around her commemorate the 30-day fast, a Muslim reporter wrestles with its meaning
By Faiza Saleh Ambah

I was prepared to start my fast when Ramadan began a week ago. But never having fasted, I was anxious, as if I were about to take an exam in a subject unfamiliar to me.

Then I woke up Friday with a toothache. The doctor prescribed antibiotics – and no fasting until next week. I was more relieved than disappointed.

On Sunday evening, I share a pizza with Ahmad, my nonfasting friend. “A bag of Cheetos and an Orangina,” he says between bites. “That’s all I have for lunch every day.”

Between dawn and dusk, the stores and restaurants are mostly closed here during the month of Ramadan.

Ahmad tells me how his grandparents, who believe he’s fasting, try to ply him with food each evening. Then, he announces, “I’m going to start fasting next week.”

“What?!” I’m stunned.

“There’s a special request I want from God. I’m going to Mecca for a minor pilgrimage and I’m going to fast, too,” he says. “I’m bringing out the big guns.”

“Why?”

“Nadia’s going to decide next week whether or not she’ll marry me.”

“I thought you didn’t believe in fasting.”

“Desperate times call for desperate measures,” he says. “I sent Nadia a large heart-shaped bouquet of flowers with a big ‘N’ in roses in the middle. Now I’ve got to work on convincing God. I want him to know that despite the fact that I’ve been a sinner, I’m really serious about Nadia.”

I am baffled by the turnaround. How can anyone move in and out of God’s grace so nonchalantly?

Suddenly I realize why I’ve been so scared about committing to Ramadan. I had performed the hajj — the once-in-a-lifetime Muslim pilgrimage to Mecca — in February, and to my surprise found myself experiencing the most wonderful spiritual five days of my life. I returned from the trip feeling a pastel-colored peace, as if I were floating in God’s palm.

But without the rituals and atmosphere of the hajj, it was only a matter of weeks before the peace broke, and I felt spiritually abandoned.

According to our Yemeni driver Izzy, who’s been encouraging me to fast, if I did Ramadan correctly, I would again find that same feeling of being close to God. But I’m afraid of another disheartening letdown. A person’s soul can only take so many stretch marks.

Every night around 6 p.m. in my parents’ home, a low, Japanese-style table for 20 is laden with chicken stews, rice with lamb, fava beans, soups, and salads. A side table is sagging with syrup-and-cream-filled desserts. The house is crowded with cousins and aunts I haven’t seen since my father’s funeral more than two years ago. Another treat is the daily presence of my busy younger brother, who has started wearing his hair in two braids, like the prophet’s.

We are sitting on the floor after Tuesday evening’s iftar, or breaking of the fast, watching TV. I turn to my brother. “Are you going to Taraweeh prayers?” I ask referring to the Ramadan prayers that usually start around 9 p.m. at the mosques. They include at least eight prostrations, or as many as 20, and can last up to two hours.

But he’s distracted by an ad with a woman dancing in a skimpy belly-dancing outfit. “Hey people, it’s Ramadan! Can someone change the channel?” he shouts.

“Did you see that?” he says to me. “That’s not what the spirit of Ramadan is about. All this distracts from the spirituality of the month. Instead of staying up late, overeating, and watching television, people should be getting up early, working, and feeling the deprivation.”

His words remind me of three different Ramadan cartoons I’ve seen in the local papers. They show government or private-sector employees sleeping at their desks while piles of paperwork grow. In Saudi Arabia, schools and most offices start one hour later and finish one hour earlier. On the other hand, the retail stores are closed almost all day, and open almost until dawn. Even my dentist appointment Thursday is at midnight.

Later that evening, my 14-year-old daughter, just back from a trip to the States, where she went on a belly-ring buying spree, appears.

“Mom, can I go to Taraweeh prayers?”

“You want to go to Taraweeh prayers?”

She rolls her eyes at me.

“Yes, Mom. I’m late. Can I go?”

“With who?”

“Khadija and Salma.”

Her beach friends. I’m dumfounded. “Why?” I demand.

“You should be happy instead of giving me an interrogation. Now can I please go? They’re waiting.”

I nod and she takes off.

That night, I sit in my room reading about Ramadan. There are many people who fast and get nothing but hunger and thirst, the prophet Muhammad said. Fasting is invalidated by backbiting and slander, one book explains. Indulging and overeating after the fast contradicts the purpose of the month, which is to diminish carnal desires and increase faith and spirituality. Compete during Ramadan to be the best Muslim you can be; everything you do this month is rewarded 70-fold.

I feel my competitive spirit stirred by the literature. I bet I could fast, and be sweet, and even eat only soup in the evenings, if I put my mind to it.

An image of my daughter going to Taraweeh comes to me, and I’m suddenly filled with gratitude for my healthy children and all the other blessings in my life. I could do Ramadan as well as if not better than the next Muslim. Although Allah and I are not on the best of terms, with all my heart I do want to say, “thank you.”

And as my Cheetos-eating friend, Ahmad says, “It can’t hurt. But it can help.”

Reprinted with permission, The Christian Science Monitor.

Editor’s Note:

On his sixth day in office, January 26, 2009, President Barack Obama gave a speech at the White House in which he talked about the extraordinary challenges to the U.S. economy and said that “no single issue is as fundamental to our future as energy.” He went on to talk about plans to achieve energy independence with these introductory remarks:

“America’s dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation and funds both sides of our struggle against terrorism. It puts the American people at the mercy of shifting gas prices, stifles innovation, and sets back our ability to compete.

“These urgent dangers to our national and economic security are compounded by the long-term threat of climate change, which, if left unchecked, could result in violent conflict, terrible storms, shrinking coastlines, and irreversible catastrophe.

“These are the facts, and they are well-known to the American people. After all, there is nothing new about these warnings. Presidents have been sounding the alarm about energy dependence for decades.”

We are reminded of a SUSRIS report last fall in which Dr. Anthony Cordesman, Arleigh Burke Chair in Strategy at the Center for Strategic and International Studies, introduced a briefing document on USCENTCOM regional strategic priorities with, among other comments, the note that: “The U.S. must broaden its efforts to focus on energy security on a pragmatic basis, understanding that politics may call for “energy independence” but that U.S. dependence on the global economy and real-world U.S. energy needs mean that the U.S. will remain strategically dependent on Gulf petroleum exports for the foreseeable future.”

This week former Saudi Ambassador to the United States, Prince Turki Al-Faisal, took on President Obama’s “proselytizing about energy independence” in an essay in which he says that U.S. politicians are as addicted to energy rhetoric as they are to “kissing babies.” Here today for your consideration is Prince Turki’s essay and an extensive collection of links to other SUSRIS articles and interviews about and with him and a host of links to energy articles.

Don’t Be Crude
Why Barack Obama’s energy-dependence talk is just demagoguery

Prince Turki Al-Faisal

“Energy independence” has become a byword on the American political scene, and invoking it is now as essential as baby-kissing. All the recent U.S. presidential candidates employed it, and to this day, the White House Web site lists as a guiding principle the need to “curb our dependence on fossil fuels and make America energy independent.” Expect a whole new round of such rhetoric when the global economic recovery begins, and with it, higher oil prices return.

But this “energy independence” motto is political posturing at its worst — a concept that is unrealistic, misguided, and ultimately harmful to energy-producing and -consuming countries alike. And it is often deployed as little more than code for arguing that the United States has a dangerous reliance on my country of Saudi Arabia, which gets blamed for everything from global terrorism to high gasoline prices.

Saudi Arabia holds about 25 percent of the world’s proven oil reserves, is by far the largest exporter of oil, and maintains the largest spare production capacity in the world. U.S. oil production started to decline in 1970, while U.S. energy needs have skyrocketed since that time, and the United States is now the world’s largest oil consumer. There is no technology on the horizon that can completely replace oil as the fuel for the United States’ massive manufacturing, transportation, and military needs; any future, no matter how wishful, will include a mix of renewable and nonrenewable fuels.

Considering this, efforts spent proselytizing about energy independence should instead focus on acknowledging energy interdependence. Like it or not, the fates of the United States and Saudi Arabia are connected and will remain so for decades to come. This realization need not strike fear into the hearts and pocketbooks of Americans. Saudi Arabia has a long record of specific actions that prove its strong commitment to providing the world with stable energy supplies. We have consistently pushed for lower prices than any other OPEC members have, and we sharply increased supplies after the Iranian Revolution, during the first Gulf War to replace the loss of Iraqi production, and immediately after the Sept. 11, 2001, terrorist attacks — all in order to calm jittery global markets.

In fact, Saudi Arabia’s oil policy has been consistent for the last 30 years: work to ensure the stability of the world’s energy supply. Today, a barrel of oil generally costs around $70. To put this into context, we should recall that even during the spike of 1973, the price of oil in 2008 dollars was just slightly over $100.

High oil prices have undoubtedly given those calling for U.S. energy independence a new talking point. But here, too, it’s important to understand what is really going on. Following the irrational and unsustainable price spike of the past few years, Saudi Arabia undertook investments to make sure the world would not be surprised by such a supply failure again. After investing almost $100 billion to reach 12.5 million barrels per day of sustained capacity, today we hold about 4.5 million barrels per day of spare capacity (or more than 90 percent of the global total), enough to replace the second- and third-largest OPEC producers overnight if the world needed more oil.

We admit that, like the United States and other countries, we were surprised by the way prices escalated in recent years. Many people blame demand from China and other emerging markets. But the sad fact is that four oil-producing countries failed to live up to production expectations. In 1998, Iran, Iraq, Nigeria, and Venezuela were producing 12.7 million barrels per day. Everyone — including major companies such as BP and our own planners at Saudi Aramco — expected them to be producing 18.4 million barrels per day in 2008. Instead, due to civil strife, failed investments, or in the case of Iraq, a U.S. invasion, they were producing only 10.2 million barrels per day. That drove the price part of the way up. Then speculators, in the form of hedge funds, did the rest.

Another factor in rising oil prices is the shortage in the world’s refining capacity. In the United States, for example, not one new refinery has been built in more than 30 years. Add to this problem another: “boutique oil,” the different grades of gasoline required in different localities. I encountered one of these anomalies when I visited Chicago three years ago. There is an oil refinery 50 miles from Chicago, but it does not supply the city with gasoline because the grade does not comply with Chicago’s standards. Instead, Chicago has to import its gas from the East Coast. Prices at the pump would be much lower if there were direct supplies from the refinery to the city.

There are many causes behind last year’s oil price spike, but Saudi Arabia is not one of them. Unlike large oil companies, which have been slow to respond to the supply crunch with more capital investments, the kingdom realized that such investments — even if they seem counterintuitive in the short term — are essential to avoiding catastrophic energy shocks. We have proposed a billion-dollar fund to promote research into making fossil fuels more environmentally friendly and have promoted the International Energy Forum to bring together producers, consumers, and the oil companies that extract, refine, and sell oil. Although it has yet to get the full support of consumers, the forum has held regular meetings to discuss relevant issues.

But Americans don’t hear all this from their political leaders. In one of his very first speeches as U.S. president, for instance, Barack Obama declared that “America’s dependence on oil is one of the most serious threats that our nation has faced.” He said that it “bankrolls dictators, pays for nuclear proliferation, and funds both sides of our struggle against terrorism,” and announced what he called “the first steps on our journey toward energy independence.”

The allure of demagoguery is strong, but U.S. politicians must muster the courage to scrap the fable of energy independence once and for all. If they continue to lead their people toward the mirage of independence and forsake the oasis of interdependence and cooperation, only disaster will result.

Prince Turki al-Faisal is chairman of the King Faisal Centre for Research and Islamic Studies. He has been director of Saudi intelligence and ambassador to Britain, Ireland, and the United States.

Source: ForeignPolicy.com

“Senator Edward M. Kennedy was not only one of the greatest senators of our time, but one of the most accomplished Americans ever to serve our democracy. Over the past half-century, nearly every major piece of legislation that has advanced the civil rights, health, and economic well-being of the American people bore his name and resulted from his efforts. With his passing, an important chapter in our American story has come to an end.”

President Barack Obama

Editor’s Note:

SUSRIS presents for your consideration a personal remembrance of Senator Edward Kennedy from Dr. John Duke Anthony, National Council on U.S.-Arab Relations President and CEO.

Senator Edward Kennedy: In Memoriam
John Duke Anthony

I met Senator Kennedy but twice. The second and shorter of the two occasions was in the 1980s when he and Senator Alan Simpson of Wyoming co-hosted a gala benefit for the Lab School, a leading Washington educational institution for differently able children with learning disabilities, among whom were those who had been diagnosed as autistic, dyslexic, brain-damaged, and/or neurologically-impaired.

The first meeting was the more memorable of the two. In the early 1970s, Senator Kennedy invited me to his home in McLean, Virginia, where he asked me to brief him on his forthcoming visit to Saudi Arabia. Joining us that evening were the senator’s foreign policy adviser, Dr. Robert Hunter, who would later serve on President Carter’s National Security Council and as American Ambassador to the Organization of Economic Cooperation and Development (OECD) in Paris; Dr. Phillip Stoddard, then Director of the Department of State’s Bureau of Intelligence and Research for the Near East; and Edward Sheehan, a journalist who had traveled with Henry Kissinger on his shuttle diplomacy visits to the Middle East following the Arab oil embargo against the United States and other countries that were deemed to have been overly supportive of Israel in the October 1973 Arab-Israeli war.

We met at the senator’s home at six o’clock on the deck outside his palatial home overlooking the southern banks of the Potomac River. Once inside his capacious home what was immediately apparent, indeed omnipresent, was a panorama of mementoes depicting one person’s – his – life and family. On end tables here, interspersed among bookshelves there, and now and again tucked into a nook and cranny off to the side were literally dozens of framed pictures of the senator, his parents, his renowned siblings, and other members of his extended family. The pictures depicted him and those of his immediate kin and others who obviously meant a great deal to him, playing touch football, sailing off Martha’s Vineyard, sitting for a group photo at a family reunion, hoisting one of his children, nieces, and nephews, accommodating a photographer’s capt