Where does all the money go?
by Jonathan Schanzer
National Review Online
October 3, 2007
Five years ago, oil was $30 a barrel. Post Labor Day 2008, oil topped out at $82. This has produced a multi-billion dollar windfall for oil producing nations, particularly Saudi Arabia, which sits on the world's largest reserves. Let's see how the Kingdom spends (or doesn't spend) America's petrodollars:
Decrepit Infrastructure. The Saudis have declined to improve their creaking infrastructure. Nora al-Saad of the Arab News writes that Jeddah, the second largest city in Saudi Arabia after the capital, Riyadh, "still doesn't have water piped into its houses through a standard waterworks system… People in Jeddah have been known to go for days without water." Al-Saad laments that this failure "is a reflection of the Kingdom as a whole and how it's managed."
Commodities Crunch. The Arab media reported early this month that Saudi citizens are seething over the escalating prices of essential commodities including rice, milk, fruits, and vegetables. According to the National Society for Human Rights, the price hikes have affected 40-percent of the population. Yet, the House of Saud refuses to subsidize food staples. Saudis believe that the Ministry of Commerce and Industry has failed to deal with the crisis.
Low-Income Housing Shortage. According to the Saudi Press Agency, the Kingdom needs more than one million housing units to shelter its poor. According to Ahmed bin Ibrahim Al-Hakami, deputy minister of economy and planning, however, plans have only been made to build 35,000 new low-income housing units in different parts of the Kingdom of Saudi Arabia within two years. Meanwhile, construction for business projects is reportedly booming.
Unemployment. According to the Arabic press, roughly two out of three Saudi men are unemployed. Indeed, the Kingdom imports foreign workers to handle many of the menial jobs that could provide salaries to Saudi's poor. It is estimated that Saudi Arabia's population of 22 million includes 7 million foreigners.
Failing Education. As Tariq al-Maeena, an Arab columnist notes, Saudi Arabia is a society that has produced dependency on skilled foreign workers and "has obviously failed to tune its educational curriculum to the needs of this growing country." Indeed, graduates from Saudi high schools "can be expected to underperform."
Clearly, the House of Saud has not invested its oil windfall on home improvement. Where, then, have the Saudis been spending our petrodollars?
Luxuries for the Wealthy. While most of the Kingdom suffers in silence, Saudi Arabia's royal family and oil sheikhs lead lives of gaudy luxury. The mainstream press has documented Saudi royals taking lavish junkets where they buy outlandishly expensive jewels, fly on private jets, lounge on yachts, and enjoy an extravagant, secular European lifestyle. According to one report, Saudi Arabia has become the second largest market for custom-built Bentley luxury cars in the Middle East, after the UAE.
Insurgency Support. According a U.S. government report, Saudi Arabia gives "financial support to Sunni groups in Iraq. Of an estimated 60 to 80 foreign fighters who enter Iraq each month…. nearly half are coming from Saudi Arabia and the Saudis have not done enough to stem the flow." U.S. officials also note that, "the majority of suicide bombers in Iraq are from Saudi Arabia and that about 40-percent of all foreign fighters are Saudi." Questions abound, concerning whether Saudi money is directly financing these radicals in Iraq.
Spreading Wahhabism. Of the more than 1,200 mosques in America, more than 80-percent were built with Saudi money, according to author Reza F. Safa (Inside Islam). In fact, Safa writes that the Saudis have spent "$87 billion since 1973 to spread Islam throughout the United States and the Western hemisphere." Elsewhere in the world, it is believed that Saudi Arabia finances some 85-percent of the world's mosques, where the vitriolic and violent Wahabbist interpretation of Islam is taught. It is indisputable that the current hatred of the United States and the ideology of Islamist violence are reinforced via these mosques.
Saudi Arabia's irresponsible allocation of its windfall is worrisome on two fronts. For one, its deep-pocket support for radicalism in Iraq and around the world continues to stoke the virus of jihadism around the world. Further, the more Saudi Arabia suffers, the more its population will believe that America is exploiting the region's only natural resource, prompting increasing numbers of frustrated Saudis to take up the Wahhabist cause.
—Jonathan Schanzer, a former Treasury intelligence analyst, is director of policy for the Jewish Policy Center and author of Al-Qaeda's Armies: Middle East Affiliate Groups and the Next Generation of Terror.
Related Topics: Oil, Saudi Arabia | Jonathan Schanzer
receive the latest by email: subscribe to the free jewish policy center mailing list