Aided by bourse crash, Saudi Islamists block reform

RIYADH — A stock market crash and an invigorated Islamist lobby appear to have stymied progress on political reforms in ultraconservative Saudi Arabia, analysts and diplomats say.

The government of King Abdullah, who came to power last year promising cautious but wide-ranging reforms, is seen as having lost the political capital needed to push more controversial issues such as women’s rights.

“The political culture is undergoing very slow change and is yet to adopt democratic norms of open dialogue, compromise and pluralism. That will take a long time to change,” said analyst Fahad Nazer of the Washington-based Institute for Gulf Affairs.

“Until then, Islamists will try to intimidate everyone who does not fall in line,” he added.

The authorities struggled to deal with a stock market collapse between February and May that created a groundswell of popular anger in this absolute monarchy where popular representation is virtually nil.

And a global uproar this year over Danish cartoons that lampooned the Prophet Mohammad strengthened the already powerful religious establishment, which fears creeping secularisation.

“Since the silly cartoons, things have moved fast in the other direction. You cannot really open your mouth to talk about reform,” said prominent reformer Hamza Mozainy, a linguistics professor. “Before that the conservative and radical movement was losing ground and on the defensive.”  The cartoons caused riots around the world and a boycott of Danish goods in Saudi Arabia, the birthplace of Islam, where clerics of the hardline Wahhabi sect have long held sway.

“The government is trying to find a way to soften this new aggressive [trend],” Mozainy said. “But appeasement sometimes doesn’t do the job.” Saudi activists have long called for political reform in the kingdom and their drive was boosted by a US initiative for democracy in the Middle East and King Abdullah’s ascension to the throne last year.

But the government is shielded from foreign and domestic demands for more fundamental political reforms — such as making the country a parliamentary democracy — by high world oil prices and its close alliance with Western nations.

Lingerie shops

Labour Minister Ghazi Algosaibi, a known liberal close to the king, has been forced at the last minute to put on hold an initiative to allow women to work in lingerie shops. The new rules were due to come into effect in June.

Though there was opposition from businessmen concerned about raised costs from replacing foreign labour with Saudi, religious conservatives used the Internet, mosques and meetings to rally against a move they saw as a sign of creeping secularism.

Al Qaeda leader Osama Ben Laden even attacked Algosaibi by name in an         audiotape in April, saying the poet-minister was one of a group of Arab intellectuals favouring Westernisation.

Talk of overturning Saudi Arabia’s informal ban on women driving — which government ministers and members of the royal family had spoken of favourably — has now all but dried up.

The self-styled reformer king even told newspapers last month that they should refrain from printing provocative pictures of women, lest men be tempted to “go astray.”

All this comes against the background of a market crash that caused an outcry among hundreds of thousands of ordinary Saudis whom the government had encouraged to own shares.

The financial authorities’ handling of the collapse was a “disaster,” one Saudi adviser told Reuters, as the economy ministry and Capital Markets Authority allowed speculators to drive the market to unrealistic levels throughout 2005.  Sudden measures to impose order on the market provoked wealthy speculators to pull out en masse, instigating the price collapse that burnt the fingers of many of the 9 million Saudis who had bought shares at the height of the stock market fever.

“With so many people putting money in the market and the price having dropped so much, the focus of everyone is very much back on basic economic issues,” one Western diplomat in Riyadh said. “People are less concerned about political reform.” In April, King Abdullah slashed domestic fuel prices by around 30 per cent in an effort to absorb popular discontent that was vocally expressed in independent forums such as the Internet. Saudi Arabia does not tolerate public protest.

And last month the octogenarian king, whose media persona is of a modernising father figure, talked of setting up a risk-free investment fund for lower-income Saudis. 

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