Thursday, July 17, 2008

Saudi Arabia changing its ways -- maybe?


Faiza Saleh Ambah, foreign service writer, provided the Washington Post with news about the underwhelming rise in oil production that Saudi Arabia promised in June, and today he has a story “Saudis Look Beyond Oil to New Economy in Desert,” on p A1, link here.

The tone of the story is that Saudi Arabia is starting to slip into 80s style thinking in a manner reminiscent of its behavior in the mid 1980s in response to Ronald Reagan. Then, it increased oil production, and oil prices fell in the US, precipitating a localized real estate and banking recession in Texas and encouraging a “short term thinking” style of extreme capitalism. This time, there seem to signs that the Saudis fear that the development of alternative energy in the West really could undermine their economy. They may be willing to increase production in the short term, even if that shortens their “peak oil” tip-over.

The kingdom is also considering relaxing religious rules, especially the social mixing of unrelated men and women, at least for foreign visitors. In the past, religious police have enforced Islamic rules even on compounds where westerners work, creating issues for employers. I remember being told this around 1980 when in Texas by someone who had worked there in the 1970s in information technology.

The kingdom is considering building several new cities with cultural centers, perhaps looking like smaller scale versions of Dubai.

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