You'd think that Saudi Arabia's ruling monarchy would have a lot to be happy about -- and you'd be right, in part. The Saudi Kingdom has, barring some exceptions, been remarkably stable. It was left unscathed by the revolutionary wave that demolished longstanding authoritarian regimes from Tunisia to Egypt. The Saudi political system -- being consensus-based and partly informal -- functions by co-opting major centers of political power, being solicitous of the views of Islamic clerics and scholars (important constituencies given Wahhabi Islam's centrality to the monarchy's legitimacy) and providing citizens with lavish cradle-to-grave benefits funded by the Kingdom's mammoth oil export revenues.
This arrangement doesn't rest on liberal democratic precepts, but it has worked; and that's partly because a population that's well provided for but knows that there's a high price to be paid for rebellion is either satisfied with, or resigned to, the status quo.
And Saudis are well taken care of: their per capita income approaches $32,000. That's less than that of the other Persian Gulf oil and gas sheikdoms, but exceeds the income per person of Spain and Italy. (You might object that the comparison isn't fair because these two European countries are mired in economic trouble -- they are -- but Saudi Arabia's per capita income is not far off from the EU's average of $35,100.) Yes, the unemployment rate is high (12 percent overall, 30 percent for young people), but the regime has abundant cash to fund benefits for those without jobs.
So what's the Saudi leadership so apprehensive about? Lots of things, as it happens, even though none presages revolution, or even upheaval.
Let's start with the Kingdom's trump card: oil. The numbers relating to Saudi Arabia's oil production and wealth are certainly impressive. It has about a fifth of the world's proven reserves (268 billion barrels out of 1.4 trillion). The U.S. Energy Information Administration notes that the Ghawar field, the world's largest, holds more oil (70 billion barrels) than the total reserves of all except the countries with the next seven largest reserves. But here's the thing: Not only are new, massive oil deposits being discovered (for example, Brazil's offshore fields, estimated to contains up to 8 billion barrels), but the shale revolution promises to put a lot more oil on the market. Saudi Arabia could face a future of diminished oil revenue. Given that oil accounts for 45 percent of its GDP, 80 percent of budget revenue and 90 percent of exports, that's a problem.
Yet this is not a challenge that, in principle, can't be overcome provided that the bountiful wealth yielded by oil is used imaginatively and effectively by Riyadh to lay the foundation for -- if not a post-oil economy -- an economy in which oil isn't everything. The Kingdom has had decades to do this, but the results have been unimpressive, notwithstanding much-touted plans and investments intended to develop the non-oil sector and equip younger Saudis with the skills needed to start and run globally competitive companies. In the Kingdom's economy, oil remains king. Saudi Arabia exhibits the same pathology as other top oil producers, such as Russia, Venezuela and Nigeria.
Countries that started with a lot less wealth have done far better -- take Singapore. It didn't have the oil riches of Saudi Arabia, but it demonstrated, under legendary former Prime Minister Lee Kuan Yew, that smart leaders, determination and foresight can create a lot from very little. A relatively poor country a generation ago, tiny Singapore is now an economic powerhouse with first-rate schools and universities and a highly educated population with abundant technical and managerial knowhow -- and a per capita income of over $60,000. Saudi Arabia, like Singapore, has been stable; what it has lacked is a counterpart to Lee Kuan Yew, a leader capable of delivering stability and generating dynamism. (Singapore is not a lone example; consider South Korea, which in 1950 had a per capita income comparable to its now-impoverished northern nemesis.)