Thanks largely to Iran, gas prices are rising to heights unseen in years ― $4 or more per gallon in some areas. And one nation more than any other stands to benefit from this.
That nation, of course, is Saudi Arabia, the world’s largest oil producer, an exceedingly wealthy state with a current-account balance of $151 billion, the world’s second largest.
So it seems a bit curious that Saudi Arabia has one of the world’s highest youth unemployment rates. At least 40 percent of Saudis under 30 years old reportedly have no job. What’s more, Saudi Arabia faces a mammoth housing shortage for these young people and others. Banque Saudi Fransi warns that the state will need 1.65 million new homes in the next three years, just to meet current demand.
This sounds like a typical story: A corrupt oil-sodden leadership steals all the money and provides nothing for its people ― another example of the “oil curse” made famous in Nigeria.
But that’s not Saudi Arabia. Transparency International ranks more than two-thirds of the world’s nations as more corrupt than Saudi Arabia. Still, why do Saudis have to wait up to 18 years to get approval for a mortgage?
Saudi leaders don’t like to talk about any of this, the nation’s dark side. They prefer to opine about closing down Iran’s nuclear program or stopping the carnage in Syria ― all worthy goals. Attending the “Friends of Syria” conference in Tunis last week, Saudi Foreign Minister Saud al-Faisal said he favored arming the Syrian opposition because “they have to protect themselves.”
It’s good to have the Saudis on the right side. But I haven’t heard al-Faisal or other members of the royal family talking much about the proposed mortgage law, intended to open the housing market. It has been marooned, “under study,” in government committees, for more than a decade now.
All of this is actually more than just a bit curious. These problems raise an important, even fundamental, question: In the modern era, can a fully Islamic state, like Saudi Arabia, function in way that serves its people? You see, the issue behind the housing, jobs and other problems is Islam.
“A lot of this is impacted by Sharia law,” said Patrick Ryan, who runs a private online Saudi information service. “You know, the Sharia prohibition of usury.”
Above all else, Saudi Arabia likes to think of itself as the custodian of Mecca and Medina, Islam’s holiest shrines. Not surprisingly, then, it’s the only state governed entirely by Sharia law in its most uncompromising form. And Islam forbids lending or borrowing money under any scheme that requires paying interest. In other words, mortgages.
A year ago, when Saudi youths stood up, demanding more rights like others across the Arab world, King Abdullah doled out $35 billion in benefits to mollify the demonstrators. It worked. And among his promises was a plan to build 500,000 new homes.
The problem is, how can young people, particularly, buy homes without a mortgage? The state does run a Sharia-certified, interest-free mortgage service, essentially a charity. But it can’t fund every new homeowner ― especially since 60 percent of Saudi Arabia’s 28 million people are under 30 years old. That’s why potential homeowners must wait 18 years for a mortgage.
“It’s kind of a ripple effect; no mortgages, and no one is building homes,” Ryan said. Last year, the government took up the mortgage bill again, talked about it a bit, enacted a couple of incremental bits, but then tossed it back into the swamp where it remains today.
The jobs problem is similar. Saudi youths understandably feel privileged, special. They live in a wealthy state of great religious importance. They aren’t going to run restaurants, work construction or wrestle with oil rigs. Foreign workers, millions of them, take care of that.
Saudis expect to work as executives or government officials. That’s why the king is creating thousands of new federal positions. But he can’t possibly manufacture acceptable jobs for many millions of young people.
Those raddled older men who govern the state and find the proposed mortgage law repugnant probably won’t appreciate one statistic that helps tell the story. Saudi Arabia has a higher incidence of obesity than any but four other states, all of them tiny Pacific islands. Their combined populations are .009 percent of Saudi Arabia’s.
I wonder, then, is it a coincidence that 60 percent of the population is young and largely unemployed ― while 36 percent is obese?
By Joel Brinkley
Joel Brinkley, a professor of journalism at Stanford University, is a Pulitzer Prize-winning former foreign correspondent for the New York Times. ― Ed.
(Tribune Media Services)