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Will protests spread to Saudi Arabia?

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Kai Ryssdal: It’s not like the Saudis are getting $100 for every single barrel of oil they pull out of the ground. But the larger point applies. World markets really began to pay attention to protests in the Middle East yesterday when Libya’s relatively modest oil production was at issue. So the news today that Saudi Arabia is promising billions of dollars in wage increases and other benefits to its workers has turned attention to the world’s biggest crude producer and whether protests could happen there.

To talk about all of this we’ve called Amy Myers Jaffe, she runs the energy research program at the Baker Institute at Rice University. Welcome to the program.

Amy Myers Jaffe: Thank you.

Ryssdal: So when you say, “oil-rich country,” when the phrase rolls off analysts’ tongues, Saudi Arabia is it, as opposed to Libya, which has some oil, but is not oil rich by any sense of the word?

Myers Jaffe: Well Libya is pretty oil rich only because they have a small population, so maybe there is a lot of poverty in Libya, but that has to do with how the government chooses to distribute or not distribute the oil wealth. In Saudi Arabia, we’re talking about maybe nine million barrels a day of oil and they have about 24 million people. So their budget is much higher. But in times like these — when the oil price is high — there is a tremendous amount of surplus money.

Ryssdal: Where does Saudi Arabia put all its oil money? I mean, what do they do with it?

Myers Jaffe: One of the things King Abdullah has done, which is very important, is to try to invest a lot more resources in higher education, so that people will come out with a brighter skill set and they will be, long term, able to really diversify their economy. The problem is a university is only as good as your K-12 education system, and so some of the things they’ve use to spend the money on recently have been a little bit cart before the horse. There are probably a lot of things that need to be done in terms of infrastructure, in terms of younger education, education in science — that’s sort of a hard slog in a place like Saudi Arabia where there’s disagreements about what’s the right approach to education, what’s the appropriate role for religion in the education system. So they do have a lot of challenges.

Ryssdal: Is King Abdullah actually making substantive political change in that country or is he using his oil wealth as a way to distract people, really, and offer them economic incentives while maintaining his rule and his control?

Myers Jaffe: Well, I think the thing you have to think about is sort of the context of the whole Middle East and Saudi Arabia in specific. I mean, there is a tradition in that part of the world that the ruler takes responsibility for his citizens. I do believe that many people in Saudi Arabia feel that King Abdullah has been a very successful king, but there are still some very big challenges being faced in Saudi Arabia and those challenges are not that different than some of the challenges we’re hearing about in countries that are more in the news in the last few weeks. You know, there is a youth bulge in Saudi Arabia, just like everybody else, and it’s very hard to come up with jobs. They have a very promising oil sector, which we’ve discussed and so that might provide money, might be able to provide assistance or infrastructure or better health care. There are things that countries can do when they have a lot of oil wealth, but in the end that doesn’t change the fundamental problem. So I think King Abdullah correctly acknowledges that money needs to go into the educational system, but after those people get out of the educational system, there still has to be a productive and interesting job for them. And Saudi Arabia has not really met that challenge yet.

Ryssdal: My sense, though, is that for all the challenges that Saudi Arabia has, you don’t really think that protests there are likely, destabilizing protests.

Myers Jaffe: Well, um, it’s kind of hard to say. The system in Saudi Arabia has been very successful over the years and they have withstood many changes in the Middle East. They withstood the rise in socialism that brought in Gamal Abdel Nasser and Saddam Hussein and Gaddafi, but I wouldn’t say that there’s no risk there.

Ryssdal: Amy Myers Jaffe, she’s the director of energy research at the Baker Institute for Public Policy at Rice University. Amy, thanks a lot.

Myers Jaffe: Thanks a lot, Kai.

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