THERE is no end in sight. The start of 2002 looks grim. Slumping oil prices and political tensions have only exacerbated the problem as Saudi Arabia — like its neighbors — is sucked into a web of uncertainty. But here is where the challenge lies and the glimmer of hope materializes.
For one thing, leaders of the six-nation Gulf Cooperation Council (GCC) have already been in action, signing agreements for customs tariffs of five percent in 2003 and a single currency by 2010. A defense force of up to 20,000 will also be stationed in certain high-security zones. Even Yemen, which is in need of economic stimulus, has become an associate of the GCC, in hopes of improving its economy.
Saudi Arabia has also used the economic slowdown to its advantage by reducing its dependence on oil and pressing for privatization in such important fields as education, health services and infrastructure. All this will play out well for Saudi Arabia as it takes preliminary steps toward a new kind of development.
Nizar Alem, an executive with the National Commercial Bank, is one of a group of optimists who believes that the country is readier than ever to absorb the flow of non-oil revenues. "The GDP for non-oil revenues is 4.4 percent this year in comparison to last year’s 1.8 percent," he said.
Relying on mortgages is another factor that Alem thinks will help strengthen the economy. The new zakah (or tax payment) will force landlords to make use of big plots of land to construct rental property. "$700 billion will be injected into the national economy," Alem added.
Economists had already predicted the big R — recession — even before the Sept. 11 attacks in the United States and forecasters have since struggled to contain the problem. So who knows? Perhaps the weak oil market for 2002 has given the Kingdom an incentive to develop the country.
There are other concerns as well. Foreign manufacturers, for example, are grappling with the public, trying to convince them not to boycott products for political reasons. PR agencies are showing the humane side of multinational companies, by planning, reporting and organizing charity events sponsored by multinationals.
A crystal ball would come in handy during these difficult times. Mixed reactions can leave the public in a maze. But all the public can do is predict, wait and see. "I don’t feel the economic impact in the Kingdom," said one commentator. People are still financially able to meet their needs, she explained. "In Cairo, though, there are economic problems," she added, as people turn to politics to express their worry and discontent.
There may be differences in the Arab world concerning the impact of Sept. 11 on financial institutions but one thing unites us all: Security. Like all others around the world, Saudis are in search of a safe haven. "We can’t change what happened in the past but we can take proper action to avoid it in the future," said Filwa Gharbawi, a customer service representative at the Saudi British Bank. People think twice before taking any steps, she explained, which is why we live in a consumer-conscious society.
"Saudis are coming out of their cocoons," said Sahar Bahrawi, owner of a health service business. "New economic changes are taking place as people realize that what happens in one part of the world will affect us. People are less self-centered than they used to be," she added.
Leaving the economy for a minute, Dr. Nawal Mishkhas, a psychiatrist at Jeddah Psychiatric Hospital, explained today’s fears as evident, although some people may have gone overboard. The media helps foster stereotypes and blow situations out of proportion which is why many Saudi students are afraid of going back to the United States. This must change, Mishkhas explained, so people can carry on with their lives as normal.
We can only hope to start the New Year in anticipation of what is yet to come. A gloomy season this may be, but my crystal ball tells me to look the other way and smile.