If the foreign media are to be believed, tensions here in the Kingdom are rising as a new Gulf war approaches. In particular, among Western expatriates there is said to be panic. Yet while the question, “Will there, won’t there, be a war?” is heard daily across the country, there is nothing like panic at all. League matches are still being played; the King’s Cup competition is still going on; wedding celebrations are taking place; people are still shopping in supermarkets, still going to restaurants, still going to work, school and college. The lack of concern is remarkable, given that most people believe that President Bush is determined to oust Saddam Hussein, regardless of what the UN decides.
But for all the outward complacency, there is concern about the economic effects war will have on the Kingdom, although it varies from place to place. In the Eastern Province, where people can remember how vulnerable they were during the last Gulf War, there is no denying some nervousness in the air; it is showing itself in the local market place. People are still going out but they do not want to spend; car sales are way down; real estate agents report people not paying their rent because they want to hold on to their cash in case they have to leave in a hurry. It is worrying. If this lack of confidence continues much longer, small businessmen are going to be hit hard.
In Riyadh too, there is nervousness — although much less than in Dammam or Dhahran — but it too is having an economic impact. Numbers of people out and about in the Faisaliya Center, for example, are visibly down, which means fewer people buying and fewer shops selling. Again, it is local shopkeepers who are beginning to feel the pinch.
In Jeddah, the picture is different. While everyone believes that there will be a war, it might as well be about to happen in the middle of the Pacific or Northern Europe for all the effect it is having on everyday lives. Westerners are still in the supermarkets, in the restaurants. Routines for everyone are exactly as they were a year ago. Nothing has changed. Clearly no one imagines that what happens to Iraq will impinge very significantly on Saudi Arabia. But it is already doing so, as can be seen in the Eastern Province, in Riyadh. We are in a waiting game — and this waiting game is bad for Saudi business and for the Saudi economy. It is sapping confidence, with the result that people are reducing their spending. Indeed, even in laid-back Jeddah, it is beginning to show; car sales are down and banks report a rise in defaults on car loans.
The effect on the foreign labor force is something else to worry about. Expats do not want to go. They say that they enjoy being here, and they know that they will not get such well-paid jobs elsewhere. Saudi Arabia cannot afford for them to go; it would severely disrupt business and the economy. While most will stay on as long as possible, there are problems. Families are already being sent home. But if families go, many husbands may decide that it is not worth keeping the house going, that it is cheaper to share with colleagues. Another blow to the economy as profits from rents drop.
It may seem callous to focus on the economic effects here of an Iraqi war when the Iraqis are suffering far more. Nonetheless, it is a solid reason for wanting the present impasse resolved as soon as possible.
