As 2004 draws to a close, it may well be remembered as a bumper year for books, articles, seminars, and conferences related to Saudi Arabia. Hardly a week has passed without some event related to the Kingdom being presented in this or that world capital. And even the keenest of speed-readers find it impossible to skim through the avalanche of writing on the subject.

The event that aroused so much interest in the Kingdom was of course the terrorist attacks launched against the United States on Sept. 11, 2001. The fact that 15 of the 19 terrorists were Saudi nationals was patently impossible to overlook. But can Saudi Arabia be understood through the single prism of terror? The answer must be an uncompromising: No.

This is not the first time that a single word has been used as the magic key to understanding the Kingdom. Throughout the 18th and 19th centuries when the heartland of the Arabian Peninsula attracted the attention of outsiders, the magic word was “tribe.” Here was one version of what Marx labeled “The Asiatic Society,” an entity which, based on collective tribal identities, allowed for no individual self-expression. From the 1920s and 1930s, when the modern Saudi kingdom was first established, until the mid-1960s, it was the word “religion” that served as the magic key. From the mid-1960s until the late 1990s, another word assumed that function: Oil.

In every case the magic word, rather than helping the world understand a complex society, caused confusion. For example, no one realized that in the formative stages of the Kingdom, religion had been used as an ideological armature around which to build a state. The enterprise proved successful because, by the mid-1950s, a large part of the Arabian Peninsula which had lacked state structures for over 1,000 years had been unified within a political framework modeled on the European nation-state.

The magic word “oil” was also misleading: It said too much and also not enough. It exaggerated the Kingdom’s dependence on a single source of income but underestimated its impact on broader social, economic and cultural developments in society. A similar analysis can be made around the current magic word: Terrorism.

There is no doubt that the monster of terrorism did not drop from the skies. What really matters now is how the Saudi state and society in general, will deal with it. Tribe, religion, oil, and terrorism. In a sense, these are all code-names for the challenges that the Saudi nation-state has faced, in the past century or so, and which it still faces today.

To become a state in the modern sense, the Kingdom had to transcend the tribe. Although strong tribal sentiments and links persist even today, the transformation was achieved by the 1950s. Tribal connections still play an important role but they no longer overrule other, broader, considerations related to the overall interests of the state. Religion remains the main cultural and ideological superstructure of the state. But it, too, is not allowed to become a political instrument in the hands of the state’s enemies. Oil remains the Kingdom’s principal source of income, but is no longer regarded as the country’s central raison d’etre.

Finally, terrorism is recognized as a major security threat that Saudi society faces today. But it does not seem to have derailed the deeper developments of Saudi society. Every new phase in the development of the Saudi state has been accompanied by a crisis.

Between the 1920s and the early 1950s, the Kingdom experienced what might be described as the crisis of nation-building. A state had been created but it reflected no particular nation in the normal sense of the term.

In Europe, the emergence of nations had preceded the creation of states. In Arabia the process was the reverse: The state came before the nation. A good part of that period was marked by internal and external wars of varying dimensions. Half a century later, there is little doubt that, despite natural regional diversities, a Saudi nation is now a reality.

The second phase of the Kingdom’s history was concerned with the creation of the paraphernalia of a modern state: A government administration, a bureaucracy, a standing army, an educational system, a diplomatic service and a body of laws.

In the third phase, the central task was the creation of a national market as the basis for a national economy. The fourth and current phase is concerned with the creation of a Saudi society composed of citizens with individual rights, responsibilities and aspirations.

The Kingdom’s history indicates that coping with the crisis caused by each phase of development has been more difficult than the previous one. The current phase is no exception. Creating a society of free, autonomous and participating citizens, in place of the mere inhabitants of a territory or mere subjects of a sovereign, is a daunting task. But there is no reason why the Saudis should not be able to measure up to the challenge. In fact, Saudi Arabia could be considered something of a success story in its geopolitical neighborhood. It is virtually the only country of any size in Western Asia and the Middle East not to have suffered a civil war or experienced conflicts exacting great human costs.

Between the early 1950s and the late 1970s, the Kingdom successfully avoided the threat of pan-Arabism, an ideology that provoked numerous civil wars, regime changes and regional wars in the Middle East. From the late 1970s until the early 1990s, the Kingdom successfully dealt with the double threat of extremism and the expansion of the Soviet Empire into Afghanistan. In 1990-91, the Kingdom was at the heart of an international coalition, led by the United States, that threw Saddam Hussein out of Kuwait and dealt his regime a blow from which it never recovered. The Kingdom’s success in emerging from each phase was due mostly to the pragmatism of its leaders and their readiness to see change as a potential ally rather than an actual foe.

If one were to suggest a new magic word for the current phase, it would have to be: Reform. The Saudi system today needs to change as it needed to change in every one of the preceding phases. It has been years since many Saudis, including some within the higher echelons of decision-making, recognize the symptom’s inadequacies — to say nothing of its dysfunction.

The Saudi economy will have to change from a rentier-distributive one to a productive-investing one. The demographic explosion that the Kingdom has experienced over the past five decades has made it impossible to sustain the desired living standards based on oil revenues alone. It is not normal that Saudi productivity should be 22 times lower than of the United States and six times lower than India’s. More and more Saudis now understand that their society may be “moneyed” but is certainly far from rich. It will be impossible for the Kingdom to become a member of the World Trade Organization (WTO) and expose itself to the crushing currents of global competition without major structural reforms.

Until not long ago Saudi Arabia could be described as a “silent society.” This was not always the result of speaking out. The real reason was that most people had little to say beyond the mundane topics of ordinary life. Today, however, Saudi Arabia is a talking society. The place is buzzing with talk: whether in private homes or in numerous formal, informal, state-approved and state disapproved clubs, associations, forums and gatherings.

Within a single generation, thousands of Saudi writers, poets, artists, academic and other intellectuals have appeared on the scene where there was none just a few decades ago. At the same time, the management of an increasingly complex society with modern economic and cultural aspirations can no longer be carried out on the sole basis of family or clan ties. A few decades ago it made little difference whose cousin ran which part of the machine since much of the structure had little more than routine functions. Today, with expensive economic, social and political decisions at stake, the choice of those in charge must be made on the basis of competence, merit and experience.

The diversity of Saudi society and the richness of the talent available make it impossible to sustain a system of selection based solely on connections. This is why there is growing awareness that the Kingdom must move toward electoral politics adapted to its specific needs. Traditional Saudi methods have always been one of slow but steady change. Today, the leaders appear to be committed to a strategy of reform. Many would say: faster, please!