A tipping point in Saudi Arabia

When Abdullah bin Abdul Aziz Al Saud was crown prince of Saudi Arabia, one of his most infamous decisions was banning the use of camera phones in 2004 – a demand from the country's Wahhabi clergy who claimed the devices were "spreading obscenity."

But the decision was quickly reversed when King Abdullah faced pressure from his government ministers and, allegedly, from a cadre of foreign businessmen who threatened to pull their companies from Saudi Arabia. "Abdullah was presented with a choice between the Wahhabis and good business," says one Riyadh-based businessman. "His decision [for the latter] was clear."

It is a decision that Abdullah has made time and again over the course of his reign as king, which hit its two-year mark this month. By sidelining the traditional clergy in favor of the merchant classes and more progressive religious voices, Abdullah has been challenging the "great bargain" of the Saudi state – namely the empowerment of the Wahhabi ulema (hard-line Islamic scholars) in exchange for their sanction of the House of Saud.

This unlikely reformer, who has unofficially led the kingdom since King Fahd's stroke in 1995, has propelled the country through a radical transformation. From accession to the World Trade Organization to the billion-dollar overhaul of the educational system to increased criticism of the religious "police" who enforce a strict interpretation of Islamic sharia law, the closed kingdom is beginning to crack open.

'The oil boom is over'

These reforms come at a critical time. Saudi Arabia is barreling toward an economic and social crisis if it does not act fast. Almost 75 percent of Saudi citizens are under age 30 and youth unemployment is approaching 30 percent – a potential breeding ground for terrorists and regime dissidents. Current high oil prices are not enough to paper over the economic ravages of the past two decades. "The oil boom is over and will not return," then-Crown Prince Abdullah said in his address to the Gulf Cooperation Council in 1998. "All of us must get used to a different lifestyle." [Editor's note:The original version did not give the year in which Abdullah made this statement.]

Economic restructuring of the kingdom is no easy task, nor can it be separated from social reform, such as increasing women's participation in economic life and creating a business environment and laws suitable for foreign companies.

Faced with resistance from the conservative official ulema, Abdullah has adopted a strategy of "circumvention" to coerce these reforms – officially toeing the Wahhabi line, but quietly giving more leeway to the private sector.

Education, for example, had traditionally been firmly under Wahhabi control, with a focus on creating more imams than businessmen. But this won't help a country striving to become an international powerhouse. So private universities – previously shunned by the religious elite because of their relative independence – have recently been legalized, with a half-dozen Western-style institutions slated to open soon. The new King Abdullah University for Science and Technology, the kingdom's first coeducational institution, is an Abdullah initiative to create a global leader in technological innovation. He tasked the relatively secular Ministry of Petroleum and Mineral Resources with running the project, keeping it away from the fundamentalists.

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