Thursday, 5th October 2017

Saudi Arabia: Driving reforms and resistance

The decision by King Salman Bin Abdelaziz to lift the ban on women drivers is a deeply symbolic development for the kingdom which could also provide a useful boost for the economy, but it also reinforces a troubling question for the Al-Saud: how to match the need for reform while maintaining their conservative credentials.

If oil prices were high and the Saudi economy was doing well, it is doubtful whether the reform would have been made. However, the economy is now in recession and needs all the help it can get. The main cause of the economic downturn at the moment is the pact among members of the Organisation of Petroleum Exporting Countries (Opec) and non-Opec members to trim oil output in an attempt to boost oil prices – that is leading to a significant falls in government revenues, the impact of which is being exacerbated by the sluggish non-oil economy, which grew by just 0.8% in the second quarter of the year.

So the authorities are searching for alternative avenues for growth wherever they can find them. A loosening of some of the social strictures within Saudi society is one obvious place to look. There have been persistent rumours that public cinemas may once again open up in the kingdom as part of a concerted effort to boost the moribund entertainment and tourism sector (GSN 1,042/6). But the announcement on 26 September that the ban on women driving cars was to be lifted was by far the most dramatic sign of how the authorities are reacting to the pressures they are under. The driving ban has been a cornerstone of international criticism of the Saudi regime for decades; many senior officials have said over the years that it would change in due course, but no-one ever specified when.

The economic benefits of the lifting of the ban could flow in a number of directions. Changing a law which means that half the country’s population cannot make their own way to work carries a few obvious potential benefits: not only will women be able to get to work, but employers may see female candidates as being at less of a disadvantage than they did in the past. There could also be a boost to consumer spending, as more families decide they need another vehicle. There are some potential downsides too. Many men currently employed as drivers might find themselves out of work, for example, but the long-term benefits will surely outweigh this.

The changes are not going to happen overnight. Many Saudi women already possess driving licences gained in other countries, but they will not be able to pilot a car on their own streets until June 2018, assuming the implementation isn’t delayed. Even then, there may be restrictions around when and where they will be allowed on the roads.

Perhaps more importantly, changing the social and economic conditions prevalent in Saudi Arabia is more than simply adjusting rules and formulating new policies. The reform efforts spearheaded by Crown Prince Mohammed Bin Salman Bin (MBS) have to date failed to wake the slumbering Saudi economy. The Vision 2030 plan and its offshoot, the National Transformation Plan 2020, are certainly ambitious and wide-ranging, but the targets they contain are not necessarily practical. Just over a year after its launch, the NTP is already being revised, with a more modest set of proposals due to be unveiled soon (GSN 1,043/1).

One of the aims of the MBS economic reforms has been to increase female participation in the workforce (it is currently at around 20%, compared to an average around the rest of the Gulf of more than 40%). That should at least be more achievable now. London-based Capital Economics calculates that for Saudi Arabia to reach the regional average around 2m more women will need to join the labour market and, if that were to happen over the next two decades, it could add up to 0.4 percentage points to GDP growth.

But Saudi society remains deeply conservative and although many will welcome the more rational driving rules – or indeed the ability to munch popcorn in a dark room while watching a Hollywood blockbuster amongst strangers – there will be many others who will bridle at the merest hint of publicly-performed music. It is a difficult path to tread and one which MBS and his allies are trying to navigate through a bit of carrot and a lot of stick, as the recent roundup of potential critics has highlighted (GSN 1,044/1). Keeping the religious establishment on side may require some more conservative concessions in the future, perhaps in the education arena, which is arguably as badly in need of reform as any area of Saudi society.

Allowing women behind the wheel is only one step along the way. The guardianship system is still firmly in place which restricts women’s rights to travel in and around the country. Some otherwise reform-minded Saudi men are content to see the rules around driving changed but say they see no reason why their female compatriots should be allowed to travel without permission. Reforms need momentum behind them to stick. It remains to be seen if that will happen in this case.

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