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.

By sidelining the ulema, Abdullah has been forced to find a new source for religious legitimacy in order for him and his successors to rule over "the land of the two holy mosques."

His strategy has been to allow a wider base of voices to speak for Islam, both Sunni and Shiite. He instituted an annual forum titled "National Dialogue," which invited a variety of prominent intellectuals to make their views heard.

The forum included Sunni scholars such as Safar al Hawali, a former member of an opposition grouping called the "Awakening Sheikhs," many of which had been previously imprisoned for their biting criticism of palace policy.

Other invitees included prominent Shiite thinkers – a distinct change from earlier years, when the highest religious authority in Saudi Arabia had declared Shiites to be "apostates." Most important, the official ulema were pointedly left off the guest list.

Some have criticized the weak translation of the forum's rhetoric into real action. Yet even its existence is an accomplishment, and a new building has been set up in Riyadh to host this forum. This is a sign, in the words of Saudi Arabia expert Jean-François Seznec, of how the "National Dialogue" is becoming "systematized and routinized," reflecting long-term changes in the regime's attitude.

Of course, Abdullah's reforms have been highly limited when compared with Western expectations.

The country is still an iron-fisted dictatorship: The much-heralded municipal elections of 2005 excluded women, and the trumpeted majlis (parliament) remains a body undemocratically appointed by the king. Women can't drive, and religious freedom is nonexistent. Fundamentalist forces also remain significant in the kingdom, with characters such as Prince Naif, the ultra-conservative interior minister, still wielding enormous power.

Economic impetus for reform

At 83 years old, Abdullah's time left in office may be short, and it is uncertain that those next in line to the throne will have the will or the ability to continue making crucial reforms.

The challenges facing the desert kingdom require highly tuned maneuvering skills. Reformers are counting on the durability of Abdullah's reforms regardless of his successor. His legacy is likely to be protected by the new economic elite he is helping to create.

"You can't bury your head in the sand and expect to become a global economic power," said one administrator at a new Western-style university in Saudi Arabia. "The king knows this, and he's ready to accept the consequences of reform."

• Dana Moss is a senior fellow for Middle Eastern Studies at the Transatlantic Institute in Brussels. Zvika Krieger is a Middle East-based special correspondent for Newsweek magazine.