The King versus the Radicals

By Krieger, Zvika | Newsweek International, May 26, 2008 | Go to article overview

The King versus the Radicals


Krieger, Zvika, Newsweek International


Byline: Zvika Krieger

Saudi Arabia's monarch is using Aramco--the crack state oil company--to build a Western-style university in a bid to outflank the repressive clergy.

The main street of Dhahran Hills passes by perfectly manicured baseball diamonds and football fields. Prefab houses--complete with freshly mown lawns and tire swings hanging from elm trees--overlook golden desert vistas. Women in shorts and tank tops jog down Miller Street and Lilac Road while kids play basketball on bougainvillea-lined cul-de-sacs. Teenagers congregate at the movie theater and bowling alley; their parents grab dinner at the Olive Garden.

This could be Phoenix or Palm Springs. But Dhahran Hills is located in Dammam, in Saudi Arabia's Eastern Province. It is the main compound of Aramco: the country's hugely successful national oil company, which turns 75 this month. Yet Dhahran Hills seems a world away from Riyadh or other Saudi cities, where men in white robes and traditional headdresses loiter aimlessly along clogged thoroughfares lined by dilapidated high-rises. Women--if they're seen outside at all in those towns--go about in black full-body coverings.

But Aramco has always been different. Since it was created by Standard Oil in 1933, and continuing through the company's takeover by the Saudi government in the '70s, Aramco has functioned as a state within a state, operating by its own set of laws and standards and maintaining a remarkable level of freedom from the fundamentalist Wahhabi clergy that dominates the rest of Saudi society. This freedom, and Aramco's impressive managerial efficiency, have helped it become the richest company in the world: a new study by McKinsey and the Financial Times put its net worth at $781 billion.

But the company's splendid isolation may be about to end. Saudi Arabia's reformist King Abdullah recently thrust Aramco into the spotlight by charging it with building a $10 billion Western-style university on the country's western coast.

It's a high-risk gamble. The project is part of Abdullah's attempt to wrest control of his country from the repressive clerics, using the one Saudi institution that's free of their influence. If the university succeeds, Aramco may become a key ally in the king's struggle and will likely be called on for other similar reform projects. But the company's involvement could also prove its undoing. For the school could turn Aramco--already suspect in many Saudis' eyes--into a prime target of the country's extremist factions, perhaps even ending its protected status. The implications will be profound for Saudi Arabia--and indeed, for the world, since the company supplies 26 percent of the world's oil.

The differences between Aramco and the rest of Saudi Arabia run deep. The corporation has its own print and broadcast media, as well as its own intelligence services and security force. It maintains its own lobbyists in foreign capitals, and its employees often act as intermediaries between the king and Western leaders. The company also sends thousands of Saudis to the United States every year for education--creating an elite that, on their return home, have formed a progressive (if tiny) core within Saudi society.

Aramco's lax social atmosphere has allowed it to attract the best talent from around the world; 15 percent of its workers are foreign, mostly at the upper echelons, with tens of thousands more foreign contractors. Perhaps more important, the company's independence has also kept it free from the corruption, nepotism, red tape and inwardness that have hindered development in the rest of the country. At Aramco, women work alongside men and hold senior positions in key divisions like petroleum engineering; 1,000 Saudi women number among its ranks. Aramco also maintains Western standards of professionalism and meritocracy--in marked distinction from most Saudi government offices and private businesses. …

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