Saudi Arabia politics: Big loss

FROM THE ECONOMIST INTELLIGENCE UNIT

The death of Ghazi al-Gosaibi has deprived Saudi Arabia of one of its most colourful public figures—a minister and diplomat who had also published a large body of literary work. Mr Gosaibi was also an important political ally of the king, Abdullah bin Abdelaziz al-Saud, in his effort to promote social and economic reform, and his departure could tilt the balance of power in favour of conservatives.

Mr Gosaibi was part of a select group of commoner technocrats that were promoted into public office in the mid-1970s as part of an earlier drive to modernise the kingdom. One of his lasting achievements was the launch of the Saudi petrochemicals industry during his stint at industry and electricity minister between 1975 and 1982, which included the creation of Saudi Basic Industries Corporation (Sabic), which has developed into a global leader in this field. Mr Gosaibi fell out of favour in 1984 during a stint as health minister, following publication of a poem touching on sensitive political issues, and spent the next eight years in the relatively junior position of ambassador to Bahrain. He was then given the more weighty post of ambassador to the UK, which he held for ten years, before being recalled by Abdullah (then crown prince, but in effective charge of the kingdom’s affairs) in 2002 to carry out structural reforms to the water and electricity sectors. He was moved to the Ministry of Labour in 2004, with a brief to stamp out the many abuses in the system for recruiting expatriate workers and to promote the employment of Saudi nationals.

Flipping burgers

Mr Gosaibi, unusually for a commoner in Saudi Arabia’s highly deferential society, was not afraid of controversy, and had a flair for self-promotion. One of the abiding images of his later years was his appearance (with media in strong attendance) at a fast-food restaurant in Jeddah, where he donned overalls and peaked cap and did a three-hour shift flipping burgers, with the aim of underlining the message that Saudis should be prepared to do any kind of job.

This direct and hands-on approach to the task of reforming the Saudi labour market did not always deliver the desired results. On becoming labour minister in early 2004, Mr Gosaibi took over responsibility for managing the issue of recruitment visas from the Ministry of the Interior. This was partly driven by the need to concentrate the interior ministry’s resources on combating a resurgent al-Qaida, which had launched a number of major attacks in Saudi Arabia in this period. It was also seen by some as bid by Abdullah to bolster his reform effort by taking some powers away from the interior minister, Prince Nayef, a leading conservative. Mr Gosaibi immediately sought to clamp down on the extensive trade in visas among Saudi businesses and to penalise companies that did not fulfil their obligations to employ and train Saudis.

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Mixed legacy

However, as noted by Steffen Hertog in his recently published book on Saudi economic reforms (Princes, Brokers and Bureaucrats, Oil and the State in Saudi Arabia, Cornell University Press, 2010), Mr Gosaibi was employing blunt, top-down, measures that in some cases actually increased the rigidities in the labour market and led to increased hardship for blameless foreign workers. “[Mr Gosaibi’s] low trust in his own subordinates was probably well justified, but as he was in fact not capable of checking all applications himself, much de facto discretion remained on lower levels,” Mr Hertog writes. Mr Gosaibi antagonised private businesses that would have willingly co-operated with him, and Mr Hertog concludes: “All in all, private sector representatives think, Gosaibi had grossly underestimated the problems that he faced.” He managed to effect a lowering of work permits for expatriates in his first two years as minister, but as the economy expanded with the mid-decade oil price surge, the cabinet decided to ease visa restrictions so as to tackle labour bottlenecks. On the plus side, Mr Gosaibi undoubtedly made an impact in his publicity campaigns for Saudi employment, and he demonstrated that it is possible for officials to challenge the overweening power of the interior ministry.

Mr Gosaibi was diagnosed with cancer, and had only recently returned to Saudi Arabia from treatment in the US at the time of his death, aged 70. His ministerial responsibilities have been assumed for several months by his deputy, Abdel-Wahed bin Khaled al-Humaid.

Although Mr Gosaibi’s influence had waned somewhat in his last years, he remained an inspiration for reform-minded Saudis concerned to combat corruption within the system as well as the twin threats of subversive radical Islamism and stifling religious conservatism.