When Islam Meets the Modern Economy

RIYADH, Saudi Arabia -- The rocket-shaped, 30-story Faisaliah Center that dominates the Riyadh skyline was envisioned as a way to change the cultural map as well as make a profit. The owners had plans to keep their shopping mall open during prayer times, for instance, and they hoped to set a relaxed tone for socializing with high-tech video games and glitzy theme restaurants.

On a recent evening, however, their goal of loosening Saudi Arabia's tight Islamic restrictions did not seem to be going well. The hiss of a local religious enforcer ordering two women to cover their heads dominated the promenade of the high-end mall, which is part of a hotel, office and convention complex. The mall had been emptied of customers as men were herded into a mosque, stores were closed, and women and non-Muslims were told to wait while men performed the evening prayer. Single men have been banned from the place altogether on weekend nights to avoid risk of fraternization with the opposite sex in this, Saudi Arabia's most uptown locale.

"Why doesn't he convert?" a bearded, brown-robed religious policeman asked the two Saudi escorts of an American journalist.

The enforcer, from a volunteer corps organized by the state-funded Committee for the Propagation of Virtue and the Prevention of Vice to make sure Islamic strictures are followed, offered taped readings from the Koran, the Muslim holy book, and told the two Saudis to finish their coffee and hurry to the mosque.

Hoping to create jobs for the half of the population that is under 18, Saudi Arabia is scrambling to diversify and expand its economy beyond selling crude oil. However, just as social and religious realities have curbed the highest hopes for the Faisaliah Mall, the strong desire to preserve Saudi Arabia's culture is likely to bump into its pursuit of capital, membership in the World Trade Organization and other goals.

In a country that bans outside influences ranging from Christianity to Pokemon cards and tries to keep its women veiled and its streets quiet, even economic modernizers say world businesses will have to conform to Saudi ways if they want to operate here.

"The country has legitimacy as the center of Islam," said Abdulrahman Tuwaijri, secretary general of the Supreme Economic Council, established by the royal family to coordinate economic changes. "It was built on Islamic values, and it is difficult to allow behavior that is not acceptable."

Saudi Arabia has been the most tenacious Arab country in clinging to tradition, seeking to mold Koranic law, tribal ways and the needs of a vast royal family into a workable system. Among neighbors, Dubai has encouraged the telecommunications and media industries and Bahrain has become a banking and tourism hub. But Saudi Arabia was among the last countries in the region to allow access to the Internet. It fought an ultimately unwinnable battle to keep out satellite dishes. Its criminal justice system metes out beheadings and beatings as stipulated in the Koran with an insistence criticized by international human rights groups and continues to punish people for such transgressions as sorcery and cross-dressing.

Saudi Arabia's prohibition of all religions other than Islam has forced a half-million or more Christians, Buddhists and others working in the country to sneak from house to house to worship. It has denied them clergy and churches and left even employees of Western embassies cautious in admitting that small groups had gathered for a major holiday like Easter.

"This is an important U.S. ally and there is absolutely no religious freedom," said Lawrence J. Goodrich, spokesman for the U.S. Commission on International Religious Freedom.

A delegation from the group recently toured the kingdom. In the past, it has recommended that Saudi Arabia be listed alongside Iran, Vietnam and Burma as a nation of "particular concern" because of periodic raids on underground Christian services and other examples of religious intolerance.

Saudi Arabia's pending membership in the World Trade Organization, meanwhile, will put its system on more open display, forcing the country to justify its way of doing business before international trade panels, auditors and financial monitors.

One diplomatic analyst said the courts, and lawmaking in general, remain a mystery to foreigners, particularly the interplay between Islamic and civil values. A recent ruling from the grand mufti, the chief Saudi interpreter of Islamic doctrine, banned distribution of the Japanese-designed Pokemon trading cards and related merchandise, leaving merchants saddled with inventory that, with no public debate and no notice, was deemed harmful to Islam.

"Joining WTO means you are signing up for a set of rules for how to conduct trade," the analyst said. "You can't just someday slap a ban on this, that or the other."

Other issues also may have to be confronted. For example, much of the country's potential labor force -- namely, women -- is economically marginalized, limited to such traditional tasks as teaching and care of the home, while movie theaters, music clubs and other businesses that could offer jobs to young people are banned because of religious sensitivities.

Until recently, such issues mattered little. A flood of petrodollars in the 1960s and '70s turned a nation of mud houses and rural villages into one of wide new roads, air-conditioned villas and up-to-date medical facilities. And it did so in a way that allowed the traditional culture to remain largely intact.

As oil prices fell in the 1980s and '90s, the kingdom found itself without adequate revenue to support the free schools, utilities and housing it had offered citizens, or the government sinecures Saudi men relied on as jobs of last resort. The per capita income declined from an oil boom high in 1981 that equaled the U.S. average of $28,600 to less than $7,000. The population of about 14 million is growing at more than 3 percent annually.

Though oil prices have rebounded, Tuwaijri and others say, Saudi Arabia has realized it cannot survive on oil alone. As a result, it seeks to diversify its $140 billion economy with foreign money and projects involving something other than petroleum.

Over the last year, the Saudi government has revised foreign investment rules to allow full outside ownership of businesses and real estate. Taxes have been lowered on foreign-owned corporations. Outside companies are being allowed to bid for the right to explore, extract and market natural gas, a move the country hopes will tap its massive reserves without tying up local capital.

It is too early to tell whether the changes will accomplish the country's broader goal of creating an economy that employs more Saudis in the private sector, decreases reliance on the 7 million foreign workers who dominate the labor force and establish for-profit markets for such necessities as water and electricity that the government can no longer afford to provide.

Compromises have been found on some touchy issues. The country wants, for example, to increase revenue from tourism, but does not want to go the path of such neighbors as Dubai, with its wide-open nightlife, or Egypt, where Sinai beaches are crowded with drinking, dancing and occasionally topless Europeans, Americans and Israelis. Saudi Arabia instead has targeted "religious tourism," encouraging Muslims to visit Mecca year-round, not just during the annual month of pilgrimage, and allowing them to tour the rest of the country during their stay.

Saudis like to note that there was a time, in the 1950s and '60s, when radio and television were viewed as works of the devil; now, they are accepted. This is meant to indicate that values will change, but the drive for economic development will never be pushed too quickly. Only when religious leaders realized the new technology could be used to spread the Koran, people here say, did they accept it.

"This country stayed pure because nobody wanted it. Who would want this desert?" Tuwaijri said. "We have to let the society change at its own pace."