August 24, 2008

By Andrew Hammond

With inflation rising across the Persian Gulf region, Saudi Arabia’s perennial problem of unequal distribution of wealth has never been so obvious.

While poor Saudis queue for hours for water in Jeddah, the kingdom’s second city, others are able to take advantage of the US’s new-found disdain for gas-guzzling 4x4s by snapping up imported cars.

Thousands of couples are cutting costs by forgoing individual weddings in favour of mass ceremonies carried out by a charity. But the affluent are still going on holidays, albeit opting for cheaper stays in neighbouring Arab countries rather than trips to Europe or Asia.

Surging oil prices have triggered a turnaround in Saudi Arabia’s economic fortunes and a return to some of the big spending – by wealthy individuals and the monarchy – that characterised the 1970s and 1980s.

But the economic boom has also stoked prices for food and property, leading to discontent in a rapidly changing country where about two-thirds of the local population of 17 million are under 30, educated and outspoken about events abroad. This has put the Al Sauds – the royal family that runs the US ally along with clerics who administer sharia law – under greater scrutiny.

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