Three years ago, I travelled from western Saudi Arabia to Al-Khobar, in the country's wealthy Eastern Province, to interview some oilmen. Al-Khobar and the sprawling city next to it, Dhahran, lie next to the Persian Gulf and are home to Saudi Aramco, the world's biggest oil company and the country's biggest employer. In effect, they are company towns on a grand scale.
Al-Khobar had a different feel than other parts of Saudi Arabia that I had visited. American-style malls were everywhere. The stores were full of female shoppers and employees and some of them were not wearing the hijab head coverings. Nearby was the country's only cinema, an Imax theatre (although it only showed educational films).
I did not see any female drivers, but I was told that thousands of women were allowed to drive in the vast Saudi Aramco compounds. How could that be? Saudi Arabia was the only country in the world to ban female drivers – "women drivers, no survivors" was the nasty old saying. But Aramco, which was known as Arabian American Oil Co. before it was fully nationalized in 1980, always had more pragmatic, Western-style culture than other Saudi employers.
A 2009 Saudi Gazette article said women had been driving in the Aramco compounds for 30 years and that, today, some 3,000 of them had licences. The Aramco women had freedom that other Saudi women could only dream of. They could get to work, the malls or their children's schools with ease. Everywhere else in the country, women had to rely on male chauffeurs – a big expense – or use public transportation, a woefully underdeveloped commodity in Saudi Arabia. Many didn't bother, which is partly why the work-force participation rate among women is only about 22 per cent (in North Korea, it's more than 70 per cent, in Canada more than 60 per cent).
The Aramco women were pioneers. This week, Mohammed Bin Salman, the 32-year-old Saudi Crown Prince who effectively runs the country in the name of his father, King Salman bin Abdulaziz Al Saud, ended the ban on women drivers. Starting in June, 2018, they will be allowed behind the wheel even if the decision earns the ire of the socially conservative religious clerics.
The end of the driving ban constitutes a cultural revolution and signals to the world that the young Prince is prepared to drag Saudi Arabia out of the Middle Ages when it comes to women's rights, although women have an exceedingly long way to go before they carry equal status with men.
But the Prince's move isn't just about righting an old wrong. It's a big step in the reinvention of the Saudi economy, which is overly dependent on a single volatile commodity – oil – whose revenues fund a welfare state that is remarkably free of entrepreneurial flair. When oil prices are weak, as they are now, so is Saudi Arabia's financial state.
The women's driving ban was a drag on the Saudi economy because it acted as a barrier to employment. Some estimates said two million or more women – Saudi Arabia has 10 million women over the age of 20 – would join the work force if they did not have to rely on household drivers. Almost 1.4 million foreign drivers work in Saudi Arabia. They earn about $500 (U.S.) a month and are also provided with food and housing. It's a huge expense for anyone but the wealthy.
A jump in women's employment could trigger a big economic boost, various economists said. BI Economics said that putting women behind the wheel could lift Saudi gross domestic product by almost a full percentage point a year, lifting output by about $90-billion (U.S.) by 2030. While hundreds of thousands of foreign drivers presumably would return to their countries, the demand hit triggered by their exodus should be more than offset by the retention of all the money the drivers were sending home in remittances.
Citing numbers from Glowork, an employment agency serving women, Reuters reported that as many as 450,000 jobs were open for women in the Saudi retail industry alone, although many could not afford drivers to take them to work.
With some luck, some of the Saudi women will develop new businesses, which is the main goal of the Crown Prince's Vision 2030, his plan for economic diversification. The idea is to shrink the bloated civil-service sector, develop a new class of entrepreneurs and boost women's work-participation rates to 30 per cent (Aramco's goal is to raise the share of women in its work force to 40 per cent from 25 per cent). The initial public offering of Saudi Aramco next year on either the London or New York stock exchanges will help fund the transition, although the company's touted valuation of $2-trillion (U.S.) seems a fantasy unless oil prices soar.
The Prince's intention of reinventing the economy by 2030 also seems a fantasy. Already, there are signs that he is rolling back his ambitions somewhat. Some cuts to the bonuses and allowances of government employees have been reversed. Still, it appears he is on the right track. An oil-fuelled welfare state is unsustainable over the long term.
Allowing women to drive was a huge symbolic victory for the Prince, burnishing his image as an agent of social change even as the Saudi blockade of Qatar and the cruel attacks on Yemen earn him harsh criticism internationally. The women's empowerment campaign he has apparently launched is a good start for women's rights and the economy, but it's only a start. The bizarre guardianship system, which requires women to have a male guardian to sign off on routine decisions, such as travel abroad or even getting a passport, is still largely in place. If Saudi Arabia is to become a vibrant economy and society, it has to go, too.