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Last weekend's bloody terrorist attack in Saudi Arabia is a cause of great concern for the United States, even as the naming of an Iraqi interim government is crowding this out of the news.
It is now clear that efforts to wipe out home grown al-Qaida cells in the country that produced most of the Sept. 11 hijackers have not fully succeeded and that the Saudi oil industry is vulnerable. Given that the nation that sits astride the world's largest known oil reserves, the insurgents seem to have gone for the jugular.
The attacks come at a particularly sensitive moment in U.S.-Saudi relations, with increasing violence in Iraq and oil prices hovering around $40 per barrel, the highest since Desert Storm.
Saudi Arabia has been closely associated with schools and camps that have turned out terrorists and what happens there is of extreme importance to the Bush administration. Consequently, the attack last Saturday raises several key questions:
Are the Saudi security forces reliable? Twenty-two people including 19 foreign workers were killed when four gunmen disguised as security guards seized the luxury housing complex in the oil city of al-Khobar. Saudi forces evacuated most of the residents and then staged a rescue operation to free the remaining 50 or so captives. But despite a massive security cordon around the compound, three of the four terrorists escaped, suggesting that either the security forces were complicit or incompetent.
Can Saudi Arabia protect its oil infrastructure? The attack at al-Khobar was on an apartment complex, not an oil facility. However, because foreign workers adre an intregal part of the Saudi Arabias oil industry, and they are now understandably spooked, this attack has a similar affect as one on oils infrastructure.
In the last few days travel agents have reported an overwhelming increase in exit visa applications. Multinational corporations are sending workers home and contemplating moving their headquarters to neighboring states. Saudi Arabian oil will be desperately needed in the coming decade as demand for oil in China, India and the United States increases. Oil prices will rise even further if the market cannot be convinced that the Saudis can protect their treasured asset.
The Bush administration will be watching very carefully to see how Saudi Arabia responds to the latest attacks. Since May 2003 when suicide bombers simultaneously struck three housing complexes in Riyadh, Washington has been basically pleased with the direction Saudi Arabia is moving. The Saudi leadership viewed the attacks as their wake-up call and have taken security, political and economic measures against the foundations of terrorism.
There are now almost weekly reports of Saudi security forces hunting down militants, disbanding al-Qaida cells and seizing weapon caches. Security forces have successfully foiled a number of potential attacks, rounded up hundreds of suspects and killed more than 30 militants, including eight from their 26 most-wanted list. Radical clerics have been warned to tone down fiery sermons.
The Saudi government also has become more serious about cutting the flow of funds to terrorists. In late March the Financial Action Task Force, a multilateral organization devoted to combating money laundering, judged that the Kingdom was in compliance with international standards in almost every indicator of effectiveness to combat terrorist financing.
This past Wednesday, Saudi officials announced that they would freeze the assets of al Haramain Islamic Foundation, a charitable organization responsible for dispersing $40 to $50 million per year and associated with The Saudi government also has begun a series of meetings with local leaders from various segments of society to address domestic problems that might nurture terrorism. What really got the attention of Saudi citizens was that the participants included prominent women and Shia clerics -- an often reviled group in the predominantly Sunni society. The result is an unprecedented society-wide discussion on the role of women, education and ethnic and sectarian diversity within society.
While this is all good news, there have continued to be violent incidents perpetrated by terrorist cells. In November 2003, attackers killed 17 at an Arab housing complex in Riyadh.
Four more died at the end of April, when assailants targeted police headquarters. A few weeks ago three gunmen dressed as security guards struck at a petrochemical company in Yanbu, killing six Westerners and one Saudi. In this context, last weekends attack raises questions about how effective the Saudis efforts have been, and whether it is capable of defeating this threat.
After Sept. 11, 2001, a spate of commentators argued that the United States and rest of the world would be safer with a different Saudi leadership.
Theoretically this may be true. But at the moment the political alternatives are substantially worse than we now have. There is no democracy in waiting. The options we face are between the current regime, with some hope of reform, and a violent anti-American religious regime. Washington should and will give the Saudi government the backing it needs in its fight against al-Qaeda.
But Washington must also start thinking more creatively, so that in two years, five years, ten years, these are not still our only options. At the same time that we are supporting the governments efforts to eradicate its ugly opposition, we must also argue for job training, quality education, basic tolerance and political participation when construction our foreign policy towards the Kingdom. A more progressive energy policy would also help. There are reform minded Saudis who will back us. But our efforts will require money, sustained attention, and courage. We have not shown any of this to date.
The real question for Washington is not whether or not to back the Saudi government; our security depends, in part, on its success. The real question is how to back the government, without contributing to a political environment that spawns future terrorists.

