Saudi bomb attack hits foreign workers

Analysis
By Ben Richardson
BBC News Online business reporter

Many of the injured were migrant workers from Arab states

The weekend bombing of a residential block in Saudi Arabia is likely to send shock waves through the ranks of foreign workers living in the kingdom.

Saudi Arabia relies heavily on workers from abroad to run its economy.

It now seems they are also a legitimate terrorist target.

In May, 35 people were killed in suicide attacks on a Western compound in Riyadh, and analysts believe the latest attacks bear the hallmarks an al-Qaeda operation.

According to the International Labour Organization (ILO), 71% of the country's employees are non-Saudi.

Business people from countries such as the US and UK have long been warned to stay away from the kingdom, which possesses a quarter of the world's known oil reserves.

But those high-profile - and often high-earning - expatriates number only about 100,000, a tiny minority of the 4.6 million foreigners living and working in Saudi Arabia.

Most of the rest are from developing countries including India, Bangladesh and Pakistan, and what worries some observers is that these workers may also be getting jittery.

Brought in at first to do jobs such as bottle washing and house cleaning, many also now work for multinational companies, buoying the country's middle class.

It remains unclear whether the bombers over the weekend knew that the complex housed mainly Arabs from outside Saudi Arabia.

Some experts say they could well have thought that among the residents were Americans working for Boeing, the US aerospace company, as had been the case in the past.

Hitting the economy

What was clear, however, was the message.

The threat of attack may prompt many employees to stay away.

"They want the foreign workers to go home," said Neil Partrick, an analyst at the Economist Intelligence Unit (EIU) in London.

"It's not around the corner, but a large number of workers leaving would have a significant effect on the economy."

Saudi Arabia relies heavily on oil revenues, which according to the EIU account for as much as 90% of annual gross domestic product.

EIU forecasts say the economy could expand 4.6% this year driven by increased output of crude oil, after growth of just 1% in 2002.

Next year, however, growth is tipped to slow to 1.4% as Iraqi oil comes on the market again and Saudi Arabia no longer has to make up the shortfall.

While the country is trying to reduce its dependence on crude, it is a slow process.

Although official figures put unemployment at 8%, unofficial estimates - taking into account widespread youth joblessness - say the rate hovers closer to 15%, regardless of state attempts to limit foreign workers and boost domestic employment.

Risks ahead

UK defence contractor BAe Systems employs about 5,500 workers in Saudi Arabia, both local and foreign. The company already had beefed up security earlier this year, but said that the weekend's attack had shocked and frustrated staff.

"Saudi Arabia used to feel like the safest place in the world," Walid Abukhaled, a BAe spokesman, told BBC News Online.

That feeling of unease is unlikely to dissipate in coming months.

Even in May, foreigners were the target of attack

The threat, the UK government warns, "remains high and we continue to believe terrorists are planning further attacks... We advise British nationals against all but essential travel to Saudi Arabia."

Canada and Australia last month issued similar alerts, while the US has urged "all American citizens in the kingdom to be especially vigilant when in any area that is perceived to be American or Western".

The warnings from governments and companies are aimed limiting risk, but they also amplify fears.

"At the moment it's not the Pakistani bottle-washer or Filipina cleaning woman who is being targeted," said Simon Henderson, owner of London-based consultancy Saudi Strategies.

"But after the weekend, even Saudi Arabians will be asking if they are doing enough to protect themselves."