(Reuters) – During the Cold War, the relative power of the United States and the Soviet Union were regularly measured in gold, silver and bronze. The last couple of Olympic Summer Games have been a race between China and the United States, with America triumphing in Athens in 2004, and China, on home turf, overtaking its rival four years later. Many commentators saw that shift as a symbol of U.S. decline and of China’s growing economic clout.

The 21st century is likely to be a multi-polar world, however. What does the medal tally say about shifting global power today?

One way to measure change is to compare the relative success of the Group of Seven, or G7, which is made up of seven rich, mostly western countries, and the BRICS, five fast-growing developing states.

Over the past four Summer Games, the G7 – Canada, France, Germany, Great Britain, Italy, Japan, and the United States – has kept its lead over the BRICS countries – Brazil, Russia, India, China and South Africa.

But the gap is narrowing. In 1996, the G7 won 38 percent of available gold medals, more than twice the BRICS share of 17 percent. In the 2008 games, the G7 won 32 percent compared to the BRICS’ 26 percent.

There are several ways to measure medal success. As well as comparing gold medal share, we looked at each group’s share of all medals by attributing three points for a gold medal, two for silver and one for bronze.

“A medal score like that is how you get a sense of the totality of achievement,” said Simon Shibli, professor of sports management at Sheffield Hallam University. By looking at what Shibli calls “market share” you also account for the increase in the number of events.

A fair analysis can really only be made since 1996, when Russia started competing independently again. But by using the Soviet Union as a rough proxy for Russia, it is possible to get a comparison over a much longer period.

Reuters looked at the medal data going back to the first modern games in Athens in 1896 and found some interesting trends. Broadly speaking, you can divide the past 116 years into four main periods:

* The first half of the 20th century – in the Olympics, as in the real world – is a story of Western domination. That’s not surprising. From the BRICS – the name wasn’t coined until 2001 – only India and South Africa competed in the Olympics on any sort of regular basis.

* In the three decades after World War Two, the growing sporting power of the Soviet Union helped the BRICS to catch up with the G7. China’s long boycott of the Games meant that, until 1980, the Soviet Union accounted for more than 95 percent of the BRICS’ medal haul.

* Thanks to boycotts by the United States and then the Soviets, the 1980s were characterized by lots of static. Hard to tell too much here, though the top two countries are obvious: the USSR won 39 percent of all gold medals at the 1980 games in Moscow and the United States 37 percent in 1984 in Los Angeles.

* The last two decades are the first in which we see a straight race between the BRICS and the G7. The demise of the Soviet Union means Russia has been Russia again and China, which returned to the games in 1984 after a long absence, has taken the games much more seriously.

CHINA

The driving force behind the recent growth of the BRICS – as in the real world – is China, which overtook a slowly fading Russia in 2008 as the BRICS’ top medal winner. China benefited from being host at the last Games but its growing dominance is also a result of the massive resources devoted to achieving Olympic glory, according to Shibli.

The country’s performance in 1988, when it ranked 11th on the medals table, “was seen as a national humiliation,” he said. “In 2008, China’s one hundred medals represented the accumulated achievement of an estimated $8 billion of investment.”

In pure market share, the BRICS’ sporting prowess still lags behind its economic growth, according to John Hawksworth, chief economist at Price Waterhouse Coopers.

“The rise in BRICS’ economic performance in terms of GDP isn’t really evident in the same way in the Olympics data aside from China, which has risen sharply on both measures,” he said. “Part of the reason is that India just doesn’t feature. In India, they’re cricket mad and hockey is the only Olympic sport where India has had consistent past success.”

The Beijing games were the first in which India won more than one medal since 1952.

South Africa, too, “has a sporting culture but it is focused around sports such as football and cricket which are not in the Olympics,” said Hawksworth. “So their share of medals isn’t that high within the BRICS.”

Brazil has won more medals over the past four Games, but its Olympic record still lags its economic growth. Brazil is now the world’s sixth biggest economy but it has never come that high on the medals table.

The G7′s share has declined slightly in recent decades, Hawksworth notes, but not as dramatically as their share of world GDP. The G7 countries and the United States in particular continue to dominate the Games; corporate sponsorship and the professionalization of sports have kept the standard of their competitors very high.

Olympic performance will never exactly mirror economic standings, of course.

Australia, which came fourth in the gold medal tally in its home summer games in 2000, is rich and sports-mad but is hardly threatening as the next global super power. Kenya and Ethiopia regularly rank high in the medal tables, but that has little to do with their economic station or political heft (poor, and relatively weak) and more to do with their incredible ability to fuse topography and genes into brilliant distance runners. Canada’s economy is booming but it doesn’t win as many medals as it did in the 1980s and ‘90s.

Still, the table does tell us stories. When you sit down to watch your favorite Olympic sport over the next few weeks, enjoy the precision, ball skills and strength of the athletes. But watch out for the geo-political shifts as well.

(Reporting by Himanshu Ojha; Editing by Sonya Hepinstall)

The 21st century is likely to be a multi-polar world,
however. What does the medal tally say about shifting global
power today?

One way to measure change is to compare the relative success
of the Group of Seven, or G7, which is made up of seven rich,
mostly western countries, and the BRICS, five fast-growing
developing states.

Over the past four Summer Games, the G7 – Canada, France,
Germany, Great Britain, Italy, Japan, and the United States -
has kept its lead over the BRICS countries – Brazil, Russia,
India, China and South Africa.

But the gap is narrowing. In 1996, the G7 won 38 percent of
available gold medals, more than twice the BRICS share of 17
percent. In the 2008 games, the G7 won 32 percent compared to
the BRICS’ 26 percent.

There are several ways to measure medal success. As well as
comparing gold medal share, we looked at each group’s share of
all medals by attributing three points for a gold medal, two for
silver and one for bronze.

“A medal score like that is how you get a sense of the
totality of achievement,” said Simon Shibli, professor of sports
management at Sheffield Hallam University. By looking at what
Shibli calls “market share” you also account for the increase in
the number of events.

A fair analysis can really only be made since 1996, when
Russia started competing independently again. But by using the
Soviet Union as a rough proxy for Russia, it is possible to get
a comparison over a much longer period.

Reuters looked at the medal data going back to the first
modern games in Athens in 1896 and found some interesting
trends. Broadly speaking, you can divide the past 116 years into
four main periods:

* The first half of the 20th century – in the Olympics, as
in the real world – is a story of Western domination. That’s not
surprising. From the BRICS – the name wasn’t coined until 2001 -
only India and South Africa competed in the Olympics on any sort
of regular basis.

* In the three decades after World War Two, the growing
sporting power of the Soviet Union helped the BRICS to catch up
with the G7. China’s long boycott of the Games meant that, until
1980, the Soviet Union accounted for more than 95 percent of the
BRICS’ medal haul.

* Thanks to boycotts by the United States and then the
Soviets, the 1980s were characterized by lots of static. Hard to
tell too much here, though the top two countries are obvious:
the USSR won 39 percent of all gold medals at the 1980 games in
Moscow and the United States 37 percent in 1984 in Los Angeles.

* The last two decades are the first in which we see a
straight race between the BRICS and the G7. The demise of the
Soviet Union means Russia has been Russia again and China, which
returned to the games in 1984 after a long absence, has taken
the games much more seriously.

CHINA

The driving force behind the recent growth of the BRICS – as
in the real world – is China, which overtook a slowly fading
Russia in 2008 as the BRICS’ top medal winner. China benefited
from being host at the last Games but its growing dominance is
also a result of the massive resources devoted to achieving
Olympic glory, according to Shibli.

The country’s performance in 1988, when it ranked 11th on
the medals table, “was seen as a national humiliation,” he said.
“In 2008, China’s one hundred medals represented the accumulated
achievement of an estimated $8 billion of investment.”

In pure market share, the BRICS’ sporting prowess still lags
behind its economic growth, according to John Hawksworth, chief
economist at Price Waterhouse Coopers.

“The rise in BRICS’ economic performance in terms of GDP
isn’t really evident in the same way in the Olympics data aside
from China, which has risen sharply on both measures,” he said.
“Part of the reason is that India just doesn’t feature. In
India, they’re cricket mad and hockey is the only Olympic sport
where India has had consistent past success.”

The Beijing games were the first in which India won more
than one medal since 1952.

South Africa, too, “has a sporting culture but it is focused
around sports such as football and cricket which are not in the
Olympics,” said Hawksworth. “So their share of medals isn’t that
high within the BRICS.”

Brazil has won more medals over the past four Games, but its
Olympic record still lags its economic growth. Brazil is now the
world’s sixth biggest economy but it has never come that high on
the medals table.

The G7′s share has declined slightly in recent decades,
Hawksworth notes, but not as dramatically as their share of
world GDP. The G7 countries and the United States in particular
continue to dominate the Games; corporate sponsorship and the
professionalisation of sports have kept the standard of their
competitors very high.

Olympic performance will never exactly mirror economic
standings, of course.

Australia, which came fourth in the gold medal tally in its
home summer games in 2000, is rich and sports-mad but is hardly
threatening as the next global super power. Kenya and Ethiopia
regularly rank high in the medal tables, but that has little to
do with their economic station or political heft (poor, and
relatively weak) and more to do with their incredible ability to
fuse topography and genes into brilliant distance runners.
Canada’s economy is booming but it doesn’t win as many medals as
it did in the 1980s and ’90s.

Still, the table does tell us stories. When you sit down to
watch your favourite Olympic sport over the next few weeks,
enjoy the precision, ball skills and strength of the athletes.
But watch out for the geo-political shifts as well.

(Reporting by Himanshu Ojha; Editing by Sonya Hepinstall)

How will the country survive, they wondered?

By leaning even more heavily on donors and aid groups, an examination of the country’s safety net shows.

As in many developing nations, international aid is both an invaluable help to South Sudan and a crutch that sometimes enables it to avoid reality. Development experts have grown more sophisticated in recent decades about how they deliver aid. But in fragile states such as South Sudan, getting the balance right between helping a country and helping that country help itself remains incredibly difficult.

On paper, South Sudanese are actually better off than their neighbors. When the oil was flowing, the government estimated per capita GDP at more than $1,500, double that in Kenya and triple that in Uganda. The government’s annual budget in 2011 was $2.3 billion.

But decades of war and neglect have left South Sudan dirt poor. That’s why foreign governments and other donors gave just under $1 billion or so in aid in 2010, the latest available figures. None of that money went directly to South Sudan’s government. But it funded everything from security training to food, drugs, textbooks and a host of other services. Around four-fifths of all health care is provided by outside groups.

South Sudan’s President Salva Kiir has spoken a number of times of his country’s reliance on aid. “We still depend on others. Our liberty today is incomplete,” he said at an independence day speech yesterday. “We must be more than liberated. We have to be independent economically.”

In a series of stories that chronicle South Sudan’s first year of independence, Reuters is examining the country’s chances of success. Getting the aid calculus right is one of the biggest challenges.

As it celebrates its birth, South Sudan faces an economic crisis. Without oil, the country is quickly running out of money. Ministries that should be taking on more and more responsibility for running things are instead cutting their budgets. The World Bank has warned of the “real possibility” of “state collapse.”

Many donors are furious with the oil shutdown and say they won’t pony up more money. But even before the government’s decision, a series of emergencies – ethnic violence, food shortages, an unexpected influx of refugees – had pushed donors to shift money earmarked for long-term development plans back into things like food aid and emergency shelter.

Last week the United Nations increased the amount of funding it thinks South Sudan will need in 2012 from $763 million to $1.15 billion. That money will assist the country through a lean period, but has delayed efforts to help the government help itself.

Hilde Johnson, the U.N. Secretary General’s Special Representative for South Sudan, said the government is still weak and struggling to take on more. The broad effort by the U.N. and aid groups to transfer responsibilities to the state “is just not happening,” she said. “This is one of the things that the aid community is struggling with.”

A SUSPECTED CASE OF TETANUS

Nowhere is South Sudan’s dependence on the outside world more clear than in its health system.

One Sunday afternoon early last month, a white Toyota Land Cruiser pulled into the compound of a health-care center in the state of Northern Bahr el Ghazal, near the border with Sudan. In the back of the vehicle, a mother hugged her week-old baby, who had a suspected case of neo-natal tetanus.

James Majuong Macar, the clinical officer at the center, helped load two more patients into the makeshift ambulance: a 12-year-old boy with a fractured leg that had ballooned alarmingly, and a three-month-old girl whom Macar thought probably had meningitis.

A storm was moving in. Wind whipped through a huge fig tree and a bicycle fell to the ground with a rattle. The Land Cruiser turned out of the gate to make the hour-long drive through the rain south to Aweil, the state capital.

The people of South Sudan face cholera, measles, meningitis, polio, river blindness, sleeping sickness, yellow fever and whooping cough. Malaria accounts for a quarter of all hospital visits. South Sudan has one of the highest maternal mortality rates in the world. Around one in six children die within their first year.

And there are just 120 doctors and 100 nurses in a country of 8 million.

“The health system as it is now, is extraordinarily dependent on non-governmental actors,” said Susan Purdin, the head of U.S.-based aid group International Rescue Committee in South Sudan. “Many years and much money, used prudently, will be needed to transition from what it is to what is envisioned.”

The Ministry of Finance and Economic Planning calculates that the country received almost $179 million in aid for health in 2010, the second-biggest amount after funding for social and humanitarian affairs, which includes things like food aid and emergency medicines.

“HONOUR AND INTEGRITY”

South Sudan depended on aid long before it became a country.

During the south’s decades-long civil war with Khartoum, the capital of Sudan, aid groups and donors kept health clinics running and built a massive hospital over the border in Kenya to treat South Sudanese who were ill or wounded by the fighting. The United Nations and aid groups helped feed people when the crops failed, and kept schools open. But aid certainly did not reach everyone.

In the lead-up to independence and in the 12 months since, many more aid groups have arrived. Donors have spent billions to build roads and bore wells, ferret out mines laid during the civil war, print textbooks, train women to farm, audit state finances and help the government write laws. They have hung more than 1 million bed nets to protect children from malarial mosquitoes and supplied sewage trucks to the prison headquarters.

In short, they have begun the effort to move from delivering emergency aid to longer-term development. But the emergencies and the oil shutdown have started to send that progress into reverse – stoking tension between the new government and some donors.

The country exports its crude through a pipeline that crosses Sudan. Juba believes the government in Khartoum stole 1.7 million barrels of oil from the pipe. Khartoum said it confiscated what it was owed in pipeline transit fees. When the two sides could not reach a settlement, South Sudan decided it would rather go without oil revenue than allow its enemy to have any.

In defending their decision to cut off the oil, South Sudanese officials have told western diplomats that “the independence, honor and integrity of South Sudan is more important than material things,” according to one European diplomat.

RISK OF “COLLAPSE”

But the economic implications are dire. A World Bank memo on the country’s outlook paints a dramatic picture. The memo, written in March and leaked to a local newspaper in May, said that the oil shutoff threatened the state’s survival.

“The World Bank has never seen a situation as dramatic as the one faced by South Sudan,” it read. “The shutdown will lead to a rapid reversal in key development gains.” The Bank forecast that the number of people living in poverty will likely jump from 51 percent to 83 percent by 2013, that the mortality rate for children under 5 will double, and that the percentage of children attending primary school will drop to 20 percent from 50 percent today.

“Donors have been asked to help cover the gap by supporting basic services,” the report said. “They are increasingly unwilling to do this or support any other aspect of the government’s aid strategy.”

The World Bank issued a statement after the document was published. It said it had “recently provided an assessment of the economic situation as requested by the Government of South Sudan” but that press coverage had misrepresented “the nature and content of the dialogue” between the Bank and the government and donors.

The South Sudanese have expressed their own frustration. When U.N. Secretary General Ban-Ki Moon urged Juba to withdraw its troops from a disputed area of the border with Sudan in April, President Kiir told South Sudan’s parliament that he had told Ban: “I’m not under your command.”

A United Nations spokesman said Ban had contacted both South Sudan’s president and Sudan’s U.N. ambassador and told them “peace and dialogue is the only option.”

Kevin J. Mullally, country director of the United States Agency for International Development, by far the single biggest donor, said Juba’s oil decision means at least some long-term development plans will have to be put on hold. “We’re a planning agency trying to divine the future,” he lamented.

A HOSPITAL

One thing he can plan on is the health system relying on foreign aid for years to come.

The Malualkon primary health care center, where the Land Cruiser picked up its patients, is officially a government facility. But it is supported by the International Rescue Committee, which has worked in southern Sudan for more than 20 years and has projects in health, education and other areas.

The IRC pays Macar’s wages and those of other health workers, both in Malualkon and across the country. The agency has trained women to become birth attendants and taught people in remote villages how to dispense drugs to treat illnesses such as malaria and diarrhea.

The IRC also runs the ambulance that collects sick people from their villages and ferries them to the health center or to Aweil, home to the only hospital in Northern Bahr el Ghazal.

The hospital itself is divided between government-run wards (outpatient, male inpatient) and those run by the international aid group Doctors Without Borders (pediatric, maternity). The U.N. and an alphabet soup of non-governmental groups, including the IRC, also offer support.

Dr. Garang Thomas Dhel, the 38-year-old director of the hospital, is frank about the limits of the care the state can provide. Dhel has only 158 employees, compared to more than 250 who work in the wards run by Doctors Without Borders.

Since secession, hundreds of thousands of South Sudanese have returned home from Khartoum. As a result, the number of patients the hospital treats every month has tripled to around 6,000.

“The staff are not enough, and even the available staff are not that well trained,” Dhel said.

Bringing in more doctors and nurses is out of the question. The Ministry of Health has imposed a hiring freeze. Even before the oil money stopped flowing, the hospital essentially ran without an operating budget. A few months ago it imposed a fee of two pounds ($0.50) when a patient needed a laboratory test to help it with running costs.

Things have improved since the end of the war, Dhel said, but he hated to think how the hospital would run in the absence of Doctors Without Borders.

“If they terminate their mission it would be a catastrophe,” he said.

“A VERY BIG SUPPLY OF NOTHING”

Dhel’s biggest complaint – one repeated by almost everyone involved in health care – is the erratic supply of drugs and other supplies.

The drug-distribution system was set up about 6 years ago. A group of big donors – including Canada, the European Union, Germany, Italy and Britain – pooled most of their aid. They asked the World Bank to administer a fund and work with South Sudan’s government to construct roads and bridges, improve education and health care, and build up Juba’s ability to run things.

Among the fund’s tasks is financing drug purchases. The World Bank helped the government procure medicines on the global market; Juba then hired a private contractor to distribute the drugs around the country. Hospitals and health centers were meant to receive new supplies four times a year.

But South Sudanese doctors and aid groups say deliveries have often taken much longer. When a shipment does turn up at his hospital, Dhel said, it is often not the life-saving anti-malarials, antibiotics and intravenous equipment he needs, but boxes of basic pain killers.

“It is a very big supply of nothing,” he said.

The South Sudanese and the World Bank disagree over the cause of these failings.

One of the problems, South Sudanese doctors and some aid workers say, is that the system was set up using a “push model”: The central government decides what drugs and supplies to send out, without giving individual hospitals a say in what they need.

South Sudan’s deputy health minister, Dr. Yatta Lori Lugor, said the system doesn’t work, and the World Bank should take responsibility for that.

“It was not the Ministry of Health that decided, it was the World Bank,” he said, sitting at his desk in the modest, two-story Ministry of Health building. “It was a mistake.”

But Bella Bird, the South Sudan country director at the World Bank, said the decision to use the system was taken by a committee that included the donors and the government of South Sudan.

“We knew it wasn’t a long term solution,” she said. “There are real teething problems getting things going in a country which pretty much had nothing. It can take years. And we have to chip away at it slowly.”

A U.N. official in Juba said the system was deliberately kept simple because the government lacked the capacity to handle anything more complicated.

Transport problems, bureaucratic bungling and civil unrest in some regions mean drug shipments are regularly held up for weeks, often sitting in shipping containers in the scorching sun. The official said the state of Jonglei had been waiting since June last year for a new shipment. Aid groups have had to step in and supply emergency drugs in some states, in one case to halt a surge in malaria deaths.

The drug-procurement contracts ended in June. Deputy Health Minister Lugor said the ministry wants to replace it with something that worked.

“We understand South Sudan better,” he said. Foreign aid groups and international organizations sometimes arrive with “assumptions that are maybe not right. Maybe they think they know better.”

But asked whether the country needed their aid, he looked stunned.

“Wow!” he said. “Of course… Until that time when we can run things ourselves, we need them.”

Wasn’t there a danger that too much aid would make South Sudan dependent?

“Dependency is when you don’t want to do something,” Lugor said. South Sudan may be struggling to train its own civil servants and take on responsibilities, but it wants to run its own affairs eventually, he said.

“There is no dependency here.”

(Edited by Michael Williams)

By Simon Robinson

(Reuters) – Watching the images of Libyan rebels streaming into Muammar Gaddafi’s compound, decapitating statues and waving the accouterments of power they had just looted it was hard not to think back to that day in Baghdad eight years ago.

At first a clutch of Iraqi men threw shoes at the statue. One beat at its marble-faced plinth with a sledgehammer. A couple brought out a ladder and tried to tie a rope around Saddam Hussein’s towering bronze legs.

I was an embedded journalist working for an American magazine on April 9, 2003 and stood in Baghdad’s Firdos Square watching as the end-of-empire drama played out around me.

After some time, a U.S. Marine commander ordered his men to pull down the monument of Saddam. The Marines were tired after three weeks of fighting and constant moving and nights of four hours sleep, but happy to be welcomed in Baghdad with cheers and handshakes rather than bullets.

People along the road to the square had come with gifts: cake, cups of tea, yellow flowers picked from a nearby garden.

A few flowers ended up in the strapping around the Marines’ Kevlar helmets. Iraqis — there were a few hundred in the square at its peak, along with Marines and reporters — laughed at the Western peace activists who had come to Baghdad to try to stop the war.

“Go home,” one man said to a young British woman. “You’re not needed here now.”

The Marines positioned their tank recovery vehicle, a kind of battlefield tow truck, in front of the statue.

There was an embarrassing kerfuffle when a Marine unfurled a flag across Saddam’s face but then cheers as the flag was replaced by an Iraqi one. The tank reeled in its cable and then reversed. As the cable went taut the bronze Saddam slowly creased at the knees and then lurched forward and hit the ground where it was swarmed by a cheering, stamping mob.

There is one major difference in Libya of course.

In Iraq, the liberators — that is how many welcomed them at first — were American and British. In Tripoli yesterday, it was Libyans shaking history, their Western sponsors careful to stay out of sight.

But in Libya, as in Iraq, an afternoon of celebration is not likely to end the violence. Already the search for the dictator and his sons has begun, just as it did eight years ago.

And as Libyans struggle to put their country back together, mending the damage of years of repression and sanctions, there will also be times when they wonder what became of the sense of hope and happiness that seemed so palpable yesterday, even just watching the scene unfold on television.

GREAT EXPECTATIONS

In 2003, the significance of Firdos Square changed quickly. Depending on your point of view, the toppling of the statue was a moment of liberation from tyranny, a victory for the United States and its swaggering president or a carefully managed show for the cameras.

But as the temperature and violence rose over the following months, the statue’s fall came to look like a moment of hubris, not so much the end of a war as the beginning of a long slide into chaos.

The looting, which had already begun as the Marines pushed into Baghdad, would last for days. By the time Saddam’s sons were killed months later and Saddam himself had been dragged from his hole in the ground, tried and executed, the optimism of Firdos Square had been replaced with blast walls and kidnappings.

If Libya is lucky its new government will learn from the mistakes of Iraq. Already Libyan rebel leaders have indicated they will not dismiss the entire military, as Baghdad’s American overlords did with tragic consequences. There is talk too of unity, an appreciation that Libya’s many tribes need to come together.

But as Iraq proved, expectations are hard to meet. It is not just that unrealistic hopes inevitably lead to disappointment, though they do. There are also a thousand unexpected changes that come when you throw off a dictatorship.

I remember talking to an old woman on the street in Baghdad a day or two after the statue came down. She was sitting on a footpath 20 yards or so from an American checkpoint, wanting to talk to someone but not sure who to approach.

“When will the Americans tell us to open our shops?” she asked when I introduced myself as a reporter.

“I’m not sure they will,” I replied through a translator. “They expect you to decide things like that now. One person deciding everything is over.”

She looked at me with puzzlement and worry.

As Libyans move on from their moment of joy, they should remember that the great change they have almost won will bring more change and then more.

On that day eight years ago, Iraqis bubbled about a new beginning. It felt as if something had shifted.

It had. We just did not yet know how.

(Editing by Jon Hemming)

But some of the biggest handouts over the past two decades have gone to his own extended family, according to unpublished American diplomatic cables dating back to 1996.

The cables, obtained by WikiLeaks and reviewed by Reuters, provide remarkable insight into how much the vast royal welfare program has cost the country — not just financially but in terms of undermining social cohesion.

Besides the huge monthly stipends that every Saudi royal receives, the cables detail various money-making schemes some royals have used to finance their lavish lifestyles over the years. Among them: siphoning off money from “off-budget” programs controlled by senior princes, sponsoring expatriate workers who then pay a small monthly fee to their royal patron and, simply, “borrowing from the banks, and not paying them back.”

As long ago as 1996, U.S. officials noted that such unrestrained behavior could fuel a backlash against the Saudi elite. In the assessment of the U.S. embassy in Riyadh in a cable from that year, “of the priority issues the country faces, getting a grip on royal family excesses is at the top.”

A 2007 cable showed that King Abdullah has made changes since taking the throne six years ago, but recent turmoil in the Middle East underlines the deep-seated resentment about economic disparities and corruption in the region.

A Saudi government spokesman contacted by Reuters declined to comment.

MONTHLY CHEQUES

The November 1996 cable — entitled “Saudi Royal Wealth: Where do they get all that money?” — provides an extraordinarily detailed picture of how the royal patronage system works. It’s the sort of overview that would have been useful required reading for years in the U.S. State department.

It begins with a line that could come from a fairytale: “Saudi princes and princesses, of whom there are thousands, are known for the stories of their fabulous wealth — and tendency to squander it.”

The most common mechanism for distributing Saudi Arabia’s wealth to the royal family is the formal, budgeted system of monthly stipends that members of the Al Saud family receive, according to the cable. Managed by the Ministry of Finance’s “Office of Decisions and Rules,” which acts like a kind of welfare office for Saudi royalty, the royal stipends in the mid-1990s ran from about $800 a month for “the lowliest member of the most remote branch of the family” to $200,000-$270,000 a month for one of the surviving sons of Abdul-Aziz Ibn Saud, the founder of modern Saudi Arabia.

Grandchildren received around $27,000 a month, “according to one contact familiar with the stipends” system, the cable says. Great-grandchildren received about $13,000 and great-great- grandchildren $8,000 a month.

“Bonus payments are available for marriage and palace building,” according to the cable, which estimates that the system cost the country, which had an annual budget of $40 billion at the time, some $2 billion a year.

“The stipends also provide a substantial incentive for royals to procreate since the stipends begin at birth.”

After a visit to the Office of Decisions and Rules, which was in an old building in Riyadh’s banking district, the U.S. embassy’s economics officer described a place “bustling with servants picking up cash for their masters.” The office distributed the monthly stipends — not just to royals but to “other families and individuals granted monthly stipends in perpetuity.” It also fulfilled “financial promises made by senior princes.”

The head of the office at the time, Abdul-Aziz al-Shubayli, told the economics officer that an important part of his job “at least in today’s more fiscally disciplined environment, is to play the role of bad cop.” He “rudely grilled a nearly blind old man about why an eye operation promised by a prince and confirmed by royal Diwan note had to be conducted overseas and not for free in one of the first-class eye hospitals in the kingdom.” After finally signing off on a trip, Shubayli noted that he himself had been in the United States twice for medical treatment, once for a chronic ulcer and once for carpal tunnel syndrome. “He chuckled, suggesting that both were probably job-induced.”

FOLLOWING THE MONEY

But the stipend system was clearly not enough for many royals, who used a range of other ways to make money, “not counting business activities.”

“By far the largest is likely royal skimming from the approximately $10 billion in annual off-budget spending controlled by a few key princes,” the 1996 cable states. Two of those projects — the Two Holy Mosques Project and the Ministry of Defense’s Strategic Storage Project — are “highly secretive, subject to no Ministry of Finance oversight or controls, transacted through the National Commercial Bank, and widely believed to be a source of substantial revenues” for the then-King and a few of his full brothers, according to the authors of the cable.

In a meeting with the U.S. ambassador at the time, one Saudi prince, alluding to the off-budget programs, “lamented the travesty that revenues from ‘one million barrels of oil per day’ go entirely to ‘five or six princes,’” according to the cable, which quoted the prince.

Then there was the apparently common practice for royals to borrow money from commercial banks and simply not repay their loans. As a result, the 12 commercial banks in the country were “generally leary of lending to royals.”

The managing director of another bank in the kingdom told the ambassador that he divided royals into four tiers, according to the cable. The top tier was the most senior princes who, perhaps because they were so wealthy, never asked for loans. The second tier included senior princes who regularly asked for loans. “The bank insists that such loans be 100 percent collateralized by deposits in other accounts at the bank,” the cable reports. The third tier included thousands of princes the bank refused to lend to. The fourth tier, “not really royals, are what this banker calls the ‘hangers on’.”

Another popular money-making scheme saw some “greedy princes” expropriate land from commoners. “Generally, the intent is to resell quickly at huge markup to the government for an upcoming project.” By the mid-1990s, a government program to grant land to commoners had dwindled. “Against this backdrop, royal land scams increasingly have become a point of public contention.”

The cable cites a banker who claimed to have a copy of “written instructions” from one powerful royal that ordered local authorities in the Mecca area to transfer to his name a “Waqf” — religious endowment — of a small parcel of land that had been in the hands of one family for centuries. “The banker noted that it was the brazenness of the letter … that was particularly egregious.”

Another senior royal was famous for “throwing fences up around vast stretches of government land.”

The confiscation of land extends to businesses as well, the cable notes. A prominent and wealthy Saudi businessman told the embassy that one reason rich Saudis keep so much money outside the country was to lessen the risk of ‘royal expropriation.’”

Finally, royals kept the money flowing by sponsoring the residence permits of foreign workers and then requiring them to pay a monthly “fee” of between $30 and $150. “It is common for a prince to sponsor a hundred or more foreigners,” the 1996 cable says.

BIG SPENDERS

The U.S. diplomats behind the cable note wryly that despite all the money that has been given to Saudi royals over the years there is not “a significant number of super-rich princes … In the end,” the cable states, Saudi’s “royals still seem more adept at squandering than accumulating wealth.”

But the authors of the cable also warned that all that money and excess was undermining the legitimacy of the ruling family. By 1996, there was “broad sentiment that royal greed has gone beyond the bounds of reason”. Still, as long as the “royal family views this country as ‘Al Saud Inc.’ ever increasing numbers of princes and princesses will see it as their birthright to receive lavish dividend payments, and dip into the till from time to time, by sheer virtue of company ownership.”

In the years that followed that remarkable assessment of Saudi royalty, there were some official efforts toward reform — driven in the late 1990s and early 2000s in particular by an oil price between $10-20 a barrel. But the real push for reform began in 2005, when King Abdullah succeeded to the throne, and even then change came slowly.

By February 2007, according to a second cable entitled “Crown Prince Sultan backs the King in family disputes”, the reforms were beginning to bite. “By far the most widespread source of discontent in the ruling family is the King’s curtailment of their privileges,” the cable says. “King Abdullah has reportedly told his brothers that he is over 80 years old and does not wish to approach his judgment day with the ‘burden of corruption on my shoulder.’”

The King, the cable states, had disconnected the cellphone service for “thousands of princes and princesses.” Year-round government-paid hotel suites in Jeddah had been canceled, as was the right of royals to request unlimited free tickets from the state airline. “We have a first-hand account that a wife of Interior minister Prince Naif attempted to board a Saudia flight with 12 companions, all expecting to travel for free,” the authors of the cables write, only to be told “to her outrage” that the new rules meant she could only take two free guests.

Others were also angered by the rules. Prince Mishal bin Majid bin Abdulaziz had taken to driving between Jeddah and Riyadh “to show his annoyance” at the reforms, according to the cable.

Abdullah had also reigned in the practice of issuing “block visas” to foreign workers “and thus cut the income of many junior princes” as well as dramatically reducing “the practice of transferring public lands to favored individuals.”

The U.S. cable reports that all those reforms had fueled tensions within the ruling family to the point where Interior Minister Prince Naif and Riyadh Governor Prince Salman had “sought to openly confront the King over reducing royal entitlements.”

But according to “well established sources with first hand access to this information,” Crown Prince Sultan stood by Abdullah and told his brothers “that challenging the King was a ‘red line’ that he would not cross.” Sultan, the cable says, has also followed the King’s lead and turned down requests for land transfers.

The cable comments that Sultan, longtime defense minister and now also Crown Prince, seemed to value family unity and stability above all.

(Editing by Jim Impoco, Claudia Parsons and Sara Ledwith)

But some of the biggest handouts over the past two decades have gone to his own extended family, according to unpublished American diplomatic cables dating back to 1996.

The cables, obtained by WikiLeaks and reviewed by Reuters, provide remarkable insight into how much the vast royal welfare program has cost the country — not just financially but in terms of undermining social cohesion.

Besides the huge monthly stipends that every Saudi royal receives, the cables detail various money-making schemes some royals have used to finance their lavish lifestyles over the years. Among them: siphoning off money from “off-budget” programmes controlled by senior princes, sponsoring expatriate workers who then pay a small monthly fee to their royal patron and, simply, “borrowing from the banks, and not paying them back.”

As long ago as 1996, U.S. officials noted that such unrestrained behaviour could fuel a backlash against the Saudi elite. In the assessment of the U.S. embassy in Riyadh in a cable from that year, “of the priority issues the country faces, getting a grip on royal family excesses is at the top.”

A 2007 cable showed that King Abdullah has made changes since taking the throne six years ago, but recent turmoil in the Middle East underlines the deep-seated resentment about economic disparities and corruption in the region.

A Saudi government spokesman contacted by Reuters declined to comment.

MONTHLY CHEQUES

The November 1996 cable — entitled “Saudi Royal Wealth: Where do they get all that money?” — provides an extraordinarily detailed picture of how the royal patronage system works. It’s the sort of overview that would have been useful required reading for years in the U.S. State department.

It begins with a line that could come from a fairytale: “Saudi princes and princesses, of whom there are thousands, are known for the stories of their fabulous wealth — and tendency to squander it.”

The most common mechanism for distributing Saudi Arabia’s wealth to the royal family is the formal, budgeted system of monthly stipends that members of the Al Saud family receive, according to the cable. Managed by the Ministry of Finance’s “Office of Decisions and Rules”, which acts like a kind of welfare office for Saudi royalty, the royal stipends in the mid-1990s ran from about $800 a month for “the lowliest member of the most remote branch of the family” to $200,000-$270,000 a month for one of the surviving sons of Abdul-Aziz Ibn Saud, the founder of modern Saudi Arabia.

Grandchildren received around $27,000 a month, “according to one contact familiar with the stipends” system, the cable says. Great-grandchildren received about $13,000 and great-great- grandchildren $8,000 a month.

“Bonus payments are available for marriage and palace building,” according to the cable, which estimates that the system cost the country, which had an annual budget of $40 billion at the time, some $2 billion a year.

“The stipends also provide a substantial incentive for royals to procreate since the stipends begin at birth.”

After a visit to the Office of Decisions and Rules, which was in an old building in Riyadh’s banking district, the U.S. embassy’s economics officer described a place “bustling with servants picking up cash for their masters”. The office distributed the monthly stipends — not just to royals but to “other families and individuals granted monthly stipends in perpetuity”. It also fulfilled “financial promises made by senior princes”.

The head of the office at the time, Abdul-Aziz al-Shubayli, told the economics officer that an important part of his job “at least in today’s more fiscally disciplined environment, is to play the role of bad cop”. He “rudely grilled a nearly blind old man about why an eye operation promised by a prince and confirmed by royal Diwan note had to be conducted overseas and not for free in one of the first-class eye hospitals in the kingdom.” After finally signing off on a trip, Shubayli noted that he himself had been in the United States twice for medical treatment, once for a chronic ulcer and once for carpal tunnel syndrome. “He chuckled, suggesting that both were probably job-induced.”

FOLLOWING THE MONEY

But the stipend system was clearly not enough for many royals, who used a range of other ways to make money, “not counting business activities”.

“By far the largest is likely royal skimming from the approximately $10 billion in annual off-budget spending controlled by a few key princes,” the 1996 cable states. Two of those projects — the Two Holy Mosques Project and the Ministry of Defence’s Strategic Storage Project — are “highly secretive, subject to no Ministry of Finance oversight or controls, transacted through the National Commercial Bank, and widely believed to be a source of substantial revenues” for the then-King and a few of his full brothers, according to the authors of the cable.

In a meeting with the U.S. ambassador at the time, one Saudi prince, alluding to the off-budget programs, “lamented the travesty that revenues from ‘one million barrels of oil per day’ go entirely to ‘five or six princes,’” according to the cable, which quoted the prince.

Then there was the apparently common practice for royals to borrow money from commercial banks and simply not repay their loans. As a result, the 12 commercial banks in the country were “generally leery of lending to royals.”

The managing director of another bank in the kingdom told the ambassador that he divided royals into four tiers, according to the cable. The top tier was the most senior princes who, perhaps because they were so wealthy, never asked for loans. The second tier included senior princes who regularly asked for loans. “The bank insists that such loans be 100 percent collateralised by deposits in other accounts at the bank,” the cable reports. The third tier included thousands of princes the bank refused to lend to. The fourth tier, “not really royals, are what this banker calls the ‘hangers on’.”

Another popular money-making scheme saw some “greedy princes” expropriate land from commoners. “Generally, the intent is to resell quickly at huge markup to the government for an upcoming project.” By the mid-1990s, a government programme to grant land to commoners had dwindled. “Against this backdrop, royal land scams increasingly have become a point of public contention.”

The cable cites a banker who claimed to have a copy of “written instructions” from one powerful royal that ordered local authorities in the Mecca area to transfer to his name a “Waqf” — religious endowment — of a small parcel of land that had been in the hands of one family for centuries. “The banker noted that it was the brazenness of the letter … that was particularly egregious.”

Another senior royal was famous for “throwing fences up around vast stretches of government land.”

The confiscation of land extends to businesses as well, the cable notes. A prominent and wealthy Saudi businessman told the embassy that one reason rich Saudis keep so much money outside the country was to lessen the risk of ‘royal expropriation.’”

Finally, royals kept the money flowing by sponsoring the residence permits of foreign workers and then requiring them to pay a monthly “fee” of between $30 and $150. “It is common for a prince to sponsor a hundred or more foreigners,” the 1996 cable says.

BIG SPENDERS

The U.S. diplomats behind the cable note wryly that despite all the money that has been given to Saudi royals over the years there is not “a significant number of super-rich princes … In the end,” the cable states, Saudi’s “royals still seem more adept at squandering than accumulating wealth.”

But the authors of the cable also warned that all that money and excess was undermining the legitimacy of the ruling family. By 1996, there was “broad sentiment that royal greed has gone beyond the bounds of reason”. Still, as long as the “royal family views this country as ‘Al Saud Inc.’ ever increasing numbers of princes and princesses will see it as their birthright to receive lavish dividend payments, and dip into the till from time to time, by sheer virtue of company ownership.”

In the years that followed that remarkable assessment of Saudi royalty, there were some official efforts towards reform — driven in the late 1990s and early 2000s in particular by an oil price between $10-20 a barrel. But the real push for reform began in 2005, when King Abdullah succeeded to the throne, and even then change came slowly.

By February 2007, according to a second cable entitled “Crown Prince Sultan backs the King in family disputes”, the reforms were beginning to bite. “By far the most widespread source of discontent in the ruling family is the King’s curtailment of their privileges,” the cable says. “King Abdullah has reportedly told his brothers that he is over 80 years old and does not wish to approach his judgement day with the ‘burden of corruption on my shoulder.’”

The King, the cable states, had disconnected the cellphone service for “thousands of princes and princesses.” Year-round government-paid hotel suites in Jeddah had been cancelled, as was the right of royals to request unlimited free tickets from the state airline. “We have a first-hand account that a wife of Interior minister Prince Naif attempted to board a Saudia flight with 12 companions, all expecting to travel for free,” the authors of the cables write, only to be told “to her outrage” that the new rules meant she could only take two free guests.

Others were also angered by the rules. Prince Mishal bin Majid bin Abdulaziz had taken to driving between Jeddah and Riyadh “to show his annoyance” at the reforms, according to the cable.

Abdullah had also reigned in the practice of issuing “block visas” to foreign workers “and thus cut the income of many junior princes” as well as dramatically reducing “the practice of transferring public lands to favoured individuals.”

The U.S. cable reports that all those reforms had fuelled tensions within the ruling family to the point where Interior Minister Prince Naif and Riyadh Governor Prince Salman had “sought to openly confront the King over reducing royal entitlements.”

But according to “well established sources with first hand access to this information,” Crown Prince Sultan stood by Abdullah and told his brothers “that challenging the King was a ‘red line’ that he would not cross.” Sultan, the cable says, has also followed the King’s lead and turned down requests for land transfers.

The cable comments that Sultan, longtime defence minister and now also Crown Prince, seemed to value family unity and stability above all.

(Editing by Jim Impoco, Claudia Parsons and Sara Ledwith)

But some of the biggest handouts over the past two decades
have gone to his own extended family, according to unpublished
American diplomatic cables dating back to 1996.

The cables, obtained by WikiLeaks and reviewed by Reuters,
provide remarkable insight into how much the vast royal welfare
program has cost the country — not just financially but in
terms of undermining social cohesion.

Besides the huge monthly stipends that every Saudi royal
receives, the cables detail various money-making schemes some
royals have used to finance their lavish lifestyles over the
years. Among them: siphoning off money from “off-budget”
programmes controlled by senior princes, sponsoring expatriate
workers who then pay a small monthly fee to their royal patron
and, simply, “borrowing from the banks, and not paying them
back.”

As long ago as 1996, U.S. officials noted that such
unrestrained behaviour could fuel a backlash against the Saudi
elite. In the assessment of the U.S. embassy in Riyadh in a
cable from that year, “of the priority issues the country faces,
getting a grip on royal family excesses is at the top.”

A 2007 cable showed that King Abdullah has made changes
since taking the throne six years ago, but recent turmoil in the
Middle East underlines the deep-seated resentment about economic
disparities and corruption in the region.

A Saudi government spokesman contacted by Reuters declined
to comment.

MONTHLY CHEQUES

The November 1996 cable — entitled “Saudi Royal Wealth:
Where do they get all that money?” — provides an
extraordinarily detailed picture of how the royal patronage
system works. It’s the sort of overview that would have been
useful required reading for years in the U.S. State department.

It begins with a line that could come from a fairytale:
“Saudi princes and princesses, of whom there are thousands, are
known for the stories of their fabulous wealth — and tendency
to squander it.”

The most common mechanism for distributing Saudi Arabia’s
wealth to the royal family is the formal, budgeted system of
monthly stipends that members of the Al Saud family receive,
according to the cable. Managed by the Ministry of Finance’s
“Office of Decisions and Rules”, which acts like a kind of
welfare office for Saudi royalty, the royal stipends in the
mid-1990s ran from about $800 a month for “the lowliest member
of the most remote branch of the family” to $200,000-$270,000 a
month for one of the surviving sons of Abdul-Aziz Ibn Saud, the
founder of modern Saudi Arabia.

Grandchildren received around $27,000 a month, “according to
one contact familiar with the stipends” system, the cable says.
Great-grandchildren received about $13,000 and great-great-
grandchildren $8,000 a month.

“Bonus payments are available for marriage and palace
building,” according to the cable, which estimates that the
system cost the country, which had an annual budget of $40
billion at the time, some $2 billion a year.

“The stipends also provide a substantial incentive for
royals to procreate since the stipends begin at birth.”

After a visit to the Office of Decisions and Rules, which
was in an old building in Riyadh’s banking district, the U.S.
embassy’s economics officer described a place “bustling with
servants picking up cash for their masters”. The office
distributed the monthly stipends — not just to royals but to
“other families and individuals granted monthly stipends in
perpetuity”. It also fulfilled “financial promises made by
senior princes”.

The head of the office at the time, Abdul-Aziz al-Shubayli,
told the economics officer that an important part of his job “at
least in today’s more fiscally disciplined environment, is to
play the role of bad cop”. He “rudely grilled a nearly blind old
man about why an eye operation promised by a prince and
confirmed by royal Diwan note had to be conducted overseas and
not for free in one of the first-class eye hospitals in the
kingdom.” After finally signing off on a trip, Shubayli noted
that he himself had been in the United States twice for medical
treatment, once for a chronic ulcer and once for carpal tunnel
syndrome. “He chuckled, suggesting that both were probably
job-induced.”

FOLLOWING THE MONEY

But the stipend system was clearly not enough for many
royals, who used a range of other ways to make money, “not
counting business activities”.

“By far the largest is likely royal skimming from the
approximately $10 billion in annual off-budget spending
controlled by a few key princes,” the 1996 cable states. Two of
those projects — the Two Holy Mosques Project and the Ministry
of Defence’s Strategic Storage Project — are “highly secretive,
subject to no Ministry of Finance oversight or controls,
transacted through the National Commercial Bank, and widely
believed to be a source of substantial revenues” for the
then-King and a few of his full brothers, according to the
authors of the cable.