An underreported story that is finally getting some ink in the US mainstream press is the redirection of Saudi Arabia's oil wealth to new, dare I say progressive, ventures. Most pundits are racing to catch up with the latest intellectual fads by decrying the "oil curse" that few have time to contemplate how the latest oil boom might actually provide the conditions for a new positive direction in Saudi Arabia.

But that is what appears to be happening according to the dean of a Saudi women's college quoted in today's cover article in the New York Times:

Suhair el-Qurashi, dean of the private all-female Dar Al Hekma College, often attacked as "bad" and "liberal," said a vigorous example of free-thinking at the university would embolden the many Saudis who back the king's quest to reform long-stagnant higher education.

"The king knows he will face some backlash and bad publicity," Ms. Qurashi said. "I think the system is moving in the right direction."

The story describes the efforts of King Abdullah to build a modern, state-of-the-art graduate university that would open its doors to foreign students as well as Saudi nationals:

On a marshy peninsula 50 miles from this Red Sea port, King Abdullah of Saudi Arabia is staking $12.5 billion on a gargantuan bid to catch up with the West in science and technology. Between an oil refinery and the sea, the monarch is building from scratch a graduate research institution that will have one of the 10 largest endowments in the world, worth more than $10 billion.

Its planners say men and women will study side by side in an enclave walled off from the rest of Saudi society, the country's notorious religious police will be barred and all religious and ethnic groups will be welcome in a push for academic freedom and international collaboration sure to test the kingdom's cultural and religious limits.

This undertaking is directly at odds with the kingdom's religious establishment, which severely limits women's rights and rejects coeducation and robust liberal inquiry as unthinkable.

For the new institution, the king has cut his own education ministry out the loop, hiring the state-owned oil giant Saudi Aramco to build the campus, create its curriculum and attract foreigners.

Supporters of what is to be called the King Abdullah University of Science and Technology, or Kaust, wonder whether the king is simply building another gated island to be dominated by foreigners, like the compounds for oil industry workers that have existed here for decades, or creating an institution that will have a real impact on Saudi society and the rest of the Arab world.

"There are two Saudi Arabias," said Jamal Khashoggi, the editor of Al Watan, a newspaper. "The question is which Saudi Arabia will take over."

The king has broken taboos, declaring that the Arabs have fallen critically behind much of the modern world in intellectual achievement and that his country depends too much on oil and not enough on creating wealth through innovation.

Viewed in isolation, the story may read as a quaint anomaly -- a King trying to make a desert bloom, guided by the adage "If you build it, they will come".

But it is one data point in a series of micro-trends, a number of which I wrote about here, that includes fiscal and economic reform with accession into the WTO, heavy domestic investment in seven new economic cities to diversify the country's nodes of power, the allocation of one-third of government jobs to women (on national economy grounds), a creation of space for critical public dialogue on governance, and veiled challenges to the religious establishment to gradual move them back into their corner. These are not easy efforts and they come in baby steps.

Do not hold your breath for a modernization "takeoff" as Walt Rostow formulated, but the days of a seemingly inert Saudi government are over. A colleague of mine once remarked that most analysts look at Saudi Arabia like an economist lamenting a recession in Silicon Valley in 1995, just before the dot-com boom. Examining the past two years will reveal a subtle fact: Saudi Arabia is on the move.

--Sameer Lalwani