The Cradle
The kingdom’s tough choices: between MbS and a hard place
If Saudi Arabia does not choose between sweeping internal reforms or an ambitious external agenda, its ruling dynasty may be in peril. Riyadh's dwindling resources cannot sustain both.
By Ziad Hafez
November 04 2021
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Knee deep in regional turmoil and facing economic austerity, Saudi Arabia seeks to maintain its hegemonic role in West Asia

Photo Credit: The Cradle

In 2016, the Arab National Conference made the assessment that Saudi Arabia would be facing a future of hard choices due to their fast-changing policies and positions. Events have since proved them right. Riyadh today faces tough decisions on the future orientation of its domestic and foreign policies – some of which could affect the very existence of the ruling dynasty and its line of succession established almost a century ago.

Domestically, two crucial changes made recently could weaken the foundations on which Saudi Arabia was built.

One of these changes relates to the line of succession, which has traditionally been bestowed through the sons of the founding monarch, Abdulaziz bin Abdul Rahman Al Saud. The succession allows only for the sons of this first king, all brothers and half-brothers, to accede to the throne in line with seniority, from eldest to youngest. The sons of these brothers are not successors to the throne.

This system has provided stability by avoiding rivalries among factions and the innate propensity for establishing lineage. However, the current King Salman bin Abdulaziz Al Saud, who succeeded to the throne via those founding principles, has effectively broken the rules by appointing his son Mohammad bin Salman (MbS) as crown prince, and thus establishing his own successive lineage.

To be fair, the old system has become increasingly difficult to implement as the second generation of princes is vanishing by attrition. As one may expect, this new appointment of King Salman’s son never sat well with the few remaining sons of the founding monarch.

However, MbS has managed to secure the endorsement of younger princes, and has consolidated his grip on power by systematically eliminating all those loyal to the former, now deposed, crown prince Mohammed Bin Nayef.

The second crucial change was implemented by MbS, when he chose to curb the influence of the clerical class who challenged his attempts to modernize the kingdom.

The firm grip of MbS on institutions that implement the observance of the Sharia, as defined by the clerical class, has allowed him to control the degree of social and cultural austerity that plagues Saudi society.

More pointedly, MbS issued a decree banning flogging in public, a significant landmark in interpreting penal rulings traditionally upheld in the kingdom. That ruling is likely to have far-reaching consequences in Islamic jurisprudence, already being addressed by scholars.

Antagonizing the clerical class may have strong support among the youth, especially those under 24 years of age who represent 51 percent of the total Saudi population of 35 million. However, the conservative nature of the population may balk at the speed of forced change.

The government is taking a big risk by undertaking difficult social and cultural reforms in a period of economic austerity. Damaging its alliance with the clerical class without having taken the time to establish a loyal middle class is akin to placing the cart before the horse.

MbS has managed to win several battles, such as granting women the right to drive, legalizing movie theaters, authorizing public, mixed-gender concerts, and creating touristic resorts on the Red Sea.

The crown prince has also cracked down on corruption and cronyism, by forcing princes of all ranks, businessmen, and others who have enriched themselves at the expense of the state, to return ‘illegitimately gained’ funds.

MbS’s most ambitious plan for the kingdom, however, is the construction of the city of Neom, touted as the future hub of technological innovation in the region. He also aims to reduce the kingdom’s dependence on oil. However, the economic infrastructure for such a shift is not in place, and will require a much longer time, and significant resources, to complete.

The question is, can these reforms continue if MbS’s economic policies do not provide the universal welfare state that the population has long enjoyed?

Saudi Arabia, by numbers

The kingdom enjoys the highest Gross Domestic Product (GDP) of 1.9 trillion US dollars in the region on a purchasing power parity  basis. Inflation was a moderate five percent in 2019. The per capita income is among the twelfth highest in the world at US$ 56,000. Income inequality is moderate with a Gini coefficient index of 45.9 (the lower the lever, the lower the inequality).

While there are some doubts about the accuracy of the index, it does, for all intents and purposes, show some inequality even though the issue has not yet been at the forefront of local grievances.

There are no statistics on poverty, and the government does not allow attention to this issue. Protests are forbidden and the media is strictly controlled and regulated. Freedom of expression as well as the traditional freedoms enjoyed in developed societies are lacking. But, overall, the Human Development Index (HDI) for the kingdom is very high (0.854), positioning at 40 out of 189 countries and territories.

The Saudization of the work force has not achieved its goals of lowering the unemployment among the kingdom’s citizens and especially the youth.

Expatriates once constituted 90 percent of the workforce in the private sector, while Saudi nationals constituted the bulk of state employment. The private sector can absorb up to 600,000 workers, but the workforce entering the market is over 1.5 million.

The IMF has issued a report saying that the government cannot sustain a policy of absorbing the incoming workforce. In 2017, about 700,000 foreigners left Saudi Arabia because of high fees on expatriate workers, yet unemployment rose to 12.9 percent, though some estimates are much higher.

The Saudi domestic workforce lacks the necessary skills and willingness to learn and adapt to the standards required by private companies. The domestic population has grown sevenfold since 1960, but its resources do not match that growth. Saudis are facing the reality of oil reserves depletion, with no new fossil fuel discoveries in sight. Oil reserves in Yemen may have been one reason for Riyadh’s aggression against its southern neighbor, but the results have been disastrous for the Saudis on every level.

Riyadh’s ability to economically provide for the needs of its population is challenged by an unstable energy market and the erratic policies of the government.

For instance, at the height of the war on Yemen, the crown prince decided to pump more oil into the market, leading to diminished oil prices and therefore government revenues. Stabilizing the market meant dealing with Russia at the great displeasure of the United States.

Furthermore, the war on Yemen has significantly drained the kingdom’s coffers, necessitating the imposition of austerity measures. Resurging oil prices have provided a small cushion of foreign reserves estimated at 500 billion US dollars, which allow Saudi Arabia’s credit ratings to remain high.

Given its erratic financial stability, ambitious domestic economic plans are likely to be further delayed due to the disastrous Saudi decision to launch an unnecessary, treasury-draining war on Yemen. The expectations of achieving a decisive victory within weeks or months, thereby cementing MbS’s legitimacy and competence, proved to be tragically misplaced.

Riyadh is now contemplating a humiliating defeat that has already delivered a blow to the crown prince’s carefully crafted image. The expected fall of the city of Marib in Yemen is likely to seal the fate of the war in the coming few weeks.

War, insecurity, and a region in flux

This unanticipated outcome has led Saudi decision makers to revisit old policies and strategies, and to examine new ones. Most importantly, the ruling dynasty has to ensure its security.

For the last 76 years, that protection was ensured by the United States. In exchange for a steady supply of oil, Washington protected the Saudi dynasty from the turmoil in the region caused by the establishment of Israel, communism and left-wing activism, and later, the ascendence of rival political Islamism.

The Saudi wars on Syria and Yemen, as well the financing of jihadi movements against Iran and its regional allies, were a major departure from the traditional Saudi quiet diplomacy of bribing opponents and bankrolling intellectual mercenaries and media outlets.

In a surprising admission, MbS has acknowledged the exportation of Wahhabism to many parts of the world upon the request of western governments and in order to provoke sedition and dissent within the Muslim and Arab world. Does this mean that the kingdom will forego its policy of arming jihadists as it did in Afghanistan, Iraq, Syria, and Libya?

It may be too early to tell, but if MbS distances himself from the extremism of Wahhabism, then at some point, the past policy of arming jihadists will become a liability significant enough to threaten the dynasty. It may have already started to do so.

Saudis today want to know if US security continues to be reliable. The question remains at the center of the kingdom’s preoccupations.

For Washington, whatever use the kingdom might have once served to US foreign policy is today a subject of ‘introspection’ by the administration of President Joe Biden. Suddenly, ‘morality’ has become a factor in the alliance with the ruling Saudi family. The murder of the Saudi journalist Jamal Khashoggi seems to have made MbS unpalatable to President Biden, although not enough yet to curtail large weapons sales.

To date, no contact between President Biden and MbS has taken place. That trend started with US President Barack Obama but was flipped on its head during the administration of Donald Trump. Furthermore, the mood in the US Congress is getting significantly cooler toward the Saudi ruling dynasty in general, and MbS in particular.

The strategic weakness of the US at the domestic level as well as the erosion of its once military, economic and financial global dominance means it is no longer able to honor its defense commitments to its partners.

Riyadh has sensed this change, especially in the aftermath of the chaotic US withdrawal from Afghanistan, with little or no notice provided to even its NATO allies.

The 2020 electoral defeat of Donald Trump was a further setback to the crown prince and his regional aspirations. Suddenly left without protection guarantees, MbS was forced to reassess both his alliances and enmities.

New friends, old foes, or just leave it to geography?

Engagement with Iran under the sponsorship of Iraqi Prime Minister Mustafa al-Kadhimi was one outcome of his recalibration. While it is too early to say whether the talks will succeed, echoes from Iran seem positive, whereas Riyadh remains circumspect.

Saudi King Salman’s declaration of the need to have good relations with neighboring countries is a notch significantly below the warmer term ‘brotherly,’ but still, a softer stance than in previous declarations. The rivalry for the leadership of the Islamic world is still very much in play.

Discussions with Tehran undoubtedly involve the war on Yemen. So far, Riyadh is still not willing to concede defeat, and developments on the ground show it is still putting up a fight. If Marib falls – an almost certainty – the game will be over. What face-saving deal could be arranged is not clear at this stage.

Will the Iranians show some leeway? Will the Houthis, formerly allied to the House of Saud during the heyday of Arab nationalism, be accommodating? The issue is no longer what kind of control the kingdom may retain in Yemen but what kind of relations will emerge.

Geography will have its say and force an accommodation of some sort as the kingdom cannot ignore the strategic position of Yemen at the entrance of the Red Sea – nor can Yemen ignore the larger neighbor it has on its northern and eastern borders.

In terms of armaments, the kingdom has started discussions with the Chinese and the Russians, a turn of events not appreciated in Washington. The impending defeat in Yemen is also a stain on the performance of US defense weaponry that could not prevent or repel the rocket attacks on oil fields in the kingdom.

The cheaper and more efficient Russian and Chinese arms systems have suddenly become more attractive to Riyadh. This does not necessarily mean a severance of ties with the US, but rather, a diversification of supply sources and an accompanying increase in Russian and Chinese influence. At this stage, the US cannot but stand helpless in this turn of events.

Such moves by the Saudi kingdom are likely to forge increased cooperation with the Eurasian block, and could result in Saudi Arabia joining Chinese President Xi Jinping’s Belt and Road Initiative (BRI).

Ultimately, the security of West Asia and the Persian Gulf cannot be maintained by the US or NATO, but by the regional powers in ascendence. The Shanghai Cooperation Organization (SCO) is likely to increasingly take the lead role in all of Asia.

In September, Saudi Arabia’s main regional rival, Iran, fully joined the now nine-member SCO and Afghanistan is an observer nation. The Saudis will want to be part of this influential powerhouse, but should be reminded that Iran has the veto power to nix any new applicant.

The kingdom is also revisiting its position in Syria and Lebanon, although in opposite directions. In Syria, it is edging closer towards a resumption of relations with the government of President Bashar Assad, whereas in Lebanon it is aggressively pursuing an alliance with the right-wing Lebanese Forces (LF) and Arab tribes against the Lebanese resistance Hezbollah, President Michel Aoun, and Prime Minister Najib Mikati.

Hezbollah remains an extremely sore spot for Riyadh, and local Lebanese political parties traditionally allied to Riyadh do not have the clout or numbers to counter the group – which handily won the popular vote in the 2018 elections – despite the huge amounts of Saudi money made available to them.

In just the past few days, the Saudis have recalled their ambassador to Lebanon, sent the Lebanese envoy packing, barred imports from the Levantine state, and urged their Gulf allies – the UAE, Kuwait, Bahrain – to follow suit. Facing a humiliating loss in Yemen, MbS has turned his wrath on yet another weak Arab state. Some habits die hard.

The most critical issue for the stability of the region remains the Palestinian struggle with the Israeli occupation. Saudi Arabia has not hidden its hostility toward the Palestinian resistance; instead showing outright disdain by imprisoning leading members of Hamas who have lived in the kingdom for several decades.

However, despite a ‘Deal of the Century’ – that later morphed into the Abraham Accords – which other Gulf neighbors quickly signed onto, the Saudis have not yet taken the step towards normalization with Israel.

Strong resistance within the Saudi kingdom appears to have influenced the decision to avoid a step considered offensive to most Arabs and Muslims around the world. Repercussions could have been significant had the caretakers of Islam’s two holiest cities ‘normalized’ relations with Israel.

Given the inherent instability of the kingdom due to the changes promoted by MbS, the spectacular failure in Yemen, and the increasing strength of the Resistance Axis in the region, it is unlikely for Saudi Arabia to normalize with Israel any time soon. The question is, where do Riyadh and MbS go from here, as Saudi Arabia’s regional, domestic and international prospects diminish?

The views expressed in this article do not necessarily reflect those of The Cradle.