Old divisions challenge the new Saudi Arabia

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Although it caused international surprise, the appointment of Mohammed bin Salman, 32, as the new Crown Prince of Saudi Arabia was a foregone conclusion.

Promoted to Deputy Crown Prince and Minister of Defence upon his father, Salman bin Abdulaziz Al Saud’s ascension to the throne, he was also made president of the Council of Economic and Development Affairs, and of Aramco, the world’s largest oil company.

This unprecedented concentration of power allowed him to profoundly disrupt the established order in the kingdom. The King’s favourite son has appointed his closest allies, young technocrats, with the highest responsibilities in the country. He is also the architect of the vast and ambitious national transformation plan, “Vision 2030”, designed to move Saudi away from reliance on oil.

He has skilfully negotiated a new alliance with Donald Trump, managing to bring the US President closely in line with the Kingdom’s diplomatic priorities: isolation of Iran and combatting jihadist movements, in exchange for more than $380 billion worth of contracts with American companies.

The US President has even encouraged a rapprochement with Israel that would only make sense for the country if it were to bring about an effective revival of the peace process and the establishment of a viable Palestinian State. This would be in keeping with Saudi ambition to be undisputed leader of the Sunni world.

At the regional level, MBS, as he is known, is the instigator of a costly war in Yemen, in both economic and humanitarian terms, where, as the head of the Arab coalition, he is facing strong resistance from the rebels supported by Iran.

At his side in the Yemeni conflict is Mohammed bin Zayed, Prince of Abu Dhabi, who has a similar outlook and has become his closest ally and partner. Abu Dhabi’s strong man is actively promoting MBS’s international standing, particularly in Moscow and Washington, where he has strong connections.

Taking advantage of the new dynamic with Washington, the two men, with the support of Egypt and Bahrain, have opened a new front against Qatar, which they accuse of destabilising the region by supporting Iran, the Muslim Brotherhood and terrorist groups. Deeply irritated by Qatar’s opportunism, interference and ties with their opponents, they are determined to isolate Qatar and force it to return to the ranks by calling off diplomatic relations and shutting down borders. This new crisis is likely to jeopardise the Gulf Cooperation Council (GCC), which has gained some credibility in recent years. It could, if it persists, lead to new fractures in the Sunni movement, particularly as a result of Turkey’s continued support for Qatar.

Over the past two very turbulent years, Mohammed bin Nayef, until now Crown Prince of Saudi Arabia, recognised and respected for his commitment to the fight against terrorism, has been in retreat, undermined by the hyper-activity of his young cousin, some of whose decisions he did not endorse. The appointment of MBS’s close allies to the intelligence services and the judiciary, Mohammed bin Nayef’s domains, highlighted the rivalry between the two men. Recently, he showed his colours when he remained silent over the Qatar crisis, which probably precipitated the succession shake-up that saw him removed from the line-up.

MBS, though, has to be careful: this regional instability poses a major challenge and may even put a halt to the economic and social reforms in his Vision 2030 plan. Supported by the youth, who represent more than 60% of the population, and the middle classes who appreciate this generational shift, his populism, and manner of governing, MBS is nevertheless all too aware he will be judged from within, on his ability to reform and modernise.

He’s already streamlining the welfare state and is intent on using funds from privatisations such as the sale of 5% of Aramco, to start amassing a huge sovereign wealth fund, of $2trn. In time, this fund will become the country’s main source of revenue. These share sales, along with the opening of the Riyadh stock exchange (Tadawul) to foreign investors, illustrate the clear slant of the new team in power.

Determined to breathe modernity into the Kingdom, MBS is committed to reducing the influence of conservative clerics in public life. He is increasing the participation of women in work and investing in the development of a leisure and culture industry.

Omnipresent and impulsive, he relies on political action and political risk to confront the conservative sections of Saudi society, and respond to the threats and challenges facing the Kingdom.

But he is now, more than ever, in a race against the clock. The population is eagerly looking forward to the emergence of this new Saudi Arabia that he is committed to building.

The economic situation remains worrying: youth unemployment is over 30%, the budget deficit remains high (almost 17% of GDP), foreign reserves are eroding (from $732 billion in 2014 to less than $500 billion in 2017), and the private sector, charged with being the engine of this new strategy and creating 400 000 jobs by 2020, remains feeble and largely dependent on public money.

To pull of MBS’s gamble, Saudi needs reliable allies, and technological and foreign investment. The Kingdom doesn’t risk running into debt, so long as the markets trust it.

Opportunities are real and many, but the country will also have to reassure investors about the growing turmoil in Yemen, rivalry with Iran, and more recently the crisis with Qatar.

Saudi’s allies, and the US and UK in particular, have a vested interest in encouraging and supporting the Kingdom in this approach through constructive mediation and working towards the success of diversification. America, which remains by far the most influential international player in the region, must no longer look at the Gulf countries as unshakeable, but engage more in resolving these crises rather than exploiting them. This is a major priority, if regional instability is not to threaten MBS’s visionary programme and more widely, global stability.

 

Article publié dans Reaction le 18 juillet 2017.