Date: Tuesday, 06 February 2018
The views expressed in this article are the author’s own and do not necessarily reflect the views of the U.S. government.
The young, brash, and inexperienced Saudi Crown Prince Mohammad bin Salman (MbS) spent 2017 breaking long-standing Saudi traditions in both domestic and foreign policies. Supporters have heralded these moves as necessary to the future of the Kingdom, while critics have chided them as threatening to regional stability. American experts are divided as to whether these are developments to cheer or fear, but Bruce Riedel at Brookings expressed the concerns of many succinctly: “The kingdom is at a crossroads. . . . Its economy has flatlined with low oil prices; the war in Yemen is a quagmire; the blockade of Qatar is a failure; Iranian influence is rampant in Lebanon, Syria and Iraq; and the succession is question mark. It is the most volatile period in Saudi history in over a half-century.”
How should U.S. policymakers take the measure of this untested leader in Riyadh at a time of such tremendous uncertainty and in a region increasingly torn by violence? This critical question will occupy the Trump administration in 2018 as it attempts to operationalize its recently published National Security Strategy and National Defense Strategy in the Middle East.
The Kingdom is in desperate need of economic and social reforms if it is to survive and thrive in the 21st century. Unemployment in Saudi Arabia has recently risen to nearly 13%, while youth unemployment is expected to rise above 40% by 2030. Despite its obvious oil wealth, some estimates suggest that nearly one quarter of the Saudi population lives in relative poverty. Moreover, the IMF recently estimated that overall GDP growth in the near term will be “close to zero.”
Meanwhile, years of low oil prices have compelled the Saudi leadership to spend down its substantial foreign reserves at an alarming rate to cover annual deficit spending. Without a substantial change in the oil market, these reserves estimated at slightly less than $500 billion can only provide the Kingdom a limited fiscal buffer of five years or so. It is this narrow window before economic calamity strikes that has invested so much urgency into Prince Mohammad’s drive to implement major economic reforms. Indeed, his Vision 2030 outlines a bold plan to reduce domestic spending on social subsidies, diversify the Saudi economy away from its heavy dependence on oil income, and modernize public sector services including health, education, infrastructure, and tourism.
Such an economic transformation, however, is also dependent on social transformations in Saudi Arabia’s traditionally conservative society. Here, too, MbS has taken important, if preliminary, steps. Most importantly, he has pledged to return the Kingdom to a “moderate, balanced Islam that is open to the world and to all religions and all traditions and peoples.” He has backed this pledge by arresting dozens of hardline clerics and curbing the arrest power of the religious police. He has also moved to loosen societal restrictions on women by allowing them to drive and attend sporting events, while improving their access to government services and expanding opportunities for women in the workplace. Harnessing the contributions of women will be critical to boosting the Kingdom’s economic output in a post-oil world.
It is in this broader economic and social context that the recent roundup of Saudi top ministers and other members of the royal elite should be viewed. In November 2017, Saudi authorities announced the arrest and freezing of the financial assets of dozens of top ministers and other members of the ruling family elite previously thought untouchable. Freezing the assets of these citizens could net the government as much as $800 billion which would provide MbS with additional time and resources to pursue his audacious reform agenda. Moreover, these arrests are a clear signal to the Saudi youth who comprise nearly half of the population that corruption by the sprawling royal family will no longer be tolerated. This crackdown might make economic reforms, such as ending subsides, more tolerable to the general population.
At least some regional experts are optimistic about prospects for success. The CIA’s former senior intelligence officer for Iran emphasized the good news associated with the recent shake-up in Saudi leadership noting that, having marginalized potential critics, MbS is now in a stronger domestic position to “push ahead with aggressive reforms.” Meanwhile, New York Times columnist Thomas Friedman hailed the reforms advocated by MbS as the emergence of a new “Arab Spring” in Saudi Arabia. Additionally, two scholars who study anti-corruption campaigns in authoritarian states suggest that MbS could follow in the path of Chinese President Xi Jinping by effectively exploiting unchecked power at home to successfully enact economic reforms.
Nonetheless, Western policymakers should be cautioned about placing too much confidence in the ability of MbS to implement quickly such wide-ranging social and economic reforms. First and foremost, academic studies indicate that very few countries heavily dependent on energy exports have ever successfully achieved meaningful economic diversification. Moreover, in the Saudi context, his ambitious social reform agenda will undoubtedly encounter strong domestic resistance from a number of quarters: the conservative Wahhabi clerics who are essential to the political and religious legitimacy of the Saudi family; a religiously conservative population resistant to change; and from members of the royal family itself who have been targeted by his anti-corruption campaign. The 1979 Iranian revolution is a cautionary tale for any monarch attempting to drive an ambitious modernization program without substantial buy-in from the public. Pushing too hard and too fast risks a dangerous backlash.
While pursing these controversial domestic economic and social reforms at home, Crown Prince Mohammad has adopted aggressive foreign policies abroad that have been both costly to the Kingdom itself and threaten to further destabilize the region. As Defense Minister, MbS initiated an unwinnable war in Yemen that has drained the Saudi treasury of billions, created the world’s worst humanitarian crisis placing millions at risk, and provided Iran with yet another opportunity to strengthen its relations with local opposition groups such as the Houthis. Extensive U.S. military support to these operations has made America complicit in this humanitarian nightmare.
Weeks after President Trump’s May 2017 visit to the Kingdom, MbS initiated a Saudi-led blockade of Qatar that has been wholly ineffective. This futile effort has ripped apart the Arab Gulf Cooperation Council and provided unexpected opportunities for outside non-Arab actors, including Iran and Turkey, to increase their regional influence. Moreover, such a split among Arab GCC partners is a major setback for U.S. interests and could potentially disrupt ongoing and future U.S. military operations in region. Qatar hosts an important U.S. airbase and the forward headquarters of both U.S. Special Operation Central Command and U.S. Air Forces Central Command—all of which have been critical to U.S. operations against the Islamic State in Syria and Iraq. There is also an important forward positioning facility in Qatar that houses U.S. military equipment that was key to enabling the military campaign in Iraq in 2003 and would be essential to any future large-scale U.S. ground combat operations.
MbS has also increased the prospects for the collapse of an already tenuous sectarian balance in Lebanon by allegedly forcing the resignation of pro-Western Sunni Prime Minister Saad Hariri in early November during a visit to Riyadh. This incident threatens to destabilize Lebanon at the very time Beirut is struggling to accommodate millions of Syrian refugees (one third of Lebanon’s population), while prospects grow for Israeli military confrontation with Hezbollah.
A sensible U.S. strategy going forward should aim at developing an institutionalized and trusted relationship with the young Crown Prince who is likely to become the next King for the coming decades. The U.S. should create a team of experienced U.S. diplomats, economists, and private business leaders to support his plans for economic reforms even as they temper expectations for rapid progress. This effort should be coupled with advisors from academia and non-governmental organizations tasked with outlining a parallel program of internal political reforms that will strengthen Saudi civil society and provide Saudis themselves a greater stake and say in shaping the detailed policies associated with these reforms.
At the same time, senior U.S. military and civilian defense officials should take the lead in working with MbS to curb his disturbing tendency to overreact and view events as a zero-sum competition with Iran. An expanded U.S. military assistance program specifically tailored to address Saudi concerns in the wake of the Iran nuclear deal, such as bolstering Saudi missile defense capabilities, could reassure MbS that the U.S. remains a dependable ally. These defense officials should also encourage MbS to de-escalate his unproductive war in Yemen and end his counterproductive blockade of Qatar, as the chaos and divisions being created are providing Iran more opportunities—not fewer—to expand Tehran’s regional influence. Defense and State Department officials alike should encourage Saudi support to an upcoming international conference on reconstruction in Iraq as a means both of easing regional sectarian tensions and preventing the emergence of another ISIS-like extremist group.
Finally, given their close personal relationships with the Crown Prince, President Trump and Jared Kushner can send a convincing and private message that Saudi Arabia will have American backing for his ambitious domestic reforms as long as his foreign policies don’t endanger regional stability and put larger U.S. security interests at risk. This is a deal that both Riyadh and Washington should welcome.