Saudi Arabia’s Crown Prince Mohammed bin Salman is an ambitious man. His plan to modernize the country, “Vision 2030,” combines long-stalled economic reforms with limited social modernization. He wants to diversify the economy and make Saudi Arabia the dominant power in the Persian Gulf and the Middle East. To accomplish both tasks, he must overcome powerful opposition at home and abroad.
Those plans took a step forward last weekend with a wave of arrests that shook the Saudi leadership. Officially, the crackdown is part of an anti-corruption campaign: At least 17 princes, current and former government ministers and business executives were taken into custody. The group included Prince Alwaleed bin Talal, one of Saudi Arabia’s wealthiest and best-known businessmen, a former finance minister and current director of Saudi Aramco, and Mutaib bin Abdullah, head of the National Guard, which provides security to the royal family.
While corruption is a problem for Saudi Arabia, Prince Mohammed’s real motivation appears to be the elimination of rivals and the consolidation of power before he becomes king. This campaign followed the arrest of Islamic dissidents and the removal of former Crown Prince Mohammed bin Nayef. Mohammed bin Salman is now head of the corruption “supreme committee,” controls all the country’s security services, and has replaced the minister of economy and planning, and the commander of Saudi Naval Forces.
Prince Mohammad then turned his attention beyond Saudi Arabia’s borders. Riyadh warned Iran this week that a missile fired from Yemen, which was intercepted by Saudi defenses, may have constituted an “act of war.” Tehran supports Houthi rebels in Yemen who deposed the government; the former government, backed by the Saudis, fights on. The conflict has descended into a stalemate that is draining both backers and resolving nothing, despite the deaths of more than 10,000 civilians.
That Saudi warning followed the resignation of Lebanese Prime Minister Saad Hariri, who stepped down Saturday during a visit to Saudi Arabia. Hariri claimed that Iran and Hezbollah were fomenting instability in the region and he quit because he was tired of being their puppet. The timing of the move, and Hariri’s denunciation of Hezbollah, the Iranian-backed militia and political organization that is part of the Damascus government, prompted speculation that Riyadh had forced him to resign, perhaps because his construction business had been ensnared in the anti-corruption campaign.
These bold moves are emblematic of Prince Mohammed’s style. He was behind the effort to isolate Qatar, a pointless endeavor that split the Gulf Cooperation Council, and exposed Riyadh as heavy-handed and the crown prince as hotheaded. The decision to intervene in Yemen has accomplished nothing except for raising questions about violations of international law during the fighting. Hariri’s resignation threatens to unravel the political balance of power in Lebanon, which is always fragile. Gridlock is likely; a descent into open conflict among the country’s factions is possible.
Prince Mohammed must now worry that his impulsiveness threatens his “vision for Saudi Arabia” by introducing uncertainty into the nation’s politics and foreign policy. In this environment, the arrest of the minister for economy and planning is precisely the sort of move that should be avoided.
Central to economic renewal is an initial public offering of a 5 percent holding in Aramco, the Saudi national oil company, reckoned to be worth as much as $100 billion. There has long been speculation that the company passed large sums of money to the royal family and the IPO will force more transparency on it. Whether it is enough to win over foreign investors is not clear, but the questions raised last weekend compound doubts about governance in the kingdom.
With unemployment in Saudi Arabia estimated to be a little more than 12 percent and the deficit running at 9.3 percent of GDP, Saudi Arabia needs an economic boost. Unfortunately, the International Monetary Fund projects non-oil growth of about 1.7 percent and a soft oil market. As a result, overall GDP growth will be “close to zero.” Serious reform has been delayed because the most important moves, such as lifting subsidies on fuel, are unpopular and mass mobilization is one of the government’s greatest fears.
Mohammed bin Salman is right to promote reform in Saudi Arabia, but his means are risky. The marginalization of other factions within the royal family and the consolidation of power will make him enemies and singularly responsible for any ill effects of his gambits, both domestic and foreign. His record is not encouraging; he and the world should brace for more bold strokes and the inevitable blowback.
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