Major changes are never going without instability, conflict and possible crisis. Saudi Arabia’s dramatic change to diversify its economy away from an oil-based rentier state status is not going as smooth as expected.
The continuing delay of the Aramco IPO, the struggling gigaprojects commissioned by the sovereign wealth fund PIF, and changes to the social fabric, could be undermining the position of the Saudi Crown Prince Mohammed bin Salman. Conservatives and religious extremists could be heading for a showdown, if the implementation of Saudi Vision 2030 is showing weaknesses. Internal royal opposition still exists, but until now MBS has been partly saved by the full-support of his father, King Salman. Looking at the situation on the ground, a showdown is looming… is another Ritz Carlton in the making?
International criticism on the ongoing dramatic changes inside of the Kingdom has been growing. Western media sources seem to have picked MBS as one of their main targets, as negative articles about the impact of Saudi Vision and the ongoing discussion on human rights or religious freedoms are following each other up on a regular basis. This criticism is for a large part unfounded, as changes to Saudi Arabia’s social fabric and the position of the Wahhabi conservative clerics should not be underestimated, especially when looking from a Western perspective. Bringing the Kingdom into the 21st Century will not go without internal instability, setbacks and possible hiccups.
Changing a patriarchal royal conservative social fabric, mainly supported by a rentier state with a redistribution based economic system, is hard and painful. MBS will have to cope with external and internal opposition, while dealing with economic and financial challenges. To change a society from within is a major challenge for any leader, but looking at the Saudi situation, this is only possible by making (short-term) enemies on all sides.
The last couple of days, several major newspapers have reported about another perceived struggle inside of the Royal Family. Reports from media-outlets, such as Al Jazeera, Al Khaleej or others, are stating that a power struggle is going on inside of the top-echelons of the House of Saud, or even inside of the Salman branch.
A rift is being reported between King Salman and his brother Prince Ahmad, the latter is reported to have criticized the way the kingdom is approaching the Yemen war. Media sources said that Prince Ahmad had directed his criticism at the King and the Crown Prince, which have been the main proponents of the Saudi-UAE military involvement in the Yemen War. Saudi media outlets have refuted these statements, claiming that the prince’s quotes were inaccurate. This situation is not life-threatening for the King Salman and MBS, but measures have been taken already to quell potential opposition from within. Related: The World’s No.1 Offshore Boom Is Facing Uncertainty
These developments are not new. Internal opposition or dissatisfaction with the role and power of MBS, who is seen by several royals as too young, too inexperienced or too aggressive and emotional, still exists. As long as King Salman is the heir and ruler, no changes will be made, but the real question is what happens when the King dies or abdicates in the future.
Even that MBS has been given a carte blanche to consolidate his powers, partly via appointing trusted supporters or direct family members, other branches of the House of Saud are still waiting to grab any opportunity to get back in the limelight. A night of the long knives is still not looming, but nothing can be ruled out yet.
At the same time, MBS will need to counter stiff opposition from within the religious establishment, of which a part is still aligned with some of the more conservative royals. MBS, and the King, continue to walk a very fine line, in their strategy to slowly remove religious conservatives or outright extremists from power, without forcing the latter to take to the streets.
The fall-out of the ‘RitzCarlton approach’ at the end of 2017, when tens of leading Saudi businessmen and princes were arrested on fraud charges is still being felt. The Western criticism on the ongoing perceived anti-liberal approach to human rights or women rights also has become an issue, as conservatives are just waiting to hit MBS if he folds for international pressure. For the Crown Prince the current strategy of arresting high-profile liberal forces, especially women, should be largely seen as a fig-leaf to the conservatives, showing that their views are still taken into account by MBS. In the meantime, the Crown Prince continues to wrest political power from the Wahhabi Ulama. In case it comes to a direct confrontation, MBS will not be able to strengthen his own position, leaving him vulnerable to direct and possibly violent reactions.
The perceived anti-democratic moves of MBS should be assessed within the conservative context of the Kingdom. MBS is struggling to keep all balls in the air. Some have already hit the ground but bounced up again, such as the Aramco IPO or some of the Giga Projects. The very short time-schedules set by MBS and his advisors have shown to be too optimistic. The current regime will need to readdress some of them, while stating to the young Saudi supporters that results should not be expected within the next year(s). Optimism is still there, but could easily be turned into a full reactionary opposition if the pain felt at present is much higher than future gains. Related: Platts Survey: OPEC Production Jumps To 10-Month High
The West also should realize that in ‘the new kingdom’ it always will mean that liberalization of the economy, inclusion of females, or openness to the global market, will never mean an end to the position of the House of Saud. All members, including MBS or his father, will take all measures needed to prevent an implosion of the royal family. Changes will be made, changes that for Saudi Arabia are enormous ones, but would never erode the position of the House of Saud. Stabilizing or undermining the power of some of the conservative elite and clerics is more important than the freedom of individuals, in the eye of MBS and his royal supporters.
The next couple of months will be crucial. Opposition within several House of Saud branches still exists. Conservatives and clerics are unhappy about the loss of power and influence. MBS will have another chance to change the Kingdom through successes at the Future Investment Initiative 2018 or progress in the Aramco IPO or gigaprojects. If no success stories are published soon, the positive attention span of the young Saudis could be waning, or even changing to a longing for the past. A potential coup is never far away, as shown before in the Kingdom. High profile events could be a precursor for such a move, if the opportunity exists.
It is clear for MBS, and his backers, that a free-lunch at present is not available for anybody. A capability to juggle a large set of balls is needed, keeping extremists and conservatives at bay, while changing the economy and social fabric forever. Internal stability at present is prevalent over global support for MBS’s future. Changes are painful, but needed. MBS’s future will be depending on it.
By Cyril Widdershoven for Oilprice.com
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Dr. Cyril Widdershoven is a long-time observer of the global energy market. Presently, he holds several advisory positions with international think tanks in the Middle… More