Saudi policy, both foreign and domestic, which was exceedingly cautious and risk-averse in earlier decades, changed almost overnight after King Salman succeeded his half-brother as sovereign of Saudi Arabia. The new King sacked officials loyal to his predecessor, promoted the former Deputy Crown Prince Mohammed bin Nayef to Crown Prince, and appointed his own son, Mohammed bin Salman as Deputy Crown Prince.
The new Deputy Crown Prince was given control of the Ministry of Defence and supervision of the Saudi economy. Active and media-savvy, Prince Salman appeared to be Saudi Arabia’s strong man, acting on behalf of his father, King Salman, while Crown Prince Nayef, was visibly sidelined.
Saudi Arabia soon embarked on a war in Yemen, at the helm of a coalition of 10 Arab and African countries, to fight the Houthis, a group of Shia rebels, believed to be supported by Iran.
Furthermore, in December 2015, Mohammed bin Salman announced the formation of a 34-country anti-terrorist coalition, the Islamic Military Alliance to Fight Terrorism (IMAFT)[1]. Hostility towards Iran and distrust of the Obama administration were two pillars of this strategy[2], heralded as the “Salman doctrine.”
On the economic front, Saudi Arabia had to face dwindling oil prices: in 2016, they reached half their 2014 level. With the running costs of a welfare state where energy, housing and transport are heavily subsidized besides infrastructure investments and soaring expenses, linked to the war in Yemen, the situation was not sustainable.[3]
Prince Salman gave several interviews to western financial papers and magazines in which he made clear that Saudi Arabia wanted to depend less on oil, and was embarking on a significant privatisation drive. In April 2016, the Prince released Vision 2030[4], a blueprint for a modern economy, drafted by western consultancy companies, including McKinsey. Following this, the King slashed salaries of ministers by 20%[5] as well as stipends of many princes, to prepare citizens for the austerity measures to come. Public investments were scrapped too, with dire consequences for the private sector.
The stated aim of freeing the Saudi economy from its dependence on oil–which currently accounts for 87% of its budget income and 90% of export earnings–has yet to materialise. Likewise, the privatisation of 5% of Aramco’s shares (about $2 trillion) is still being prepared–the Saudi State will retain control of strategic decisions.
Strategic setbacks
It is too early to assess how far this new economic policy will go, although the Saudis have felt the pinch with GDP growth of 0.7% in real terms in 2016.There is room for doubt about the ability and willingness of Saudi society to conform to the reform plan.
On the diplomatic and military fronts, failure is already evident, considering that the object was to contain and roll back Iranian influence in the Gulf and in West Asia in general. Two years of ceaseless bombing of Yemen have done little, if anything, to contain the Houthi rebels, whose remarkable resilience and capacity to attack Saudi territory in the border areas remain nearly intact. On the other hand, the bombings by the coalition aircraft, with intelligence support from the United States, Britain and France, have caused more than 10,000 deaths and 40,000 injured people while wrecking what was already one of the poorest countries in the world.
In Syria, the Saudis stepped up support to jihadi groups, fighting Bashar al-Asad’s regime, but to no avail. Russian direct military involvement in support of the regime has changed ground realities as illustrated by the fall of Aleppo into government hands in December 2016, followed by the exclusion of Saudi Arabia from peace talks in Astana under Russian supervision in January 2017. This tight coordination between Iran and Russia on Syria represents a crushing humiliation for Saudi Arabia.
Moreover, relations with Egypt, whose economy survives in part thanks to financial aid from Saudi Arabia, have worsened[6] after Egypt’s Supreme Administrative Court declared illegal the cession of two Red Sea islands to Riyadh. President Sisi has voiced increasing support for the Syrian regime, while refraining from committing Egyptian troops in Yemen.
One consolation is the recruitment of the recently retired Pakistani chief of army staff, Raheel Sharif, as director of IMAFT. This appears to be a face saving compromise for both Riyadh and Islamabad as Pakistan has refused to commit troops in Yemen. This should not worry India as it does not amount to a return to Pakistan and Saudi relations during Zia ul-Haq or even Nawaz Sharif’s first tenure (1997-1999).[7]
The Trump factor
Trump’s election as U.S. President could be a cause for worry, given his stated hostility to Muslims. However, the mood is optimistic in Riyadh. Trump’s administration includes key players keen on confronting Iran. Trump is also unlikely to lecture Saudi Arabia on its human rights record. Further, the President has surrounded himself with oilmen, including his secretary of state Rex Tillerson, a good sign from a Saudi point of view.
The downside is that Saudi Arabia, which has, reveled in its new-found “strategic autonomy” vis-à-vis Washington, now finds itself increasingly dependent on the U.S. for its security.
Olivier Da Lage is editor-in-chief at Radio France International. He contributes to Gateway House in his personal capacity.
This article was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.
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References
[1] “Coalition of the unwilling”, Gateway House, accessed on 31 January 2017, <https://www.gatewayhouse.in/saudi-coalition-of-the-unwilling/>
[2] “The Salman Doctrine: the Saudi Reply to Obama’s Weakness”, Nawaf Obaid, The National Interest, accessed on 31 January 2017, <http://nationalinterest.org/feature/the-salman-doctrine-the-saudi-reply-obamas-weakness-15623>
[3] “Challenges to the Saudi distributional state in the age of austerity”, Steffen Hertog, LES, accessed on 31 January 2017, <http://eprints.lse.ac.uk/68625/>
[4] Kingdom of Saudi Arabia, Our Vision: Saudi Arabia..the heart of the Arab and Islamic worlds, the investment powerhouse, and the hub connecting three continents, accessed on 31 January 2017, <http://vision2030.gov.sa/en>
[5] “Ministers’ pay cut by 20%”, Arab News, 27 September 2016, accessed on 31 January 2017, <http://www.arabnews.com/node/990401/saudi-arabia>
[6] Gresh, Alain, “A Turbulent Time in Saudi-Egyptian Relations”, Orient XXI, 14 December 2016, accessed on 31 January 2017, <http://orientxxi.info/magazine/a-turbulent-time-in-saudi-egyptian-relations,1627>
[7] Bagchi, Indrani, “India is our strategic partner, Pak historic ally: Saudi mantra”,Times of India, 10 March 2016, accessed on 31 January 2017, <http://timesofindia.indiatimes.com/india/India-is-our-strategic-partner-Pak-historic-ally-Saudi-mantri/articleshow/51335386.cms