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New king, old kingdom? | The World Weekly

I ask God to assist me to serve our dear people and realise their hopes, and to preserve our country and our nation's security and stability, and to protect them from all evils,” These were the words of Salman bin Abdulaziz al-Saud upon becoming the new king of Saudi Arabia. 

The Kingdom of Saudi Arabia has long presented itself as a guarantor of stability in a region afflicted by upheaval, but it currently faces unprecedented challenges. In its quest for stability the country has involved itself deeply in the region’s politics and conflicts over the decades, struck up a strategic alliance with the United States, and funded the spread of its ultra conservative version of Islam known as Wahhabism across the world.

After the death of King Abdullah in January, who effectively ruled the country since 1995, his half-brother Salman took the throne, thus ensuring the continued rule of the House of Saud over the largest country in the Arabian Peninsula. At the end of April, the new king reshuffled the order of succession and appointed his nephew Mohammed bin Nayef as crown prince while positioning his son Mohammed bin Salman as deputy crown prince. If unchallenged, this move means that the succession to the Saudi throne is set for decades to come.

This marked the first time that a grandson of the founder of modern-day Saudi Arabia, King Abdulaziz (also known as Ibn Saud), and not one of his sons is set to ascend to the throne. King Salman’s royal decree further entrenched the power of the Sudairi clan, also referred to as the Sudairi Seven, to which the current king belongs. The name Sudairi stems from one of King Abdulaziz’s wives, Hussa bint Ahmed al-Sudairi, who stems from an influential family from Najd.

Analysts noted King Salman’s pledges of continuity and many did not expect major changes after he ascended the throne. "If there is one theme that King Salman has seemed to be stressing above all else in his first speech as king, it was continuity," Fahad Nazer, a former political analyst at the Saudi Arabian embassy in the US, told Al Jazeera in January.

Despite these signs and pledges of continuity, recent events have brought to light again the kingdom’s plethora of challenges, external and internal. This was starkly highlighted in recent weeks as several bombings - claimed by Islamic State (IS) - targeted Shia Muslims on two consecutive Fridays, killing dozens of people. Saudi Arabia’s military engagement in neighbouring Yemen, where a protracted campaign of airstrikes continues, brings its own risks, as Saudi border areas have witnessed intensified shelling.

Beyond that, King Salman has to deal with youth unemployment, US-Iranian rapprochement and falling oil prices. To the surprise of many observers, he has already shaken up Saudi Arabia’s foreign policy. 

A more assertive foreign policy

US President Barack Obama meet King Salman shortly after his ascendancy to the throne in January

Saudi Arabia is worried about Iran’s growing regional influence and has a tradition of portraying itself as a protector of Sunni Muslim interests in the Middle East. The current military campaign in neighbouring Yemen has to be seen in this context, as Saudi officials and media have been very keen to paint the Zaydi-Shia Houthi rebels as Iranian proxies, similar to Lebanese Hezbollah.

Iranian influence over the Yemeni group is a contentious topic. While evidence points to a certain degree of support in the past, it remains unclear whether Iran exerts influence on the Houthis on the ground, with many analysts arguing that Iran’s control over the group is limited.

The Yemen campaign signals a departure from a traditional reliance on the US for Saudi security, as Erin Cunningham and Brian Murphy write for the Washington Post, and presents a crucial test for the new Saudi leadership, especially young Deputy Crown Prince and Defence Minister Mohammed bin Salman, the new king’s son.

In this context, much has been made of Mohammed bin Salman’s rise and he has been portrayed as embodying the new spirit of Saudi foreign policy. Breaking with a tradition of sharing power among different branches of the royal family, the deputy crown prince has also been given the top role at the Saudi state oil company and in a newly created council on economic and development affairs. According to some accounts, he is poised to take over the National Guard.

Reflecting on the importance of the campaign in Yemen, Madawi al-Rasheed, a visiting professor at the Middle East Centre at the London School of Economics and Political Science (LSE), writes for Al Monitor that King Salman and his son “cannot afford to achieve anything less than total victory” and stresses the need for Mohammed bin Salman to establish his credentials as soon as possible.

Despite the ongoing air campaign and support for anti-Houthi forces, Saudi efforts have not yielded the desired result of reinstating exiled Yemeni President Abd Rabbu Mansour Hadi in power or militarily defeating the Houthis and their allies, including former President Ali Abdullah Saleh. The Houthis reportedly seized the provincial capital of the desert province al-Jawf, which borders Saudi Arabia, on June 14. Current UN-brokered talks in Geneva seem unlikely to lead to Mr. Hadi’s reinstatement. 

“The Saudi-led military campaign in Yemen has been a disaster,” Chris Zambelis, a senior analyst with the risk consultancy Helios Global who specialises in the Middle East, tells The World Weekly before the start of UN-brokered peace talks in June. He adds that as a new king, “Salman has a great interest in reasserting Saudi Arabia’s position in the Arabian Peninsula, Persian Gulf, and wider Middle East.”

The search for stability

Yemen does not present the only hotspot where Saudi foreign policy is facing serious challenges. The current negotiations over Iran’s nuclear programme and the potential end of Iran’s isolation on the international stage are also major preoccupations of the Saudi leadership. While the kingdom issued a statement of cautious support after an interim deal was struck between Iran and the P5+1 powers (US, UK, France, Russia, China and Germany) in April this year, Iran remains Saudi Arabia’s main regional rival with many analysts pointing to a proxy war between the two countries. There are also ongoing fears that a nuclear arms race could ensue if Iran develops a nuclear weapon. 

Saudi ambassador to London Prince Mohammed bin Nawwaf bin Abdulaziz al-Saud, told The Telegraph in an interview in June: “We hope we receive the assurances that guarantee Iran will not pursue this kind of weapon... But if this does not happen, then all options will be on the table for Saudi Arabia.” 

While there is no consensus on this issue, some experts are doubtful that Saudi Arabia could acquire nuclear weapons, given only a nascent nuclear infrastructure. Moreover, it is not clear whether nuclear-armed Pakistan, a Saudi ally, would be willing to proliferate nuclear weapons further by selling them to the kingdom, as was suggested, researchers Ian Stewart and Dominic Williams of King’s College London write in The Telegraph.

“Any rapprochement between the US and Iran, which would mean that Iran returns to the world stage as a regional power, oil power, etc., is viewed as a disaster in Riyadh,” Mr. Zambelis says.

The Saudi-Iranian rivalry also extends to the war in Syria. While Iran remains a steadfast supporter of Syrian President Bashar al-Assad, Saudi Arabia has lent support to a variety of rebel factions and is adamant about pushing Mr. Assad out of power. It is also part of the US-led coalition against jihadi factions in Syria such as Jabhat al-Nusra and IS. Professor al-Rasheed tells The World Weekly that “Saudi foreign policy is yet to recover from the setback it received in the past years when it failed to deliver a desired outcome in Syria”, namely deposing President Assad.

Deputy Crown Prince Mohammed bin Salman was part of the delegation to the Camp David summit in May

While supporting the armed opposition to the Iranian-backed government in Damascus, Saudi Arabia has acted as a counter-revolutionary force in other places in the context of the Arab uprisings. It has become a key backer of Egyptian President Abdel Fattah al-Sisi, having been one of the first states to welcome the ouster of Islamist President Mohammed Morsi in 2013. It also helped support the violent crackdown on protesters in Bahrain by sending in troops, as did other Gulf Cooperation Council (GCC) members, and offered ousted Tunisian President Zine Abidine Ben Ali exile in 2011. Saudi Arabia also manoeuvred to ensure that a pro-Saudi government would replace Ali Abdullah Saleh in Yemen.

Part of the Saudi quest for stability in the region is rooted in the need to ensure the steady flow of Saudi oil to its destined export markets, as oil remains the country’s main income source.

Critics say that Saudi funding of Islamist and even jihadi causes abroad, while aiming to steer conflicts away from its own territory, is precisely the source of instability in the region. The Saudi state has invested billions of dollars in spreading its fundamentalist Wahhabi interpretation of Sunni Islam; a doctrine which bears a crucial resemblance to the ideology of militant groups such as IS and al-Qaeda. Criticism often focuses on a lack of enforcement by the Saudi authorities to stop private donors from sending money to jihadi organisations. The Pakistani Lashkar-e-Taiba group, designated by the US as a foreign terrorist organisation and banned by other countries including India and Pakistan, was able to raise funds through a “probable” front company in Saudi Arabia, a US embassy cable from 2009 exposed by WikiLeaks says.

Sectarianism and the IS threat at home

The rise of IS has not only threatened Syria and Iraq, but also spread to Saudi Arabia, where deadly bombings against Shia mosques in the eastern Qatif region in May put authorities on high alert. 

While attacks like the ones in Qatif are a rare occurrence in Saudi Arabia, there are fears that radicalised Saudi citizens or foreigners residing in the kingdom could try to carry out similar attacks. In addition, more than 2,500 Saudi citizens have left the country to join jihadi groups in Iraq and Syria, representing one of the largest foreign fighter contingents overall.

This can be seen as one of the signs that the Saudi religious establishment, which is preaching the importance of allegiance to the sovereign, is struggling to retain control over an increasingly diverse spectrum of religious beliefs in Saudi Arabia.

Aiming to counter the trend of Saudis joining jihadi groups abroad, the Saudi state has introduced lengthy jail sentences for anyone entering into such a conflict and its top religious authorities have strongly spoken out against the practice. In a statement after the first attack on a Shia mosque, King Salman vowed to “wipe out” IS. After a second deadly bombing, the government initiated a major security operation involving 94,000 men to protect mosques from similar attacks.

A Saudi border guard patrols the border to Iraq. The kingdom increased security measures after several IS attacks

IS has taken on an increasingly aggressive stance towards Saudi Arabia and especially the Saudi royal family, which presents itself as the guardian of Islam’s holiest sites. IS leader 

Abu Bakr al-Baghdadi referred to the Saudi royal family as “the serpent’s head” and “the stronghold of the disease” in an audio statement from November 2014, while urging the expansion of IS into the “lands of al-Haramein” (two holy places), a reference to the holy sites in Mecca and Medina.

By not referring to Saudi Arabia by name, Mr. al-Baghdadi followed the radical Islamist tradition of not even indirectly recognising the Saudi royal family, Mr. Zambelis writes in an article for The Jamestown Foundation. In the November recording, the IS leader also called on Saudis to attack the “al-Saloul”, a derogatory distortion of the al-Saud family name: in Islamic tradition, the al-Saloul family were the guards of the then-pagan holy site of the Kaaba in pre-Islamic Mecca. More recent statements contained derogatory comments about the Saudi leadership and the country’s Shia minority.

While Saudi Arabia assisted the mujahideen in Afghanistan in the 1980s in the battle against the Soviet Union, the kingdom fell out with the jihadis after allowing US and allied troops onto its soil for the military campaign against Saddam Hussein. Late al-Qaeda leader Osama bin Laden, born in Saudi Arabia, heavily criticised the Saudi leadership for letting Western troops into the land of Islam’s holiest sites. But Saudi splits with radical Islamist fighters can be traced back to the 1920s when Ibn Saud put down a rebellion of the Ikhwan, who previously formed a core element of the founder of modern Saudi Arabia’s fighting force.

But sectarian hate speech against Saudi Shias, who represent about 10-15% of the population, is not confined to militant groups such as IS - it is also practiced, note analysts, by government-allied clerics and Saudi media. Wahhabism, the strand of Islam promoted by Saudi Arabia, frequently portrays Shias as apostates or heretics, a line often repeated by hardline Sunni clerics.

There has also been a schism in the Saudi population with regard to the war in Yemen. Conservative elements of Saudi Arabia’s religious establishment have framed the campaign as a holy war, while the country’s Shia population has spoken out against the military campaign, Giorgio Cafiero, co-founder of Gulf State Analytics, tells The World Weekly. 

He adds that there have been clashes between the security forces and Shia protesting the military operation. Sectarianism and marginalisation of the minority Shia population reaches back to the conquest of the Arabian Peninsula by the Wahhabi-Saudi alliance in the 18th Century. Shias have long complained about discrimination in education and a lack of opportunities to attain highly coveted government jobs. Saudi Arabia’s eastern region, where most of them reside, also lags in economic development, while containing most of the country’s oil wealth.

Professor al-Rasheed too stresses the threat of sectarianism, arguing that it “will remain as long as the [Saudi] leadership denies the Shia full rights”, in reference to the hate campaigns against them and their lack of equal civil rights. Human Rights Watch reports that “state practices of discrimination and exclusion toward Shia have created a sentiment of unequal citizenship”, highlighting discrimination in “public education, the justice system, religious freedom, and employment.” Shia citizens, for example, rarely receive permission to build their own mosques.

While the government has rushed to condemn the sectarian violence and strongly condemned IS and its actions, Mr. Cafiero highlights that many Shia see “their rulers’ record of promoting intolerant views of the sect as a root cause of the terrorism and believe that Riyadh is permitting Daesh to wage such terrorist attacks”.

Adel al-Jubeir, former Saudi ambassador to the US, was elevated to the post of foreign minister by King Salman

There are, however, conservative elements among Saudi Sunnis that view the government as having turned “soft” on Shia dissent, leading to a wave of protests in the wake of the Arab uprisings of 2011, the Gulf analyst adds.

The editor-in-chief of the leading Saudi daily Okaz, Mohammed al-Fal, counters the observation that sectarianism has become widespread, stressing that it is only a feature among extremists on both sides. “The Kingdom of Saudi Arabia is careful and keen to deal with all the citizens on one level,” Mr. al-Fal told Voice of America in May. The editor-in-chief of Saudi-owned Asharq Al-Awsat newspaper also commented after the second mosque attack that IS “has failed to even partially achieve its aim of creating a sectarian sedition in Saudi Arabia”, praising the country’s efforts to fight terrorism at home and abroad. “Every time, Saudi Arabia has managed to move steadfastly in a turbulent sea, showing an extraordinary ability to contain and keep regional chaos at bay,” Salman al-Dosary writes. 

Nevertheless, it is precisely this balancing act that will be King Salman’s challenge: assuring the Shia population of Saudi Arabia’s commitment to their security and rights and confronting the IS threat at home and abroad, while not alienating conservative elements in the Sunni majority population who predominantly see Shias through a sectarian lens and potentially hold sympathy for IS’ discourse and actions. This is no easy feat considering that the oil-rich country also faces several economic challenges, particularly affecting its large youth population.   

The economy 

In his first major speech since taking power, King Salman focused on the economy and the need to create private sector jobs, which has been a big concern for the Saudi leadership for years. He pledged that he would diversify the economy by “working towards building a solid economy based on strong grounds that will lead to the multiplication of the sources of income” and stressed that the “coming years will witness rich and great achievements that enhance industrial and services roles in the national economy”.

At this stage, however, the Saudi economy overwhelmingly relies on oil revenues. The country was the second-largest holder of proven crude oil reserves in the world in 2014 after Venezuela and petroleum accounted for 85% of Saudi export revenues in 2013, the US Energy Information Administration reports. Saudi Arabia also holds the world’s fifth-largest natural gas reserves, while production remains limited.

In spite of its oil wealth, the official unemployment rate for Saudi citizens was at 11.6% in the last quarter of 2014 - female 32.5% and male 5.9% - while unemployment for non-Saudis, an important figure given the country’s large foreign workforce, was only at 0.3%.

In this context, falling oil prices play a crucial role. Brent and WTI benchmark oil prices declined from over $100 in July 2014 to around $60-65, although this is up a little from the $47 low reached in January this year. After OPEC’s decision on June 5 not to cut production levels, oil prices are likely to continue to decline, energy specialist Art Berman writes for Oilprice.com.

Several days after the OPEC meeting, Saudi Arabia’s Ministry of Petroleum and Mineral Resources refuted media reports that it was pumping more oil “to compensate for lower oil prices” and gain more market share at the expense of other producers. Analysts have seen the move to maintain current production levels as aimed at reasserting OPEC’s dominance against new rivals such as North American shale oil companies. This strategy can be regarded as part of the new leadership’s assertiveness.

It is not the role of Saudi Arabia, or certain other OPEC nations, to subsidise higher cost producers by ceding market share” - Ali al-Naimi, Saudi oil minister

Saudi Arabia has about $300 billion in sovereign wealth funds and $750 billion in foreign exchange reserves. Despite this, low oil prices and a continued demand for spending on social programmes present a fiscal headache for the country’s rulers. A key point here is the lack of economic diversification: oil exports still account for 43% of GDP. Moreover, analysts say that foreign exchange reserves could shrink to $500 billion within two years given current oil price levels, Anjli Raval and Simeon Kerr report for the Financial Times.

Shortly after assuming power, King Salman ordered a two-month bonus for all state employees and later the military, a large sum when one considers that a third of all jobs in Saudi Arabia are in the public sector. This has come as signs of a slowdown emerge, with companies which depend on government contracts predicting lower revenues. In turn, this has the potential to exacerbate unemployment, especially among young adults, Ms. Raval and Mr. Kerr point out. Nevertheless, they also note that mega projects like the King Abdullah Financial District are not hurt by the slowdown and that many Saudi citizens have not felt the impact yet.

There are signs that the new king has realised the need to boost employment among the kingdom’s citizens, but what makes the issue really pressing is the high unemployment rate among young Saudis, estimated to be 29% among those aged 16-29.

King Salman put his son Mohammed bin Salman in charge of a newly formed economic council and Western officials have said that the deputy crown prince is aware of Saudi Arabia’s need to diversify the economy and increase the employment rate. But he has not set out a vision for reaching this important goal, Ms. Raval and Mr. Kerr argue.

Young Saudis lack the educational and technical skills the private sector needs, according to the CIA World Factbook. A Boston Consulting Group survey of Saudi youth found that one in three nationwide see education as a top concern; almost half of the respondents from the east and south of the country cited it as a major concern. While young Saudis see the education system as effective in teaching them about Islam and basic subjects such as reading, writing and mathematics, they are much less satisfied with instruction in skills such as “problem solving, teamwork and collaboration, effective communication, and critical thinking”, the study shows, and they feel under-equipped for the jobs market.

On June 15, Saudi Arabia opened its stocke exchange to foreign investments

A connected issue is the high proportion of foreign workers in the kingdom. “Gaps in labour rights and labour prices between nationals and migrant workers are the main causes explaining the low participation of GCC citizens in the region’s private labour markets,” Steffen Hertog, an associate professor of comparative politics at LSE, writes in a Gulf Labour Markets and Migration research paper. Some estimates judge that 25% of the Saudi population lives in poverty.

For a long time Saudi Arabia has experimented with nationalisation strategies in the labour market, with the first Saudisation quotas back in the late 1940s; but they were never consistently applied, Dr. Hertog highlights in his paper. Since many Saudi men work for the government, certain sectors of the economy have been dominated by expatriates/migrant workers. In its latest effort to address this, the Saudi Ministry of Labour introduced the Nitaqat (bands) Saudisation programme in 2011, which includes a ranking system for companies’ compliance and differentiation between 41 sectors.

Past distributional measures “very likely worked against private sector Saudisation”, Dr. Hertog writes. These measures included some by the late King Abdullah in 2011, in which he decreed a public sector minimum wage and an unemployment assistance scheme of monthly payments for a year that corresponded to two-thirds of an average Saudi salary in the private sector at the time. This seems to have led some low-wage Saudi workers to drop out of private sector employment, Dr. Hertog points out.

Additionally, many private sector industries, such as aluminium and petrochemicals, rely on the subsidised energy sector, further tying the private sector to the fortunes of the state economy.

Stressing the dire need for skill-based training, Adel Bayomi, the director of human resources at a private company for food products, tells Arab News that the labour ministry has to play “a vital role to launch more training programmes to qualify Saudis and then the ministry can implement its Saudisation plans”. In a recent development, the Saudi labour ministry postponed the third phase of the Nitaqat programme to allow the private sector more time to understand this phase’s requirements. Meanwhile, the representative body of the Council of Saudi Chambers put pressure on the ministry to delay the implementation to avoid labour shortages in the construction, sales and manufacturing industries.

Saudi Arabia is not the only Middle Eastern country with these types of problems. Analysts regularly point to a disconnect between education and labour market needs throughout the Middle East and North Africa.

The Saudi youth bulge will make the implementation of necessary reforms harder and much will depend on Deputy Crown Prince Mohammed bin Salman’s ability to present a coherent vision for the newly founded economic council. In his speech in March, King Salman highlighted efforts “to ensure the compatibility between the educational output and the needs of the job market”. It remains to be seen how quickly measures in this regard can help boost Saudisation in the private sector and diversify the economy.

Demands for economic reforms were also at the heart of unrest in Saudi Arabia’s eastern regions, where most of the country’s Shia population resides. Especially in the face of past attacks on the minority community and more frequent protests since 2011 calling for social and political reforms, addressing those concerns may become more urgent than ever.

New king, old kingdom?

In the past few months, the new Saudi leadership has acted with a new assertiveness, especially in the arena of foreign policy, as the conflict in Yemen showcases; but the key pillars of the kingdom’s foreign policy remain in place, Mr. Zambelis of risk consultancy Helios Global says. These include “ensuring its strategic partnership with the US, checking Iran and its allies, leading a “counter-revolution” against democratic opposition and Islamist movements in favour of old-style dictators, looking more to China and Asia” among other objectives.

At home, King Salman “ignored the domestic agenda with the exception of placing his son as deputy crown prince and concentrating so many powers in his hands”, Professor al-Rasheed argues. Mr. Zambelis concurs, stating that “critical issues such as the need to implement domestic social, political, and economic reforms at home are receiving little or no attention.”

Others view the new leadership more favourably, as the case of Mohsen al-Awaji shows. The cleric and former critic of the government, who was one of the main signatories of a statement in support of deposed Egyptian President Mohammed Morsi, told the Economist in May that “the country was a ship afloat with no compass and a dark sky… It is early days, but now we at least have stars.”  

Quoting from a speech King Salman gave on Yemen - “we wish to see an end to the stoking of sectarian tensions” - Mr. al-Dosari stresses the Saudi military campaign’s positive nature: “In time, history will remember that this Arab-wide, Saudi-led offensive not only saved Yemen, but also the entire Arabian Peninsula from the divisive, insidious efforts of Iran, which has used sectarian tensions to sow discord throughout the entire region.”

In the midst of reports of efforts by exiled Yemeni President Hadi to build a strong anti-Houthi force on the ground, it is questionable whether such a force, which also includes southern secessionists, could be controlled by a unified command, as independent Gulf-based analyst Theodore Karasik tells Reuters. Groups like al-Qaeda in the Arabian Peninsula could challenge or infiltrate these units. Despite airdrops from the Saudi-led coalition, they also remain outgunned by the Houthis and army units loyal to former President Saleh.

In sum, Saudi Arabia’s new leadership has left its mark with its projection of strength in the Arabian Peninsula, but the Saudi-led campaign seems far from achieving its goal.

A poster in a shopping mall in Riyadh shows Saudi Arabia's new triumvirate

On the economic front, the Saudi authorities opened the country’s stock market to foreigners on June 15. Foreigners can now buy and sell shares in companies listed on the Saudi stock exchange and have voting rights as shareholders. This development is seen by some industry experts as helping to push the country’s economic reforms due to an increase in foreign investment. Ahmed al-Omran writes for the Wall Street Journal anticipates that the move could attract tens of billions of dollars, “helping to ease the pressure on the government to support the private sector amid a weak outlook for oil prices”. But several analysts point out that the impact will take time to take effect, while BBC Middle East Business correspondent Mark Lobel argues that there is unlikely to be a flood of new investors since rules for foreign investments remain restrictive.

Mohieddine Kronfol, a founding partner of Franklin Templeton Investments ME, tells the BBC that the activity of foreign investors could lead to an energised debt market, while predicting that ethical investors will increase the pressure to enact political and social reforms.

Commenting to The World Weekly on another key domestic issue, radicalisation and extremism, Professor al-Rasheed says that “the Saudi leadership focuses on repression, detention and other coercive means, but is yet to have serious consideration of other means to combat terrorism such as opening the public sphere to honest debates about the Saudi role in nourishing the conditions for violent radical groups. The youth need to find alternative preoccupations that draw them away from listening to radical religious messages.”

Saudi Arabia’s long-term stability will require the simultaneous addressing of the country’s various political, social and economic challenges: a huge task.

While King Salman has shown he can act confidently and decisively, he is unlikely to shake the core of the Saudi state and its tenets. His outreach to conservative elements in society and search to shore up stability at home suggest that the alliance between the House of Saud and the followers of Sheikh Muhammad ibn Abdul-Wahhab, the father of Wahhabism, remains firmly in place.

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