Stratfor explains this week’s coup in Saudi Arabia

Summary: This week’s events in Saudi Arabia might further destabilize this key region. Here Stratfor cuts through the fog of misinformation to explain what we know — and what might happen next.

“… sweeping change in Saudi Arabia has historically required consensus among the ruling family. But that system now seems to have run its course.”

Mohammed bin Salman
Fayez Nureldine/AFP/Getty Images.

Saudi Arabia: Where Ambition and Geopolitics Align.

by Stratfor, 8 November 2017.

Change is in the air in the desert kingdom of Saudi Arabia. Three days of palace intrigue in Riyadh have captivated Saudis and foreign observers alike as dozens of princes, ministers and former officials were swept up in an anti-corruption campaign led by young Crown Prince Mohammed bin Salman.

The crackdown is certainly driven by the legitimate motives of restructuring the royal family’s patronage networks and curtailing corruption. However, it is also designed to cement the powerful prince’s status at the top of the country’s economic and political hierarchy. For years bin Salman and his father, King Salman, have meticulously planned the young ruler’s rapid ascent to the throne. But their quest to consolidate power is as much a product of Saudi Arabia’s geopolitical environment as it is of their personal ambition.

With a New Generation, a New Balance of Power.

The Salmans’ attempt to amass power has been years in the making. Because Saudi Arabia’s founder, King Abdulaziz, had 36 sons, much of the kingdom’s contemporary history has been characterized by competition — and alliance-building, often along maternal lines — among the family’s various branches. Control of certain positions or institutions would often go to specific bases of royal influence. For instance, former Crown Prince Sultan bin Abdulaziz led the Defense Ministry for nearly 50 years before passing it to his brother, the current king. In much the same way, former King Abdullah eventually handed the reins of the Saudi Arabian National Guard to his son. Some princes even managed to carve out their own roles in the kingdom’s economy, though certain sectors, including the all-important oil industry, remained in the hands of technocrats.

This patchwork power structure created an informal system of checks and balances that prevented any single royal faction from dominating the country. As a result, sweeping change in Saudi Arabia has historically required consensus among the ruling family. But that system now seems to have run its course. The sons of the kingdom’s founder are aging, and his grandsons are eager to claim their birthright. As they do, King Salman has taken it upon himself to restructure the House of Saud and the balance of power within it.

Since assuming the throne in January 2015, the king has worked to reorganize the Saudi state under the control of his son Mohammed — the oldest of the founder’s grandsons — while eliminating challenges from familial rivals. In fact, just hours after taking office, King Salman named Mohammed bin Salman defense minister, giving him a leading role in the country’s military apparatus. In the years that followed, the crown prince also became the face of the kingdom’s  for economic reform and the head of several important economic councils, including the newly created supreme council of the Saudi Arabian Oil Co.

Mohammed bin Salman quickly rose to prominence, but it wasn’t until this year that he was able to unseat two of his greatest competitors. In June, the king passed over the powerful Mohammed bin Nayef, who controlled the Interior Ministry and thus some of the country’s intelligence services, to name bin Salman crown prince. By the following month, the newly appointed ruler had built a security directorate that gave him additional oversight into the investigative functions of the Saudi intelligence community. Bin Salman then removed Prince Miteb bin Abdullah from his post at the head of the Saudi Arabian National Guard in November, curbing his cousin’s clout while enhancing his own in the process.

Click to enlarge…

Mohammed bin Salman's spreading powers

A Need for Reform Rooted in Geopolitics.

But there is more spurring the crown prince’s activities than a simple generational shift. Today the Saudi kingdom faces the biggest economic crisis it has encountered since the discovery of oil in 1938. Stubbornly low crude prices have slowed the country’s oil-dependent economy, and though they may temporarily rise — indeed, on Nov. 6 prices reached their highest peak since June 2015 — it is clear that oil will not reliably fuel Saudi Arabia’s economic growth as it once did. Bin Salman, who is only 32 years old, will doubtless preside over the rocky economic transition ahead as the importance of oil in the global energy mix diminishes over the next few decades.

The fiscal challenges this adjustment has caused have already forced Saudi Arabia to tighten its belt. Earlier this year, Saudi officials slashed certain subsidies and at one point even considered canceling all of them. But as difficult as the reduction in oil revenue and social spending has been for Riyadh, finding a new economic model to replace its current one, oriented around petroleum exports, will be even harder.

In all likelihood, a massive reform package like the Vision 2030 program that seeks to leverage the kingdom’s strength — massive financial reserves that can be funneled toward investment — may be its best chance for growth in the long run. And as Saudi Arabia searches for ways to boost its labor productivity, it will have greater economic incentive to encourage the participation of women in the workforce and in public life. All of these changes are significant and sensitive issues that Saudi Arabia’s next ruler must grapple with over the next decade or two. And all are problems the crown prince cannot address from a position of weakness, since their solutions are likely to alienate some of the country’s most influential factions.

Beyond the domestic forces shaping bin Salman’s economic policies, there are also external forces pushing the crown prince to adopt a more aggressive foreign policy. Saudi Arabia’s goals of combating terrorism and curbing the ability of regional rivals, such as Iran, to aid militant groups throughout the region have pushed Riyadh to remain engaged in a costly war in Yemen. Meanwhile, Tehran’s growing political and security ties to places like Iraq, Syria and Lebanon have fueled Riyadh’s fears that Iran is gaining influence in the Middle East at Saudi Arabia’s expense.

Bin Salman has already proved more than willing to challenge Iran in the places where it has most sway, especially with a mighty ally — Washington — at his back. Wary of the ways in which Iran might use its ties to militias in Iraq, Syria and Lebanon, the United States has supported Saudi Arabia’s aspirations of regional dominance. Though the crown prince would likely stick to his assertive tactics abroad with or without Washington’s approval, the heft of U.S. support has certainly aided his endeavors.

Mohammed bin Salman
Charles Platiau/Reuters.

A Risky Gamble.

Overhauling the kingdom’s traditional methods of decision-making carries certain risks. The swift upset of patronage networks and power channels is bound to invite pushback from the Saudi elite. So far it is unclear whether bin Salman intends to shrink the circle of power to a group of his closest advisers, or to monopolize power himself. But what it is clear is that the crown prince is betting on his popularity among Saudi citizens — many of whom support his anti-corruption drive — to provide the mandate he needs to rewrite the kingdom’s social contract against the wishes of its leaders.

After all, in a post-oil era, Saudi Arabia can no longer afford to offer the type of generous handouts that have long kept a healthy distance between the country’s government and those being governed. Instead, the kingdom will need a different social contract that demands more trust between Saudi citizens and officials. Bin Salman is well aware of this need, and to a point he has been successful in his pursuit of the strength required to fulfill it. But only time will tell whether he will achieve the same success in cultivating his people’s confidence in those who rule them.

Saudi Arabia: Where Ambition and Geopolitics Align
is republished with permission of Stratfor.

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Stratfor-Worldview

About Stratfor

Founded in 1996, Stratfor provides strategic analysis and forecasting to individuals and organizations around the world. By placing global events in a geopolitical framework, they help customers anticipate opportunities and better understand international developments. They believe that transformative world events are not random and are, indeed, predictable. See their About Page for more information.

For More Information

For more about Mohammed bin Salman, see “The man who is shaking up Saudi Arabia” (The Times). Here’s a dark analysis of the event that brought the Crown Prince to power: “A family coup in Saudi Arabia” by Nick Butler (Visiting Professor at Kings College London). For more about this week;s events see “Saudi Crown Prince’s Mass Purge Upends a Longstanding System” (NY Times).

If you liked this post, like us on Facebook and follow us on Twitter. See all posts about Saudi Arabia, about Mohammed bin Salman, and especially these…

  1. Stratfor looks at the Saudi Princes’ plans for a 21stC Kingdom under their rule.
  2. Professor Vijay Prashad: Saudi Arabia Is in trouble & makes a big mistake.
  3. Today the Saudis got a new Crown Prince. Stratfor explains how this might rock the region.
  4. Stories about Saudi Arabia reveal mysteries of the world’s most powerful kingdom.
  5. Stratfor on the Saudi’s political intrigue (bigger and more interesting than ours).

Two timely books about Saudi Arabia.

Saudi Arabia: A Kingdom in Peril by Paul Aarts and Carolien Roelants (2015).

Force and Fanaticism: Wahhabism in Saudi Arabia and Beyond by Simon Ross Valentine (2015).

Saudi Arabia: A Kingdom in Peril
Available at Amazon.
Force and Fanaticism: Wahhabism in Saudi Arabia and Beyond
Available at Amazon.

 

9 thoughts on “Stratfor explains this week’s coup in Saudi Arabia

  1. With almost all of Saudi Arabia’s skilled labor being provided by expatriates, it’s difficult to see how they will diversify into a banking empire, etc, through Vision 2030.

    It will be interesting to see how the IPO of Aramco plays out. With its opacity, lack of shareholder control, and traditional ME business practices, it will be hard to price and tricky to understand what you’re really buying. I’m not touchin’ the stuff.

    1. The Iconoclast,

      “With almost all of Saudi Arabia’s skilled labor being provided by expatriates, ”

      The goal is to change that. It is already happening. For example, see the WSJ story mentioning the rapid growth in Saudi-run food trucks. They’re not all rich princes.

      “It will be interesting to see how the IPO of Aramco plays out.”

      I am somewhat skeptical that it can be done in the West’s public markets. A private sale to western and Chinese investors would be much easier.

      “I’m not touchin’ the stuff.”

      That hardly matters. The Saudi Princes could easily arrange a sale at a good price to China, allowing China to lock-in much of its oil supply. The Saudi Princes probably do not want such a strong partner, however.

  2. Larry, the link to the WSJ story you posted about teh food trucks won’t open at all. At least not for me.

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