Ali Shihabi explains what the media won’t about Saudi Arabia

Summary: This is the best analysis I have seen of the recent events in Saudi Arabia, which will shake the region and perhaps the world. It is by someone with deep knowledge of that nation. It is a perspective seldom seen in the US news media — but which matches the known facts and is consistent with history. However, remember when reading it that there are no neutrals among experts. The bottom line: change was necessary, since Saudi Arabia could not long continue as it was.

Saudi Arabia flag

Why the Saudi “Purge” Is Not What It Seems to Be

Bv Ali Shihabi at the Arabia Foundation, 9 November 2017.
Posted with their generous permission.
Headings, images, and red emphasis added.

This past weekend, Saudi Arabia detained numerous members of the royal family, as well as current and former ministers and prominent businessmen, on charges of corruption. Many argued that the detentions constitute a thinly veiled attempt by the Kingdom’s Crown Prince Mohammed bin Salman (MBS) to consolidate political power. However, this narrative misses the mark; the “purge” is not about removing political rivals who threatened MBS’s position as heir apparent but rather about sending a message to political and economic elites that their entitlement to extreme wealth and privilege, and their impunity, is coming to an end.

In insular nondemocratic systems, trumped-up corruption charges are often used as a pretext to eliminate political opponents. In this context, the sweeping nature of the arrests, the high profiles of the detainees (e.g., celebrity investor Prince Waleed bin Talal), and the general opaqueness of Saudi politics fueled speculation that this past weekend’s events constituted exactly that.

However, a careful examination of the list of detainees belies this assertion. With the exception of Minister of the National Guard Prince Mutaib bin Abdallah, the detainee list is made up entirely of individuals who had no capacity to challenge the succession. Indeed, many of those arrested, such as Prince Waleed, had gone out of their way to publicly express their support for the Crown Prince and curry favor with the new leadership.

Mohammed bin Salman
Recent photo of Crown Prince Mohammed bin Salman projected on Prince Al Waleed Bin Talal’s HQ building in Riyadh. Photo: Getty Images.

As for Prince Mutaib, despite leading the national guard, he posed no political threat to the Crown Prince. Saudi watchers have consistently misread a royal family member’s command of key military apparatuses, specifically, the Ministry of Interior, the Ministry of Defense, and the national guard, as something that gives that family member independent control over his respective organization.

This is a flawed interpretation. These ministries have always behaved as part of the extended government bureaucracy that looks to the King, rather than to the individual minister, as the ultimate source of authority. This is why no elements in the Ministry of Interior or in the national guard resisted or reacted to the removal of Prince Mohammed bin Nayef (MBN) or Prince Mutaib. For these two men, their individual authority over the entities they were responsible for ended with the loss of their command. Whatever authority they enjoyed had been delegated to them by the king, and once this was withdrawn, that authority ended.

Ibn Saud
Founder of the Saudi monarchy.

The transition of leadership across generations.

In actuality, Saudi Arabia completed its political transition last June when King Salman replaced MBN with MBS as heir to the throne. The transition (mislabeled a coup by some) saw the elder MBN being relieved of all government responsibilities, swearing an oath of allegiance to his younger cousin, and exiting politics. MBN’s removal was swiftly followed by the appointment of a new generation of young princes and technocrats to key ministerial posts and governorates.

This step inevitably created winners and losers within the royal family. Given the relatively young age of the new Crown Prince, the action naturally alienated many of MBS’s older cousins, and even some uncles, who suddenly found themselves politically marginalized as a result of their younger relative’s rapid rise to power. But alienation does not mean that these princes possess the power to threaten the throne or to determine the succession.

This has been particularly true since the passing of the founding generation of princes who originally united the country with the founder, King Abdul Aziz. Just as MBN and Prince Mutaib derived their stature and influence solely by virtue of the delegated authority granted to them by the ruling monarch, other members of the royal family do too. No royal maintains an independent constituency among the population at large. And, unlike politicians in, say, modern Lebanon, or the dukes of medieval Europe, individual Saudi royals lack any direct constituencies among the people that they can galvanize against the monarchy by, for example, ordering them to take to the streets, let alone have the capacity to mobilize sections of the military on their own behalf. This is why it is wrong to interpret last weekend’s arrests as an action that materially increases the political risk to the monarchy.

Bearing this in mind, King Salman and MBS have chosen to go the populist route by appealing to the Saudi public, and specifically to the youth, rather than seeking to placate the many “losers” in this succession by lavishing them with money (a tactic widely used in the past that was highly unpopular with the Saudi public and that has become increasingly unaffordable). Now there will be no paying-off of discontented princes in exchange for their loyalty and acquiescence.

Hearts of gold
Hearts of gold.

The arrests.

The very public arrest of these high-profile individuals serves an important objective. To begin with, the choice of the particular individuals who were arrested is highly symbolic. The system in the Kingdom over the years has certainly produced many more examples of corruption and ill-gotten wealth than just these specific people. Rather than arrest every offender, the government made a deliberate choice, selecting a number of very high-profile individuals with wide name recognition, most of whom are instantly recognizable to the public and seen as beneficiaries of ill-gotten wealth. By doing this, the government sent the message to all elites that action will be taken and that nobody is immune, encouraging them all to cooperate with the state in returning assets and to face the new reality that the old order has been replaced with a new one and they had better reconcile themselves to it.

In the short term, these detentions will lead, directly and indirectly (i.e., by example of what can happen to those who do not cooperate), to the recovery of substantial ill-gotten assets from many members of the elite, including, in all probability, vast tracts of urban land that were “acquired” by senior royals in decades past. The monopolization of this resource limited the amount of urban land available to the masses, pushing up land and home prices, which contributed to massive land and home shortages. Remedying this situation will reduce the cost of home ownership, thereby alleviating a major source of grievance among middle- and lower-class Saudis.

Although commentators have widely criticized what they see as arbitrary and selective steps taken quickly and without “due process,” they must understand that this spate of arrests is as much a political and symbolic act as it is a legal one. In all likelihood the government made sure prior to taking this step that it had enough hard evidence to stand up in a Saudi court (and even to outside observers if required). Certainly a drip-by-drip process drawn out over months and years would have been much more disruptive.

"The Saudi Kingdom" by Al Shihabi
By the author. Available at Amazon.

The measures necessary to reform of an aristocracy.

More importantly, in a country beset by an extremely wide political spectrum ranging from the extreme religious right to the liberal left, achieving consensus on key issues is virtually impossible. Hence, if any reform is to take place within a reasonable time frame, it will have to be autocratically managed. Reforms such as removing the prohibition on women’s driving, combating extremism, and curbing elite entitlements would have been impossible to accomplish through deliberation and consensus.

Coercive action and an authoritarian hand, rather than endless debate, discussion, and negotiation with thousands of royals and political, economic, and religious elites, was needed to drive home to these individuals that the monarchy is serious about fundamental reform and that the “old guard” needs to get with the program or face dire consequences.

Previous attempts to negotiate elite entitlements achieved negligible results. To cite just one example, relentless pushback and delay tactics scuttled a recent initiative that would have forced elites to pay full utility costs and newly introduced property taxes on undeveloped land. Arresting high-profile household names, people long considered to be untouchable, was the best way for the King and the Crown Prince to deliver the shock needed to recalibrate the behavior and expectations of the elite class.

What the King and MBS are attempting is not new for developing states pursuing comprehensive socioeconomic transformation. In 2008, the ruler of Dubai responded to Dubai’s financial collapse by mounting a wide-scale purge of senior government officials who had perpetuated the corrupt practices that were rife during the emirate’s rapid development. Chinese leader Xi Jinping’s 2012 campaign against his fellow “princelings,” descendants of party scions whose station gave them unparalleled economic privilege and virtual control over key sectors of the national economy, also comes to mind.

Both campaigns were initially shocking and considered to be highly controversial among observers who questioned the wisdom and speed of such actions, but they proved to be politically popular because they demonstrated a firm break with a venal past. Powerful elites who for decades had avoided accountability were publicly investigated, detained, prosecuted, and sentenced. Today, both Dubai and China are better off for it.

The detention of the Kingdom’s own princelings, while clearly authoritarian and also populist in nature, is necessary to bring about the type of social and economic transformation the Kingdom needs to restructure the social contract between the throne and the people. Are these actions risky? Absolutely. But when comprehensive reform is required to safeguard the Kingdom’s post-petroleum future, and when the status quo (with, at best, a glacial approach to reform) threatens the country’s present, decisive action is not only preferable to inaction but also actually far less risky.

The Future: next exit

Conclusions.

Paradoxically, the Saudi “purge” may very well secure the future of Saudi elites as a class, and even the future of the very elites who were arrested. In Dubai, the crackdown ended when convicted elites were quietly released after they had returned looted state assets. It is probable that the Kingdom will follow a similar path. For Saudi elites, succumbing to a “revolution” from above that requires them to forfeit some of their extreme wealth and privilege is still preferable to a real populist revolution from below, which would wipe them out completely and destroy the country.

————————————-

Ali Shihabi

About the author

“Ali Shihabi is the founder and the executive director of the Arabia Foundation. A Saudi national, he graduated with a BA from Princeton University and an MBA from Harvard Business School.

“Ali began his career in Riyadh in 1985 in banking and finance. In 1999 he founded Rasmala, a GCC-focused private equity fund. In 2012, he took early retirement from banking to write two books: Arabian War Games: Cataclysmic Wars Redraw the Map of the Middle East, a work of fiction published in 2013, and The Saudi Kingdom: Between the Jihadi Hammer and the Iranian Anvil, published in 2015 as part of the Princeton University Series on the Middle East. Ali is a member of the board of trustees of the International Crisis Group.”

About the Arabia Foundation

The Arabia Foundation is an independent, Washington, DC-based think tank focused on the geopolitics and socioeconomics of the Middle East with a particular focus on the states of the Arabian Peninsula.

“Established in 2017, our core mission is to provide insights and encourage debate on the domestic and foreign politics of key regional states and non-state actors as well as their relationships with the United States. We also aim to highlight and contextualize the significant social and economic transformations that are currently taking place within many of these countries.

“Our reports, analyses, commentary, and events are designed to be a resource for {those} who wish to better understand the complexities of an opaque part of the world that remains critical to global stability. The Arabia Foundation is …privately funded by corporate and individual donations. For more information, follow us on Twitter (@ArabiaFdn) and on Facebook.”

Note their all-star Advisory Board and the analytical depth of their professional staff.

For More Information…

For more about this week’s events see “Saudi Crown Prince’s Mass Purge Upends a Longstanding System” (NY Times). How are they getting the Princes to turn over their cash? “Senior Saudi figures tortured and beaten in purge” (this is a story, as yet unverified).

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).

A National Bureau of Economic Research study published in September estimated that the Princes have stashed offshore funds equivalent to roughly 55% of Saudi Arabia’s GDP. About those hopes for a cash windfall: “Why Saudi may struggle to repatriate assets after corruption crackdown.

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).
  6. Stratfor explains this week’s coup in Saudi Arabia.

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.

 

8 thoughts on “Ali Shihabi explains what the media won’t about Saudi Arabia

  1. I agree. This is a helpful supplement to analytically sound reports from other sources with perhaps less insight into the SA community of elites. I trust these other reports as well because they acknowledge their limited understanding of the inner workings of the SA social order. Needless to say, none of these alternative sources are part of the legacy or “commenters in pajamas” of the self-styled “new media”. All of these are focused on mesmerizing their audiences to focus on the “urgent”.

  2. Thanks for posting this. Analysis of recent developments in Saudi Arabia giving a logical explanation of who is doing what to whom and why tends to be scarce.

    1. The Man,

      Sad but true. That’s an example of a general observation I’ve wanted to write about: US policy debates usually take place on the weakest of factual and analytical foundations. Crime, climate change, education, defense — the motto for all of them is “the elephant is great and powerful, but prefers to be blind.”

  3. Very interesting. I wouldn’t mind seeing more from Mr. Shihabi.

    “In 2008, the ruler of Dubai responded to Dubai’s financial collapse by mounting a wide-scale purge of senior government officials who had perpetuated the corrupt practices that were rife during the emirate’s rapid development.”

    I never thought I’d be envious of Dubai!

    1. PAT,

      That’s a powerful point, one I’ve obliquely mentioned hundreds of time. Political regimes suffer senescence, just like individuals. Sometimes harsh measures are necessary for rejuvenation. That has often been the case in Western Civilization.

      The high-minded critics of the Crown Prince’s actions seldom — if ever — mention what he should have done to get Saudi Arabia off the path of certain destruction at the hands of “blood sucking” Princes. Note that, once again, Trump stated the unspeakable obvious — to be ignored by the American Great and Wise, with their hands over their eyes and ears.

  4. “…. to be ignored by the American Great and Wise, with their hands over their eyes and ears.”
    And with hands around their mouths (as megaphones) to insure they can dominate the verbiage battle. This article helps prevent this. Thanks.

Leave a Reply