This flush out has ramifications on global bourses, oil prices and jobs across the world
By Mridu Kumari
Before knowing what is happening inside the Saudi kingdom and why 32-year-old Crown Prince Mohammed Bin Salman has triggered a quake inside the palace, it is important to understand that Riyadh is preparing itself under “Vision 2030” for a post oil era phase. Under this, the kingdom wants to usher in social and economic reforms. It wants to get rid of old, hackneyed and ultra-conservative laws that forbid women from driving car, entering sports stadiums, going to restaurants and getting access to government services such as education and healthcare without the need of consent of her father, husband or brother. And then since 2011, women are already enjoying voting rights and have been appointed to the Consultative Assembly, a formal advisory body meant for the King.
Together with such reforms, need of hour for the decades old kingdom is to clean itself of rampant corruption. Bribes, lavish kickbacks are said to have long been an integral part of doing business in Saudi Arabia, the world’s leading oil producing nation. Many of those sitting on important decision making posts are said to have amassed enormous wealth, in some cases running into billions of US dollar. The Crown Prince taking benefits of a new anti-corruption committee formed by his father and the King on November 4thlaunched major crackdown against corruption across the country. Backed by his father, the Crown Prince got arrested several princes, ministers and wealthy tycoons.
According to Al Arabiya television, police arrested 11 princes, four ministers and dozens of former ministers. Prince Alawaleed bin Talal, one of the world’s richest men was also arrested. Economy and Planning Minister Adel Fakeih was removed from his post and replaced by Mohammed Al-Tuwaijr. Highly influential authority in the kingdom, Prince Miteb, son of late King Abdullah was also sacked from his post as the head of the powerful National Guards and replaced by Prince Khaled bin Ayyaf.
But steely ruthlessness of the Crown Prince has the blessings of the US, the Uncle Sam which wants Saudi Arabia to become modern, powerful anti-corruption and anti-jehadi crusader in the Muslim world. In July, Saudi Arabia along with the UAE, Bahrain and Egypt cut off its diplomatic engagement with Qatar after accusing the latter of supporting terrorism and destabilizing the region. Yemen and the Maldives had followed the suit. In this move, the US was seen as key mover and shaker. It had taken place two months after US President Donald Trump’s first overseas visit to Saudi Arabia in May after taking office.
During his visit, the US President was said to have raised the issue of funding by the kingdom for Wahhabi schools running across Sunni dominated Muslim countries. Several countries, including European Parliament has identified Wahhabism as the main source of terrorism. Taking leaf out of such outcry against Wahhabism, the US President was said to have had asked Riyadh to curb such funding activities; he also told the officials of the kingdom about expediting social, religious and economic reforms. In that way, many of actions of the Crown Prince are seen as being undertaken at the US behest.
Even if it is judged as baseless, his sudden move to purge the kingdom of corruption and misdeeds of elites belonging to the royal palace can’t be separated from his burgeoning ambition to control over the key levers of the country before his final ascension. Octogenarian King Salman still has the last word on every domestic and foreign issue. However, he has delegated the running of the Kingdom’s military, security, economic, foreign and social affairs to the Crown Prince. There has been speculation for months, denied by court officials, that the king will soon abdicate the throne to MbS, as the Crown Prince is popularly known by. He runs the all-powerful royal court, and he has some useful allies.
After his visit to Washington and President Donald Trump’s trip to Saudi Arabia, bond between the Crown Prince and the White House has become stronger. He is popular with the young, despite dragging the country into a seemingly unwinnable war in Yemen. For a start, the elevation of young, untested prince to be next in line to the throne has upset the usual line of succession. This has rattled royal family members. They are grumbling that the Crown Prince is taking on too much and too quickly.
Some insiders say tensions were laid bare during family meetings over the summer. One insider said it was widely known to Crown Prince Mohammed that some of the powerful royals, including Miteb, were resentful about his elevation. It should be noted that he was appointed defense minister in 2015 when King Salman became monarch. In June, the King named him heir to the throne, pushing aside his older cousin Mohammed bin Nayef, a veteran head of the security apparatus. Soon after this, he had openly said in interviews that he would investigate the kingdom’s endemic corruption and would not hesitate to go after top officials. And this was proved right after anti-corruption committee was created in the first week of November. Saudi authorities have questioned 208 people in the anti-corruption investigation and estimate at least $100 billion has been stolen through graft, the attorney-general said.
The head of the committee said investigators had been collecting evidence for three years. By launching a war on corruption, the prince has combined a popular cause with the elimination of an obstacle to acceding to the throne.
Yet more worrying thing is how the religious conservatives will react in the long-term. The kingdom depends on clerics for their legitimacy to rule the home of the two holiest places in Islam, Mecca and Medina and the King is regarded as the custodian of the two holy mosques. In fact, the kingdom has over the years existed on an enduring cohabitation between the royal family and the clerics who control the hardliner version of Islam that originated in Saudi Arabia. They have so far adjusted to life after curbs on their power were imposed.
Yet how will they react when cinemas and other Western-style forms of entertainment are being introduced? How will the huge and well-connected Saudi business community react to the anti-corruption move? Secondly, can the Crown Prince deliver on his promise of jobs for the kingdom’s youth? In time, it will be history which will decide whether the purge started by the Crown Prince has set the course for a better, cleaner Saudi Arabia, or whether it has started to melt the glue that holds this complex country together.
Significantly, the ruling establishment of the kingdom promised to give Saudis comfortable lives and a share of the country’s oil wealth. In return, their subjects have offered political submission and promised to follow the country’s strict religious and social codes.
King Abdulaziz, who was also known as Ibn Saud, died in 1953. Since that time Saudi Arabia has been run by the King and below him there has been a group of princes, none of them strong enough to impose his will against the wishes of the others. Decisions have mostly come through consensus. But the Crown Prince appears intent to tear asunder this consensus path which has been the core of the political stability of the country. He has not appointed any of his brothers or other close family to top positions, instead relying on a team of advisers mainly Saudis, some of whom are America or Britain trained specialists.
The 32-year-old Crown Prince believes that unless the country changes, the economy will sink into a crisis that could fan unrest and could threaten the royal family and weaken the country in its regional rivalry with Iran. The attorney general has already announced that “phase one” of the purge is complete, implying there are more arrests to come.
The ruling Al Saud family has never revealed how much of the nation’s oil wealth goes to which princes and their families, and there are thousands of them. Yet for now, he would love to get his hands on some of offshore private assets of Saudis, estimated by some to total as much as $800bn. But where does it end? The second-to-the heir says he offers a new social contract: A state that functions better than the rigid bureaucracy of the past, opportunities to have fun and an economy that will create jobs that can last, whatever happens in oil markets.
Nonetheless, the unprecedented purge move has shaken the Middle-East with politicians, diplomats, journalists scrambling to analyze its significance. Since tension has escalated between Saudi Arabia and its rival Iran following the resignation of Lebanon’s Sunni Prime Minister Saad Hariri. Interestingly, he did so after landing in Riyadh. While the development has thrown Lebanon into crisis, Iran, strong ally of Hezbollah which was in power sharing arrangement with Hariri-led outfit, blamed Riyadh for the crisis.
But Hariri claimed that he had been under threat of assassination and blamed Tehran’s influence on Lebanese politics for his resignation. Hours later, Yemen’s Houthi rebels who enjoy Iran’s backing, fired a medium range rocket on Riyadh which was intercepted. In a televised announcement, Houthi rebels said they had launched a long range ballistic missile targeting King Khalid international airport of Saudi Arabia. It wasn’t immediately clear if Hariri’s stepping down and the missile launch was connected to each other or not. A day before Hariri resigned; he claimed that he had a meeting with Ali Akbar Velayati, a top adviser to Iran’s supreme leader, Ali Khamenei in Beirut. Few details of the meeting were disclosed, but Iran’s Fars News Agency said the two men clashed over Yemen, with Velayati rejecting a Saudi proposal to end a crisis that has been a drag on Riyadh’s coffers.
Since the Arab uprisings of 2011, Gulf regimes such as Saudi Arabia have lived in existential fear of the sudden eruption of popular mobilization, while pursuing unusually interventionist foreign policies across the region. The extended Saudi power transition at home and its erratic pattern of failed foreign policy interventions must be understood within this wider regional context. Though seemingly unprecedented, the weekend’s developments follow the pattern Mohammed bin Salman has used since the beginning of his rapid ascent to power three year ago. In both domestic and foreign affairs, he has consistently undertaken sudden and wide-ranging campaigns for unclear reasons which shatter prevailing norms. At home, this audacious political strategy has proven relatively successful, at least in the short term. Abroad, foreign policy gambits such as the intervention in Yemen and the blockade of Qatar have rapidly degenerated into damaging quagmires. Saudi Arabia’s institutions are strong enough to mitigate the effects of provocative policies, yet international politics are less forgiving and have fewer safety nets.
Virtually every major foreign policy initiative the Crown Prince has championed has proved disastrous, often producing precisely the negative results that the move had been designed to prevent. Whatever the justification for the initial intervention following the advances by the Houthis and former Yemeni President Ali Abdullah Saleh, it has long since been clear that the military intervention had failed. The Saudi-UAE coalition has continued a relentless blockade and bombing campaign without any meaningful political horizon or evident theory of victory. The humanitarian impact has been catastrophic. The weekend’s reported missile attack on Riyadh demonstrates that the costs of this stalemate cannot be contained within a shattered Yemen.
The Qatar campaign has been similarly disastrous, effectively destroying the Gulf Cooperation Council in a quixotic effort to impose Saudi-UAE leadership. Despite the promise of rapid Qatari capitulation, the conflict quickly settled into an entrenched stalemate that has paralyzed the GCC and escalated the toxic polarization of regional politics. This quagmire exposed Saudi Arabia’s weakness and its inability to play the role of regional hegemon to which it aspired. Even in partnership with the UAE, Saudi Arabia managed to bring only Bahrain and Egypt into its anti-Qatar coalition, while the rest of the region struggled to avoid taking sides.
This pattern raises real concerns about the development in Riyadh, Hariri’s announcement of his resignation, and the escalation of Yemen’s war following a missile targeting Riyadh. Ordinarily, each could be considered primarily local developments, a reshuffling of Lebanon’s political deck and another ratcheting upward of Yemen’s two-year-old war. The Crown Prince’s domestic power grabs have often been accompanied by major foreign policy moves. Many regional observers therefore fear that Hariri’s resignation, announced in Riyadh with a sharply anti-Iranian speech, could trigger a political crisis intended to end with a military campaign against Hezbollah. Such a move would fit the pattern of bold foreign policy initiatives launched in the expectation of a rapid, politically popular victory. It would also very likely follow the pattern of such initiatives rapidly collapsing into a bloody, destabilizing quagmire. But then trepidation looms large over investors and businessmen too.
The purge moment has ramifications on international stock markets, oil prices and jobs across the world. In fact, revenue generated through oil by Saudi Arabia has its ways to various corporations around the world. Billions of dollar worth of money every year is invested to build the country’s engineering projects, run its oil fields and technology and purchase weapons for its security. Therefore, what way the present development within the richest Middle-East kingdom will take? Whether the Gulf would plunge into deep crisis in the aftermath of the Crown Prince’s elevation? Answers to all such questions lie in the deep and unknown womb of future.