Results from Iraq’s elections show that a determined young generation can organize and win seats, no matter the obstacles placed in the way by a political system most Iraqis lost faith in long ago.
Saudi Crown Prince Mohammed bin Salman refers to this era as the fourth Saudi state, so profound is the transformation of institutions and practices across ruling structures, the economy, and society. There have been recent dramatic examples of the fourth state’s decision making, with power plays on both the domestic front and international arena. The detention of two leading royals and the torching of the Saudi-Russian oil compact are illustrative of the new political dynamics under MbS, in which policymaking has been centralized and foreign policy is shaped by nationalist assertion. Both moves reflect the revised social compact, with political and economic risk now shared across society.
Disciplining the Royal Family
On March 5, multiple news organizations reported the detention of the king’s brother, Ahmed bin Abdulaziz, and nephew, the former interior minister and once Crown Prince Mohammed bin Nayef. Initial speculation that the arrests were to prevent a coup attempt did not appear borne out by events. While there were reports of broader detentions concentrated in intelligence circles – including the current Interior Minister Abdulaziz bin Saud bin Nayef and his father, who is Prince Nayef’s brother – they were quickly released and photographed resuming their official duties.
It is difficult to know with certainty the motivation behind the continued detention of Prince Ahmed and Mohammed bin Nayef. There has been no official public recognition of their arrests. Sources close to the royal family stated the arrests were meant to send a “message to anyone in the royal family feeling disenfranchised: stop grumbling and toe the line.” Another report in The Guardian suggested the two may have been discussing ensconcing Prince Ahmed as chairman of the Allegiance Council, a body created by former King Abdullah to institutionalize royal input on future leaders. The council is responsible for initiating the call for allegiance to the crown prince to become monarch were the king to die or become incapacitated.
As leading candidates from the first and second generation respectively, Prince Ahmed and Mohammed bin Nayef have drawn attention as alternatives to the crown prince from disgruntled royals and countrymen angered by MbS’s policies and the abandonment of longstanding royal norms. While there were reports that Prince Ahmed was one of three royals to withhold support within the Allegiance Council for MbS’s ascension to crown prince in 2017, neither has acknowledged any ambitions to rule, nor do they bear the means to achieve such ambitions. With state institutional authority now consolidated within the royal court, the Allegiance Council is the one institution where, legitimately, their traditional social capital might have weight.
It has been MbS’s modus operandi to anticipate any potential opposition and get ahead of it. The crown prince has ruthlessly controlled messaging, compelling public affirmations of his policies and rule, especially at critical times. It is telling the arrests coincided with another momentous decision – on the international stage – with even more profound implications for MbS and his reform agenda.
Disciplining Oil Markets
The coronavirus epidemic is precipitating a historic collapse in economic activity and drying up energy demand, the lifeblood of Gulf oil exporters. The extraordinary March 5 meeting of the OPEC conference, and subsequent March 6 OPEC+ meeting with Russia, were always going to entail tricky negotiations and difficult choices. Primary among these were talks with Russia, which, alongside Saudi Arabia, has been cooperating since 2016 to shore up oil prices by limiting output among OPEC and several non-OPEC producers.
These negotiations were headed by MbS’s half-brother, Energy Minister Prince Abdulaziz bin Salman, who became the first royal to hold the post following the removal of Khalid al-Falih in September 2019. This shuffle was indicative of the consolidation of energy policy within the royal court, and in service of the ambitious Vision 2030 agenda championed by the crown prince. Indeed, at the same time, the chairmanship of Saudi Aramco was handed over to Yasir al-Rumayyan, the MbS confidant heading the Public Investment Fund. The PIF has been playing the leading role in diversifying the economy, through high stakes investment abroad, but also through multibillion-dollar investments at home, establishing whole new industries and even new cities. To finance these needs, Saudi Aramco has been pressed to produce immediate funds, whether garnered through the purchase of the parastatal Saudi Basic Industries Corporation or through its own limited privatization.
These policies necessitate high oil prices. Saudi Arabia entered the March OPEC conference intent on cutting oil output further and pressured Russia to do the same. Nevertheless, when Russia balked, preferring to wait until the inevitable lower prices thinned out high-cost producers such as the U.S. shale industry, Saudi Arabia dramatically shifted strategy. Reports from Vienna indicate the crown prince directed his brother to start a war for market share, which has contributed to oil prices plunging to their lowest point in 20 years.
Rational management of oil markets, economically speaking, would recommend cutting output at a time when oil demand is cratering, and global financial markets are teetering. Yet this crisis comes at a time of nationalist assertion when global institutions and international cooperation are at their weakest. Instead, the emerging global order and hierarchy of states are being tested through contests of power, both military and commercial. As Saudi Arabia’s global clout derives from oil production, it is perhaps unsurprising that MbS chose that arena to challenge Russia. He issued an ultimatum, but Russian President Vladimir Putin refused to acquiesce.
Saudi Arabia is confident it can win this oil price war, but at what cost? Certainly, the impending collapse of oil revenue, and with them, MbS’s ambitious economic plans, will constitute a challenge more severe than that posed by any potential royal rivals.
The national political considerations driving oil policy are echoed in the nationalism reshaping politics in the kingdom. As MbS has diminished the power of princes, he has boosted his reliance on the Saudi public, both for political support and contributions to the economy. This places the Saudi public on the hook for decisions in oil markets in ways that impact them with more immediacy than before.
It is unclear how this will impact government legitimacy in the oncoming era of fiscal restraint. Saudi commentators have taken to both the international and domestic press to explain this reversal in oil policy. Op-eds consistently praise MbS for standing up to Putin and assure the public that the battle for market share will pay off. Still, it is hard to see how the dramatic shift in oil policy – from a high price strategy to low – will coexist with the considerable state investments in entertainment, technology, and tourism favored in the MbS era.
The fallout from the coronavirus crisis and new low oil price strategy is having an immediate impact on the Saudi budget. Ministerial directives have been issued to cut spending by 5%, with future studies contemplating a 20% reduction in government spending. To make up for the shortfall, Saudi Arabia is considering raising the government debt ceiling from 30% to 50% of its gross domestic product, although easy credit may be harder to come by if global financial markets seize up.
Meanwhile, Saudi banks and individual investors urged to display national pride by investing in Saudi Aramco have seen their holdings in the flagship company diminish by over 20%. While the investment by the Saudi public in Aramco demonstrated public confidence in the Saudi state, it effectively multiplied the public’s exposure to oil risk, amplifying the cost of the current downturn.
Still, it may not be the last sacrifice the Saudi state demands of its citizens. If the economic situation further declines, the Saudi government is likely to lean further on the new nationalist narrative promoting a strong work ethic and greater self-reliance. Meanwhile, the Saudi anti-corruption commission, Nazaha, announced the detention of nearly 300 civil servants, enhancing the government’s populist credentials and signaling determination to continue a crackdown on abuse of public funds.
Saudi Population Invested, and On the Line
As the crown prince has championed the Saudi transformation, he has put his imprint on decision making in energy, economic, and foreign policy. While sidelining princes, he has mobilized Saudis to support social changes and to give more, from their labor and their finances. As high-stakes maneuvers such as the confrontation with Russia add up, the Saudi population is now personally invested and on the line.
With each round of detentions, the debate resumes: Is MbS doing this because he is strong? Or because he is weak? Perhaps a different question should be asked. Is this simply the new normal for a kingdom in which popular mobilization – and intimidation – are more central to governance? As the kingdom moves with much of the globe toward more trying economic times, we can expect even more reliance on these measures.
AGSIW's Geneive Abdo spoke with Akeel Abbas, an expert on Iraqi politics and sectarian identities, to discuss the results of Iraq's October 10 parliamentary elections.
A Kuwaiti-Bahraini duo engages Gulf architects, designers, and the public in bringing the built environment to life through storytelling.
Through its careful examination of the forces shaping the evolution of Gulf societies and the new generation of emerging leaders, AGSIW facilitates a richer understanding of the role the countries in this key geostrategic region can be expected to play in the 21st century.Learn More