Saudi Change is Slow
May 9, 2016
While Saudi Arabia is not always the easiest place to understand, Western misunderstandings of last weekend’s cabinet reshuffle are especially notable. The story that many newspapers issued was that the long-standing oil minister was sacked by an ambitious deputy crown prince who is wresting control of national oil policy on the way to implementing his ambitious national reform project.
The first misunderstanding is assuming there was something malicious about the replacement of the oil minister, an 80-year old who had served for two decades and was clearly looking for an opportunity to step down. Officials do not submit letters of resignation in Saudi Arabia; they serve at the pleasure of the king. While some officials—especially royals—are removed from positions “at their own request,” it is hard to find a pattern that suggests it has much meaning.
People who listened closely to the oil minister for the last three years find no sign of daylight between his policy and the policy of the palace. He consistently argued against losing market share in an effort to prop up prices. That is what the new minister is likely to do as well. This is not the deputy crown prince’s strategy. There is every indication that it has been and will be the national strategy.
It is true that the new oil minister is close to the deputy crown prince, but one should read his expanded portfolio—now extending to Energy, Industry, and Mineral Resources—as much a nod to the capabilities of the technocratic new incumbent as it is to the ambitions of the deputy crown prince.
Perhaps most fundamentally, attention paid to the ambitious “Vision 2030” program that the deputy crown prince rolled out has almost entirely been misguided. There is little question that the main ambitions of the program are sound, and they have been suggested by numerous advisers, consultants, and bankers for decades. Rather than be questions of economics, the key questions are questions of politics.
Economics in Saudi Arabia have been carefully tailored to meet the political needs of the rulers. Alliances have been built, and family solidarity has been maintained, by distributing the wealth of the state. Traditionally, economic change in the kingdom has been slow out of an abundance of caution. The deputy crown prince has to worry about resistance from two places:
1) The royal family itself, and the senior businessmen with whom it partners, have vast economic interests in the system as it is currently constructed. What seems like “efficiency” in some eyes not only threatens the livelihood of dozens of billionaires, but it does so at the whim of a young and ambitious prince who seeks to leapfrog dozens of cousins who have been patiently waiting their turn.
2) The population at large has accommodated itself to the current level of subsidies and the absence of taxation. Altering that system in any way will appear to the public as a vast system of price hikes without compensating increases in income and will breed resentment.
The deputy crown prince has garnered some positive attention, especially from young people, as a change agent. That much is new. But in point of fact, he hasn’t been able to accomplish anything visible since his rise that gives him instant credibility. The Yemen war has dragged on longer than anyone anticipated and to less certain results, and it is hard to imagine him getting much credit for diminishing government outlays on the population. Senior royals, perhaps out of jealousy as much as self-interest, may try to undermine his success. While the economic proposals of the deputy crown prince are interesting, managing the politics of their implementation will be a real struggle.
Jon B. Alterman is senior vice president, Brzezinski Chair in Global Security and Geostrategy, and director of the Middle East Program at the Center for Strategic and International Studies in Washington, D.C.
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