Saudi Arabia’s new crown prince, the 31-year-old Mohammed bin Salman, presents himself as a modernizer. His supporters see him as bringing Saudi Arabia up to date with the needs and aspirations of its population, who are accustomed to being ruled by men in their 80s but are mostly under 30 themselves. His critics see him as inexperienced and reckless.
Whatever view is taken, MBS, as he is nicknamed, is disrupting the traditional model of Saudi government on a number of fronts at once. Foreign policy has changed dramatically, from the war in Yemen—the first war Saudi Arabia has led since the state was formed—to joining forces with the UAE, Bahrain and Egypt to boycott Qatar. Moreover, his sudden elevation to crown prince in June broke with tradition in a dynasty where power has long been shared between elderly half-brothers—the throne has only once before passed from father to son.
But while MBS is changing Saudi Arabia in many ways, one change is conspicuous by its absence: political reform. Nonetheless, this can’t be neglected forever, as all the other changes are altering the social contract that the kingdom has established over decades.
With an eye to the concerns of Saudi youth, MBS has associated himself closely with Vision 2030, a raft of economic reforms to reduce the country’s unsustainable dependence on oil and create more private-sector jobs, and with a gradual relaxation of the country’s tight social restrictions, including a new government agency for entertainment bringing pop concerts to Saudi Arabia.
Building on a whole series of economic diversification policies that Saudi Arabia has developed over the years, Vision 2030 promises to develop Saudi Arabia as a centre for business, trade and logistics, and tourism. MBS is also planning to sell a stake in Saudi Aramco, the world’s largest oil company, and use it to set up a sovereign wealth fund. The idea is that a thriving private sector would replace the traditional role of the public sector in providing jobs and fuelling growth.
This is a necessity, because oil-price trends make it clear that the government cannot afford to keep expanding public spending indefinitely. The problem is that attracting private investment is also difficult when oil prices are low, as investors still tend to judge Saudi Arabia’s growth prospects on the basis of the oil price. Thus, the negative effects of fiscal austerity have been felt immediately, whereas its promised benefits have yet to materialize. In one dramatic move, the government cut a complex system of benefits in the public sector, which employs twice as many Saudis as the private sector does, with the result that many people’s take-home pay was cut by some 20 per cent.
Unsurprisingly, people complained. To appease public sentiment, King Salman, MBS’s father, reversed those cuts in April and said everyone would receive six months of back-dated benefits to compensate.
A predictable backlash
The U-turn showed the difficulty of changing the economic bargain in a country where the social contract has for decades been shaped by the government’s ability to disburse revenue without needing to levy income tax. But this is an old story, which has been repeated many times in Saudi Arabia and other Gulf states. The new leadership could have predicted the backlash, and prepared for it better, by making the changes more gradually, communicating them to the public better, and working to establish social safety nets before starting the austerity programme. Looking ahead, it is predictable that jobs will be the next challenge.
Cutting back on government spending, and privatizing government entities, will result in job losses. It will take years for the private sector to replace the jobs lost in the public sector. The risks of growing inequality and social exclusion pose a number of risks in a political system predicated on the paternalistic provision of benefits by the state. The implications for the social contract need to be addressed.
MBS is driving change in economic policy, the business sector, foreign policy, social norms, and the way power is shared within the ruling family. That means change in virtually every sphere—except for political reform. Whereas King Abdullah introduced municipal elections and appointed women to the consultative Shura Council for the first time, the new leadership has not laid out any proposals for political reforms. They feel no pressure to do so. The violent fallout of the Arab uprisings has deterred most Saudis from mobilizing politically at home. Some have been arrested; many more simply fear that rapid political change could bring them something worse.
The challenge from jihadis
With moderates muffled, the only serious challengers to the system are the extremist jihadi groups—ISIS and Al-Qaeda—which have recruited thousands of Saudis, but have alienated the majority of the country’s population, who don’t want violent upheaval. And whereas the US used to call for political reform in Saudi Arabia, few in the West have the appetite to do that at present. Saudi leaders will simply say Western-style political reforms— such as introducing an elected component to the shura council—would be inappropriate, or would empower extremists.
But that is precisely why Mohammed bin Salman should empower Saudis to develop more indigenous ideas for political development and reform, to provide alternatives to imported models, and indeed to extremist ones. After all, the various changes he envisages point to a future where Saudi citizens are no longer guaranteed a job, and no longer certain they can depend on the US for their security, while powerful clerics and princes are no longer certain of their standing. All this is bound to disrupt the country’s implicit social contract, with significant political implications.
Opposition in Saudi Arabia won’t be subdued forever, and MBS should not miss the opportunity to get ahead of the curve when it comes to political reform.
This article was originally published by Prospect.
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