The Houthis bloodied Saudi Crown Prince Muhammad bin Salman’s nose—again—with their deadly, cruel, but effective attacks on Riyadh’s King Khalid International Airport last week. The strikes are the latest in a series of mostly self-inflicted setbacks—exacerbated by President Trump’s ill-considered war with Iran—that have frustrated the Crown Prince’s now decade-old aspirations to turn Saudi Arabia into a global economic, financial, and military powerhouse. Instead, MbS’s faltering economic reforms, combined with his bad bet on relying on Donald Trump as a security partner, are yet another reminder that Saudi Arabia is a weak state, dependent on and vulnerable to the whims of more powerful outside actors. And more than ever, the Saudis don’t have a good way out of that predicament.
The roots of MbS’s cascading problems lie in the early years of his de facto reign, which began in 2015, when he assumed the roles of defense minister and deputy crown prince. They stem from his personal arrogance and foreign misadventures, as well as his more admirable recognition—poorly acted upon—that the Saudi kingdom was, and remains, a relic in need of modernization and a future beyond hydrocarbons.
Over several years, MbS shattered Al Saud governing norms; alienated and pushed aside many members of the large and mostly indolent royal family; and sidelined the kingdom’s religious establishment (good riddance, say I). He also alienated neighbors such as Qatar and the UAE, ultimately to Saudi Arabia’s detriment, and started a war with the Houthis that he lost—and is now losing again.
MbS also unleashed much-needed economic and social reforms (women can now—gasp!—drive). The economy has gone from being mostly driven by government spending to being slightly less so. Homeownership is up, and unemployment among Saudis is down, according to IMF data. Nonreligious tourism grew from 2019 until last year, albeit from a low base. And Aramco’s kind-of, sort-of IPO in 2019 raised billions to support MbS’s ambitions in what was then the largest such offering in global equity history, although it now seems quaint beside the $85 billion SpaceX IPO.
But extravagant government spending in pursuit of unproductive, unachievable vanity projects (NEOM, anyone?) and MbS’s wild overestimation of the resources at his disposal are hobbling his ability to pursue the Vision 2030 economic reform program. And it turns out that, beyond the usual cadre of foreign finance bros and management consultants who are happy to bill the Saudi government by the hour or by the project, outside investors who could provide the capital and expertise needed to make the reforms viable are not convinced that Saudi Arabia is a place where they want to do business at the scale MbS needs. Net foreign direct investment in the kingdom last year was only about one-third of what the Saudi government had envisioned under Vision 2030. And, it goes without saying, 2026 is not proving to be a good year, with the IMF estimating that FDI will fall by about one-third.
The Crown Prince’s problems are not all of his own making, of course. But even so, his miscalculations have exacerbated the difficulties he is now struggling to address. The Iran war has scrambled the kingdom’s security and economic calculations, inviting Iran and its Houthi allies to prey on a country woefully unprepared for conflict despite decades of profligate but mostly ineffectual defense spending. The extravagant welcome MbS accorded Trump in Riyadh early last year has gained the Saudis mostly nothing. It’s not just that the Saudis—and other Gulf potentates, to be sure—assess that President Trump has treated them shabbily. It is that the American military has so far proved unable to achieve anything better than a stalemate against a third-rate regional power—Iran—with all the implications that sad fact holds for the region and for our global standing and credibility.
So where does this leave the now-middle-aged Crown Prince and the country he rules as he contemplates the coming decades of his reign? Recalibrating and scrambling, to be sure. Many of the investment megaprojects that were once cornerstones of his Vision 2030 program are dead or on life support. Three prominent examples are the now-bankrupt, Saudi-financed LIV Golf league; The Line at NEOM; and the absurdly overpriced, vanity-driven $50 billion giant cube, the Mukaab in Riyadh. And the economic pain is bleeding into other prestige projects as well, including the postponed (read: canceled) Asian Winter Games originally scheduled for 2029. The tens of billions spent—and the tens of billions more not spent because the country can’t afford it—have left the Saudis mostly where they were after all their past failed efforts to diversify the economy: reliant on hydrocarbons to sustain it and pay the government’s bills. Vision 2030 has changed that at the margins (and the vibes of living in and visiting the country are certainly different), but not in a fundamental way.
Compounding MbS’s woes, of course, is the regional security earthquake brought about by Trump’s Iran war. The United States is receding and retreating from its role as regional hegemon and the Crown Prince can be under no illusion that this will change after Trump leaves office in 2029. The Saudi brand is toxic among Democrats, and the emergence of the US as the global energy superpower under President Obama and during the first Trump administration has fundamentally changed the relationship between Riyadh and Washington. So, again, Riyadh is reduced to trying to do what it has always been forced to do: seek outside protection while also accommodating its adversaries.
The Crown Prince’s options are not good. His much-vaunted security agreement with Turkey and Pakistan demonstrates how poor his alternatives are to the now-defunct Pax Americana—and must also be personally humiliating. After all, one of his putative new protectors, President Erdoğan, gleefully embarrassed the then-young Crown Prince after Saudi agents murdered Jamal Khashoggi in Turkey in 2018. And anyone who has spent time in the kingdom knows well the lingering distaste for—and insecurity about—the country’s former Ottoman masters. As for Pakistan, it takes little imagination to understand how that benighted and impoverished country is viewed by the kingdom’s ruling family.
At a more practical level, Turkey and Pakistan will never replace the military capabilities of the United States, and both countries’ commitment to their new security agreement will be limited by the simple fact that Iran holds them at risk as well. Riyadh’s security strategy will probably closely resemble its current response to the Houthi threat, as detailed in a recent Wall Street Journal article: scouring the globe for weapons to defend against missiles and drones, contemplating hiring mercenaries to fight in Yemen in lieu of Saudi forces that are demonstrably not up to the task, and quietly seeking an accommodation with the Houthis to try to make the whole thing go away. In a region fundamentally altered by the US-Iran war—with US credibility as a security partner in tatters and Iran emboldened, if weakened—good luck with that.
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