Ripple effects have been felt across the Kingdom as the Saudi royal family transitions to a new generation of leaders. According to former U.S. Ambassador to Oman, Gary Grappo, the new economic plan introduced by Deputy Crown Prince Mohammed Bin Salman, while ambitious, “will help the country diversify greater and more quickly than it has already been doing.” Further, Grappo explains that the increasing number of social media users among the younger generation of Saudis and the political-religious dynamic within the Kingdom, are both interesting developments to watch.
The Cipher Brief: After ascending to the throne in January 2015, Saudi Arabia’s King Salman reshuffled the ruling family, appointing Muhammad Bin Nayef as Crown Prince and his son, Mohammad bin Salman, as Deputy Crown Prince. How did these moves impact dynamics within the royal family? Has there been a ripple affect in the royal family as a result of these appointments?
Gary Grappo: There were some surprising aftereffects from the change in Saudi’s succession lineup. Previously, under King Abdullah, Prince Muqrin bin Abdulaziz was in line to assume the throne. He is the youngest brother in the second generation Ibn Saud line, and now with Mohammed bin Nayef, they have moved to the next generation, and then considerably down that line in terms of King Salman’s appointment of his son, Mohammad bin Salman, as the Deputy Crown Prince. This was surprising, because typically any tension or dissent within the royal family rarely surfaces. But early on, there was a bit of dissent that began to emerge, including anonymous chatter that made it into the media, which opposed this approach and particularly the skipping of Prince Muqrin.
That came out in the early period after King Salman bin Abdulaziz assumed the throne. However, I’ve heard or read very little since then.
I suspect that either those in the dissent category have been mollified in some fashion, or they’ve pretty much come around to accept the current lineup as it is. The real concern here was the appointment of King Salman’s very young and inexperienced son as Deputy Crown Prince, Defense Minister, and the person in charge of the Saudi economy. It is an enormous portfolio, which allows him to wield considerable power. The royal family may have been upset that those responsibilities weren’t more evenly distributed among the family as typically has been done.
TCB: What role has the next generation of Saudi leaders, such as Crown Prince Muhammad Bin Nayef and Deputy Crown Prince Mohammad Bin Salman, played in Saudi’s shifting foreign and economic approaches?
GG: The most obvious one has been on the economic side, where we’ve seen Prince Mohammad bin Salman come out with a new economic policy. He very ambitiously predicted that Saudi Arabia would no longer be dependent on oil revenue by 2020. This is extraordinarily ambitious and a goal unlikely to be met given the structure and the economic dynamics of the country and some pretty difficult problems that they are facing internally and socially. I’m not sure that they can meet this.
Nevertheless, I think the response both internally and externally has been generally positive, which is not such a bad thing for Saudi Arabia, particularly in light of the impact of the very low oil prices and the likelihood of low prices continuing for a bit longer than most people had expected. The country needs to diversify greater and more quickly than they have already been doing. For that reason, maybe Saudi Arabia’s new economic measures may not be such a bad idea. They are ambitious and that probably comes with a very young and inexperienced person setting lofty goals. We’ll have to see. If oil prices continue at this point, he is more likely to reach that goal, of course depending on how well this economic reform plan does. On the other hand, if prices resume the upward climb and reach anything approaching what they were a couple of years ago, then that certainly is not going to happen.
TCB: What is the current popular sentiment toward the Saudi ruling family? Have falling oil prices or the intervention in Yemen affected local attitudes?
GG: As the civil war in Yemen drags out, there may be increasing backlash against the royal family. One the one hand, the death toll of Saudi’s fighting in Yemen has been fairly low—I don’t know the exact figure, but it has been low. The Saudis have avoided sending large numbers of ground troops into Yemen; they have sent a few in, but only around the peripheries, and they don’t stay for very long. For the most part, the Saudis rely virtually entirely on air power to weaken the Houthis in Yemen.
Nevertheless, the war is quite costly, and is a drag on what is now a constrained budget. The Saudi finance minister, the International Monetary Fund (IMF), and others are predicting a fairly significant budget deficit this year, and they already had a deficit last year. On top of that, there are several social programs that the Saudis need to address. Some are included in Deputy Crown Prince Mohammad bin Salman’s economic plan, but he and the rest of the Saudi leadership should be looking for a quick exit from Yemen, which means capitalizing on some of the facilitating offers that have been put forth by Oman and others to bring this civil war to a conclusion.
On the economic side, based on what I’ve been able to read and some things that I’ve heard, among the younger generation, this new economic plan is not necessarily unpopular, because it will afford the young generation of Saudis greater opportunity. This is what they all want. According to the latest statistics, youth unemployment is over 25 percent in Saudi Arabia, a figure that is not uncommon for the region these days given its stagnant economic growth. But for Saudi Arabia, that’s high. It is certainly in, what I would classify, as a dangerous category for any country.
Further, Saudi Arabia is a country with an unwritten social contract: there are no taxes, there is no draft, there is a very generous social welfare program, and of course there is no democracy as a result. Now with the claimed imposition of a tax that is set to be implemented by the end of this year, Saudi citizens may begin to wonder, “Taxation without representation doesn’t go over so well.” That will certainly bear watching.
However, for the most part, it seems that the younger Saudis see potential opportunities with the new economic plan. They see what appears to be a genuine effort to address unemployment in the country and increase new opportunities outside of the oil sector. I don’t see them necessarily reacting very strongly or critically against this proposal.
Of course the implementation will be the test, and it is just getting started. Things like privatizing a small percentage of Saudi Aramco, on paper, could be great - there won’t be any shortages of businesses interested. On the other hand, are the Saudi’s prepared to lay bare the financial data about Saudi Aramco, which heretofore they have not? This financial data has pretty much remained a state secret. I met with former Saudi Oil Minister Ali Al-Naimi some time ago, and he was always very cautious about releasing financial details about Saudi Aramco, as has the leadership of Saudi Aramco and the Saudi royal family. That’s not something they’ve wanted to talk about, certainly not to the Saudi public. Now, with investors supposedly being recruited, we’ll see how forthcoming they are going to be.
Generally speaking, Saudi Arabia is certainly one of the more enigmatic countries in the world. One of the stranger things in Saudi Arabia is that change typically comes from the top down. The reformers have been the royal family and the inner circle of advisors and ministers who are western educated, most-often in the U.S., and who propose and implement change generally for the good of the country. This is very different from many other countries around the world where change comes from the bottom up.
Also, today, more and more young Saudis are becoming active on social media, and that’s not a bad thing, certainly from the human rights standpoint but also for the general health and wellbeing of the country. The royal family could come down hard on this. There are many savvy young people coming forward on social media, not really presenting a threat, but just expressing view and ideas about the country. It’s going to be very interesting to watch that play out. Perhaps with the newer generation of the royal family coming into leadership positions, there may be greater tolerance on this front. These younger, well-intentioned Saudis must be listened to if the country is to move forward.
TCB: How could the next generation of Saudi leaders impact the delicate balance between the Royal family and the country’s religious establishment?
GG: This will be very interesting, because the religious establishment still wields considerable control in a number of key ministries that directly affect the younger generation of Saudis, including the education and higher education systems, the justice ministry, and others. This could create some difficulties among the younger Saudis. It’s going to require that Saudi citizens come to view their country as something other than a Wahhabist preserve. In fact, at least the way it’s interpreted today, if the religious dynamic becomes a constraint on the progress and development that the younger generation of Saudis seems to want, then I believe that they might insist on changes, although I’m not sure exactly how and what.
This is a very difficult challenge for the Saudi Royal family because there has been a symbiotic relationship between the Wahhabist religious establishment and the Saudi royal family for some time. Each side divided up power and control, and the idea that one side of it would want to put bounds on the other could potentially create internal difficulties. We just don’t know what kind of discussions take place within the ruling family—they keep those pretty close to the vest. That’s why it was so unusual that some of these criticisms for Prince Mohammad bin Salman’s appointments came to light.
