For a Change, Saudi Arabia Is Begging for Money
Crown Prince Mohammed bin Salman is seeking capital overseas, but investor beware: He is turning the kingdom into an even more dysfunctional dictatorship, not a progressive state
It’s not easy to be an authoritarian leader on the road.
Back at home in Saudi Arabia, Crown Prince Mohammed bin Salman can count on a loyal media, strict social controls and arrests to ensure his controversial rule goes unchallenged.
The problem is when you go abroad, as MBS did last week. The prince embarked on a three-day visit to Britain and is going to the United States again, for three weeks, next Monday.
In Britain, MBS did his best to recreate the kind of laudatory atmosphere he enjoys at home. He paid for billboards with his picture and slogans like “He’s creating a new, vibrant Saudi Arabia" to be erected across London. Panel trucks circulated around the city with welcome messages affixed to their sides. On the part of his hosts, even though MBS is technically only the heir to the throne, not the official leader, he got head-of-state treatment and a visit with Queen Elizabeth.
Presumably the same kind of PR campaign is being whipped up for his U.S. tour. But in Britain he had to put up with street protests of the kind he would never have tolerated back at home. There was also a counter-campaign of bus ads accusing home of being a war criminal because of Saudi Arabia’s role in Yemen’s civil war.
And a week before he lands in America, The New York Times ran a high-profile expose about the fate of the hundreds of wealthy businessmen and rival royals who had been locked in Riyadh’s Ritz-Carlton Hotel. They were not only incarcerated without any legal process, they were forced to sign over tens of billions of dollars of assets on the grounds they were obtained through corrupt means. Many were freed but have been ordered to wear ankle bracelets monitoring their moves or are accompanied by armed guards.
MBS has been praised for his efforts to shake up Saudi Arabia by removing the most onerous of its Islam-inspired social controls. Women will soon be able to drive, movie theaters are reopening, concerts are being staged and rules on women’s dress in public are being eased (black is no longer mandatory). Plans are afoot for a new $500 billion city called Neom, designed to be a hub for advanced manufacturing, biotech and media replete with robots and women in bikinis.
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There’s no reason to think that any of this means that MBS wants to slowly, slowly turn the kingdom into something like a progressive democratic state.
The looser social controls haven’t been accompanied by the slightest diminution of his or his family’s political power. Indeed, MBS seem intent on concentrating that power into his wing of the al-Saud family.
His titles now include crown price, defense minister, deputy prime minister, chairman of the Supreme Economic Council, head of a council overseeing the state-run oil giant Saudi Aramco, head of the Public Investment Fund and a pivotal member of the Council of Political and Security Affairs, just to name the most important ones.
What we’re witnessing in the transition of Saudi Arabia from a traditional Arab kingdom rooted in tribal traditions and Islamic piety into another dysfunctional Arab dictatorship of the kind that rules in Egypt, Algeria and Syria and once held power in Iraq and Tunisia.
When businesspeople are tortured at a hotel
Islamic traditions come second to keeping the leader in power; they can even be a threat if religion becomes as a rallying point for the opposition, so it makes sense to encourage some mild liberalism.
MBS has a very big problem, and a very practical solution for it.
The oil profits that have kept the kingdom going economically and smoothed over demands for political change over the last decades have vanished. Even if petroleum prices rise again, the kingdom is getting too populous to be a company town reliant on a single industry.
MBS wants to wean the kingdom off oil by creating a more diversified economy and sending packing the millions of expensive expats doing most of the economy’s work. To do that, he has to create new industries and make it easier for Saudi women to enter the job market.
The third element of the solution is the capital to fund the transition.
The days when the kingdom could throw around tens of billions without a thought are gone. Low oil prices have already forced it to dig into its reserves to the tune of $200 billion.
So MBS is travelling to Britain and the U.S. not on a traditional royal shopping spree but hat in hand looking for investment capital. The PR campaigns are aimed not just at making MBS look good but at portraying Saudi Arabia as progressive and stable country and a good place to do business.
The catch is that stories about businessmen being tortured at a luxury hotel and having their assets impounded through a murky legal process tells a different story. So does the nasty war in Yemen and MBS’s brief experiment holding the prime minister of Lebanon hostage.
It’s not that Saudi Arabia was a paragon of good government and rule of law before MBS arrived, but what the crown prince is doing is removing the traditional rule that kept the kingdom together. In return, he’s offering Saudis an unattractive future of dictatorship and having to work for a living, something Saudis don’t take for granted.
The Saudi Arabia of the future will not only have less oil, but little stability and considerably less wealth.