Saudi at a crossroads

November 13, 2017

 

"Honestly, we won’t waste 30 years of our life in dealing with any extremist ideas. We will destroy them today and immediately.". By saying these words, Mohammad bin Salman (also known as MBS), 32, son of King of Saudi Arabia, received the applause of some 3,000 politicians and businessmen attending the Ritz-Carlton in Riyadh for the Future Investment Initiative Conference.

On this occasion, MBS presented the futuristic city “Neom”: 26,500 square kilometres on the Red Sea coast on the borders of Jordan and Egypt. This 500 billion dollars’ project would take the form of an economic zone with an advantageous legislation as the Kingdom has already imagined in the past without succeeding.

 

In this same hotel, just two weeks later, more than 200 dignitaries are imprisoned after being arrested for corruption. It turns out that the corrupt are quite well chosen since each could represent a potential threat to the authority of MBS. The Islamic monarchy expresses the hypothesis of confiscating hundreds of billions of ill-gotten assets which would well settle the accounts of the Kingdom which, with the fall in the price of oil, had to take from its reserves and lower its expenses to balance its budget.

 

Geopolitically, the situation is far from being simple.

Since 2015, Saudi Arabia has been present in Yemen to help the ruling power to deal with Iran-backed rebels and has organised the blockade of the country to prevent its supply of weapons by Tehran, which accuses Riyadh of plunging Yemen into a bloodbath.

Last week, a missile was intercepted over the capital of the Kingdom, which accuses Iran that is challenging.

 

On the same day, Prime Minister of Lebanon, Saad Hariri, announced his surprise resignation from Saudi Arabia denouncing the destabilisation of his country by Hezbollah and Iran.

Some, including Lebanon's President Michel Aoun and Hezbollah leader Hassan Nasrallah, suspect that Riyadh has written the letter of resignation. Indeed, Saad Hariri is considered ineffective in his fight against Iran and Hezbollah and part of the money from the corruption that MBS fights was allegedly laundered by a company owned by the Lebanese Prime Minister who announced that he would return soon to Beirut.

 

Saudi Arabia has called on its nationals present in Lebanon to leave the country which may suggest a military intervention according to some experts.

Add to this that in October, a few days after the President of the United States questioned the Iran nuclear deal, Saudi Arabia announced that it would exploit its uranium and start building two nuclear reactors.

 

The anti-corruption purge and geopolitical events have raised investor concerns without calling into question the country's vast potential particularly in defence and infrastructure. Much of the economic transformation plan wanted by MBS is conditioned by the successful sale of 5% of Saudi Aramco, the state-owned company exploiting the Kingdom's hydrocarbon reserves. The operation that should take place next year notably aroused the interest of China.

 

One thing is for sure, the destiny of the largest country in the Middle East is and will remain closely linked to the game of regional alliances and relations with the rest of the world. The question is whether the success of Saudi Arabia is conditioned by the failure of Iran or if this bellicose relationship is only the legacy of the history with which the future King will have to deal.

 

 

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