Wednesday, 2 March 2016

SAUDI ARABIA: The Prospective Collapse

For a half of century, the Kingdom of Saudi Arabia has been the linchpin of US Mideast policy. A guaranteed supply of oil has brought a guaranteed supply of security. Ignoring autocratic practices and the export of Wahhabi extremism. Washington stubbornly dubs its ally: ''moderate''.  Like many countries in the region before it, Saudi Arabia is on the brink of perfect storm of interconnected challenges that, if history is anything to judge by, will be monarchy's undoing well within the next decade.


First, there is a Saudi-Yemen quagmire of a war, which has burnt billions of dollars and made the Saudi government look pretty weak and unable to defeat the army of the poorest Arab state--even with a 10 country coalition and, indirectly via arms sales, American and British help. 

Next, in Syria, the Saudis kicked and screamed to have the US topple President Bashar Assad's regime on their behalf but US President Barack Obama did not, even when his alleged red line of chemical weapons was crossed. Then came the Russian intervention that put an end to the Saudi project. 

Finally, there is Iraq and its progress in defeating the so called Islamic State-albeit at a slow pace. The Saudis tried for years to create instability in Iraq to prevent the country from emerging as a Shiite-led government that represents its Sunni population. This explains the Saudi policy of allowing thousands of Saudi men to travel to Iraq to fight Iraqi and American troops and bring death and destruction to the country. A stable Iraq is a natural economic and political competitor. 

And then there is Iran, Saudi's long-time regional nemesis, who is now coming back to the international arena with more than 100$ billion from frozen assets and a warmer relationship with the West. The Saudis have tried for years to get the US to bomb Iran on their behalf but it did not work. The Kingdom mounted one its most aggressive diplomatic campaigns ever to block the P5+1 nuclear deal with Iran but to no avail. It was possibly their worst political defeat of 2015. 

Furthermore, the Saudi riyal, currently pegged to the dollar, is facing grater pressure and would most likely be floated and lose value. This will bring unprecedented inflation and greater domestic grumbling, considering that the country imports most of its food and consumer goods.  Against this background of grim reality, so tight is the truth that US special operators dip into Saudi petrodollars as counterterrorism slush fund without a second thought. In a sea of chaos, goes the refrain, the Kingdom is one state that's stable. But is it? In fact, Saudi Arabia is no state at all.

There are two ways to describe it: as political enterprise with a clever but ultimately unsustainable business model, or as an entity so corrupt as to resemble a vertically and horizontally integrated criminal organization. Either way, it cannot last. it is past time US decision makers began planning for the collapse of the Saudi kingdom. The US military and other government personnel are startled at how startled they seem at this prospect. Here is the analysis they should be working through. 

Understood one way, the Saudi king is the CEO of a family business that converts oil into payouts that buy political loyalty. They take two forms: cash handouts or commercial concessions for the increasingly numerous scions of the royal clan, and a modicum of public goods and employment opportunities for commoners. The coercive stick is supplied by brutal internal-security services lavishly outfitted with American equipment. The United States has long counted on the ruling family having bottomless coffers of cash with which to rent loyalty. Even accounting for today's low oil prices, and even as Saudi officials step up arms purchases and military adventure in Yemen and elsewhere, Riyadth is hardly running out of funds. 

Still, expanded oil production in the face of such low prices-until the Feb 16 announcement of a Saudi-Russian output freeze at very high January levels- may reflect an urgent need for revenue as well as other strategic imperatives. Talk of Saudi Aramco IPO similarly suggests a need for hard currency.  A political market, moreover, functions according to demand as well supply. What if the price of loyalty rises? It appears that is just what happening. King Salman had spend lavishly to secure the allegiance of the notables who were pledged to late King Abdullah. 

Here is what played out in two other countries when this kind of inflation hit: In South Sudan, an insatiable elite now only diverted the newly minted country's oil money to private pockets but also kept up their outsized demands when money ran out, sparking a descent into chaos. The Somali government enjoys generous donor support, security, or criminal agendas of their own. Such comparisons may be offensive to Saudi, but they are telling. If the loyalty price index keep rising, the monarchy could face political insolvency.

Looked at another way, the Saudi ruling elite is operating something like a sophisticated criminal enterprise, when populations everywhere are making insistent demands for government accountability. With its political and business elites interwoven in a monopolistic network, quantities of a unaccountable cash leaving the country for private investments and lavish purchases abroad, and state functions bent to serve these objectives, Saudi Arabia might be compared to such kleptocracies as Viktor Yanukovich's Ukraine.

Increasingly, Saudi citizens are seeing themselves as just that: citizens, not subjects. In countries as diverse as Nigeria, Ukraine, Brazil, Moldova, and Malaysia, people are contesting criminalized government and impunity for public officials--sometimes violently. In more than  half a dozen countries in 2015, populations took to the streets to protest corruption. In three of them, heads of state are either threatened or have had to resign. Elsewhere, the same grievances have contributed to the expansion of Jihadist movements or criminal organizations posing as Robin Hoods. Russia and China's external adventurism can at least partially be explained as an effort to re-channel their public's dissatisfaction with the quality of governance.. 

For the moment, it is largely Saudi Arabia's Shia minority that is voicing political demands. But the highly educated Sunni majority, with unprecedented exposure to the outside world, is unlikely to stay satisfied forever with a few favors doled out by geriatric rulers impervious to their input. And then there are the ''guest workers''. Saudi officials, like those in other Gulf states, seem to think they can exploit an infinite supply of indigents grateful to work, whatever the conditions. But citizens are now heavily outnumbered in their own countries by laborers who may soon begin claiming rights. 

For decades, Riyadth has eased pressure by exposing its dissenters- like Osama Bin Laden-fomenting extremism across the Muslim world. But that strategy can backfire: Bin Laden's critique of Saudi corruption has been taken up by others, and it resonates among many Arabs. And King Salman does not display the dexterity of his half-brother Addullah. He's reached for some of the familiar items in the autocrats' toolbox: executing dissidents, embarking on foreign wars, and whipping up sectarian rivalries to discredit the demands of Saudi Shiites and boost nationalist fervor. Each of these has grave risks. 

There are few ways things could go, as Salman's brittle grip on power begins cracking. One is a factional struggle within the royal family, with the price of allegiance bid up beyond anyone's ability to pay in cash. Another is foreign war. With Saudi Arabia and Iran already confronting each other by proxy in Yemen and Syria, escalation is too easy. US decision makers should bear that danger in mind as they keep pressing for regional solutions to regional problems. A third scenario is insurrection--either a nonviolent uprising or a Jihadi insurgency--a result all too predictable given episodes throughout the region in recent years. 

The United States keeps getting caught off guard when purportedly solid countries come apart. To do better this time, US military and intelligence officials should, at very least, and immediately, run some rigorous planning exercises to test different scenarios and potential actions aimed at reducing codependence and mitigating risk. 

They should work hard to identify the most likely, and most dangerous, regional outcomes of a Saudi abandon the automatic-pilot thinking that has been guiding US policy to date. Hope is not a policy: is a hackneyed phrase. But choosing not to consider alternatives amounts to the same thing.

By Guylain Gustave Moke
Investigative Journalist
Political Analyst/Writer
World Affairs Expert

Photo-Credit: Associated Press Photo of - King Salman of Saudi-Arabia