U.S.-Saudi Arabia Relations Returning to Normal Plus

The last ten days were dramatic and, potentially in their own way, historic. The occasion was a visit to the United States by the Saudi Arabian Deputy Crown Prince and Minister of Defense, HRH Prince Mohammed bin Salman. The setting was at once stirring as was the atmosphere laced with a degree of uncertainly given some of the perceived, media-fed strains in the U.S.-Saudi Arabian relationship over the past several years.

Not least among the reasons the visit was so portentous are the following:

First, only days before the Deputy Crown Prince’s arrival the Trump administration had slapped punitive sanctions on half-a-dozen Muslim-majority countries, of which all but Iran are Arab nations.

Second, the visit came on the heels of ongoing uncertainties over the implications of significantly plummeted international oil prices since 2014. What each side will do about this sea change in the price of the strategic commodity that drives the engines of the world’s economies remains to be seen. One of the key dimensions of the likely near-term outcome turns for a greater extent than ever before on discussions between the Arab-led OPEC nations, on one hand, and key non-OPEC countries such as the United States and Russia, on the other.

Third, the Kingdom’s and America’s leaders convened at a moment when the growing encirclement of ISIS in Mosul, Iraq’s third-largest city, is fraught with an uncertain finale. More open to question is what will likely follow the eventual routing of one of the most lethal and debilitating scourges to have dominated parts of the Arab landscape in history.

Similar uncertainty underpins any sound analysis and assessment of the near term future of Syria. Russia, Iran, and Hezbollah, among the foreign forces that have tipped the balance in favor of the Assad regime in Damascus, are undoubtedly riding high at the moment. It remains to be seen, however, what the fate and future will be of the remaining opposition groups, including, in particular, the separatists, or at a minimum pro-autonomy, Kurdish forces in the country’s northeast.

Fourth, the nature, content, and extent of U.S.-Saudi Arabia cooperation in counter-terrorism going forward has, understandably, remained high in the national strategic imperatives of both countries’ needs, concerns, and interests.

Fifth, the two countries remain, for better or worse, locked in an inevitable strategic, national security, and defense cooperation-related relationship of the upmost importance as it pertains to Yemen. This is despite the growing anti-American involvement sentiment regarding this campaign in the media, so-called think tanks, and in rising numbers of members of Congress. Many of those favor, at most, a halt to further U.S. arms exports to the Kingdom, and, at minimum, a cessation of deliveries of munitions and ordnance designated for the two year old multinational coalition campaign to restore the legitimate government of Yemeni President Abed Rabbo Mansour Hadi.

Americans need to know there will be no slackening in this component of the two countries defense relationship. Indeed, there will be likely no slackening in the two countries determination to ensure that the conflict in Yemen, aided and abetted by Iran, does not further threaten the security and stability of the Kingdom. Nor will there be any willingness to further enhance Iran’s Shia-centric objective of expanding Tehran’s appeal to and influence over the region’s Shia Muslim people beyond that which it has already achieved.

Finally, the visit should help to put to rest the unseemly innuendo of the past year in which there were reports that President Barack Obama considered, if not Saudi Arabia itself, then those in its camp “free riders.” In reality, a persuasive argument could be made that the reverse is the case.

For the later perspective, consider those American livelihoods that turn directly on Saudi Arabia’s tens of billions of dollars of purchases of American goods and services. The tens of thousands of full-paying Saudi Arabian students at American universities. The tens of thousands of Americans whose livelihoods are derived from living and working in the Kingdom, versus no comparable number of Saudi Arabians taking money out of the United States. This is in addition to the Kingdom’s rock-solid support, against all competitors, for ongoing reliance upon the American dollar as the instrument of exchange in all of its international economic and financial transactions. The benefits of that alone have aided mightily in the ongoing preeminence of the American monetary banking system worldwide.

These are but a few of the bountiful and poorly-understood American benefits that derive from the eighty-year old, unapologetically special relationship between our two peoples. As Fahad Nazer’s insightful essay thoughtfully illustrates, one ought not to count on any near- or long-term jettisoning of the reciprocal rewards that remain embedded in these extraordinary special ties that remain the envy of practically every other nation in the world.

Dr. John Duke Anthony
Founding President and CEO
National Council on U.S.-Arab Relations
Washington, DC

Over a quarter-century ago, the United States and Saudi Arabia fought side by side in Operations Desert Shield and Desert Storm. They did so to reverse Iraq’s August 1990 aggression against Kuwait. Afterwards, as to whether the United States and Saudi Arabia were friends, both answered “yes” unequivocally.

If the first two months of Donald Trump’s presidency are any indication, bilateral ties might return to their “Kuwait Crisis” heyday. That was when both countries’ officials routinely characterized them as “special.”

Last week, Saudi Arabia’s Deputy Crown Prince and Minister of Defense, HRH Prince Mohammed bin Salman, visited Washington. Accompanied by foreign affairs and defense policy advisers, Prince Mohammed met with President Trump at the White House on March 14 and with U.S. Secretary of Defense General (Ret.) Jim Mattis at the Pentagon on March 16. The visit’s timing and the meetings themselves, as well as the statements issued by the American and Saudi Arabian participants, suggest that both countries’ leaders agree on a wide array of political and economic issues and policies. This bodes well for their future relations. To the envy of many, these ties have endured for the past eight decades. What is more, they have broadened and strengthened on many levels.

Saudi Arabia’s Deputy Crown Prince and Minister of Defense HRH Prince Mohammed bin Salman meets with U.S. President Donald Trump in Washington, D.C., on March 14, 2017. Photo: Saudi Press Agency.

The timing of the visit – less than two months after President Trump’s inauguration – was at once indicative and propitious. To critics, it was too soon. To others, it emphasized yet again the importance that the two countries accord their relations. It highlighted the keenness of both countries’ leaders to establish good personal relations early in the Trump administration.

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Can Saudi Arabia’s “Vision 2030” Get the Kingdom Off the Oil-Economy Roller Coaster?

Saudi Arabia has begun administering the Kingdom’s boldest, most innovative, and farthest-reaching modernization and development plan in the country’s history. It addresses the near, mid-term, and longer-term needs and challenges that strategists believe the country is likely to face in the next fifteen years. Conceptualized and approved by the country’s leaders, the plan’s name is “Saudi Arabia Vision 2030.”

The plan reflects an extraordinary degree of extended research, analysis, and assessment. It was aided throughout by the input and comment of some of the world’s most renowned and experienced advisors in forward planning, focus, messaging, and communication. The process was launched in 2015 soon after Custodian of the Two Holy Mosques HRH King Salman bin Abdulaziz Al Sa’ud appointed his son, HRH Prince Mohammed bin Salman, as Deputy Crown Prince and Minister of Defense.

In the eyes of his fellow citizens and the Kingdom’s inhabitants, Prince Mohammed is unique. A reason is not only because of his youth. He was 30 years of age on the day “Vision 2030” was officially announced in April 2016. Of special interest and in this century without precedent is that he has been entrusted to oversee, guide, and administer two of the country’s most strategically vital portfolios.

In one, in his position and role as Chairman of the Economic and Development Affairs Council, Prince Mohammed is tasked with protecting and advancing the material wellbeing of the Kingdom’s 30 million people. Not least among his challenges in this regard is how best to address the needs of the country’s burgeoning youthful citizenry. The nature and degree of unemployment among this segment of Saudi Arabia’s population is a matter of mounting and daunting concern, combined as it is with the goal of increasing dramatically the share of private sector and foreign investment involvement in the Kingdom’s economic growth.

A National Council on U.S.-Arab Relations delegation of Model Arab League students and faculty advisers, led by National Council Founding President and CEO Dr. John Duke Anthony, visits Queen Effat University in Jeddah, Saudi Arabia.
A National Council on U.S.-Arab Relations delegation of Model Arab League students and faculty advisers, led by National Council Founding President and CEO Dr. John Duke Anthony, visits Queen Effat University in Jeddah, Saudi Arabia, to meet with the emerging generation of the Kingdom’s leaders.

The Deputy Crown Prince has also been assigned to head the country’s principal armed forces establishment. The Kingdom’s military is tasked with defending the Arab and Muslim world’s most important and influential country in a region that, to a greater extent than any in the past half century, is laced – not within the GCC region, of which it is an integral part, but immediately beyond it – with an unprecedented degree of tension and turmoil.

In this regard, in close association with his ruling family cousin, Second-in-Command Crown Prince and Minister of Interior HRH Prince Mohammad bin Naif bin Abdulaziz Al Sa’ud, Deputy Crown Prince Mohammed is responsible for aiding the King in his role as Custodian of Islam’s two holiest places, Mecca and Medina. Internationally and domestically, the two leaders are jointly expected to ensure the Kingdom’s ongoing national sovereignty, political independence, and territorial integrity.

Stated differently, the two leaders, assisted by Minister of Foreign Affairs HE Adel bin Ahmed Al-Jubeir, are the primary Saudi Arabians tasked with protecting the country and the legitimate interests of its people. These include first and foremost enhancing the Kingdom’s security, stability, and peace, without which there would be no prospects for prosperity. Were these three interconnected factors to be weakened or lost, the likelihood of the country being able to maintain its present standard of living, let alone strengthen and advance it, would be difficult if not impossible.

It is with regard to this first aspect of the Deputy Crown Prince’s responsibilities that the National Council on U.S.-Arab Relations is pleased to provide an essay asking “Can Saudi Arabia’s ‘Vision 2030’ Get the Kingdom Off the Oil-Economy Roller Coaster?” The author is Dr. Paul Sullivan, a Council Non-Resident Senior International Affairs Fellow. Drawing on the courses he teaches on national security challenges and economic dynamics, and vice versa, at two of America’s leading institutions of higher education, Dr. Sullivan examines the nature and goals of as well as the necessary national material and human resources relevant to the Kingdom’s strategic development plan for the next fifteen years.

In keeping with National Council’s Analyses and Assessments series, of which this essay is a part, the author weighs the prospects for the Kingdom being able to manage and address “Vision 2030″‘s challenges effectively. In so doing, he sheds light on what in his view will be required to achieve even a portion of the plan’s stated goals. In the process, he provides an array of information about, insightful data on, and analysis and evaluation of the Kingdom’s economic development prospects that would otherwise be hard-to-come-by.

Dr. John Duke Anthony
Founding President and CEO
National Council on U.S.-Arab Relations
Washington, DC


The Saudi Arabian economy is dominated by oil and has been for many decades. Oil accounts for about 35-45% of the GDP of Saudi Arabia. It is the source of 75-80% of its government revenues and 85-90% of its export revenues. Petrochemicals, based on oil and a much more recent component of the Kingdom’s economy than hydrocarbon fuels, are Saudi Arabia’s next largest export.

Saudi Arabia’s Oil-Economy Roller Coaster

At times in the past Saudi Arabia’s economy has been like a roller coaster. There was an economic boom due to the October 1973 Israeli-Arab war-induced oil embargo and the 1979 Iranian Revolution’s boost to the price for hydrocarbon fuels. This was followed by the collapse of oil prices and the resultant damage to the Saudi Arabian economy, which began in the early 1980s and continued until the late 1990s. As international oil prices remained stagnate throughout the better part of these two decades until the turn of the present century, so too, in many ways, did the Kingdom’s economy.

Chart: Saudi Arabia's Oil-Economy Roller Coaster

As prices began to ramp up in the 2000s, Saudi Arabia’s economy moved up with them until the Great Recession hit in 2008 when they collapsed for a brief period as the 2008 recession took its toll on markets. Soon after, however, prices rose to more than $100 per barrel in 2011, where they would remain until May 2014.

The most recent price collapse – from May-June 2014 until about January-February 2016 – was precipitous. The price since then, however, has risen, albeit in an unstable, bouncy, and slow manner. In short, Saudi Arabia has ridden the good times of oil price booms. It has also ridden the bad times when the price has collapsed.

Saudi Arabia has ridden the good times of oil price booms. It has also ridden the bad times when the price has collapsed.

The average Saudi Arabian’s income and wealth increased dramatically from 2002 to 2014. This was mostly due to the elevated level of oil revenues. The result was an increase in government spending and massive capital expenditures together with public sector investments.

Past Saudi Arabian economic improvements have started with a significant and sustained increase in the price of oil with concomitant increases in government and export revenues. These have been followed by large expenditures and investments in public sector ventures, with corresponding increases in imported labor, in Saudi Arabian employment, in massive building programs, and in contributions to the Public Investment Fund as well as, to a much greater extent, the Kingdom’s foreign reserves.

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