The results of the U.S. Presidential Election last month confounded most American political pundits and many professional pollsters. Donald Trump’s upset victory over Hillary Clinton also surprised many observers in the Gulf Cooperation Council (GCC) countries (the GCC is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates). Almost immediately after the result was announced, though, it became clear that leaders from the region were ready to embrace the new President-elect and prepared to quickly adjust to the new political reality.
Within hours, GCC officials congratulated President-elect Trump. They expressed a desire to strengthen the decades-old partnerships between their respective countries and the United States. According to at least one Saudi Arabian news outlet, President-elect Trump conveyed a similar sentiment to King Salman. The two reportedly spoke by telephone within hours of the election results. Each side appears to be fully aware of what lies ahead. All appreciate how difficult it will be to overcome the unprecedented political violence and insidious sectarianism that has convulsed seven of the 22 Arab countries in recent years.
Numerous observers in the GCC countries have expressed hope that President-elect Trump’s administration will adopt a proactive approach to the turmoil in the region. Others are particularly eager to ascertain what, if anything, he may do differently than the Obama administration regarding the threat posed by militant groups like the so-called Islamic State. Just as importantly, there is anticipation that the new President will take seriously the GCC’s deep concerns about Iran’s policies in the Arab world.
The reference to the latter concern is especially Tehran’s support of militant non-state actors like Hezbollah in Lebanon, the Popular Mobilization Units in Iraq, and the Houthi rebels in Yemen as well as what further assistance it may extend to the government of President Bashar al-Assad in Damascus. It is difficult, of course, at this early stage to ascertain the contours of what may, at some point, become known as the “Trump Doctrine.” Even so, important lessons can be drawn from history.
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.
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.
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.
The economic trials currently facing Saudi Arabia – a fall in oil prices resulting in budget deficits, wars in Syria and Yemen, and social stresses stemming from increases in gas and other utility prices – in reality present opportunities as much as challenges. This is particularly the case because the government led by King Salman and his son, Deputy Crown Prince Mohammed Bin Salman, has demonstrated a clear understanding of these realities and shows promise in confronting them effectively.
The Saudi Arabian government is essentially looking to restructure its economic system and renegotiate its social contract. Prince Mohammed has let it be known that announcements regarding these changes will begin April 25, with specifics to follow over the following months. More details are thus forthcoming, but so far we know that the new vision involves opening up national wealth to more foreign investment as well as further liberalization, deregulation, and privatization. These changes not only promise greater economic stability to the Kingdom – a key regional and global energy, commercial, and security partner to the United States – but also present an opportunity for American companies to invest reliable long-term capital in a wide range of sectors and regions. The Kingdom seeks to maximize returns from these investments in the way that well-managed businesses do.
When the Arab uprisings began in 2010, the future of the Middle East looked more uncertain than usual. In the midst of the turmoil, Saudi Arabia was forced to strengthen and clarify its foreign policy. Since then, the Kingdom has structured its foreign policy leadership and its vision for its future around unity, stability, and responsibility.
The unity that Saudi Arabia advocates, and the vision it promotes, is the unity of the Arab Gulf. In the past few years, the Kingdom has made great efforts to prioritize the oneness of the Gulf’s Arab countries and their shared interests over small and transient differences. In the struggle to restore the legitimate government to power in Yemen, the Kingdom has forged a coalition of the GCC countries and likeminded Arab and non-Arab countries to achieve that aim. The purpose has been to prevent the usurpers of power, the Houthis and the forces of the deposed president, Ali Abdullah Saleh, from forcing themselves on the Yemeni people.
As sectarian violence deepens rifts and breaks apart homes and communities across the Arab world, Saudi Arabia’s call for unity has become more urgent than ever. Iraq and Syria are among the countries following the same heartbreaking narrative: citizens with the same shared history, religion, and homeland continue to be torn apart by radical groups exploiting sectarian religious and ethnic divisions for their own gain. Groups like ISIS, the Shi‘i militias in Syria and Iraq, Hezbollah, and the Houthis use religious extremism in order to gain loyalty by providing the young a militant identity, a sense of belonging, and a vision for which to fight. But the unity of radicalism is an illusion; it cannot exist without an enemy. It reaches not toward harmony but toward domination and control. ISIS is a symptom of the disease of anarchy in Syria and Iraq.
But the unity of radicalism is an illusion; it cannot exist without an enemy. It reaches not toward harmony but toward domination and control.
Russia has now added to this bloody scene air strikes aimed at Syria’s moderate opposition, which is fighting ISIS and Bashar al-Assad alike. This is a most unwelcome addition to an already combustible situation. Russian representatives state they are there to fight the terrorists. Alas, together with the United States Moscow is ignoring the father of all terrorists in Syria – Assad. In Baghdad, the legacy of Nuri al-Maliki’s sectarian rule disenfranchised the Sunni Iraqis and allowed ISIS to take advantage of the resultant vacuum to establish rule in Mosul and other parts of Iraq. Fix Damascus and Baghdad, and ISIS will wither away.
Fighting sectarianism is far from easy. Sectarianism thrives on the enmity of others. The kingdom asked fellow Islamic countries in 2012 to build a center that will research and help dismantle sectarian ideologies while promoting intersectarian dialogue. But there is only so much that can be done for countries like Iraq and Syria, where sectarianism has become and remains a valuable political currency. The desire for unity cannot come from the outside alone; it must also come from within.
Context and history are necessary to understand Saudi Arabia’s decision earlier this month to sever diplomatic ties with Iran. After the storming of the Saudi Arabian embassy in Tehran – a response to Saudi Arabia’s execution of the Shi‘i leader Nimr al-Nimr on January 2 – Saudi Arabian Foreign Minister Adel al-Jubeir announced the cutting of ties. In doing so, he noted that Iran’s aggression is “a violation of all agreements and international conventions” and called it part of an effort by Iran to “destabilize” the region. “We are determined not to allow Iran to undermine our security,” he said.
A sentiment echoing the same tone and spirit while underscoring this Saudi Arabian position of sovereignty and agency in the face of international conflict, and which could just as well have been directed at the recent American media barbs thrown at the kingdom, was conveyed more than two years ago. In an op-ed for the New York Times on December 17, 2013, Saudi Arabian Ambassador to the United Kingdom Prince Mohammad Bin Nawaf Bin Abdulaziz Al Sa‘ud explained,
Saudi Arabia has enormous responsibilities within the region, as the cradle of Islam, and one of the world’s most significant political powers. We have global responsibilities – economic and political – as the world’s de facto central banker for energy. And we have a humanitarian responsibility to do what we can to end the suffering in Syria. We will act to fulfill these responsibilities, with or without the support of our Western partners.
The flood of media attacks against Saudi Arabia since the executions has been nonstop. For example, the Iranian policymaker Seyed Hossein Mousavian published an article titled “14 Reasons Why Saudi Arabia is a Failed Mideast Power.” And the New York Times printed an op-ed by Iranian Foreign Minister Mohammad Javad Zarif that provided his view, containing unproven statements, of what transpired and the issues involved.
Because there has yet to appear a different perspective on these matters except for the op-ed by Foreign Minister al-Jubeir in today’s New York Times, this writer, an American who has visited the kingdom often over the past 46 years, is moved to also contribute to the national dialogue on these matters.
He writes as though he were in the shoes of an observer in Riyadh. What such an observer might argue in reply to the media campaign against their country would likely include the following and should be read as quotations.