National Security & Defense

Saudi Arabia Needs to Change Course

Saudi King Salman (center) in Riyadh, January 2015. (Saul Loeb/AFP/Getty)
The House of Saud cannot simply continue with business as usual.

The Middle East today is once more on the edge of implosion. The humanitarian catastrophe in Syria continues unabated, the Islamic State is on the march, and Russia remains the only great power with a serious presence in the region. Another state that is dangling precariously in the new Middle East is Saudi Arabia. The twin bases of the monarchy’s legitimacy — cradle-to-grave welfare provisions and religious orthodoxy — are both waning sources of authority. The changing complexion of the energy markets and the rise of alternative fuels means shrinking budgets for the kingdom at a time of a growing population. And historically, the monarchy’s internal stability has been most endangered when the region polarizes along competing ideologies. As the flatfooted and aging Saudi rulers confront dramatic threats to their rule, they may have neither the money nor the Islamist legitimacy to fend off their rising opponents.

Wahhabi Islam may be the House of Saud’s rallying cry, but the welfare state is its most practical achievement. The kings offered their subjects not just the promise of salvation but also material rewards. At times of tight oil markets, the kingdom drew from its vast financial reserves so as not to disrupt this transactional relationship. Oil prices always rebounded, and the population was small enough for stability to endure. But this national compact was endangered by new demographic changes and by the diminishing importance of the kingdom’s staple crop. Saudi Arabia is hardly on the edge of fiscal bankruptcy, but its economic future is uncertain. The kingdom’s rulers may not have the luxury their predecessors had of being able to simply buy off their subjects.

In recent months, the kingdom has instituted certain austerity measures, and it seems poised to reduce its subsidies. However, the monarchy is still overtly reliant on foreign labor, and its foray into subsidy reform is tentative. Too many Saudis still abjure the private sector and prefer a government job that is well-paid and demands little of them. It is this mindset that has been cultivated over a century of promises and pledges from a monarchy that has seldom exercised fiscal prudence.

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The troubling economic news comes at a time when the monarchy is locked in a regional conflict with its longstanding nemesis, Iran. In 1964, the historian Malcolm Kerr published a pithy book called The Arab Cold War, in which he described how the region was being polarized between the conservative monarchies and the radical republics led by Gamal Abdul Nasser’s Egypt. The Middle East today is undergoing another cold war, this time pitting the Saudi monarchy against the Shia power in Iran. This new sectarian cold war is playing itself out in Iraq, Bahrain, Lebanon, Yemen, and, most dramatically, Syria. It is a costly affair for the Saudi monarchy, as it has the ambitious goal of negating the Islamic Republic’s efforts in the region. At a time when Iran is reaping the windfall of its nuclear deal and America seems indifferent to the regional tremors, the Saudis have emerged as the principal banker of Sunni resistance. And thus far it is proving to be a losing affair. Iran is consolidating its position in Iraq and Syria, manipulating sectarian divisions in Bahrain and Lebanon, and successfully ensnaring the Saudis in a Yemeni quagmire. The longer these conflicts drag on, the more the Saudi treasury will be depleted.

Saudi Arabia’s chief difficulties have arisen when the region’s political convulsions radicalize its population.

As significant as economics may be, Saudi Arabia’s chief difficulties have arisen when the region’s political convulsions radicalize its population. In the 1950s and ’60s, the Saudi state was emerging as a significant oil producer, and the monarchy was undertaking impressive development projects. such as building a vast national infrastructure while offering its citizens free housing, education, and health care. Yet, Nasser’s message of pan-Arabism and anti-Americanism resonated with the youth and the intelligentsia. The kingdom was under siege, as even some in the princely class found Nasser’s message of revolutionary defiance preferable to the monarchy’s cautious conservatism. In one of the paradoxes of the Middle East, it was Israel that came to the rescue of the House of Saud. By decisively defeating Nasser and his radical allies in the 1967 war, Israel proved that pan-Arabism and its claims of empowerment were hollow slogans. A crestfallen and bankrupt Nasser had to make his peace with the Saudis, as his need for their petrodollars exceeded his contempt for their traditional ways.

#share#In the 1970s, it was again regional tumult, not economic factors, that sparked protests in Saudi Arabia and radicalized both its Sunni and its Shia subjects. Iran’s 1979 revolution unleashed a wave of protests in the Shia-dominated Eastern Province. Long disdained as second-class citizens, the Shias were inspired by Iran’s model of revolutionary activism. The Sunni community reacted to all this with its own militant offshoot, which took over the Grand Mosque and had to be forcibly evicted. These were not opposition movements launched because of economic distress but sectarian groups radicalized by the region’s upheavals.

In the aftermath of the American invasion of Iraq in 2003, the Sunni community grew anguished about the Shia parties that were suddenly the masters of Baghdad. Radical Sunni groups assailed the Saudi monarchy for its seeming passivity as the Shias gained control of a pivotal Arab state and realigned the region’s balance of power in favor of the Shia theocracy in Iran. The monarchy could no longer rely on establishment clerics to fend off such critiques, and it was beset by a wave of terrorism launched by al-Qaeda. From 2003 to 2006, Saudi Arabia was the scene of street battles that cost hundreds of lives. The security forces eventually prevailed, but the monarchy was unsettled by an al-Qaeda narrative that inspired many of its Sunni constituents. Again, all these disturbances happened at a time when oil prices were hovering at around 100 dollars per barrel. Today, oil prices are about half that.

In today’s Middle East, the collapse of state power and the intensification of sectarian identities have empowered the Islamic State.

In today’s Middle East, the collapse of state power and the intensification of sectarian identities have empowered the Islamic State. It is hard to imagine how these militants can capture the imagination of the Sunni community without eventually turning their gaze to a kingdom that professes to be the guardian of Islam’s holiest shrines. Once more, the Saudi narrative of being the protector of orthodox Islam will be turned against it by zealots who claim that the monarchy has not done enough to fend off Shia heretics. In the meantime, the trends in the energy markets may mean a more depleted treasury, as the monarchy faces a growing population and terrorist threats.

It is time for one of the most resilient monarchies in the Middle East to revamp its outdated national compact. The days when the kingdom could simply rely on cash payments to its citizens and take refuge behind the façade of the religious establishment are coming to an end. Its economy cannot afford such generosity, and its battered religious legitimacy cannot deter militants professing to be more in line with God’s will. The monarchy needs a new compact, one that bases its power on a measure of democratic participation. A parliament and local assemblies could allow citizens a voice in national deliberations and diminish the appeal of nihilistic forces such as the Islamic State. Only a government resting on such popular approbation can tackle the thorny issue of subsidies that have to be phased out. Paradoxically, a monarchy that long relied on God and oil may now need to rely on democracy to ensure its continued existence.

Ray Takeyh is a senior fellow at the Council on Foreign Relations and the co-author of The Pragmatic Superpower: Winning the Cold War in the Middle East.

Ray TakeyhMr. Takeyh is a senior fellow at the Council on Foreign Relations and the author of The Last Shah: America, Iran, and the Fall of the Pahlavi Dynasty.


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