Deciphering Saudi Arabia in the Biden Era

Moreover, the pressure on Iran from Washington and Riyadh led to the Iranian missile and drone attack on Saudi oil facilities in September 2019, an attack that the Trump Administration allowed to go unanswered. So, Saudi Arabia was going to have to reassess its policy toward Iran at some point, no matter who was governing in Washington. Saudi-Iranian talks, confirmed by both sides, did begin shortly after the Biden Administration came to power. Undoubtedly, the change in Washington toward Iran had some role in Saudi rethinking. However, we should not exaggerate what those talks will produce. A reduction in tensions would be beneficial for the region as a whole, but the core issue of the growth of Iranian power and the worry that has created in Saudi Arabia is not going to be solved anytime soon.

SO: How do you assess the reform agenda of MbS? Has he consolidated his power? Has he learned from his own excesses?

Anything can happen in palace politics, of course, but right now it looks like the Crown Prince is secure. His reform agenda at home is extremely ambitious. On the social side, the moves he has made to increase the role of women in public life and loosen the restrictions on entertainment are profoundly important. His economic agenda will be harder to realize, given the continuing role of oil in the Saudi political economy. However, the steps he has taken to implement taxes, raise the cost of foreign labor and encourage investment in non-oil sectors are part of a larger recognition that the Saudi economy has to change. He is unlikely to reach all the goals set in Vision 2030 to reduce the role of oil in the Saudi economy, but even if he achieves 25% of the goals, it will be a step in the right direction. 

There do remain contradictions in his economic plans that have to be recognized. While he promotes the private sector as the future driver of the Saudi economy, he is using the country’s sovereign wealth fund, the Public Investment Fund, to increase the role of the government in a number of sectors. The mega-projects, like the futuristic city Neom and the Red Sea Development Project, rely almost exclusively on the Fund’s capital so far. We also have to acknowledge that there is absolutely no element of political reform in the Crown Prince’s plans. The country is in some ways even more authoritarian than it has been in the past, as the rule by a committee of princes is replaced by the rule of one man. Has he learned from his own excesses? I do not know, but that is the most important question for the future of Saudi Arabia.

Copyright: FAYEZ NURELDINE / AFP