Saudi Arabia: At an Inflection Point

By Ethan Wu

The tides turn swiftly in the Middle East. On Nov. 4th, Saad Hariri, the prime minister of Lebanon, fled to Saudi Arabia and resigned his post in a televised appearance. Mr. Hariri, a Sunni Muslim, blamed Iran for sowing “discord” in Lebanese politics. Iran has since blamed the Saudis for holding Mr. Hariri hostage, while the Saudis allege there was a plot on his life.

 

The fracas over Mr. Hariri is but one in a series of proxy clashes between the Middle East’s preeminent Sunni and Shia powers—Saudi Arabia and Iran, respectively. Shortly after Mr. Hariri resigned, an Iranian-backed rebel group in Yemen fired a Burqan 2H missile into Saudi airspace, which was later intercepted. The Saudis called it an “act of war” from the Iranians. Separately, the leader of an Iranian-backed political party in Lebanon alleged that the Saudis asked Israel to attack Lebanon, though there is no evidence for the claim. Still, the Saudis have ordered their citizens to leave Lebanon immediately. Iran’s shadow looms large.

 

Back at home, the powerful crown prince Mohammed bin Salman (known as “MBS”) has arrested dozens of Saudi princes and government ministers in an ostensible crackdown on corruption. The popular wisdom is that MBS is consolidating his power. He may also be signaling that the oil-rich Saudi elite will no longer be able to mooch off state coffers. The crackdown is popular, too. MBS, who casts himself as a champion of the Saudi youth, is perceived as an intrepid reformer who caves to no one.

 

MBS has wide latitude to overhaul the Saudi economy, having consolidated all power in the kingdom. Yet his economic reform program, called Vision 2030, has run into headwinds. Proposed cuts to Saudi Arabia’s lavish energy subsidies and bloated private sector were halted over public distress. An initial public offering of the state-owned oil giant Saudi Aramco is hamstrung by internal disagreements. Moreover, MBS continues to spearhead a futile war against Iranian-backed rebels in Yemen, resulting in little more than disease (cholera has made a comeback in Yemen) and death.

 

It is possible that MBS’s newly attained dominance will enable him to implement the reforms he so desires. But he must also juggle these various domestic reforms while avoiding war with an emboldened Iran. Perhaps most difficult of all, he must avoid falling into the familiar trap of the impotent one-man state. Otherwise, MBS could soon find himself washed out by the tide.