08.11.2015 Author: Viktor Mikhin

Saudi Arabia is at a Dangerous Crossroads

200553Ambivalence, political twists and turns and the adoption of mutually exclusive decisions on Syria clearly show how completely lost the Saudi leaders are and their distinct lack of understanding of the fundamentals of modern foreign policy. The leaders of the wealthiest countries in the world, the leaders of the Arab and Muslim world have fully displayed their political inadequacy, inability to manoeuvre and adapt to the realities of the modern world. The once infinite riches are melting away rapidly, and soon ordinary Saudis will be faced with the issue of cost-cutting in their simple everyday problems.

But, as they say, all in good time. It seemed that only recently the Saudi press took after its main overseas sponsor and ally, the United States, which have put forward a plan of the “smooth transition” of power in Syria and did not call for the immediate resignation of President Bashar al-Assad. US Secretary of State John Kerry told CNN reporters that Washington had changed its position on Bashar al-Assad. The United States, according to The New York Times, have closed their largest training centres of so-called moderate Syrian rebels in Jordan, Saudi Arabia, Qatar and the UAE. Saudi rulers even responded positively to the position of German Chancellor Angela Merkel, who was also forced to be in favour of negotiations with the current Syrian president. In this regard, experts drew attention to the statement of Prince Turki al-Faisal, the former Saudi ambassador in Washington and former intelligence chief, who expressed his confidence that Moscow’s strategy on Syria seems to be more effective than the efforts of the United States, and that the Russian point of view demands attention and respect. However, Russia has never departed from its principled position and has consistently advocated peace talks with the legitimate President, al-Assad.

At the same time, according to the presidential press secretary, Dmitry Peskov, the visit of the King of Saudi Arabia, Salman bin Abdulaziz Al Saud to Russia is being worked out and agreed through diplomatic channels. Such a possibility is being worked out by way of diplomatic channels, and after all the necessary terms and conditions are agreed, Saudi Arabia and representatives of the Russian government will make a joint announcement. It is quite clear that at the talks in Moscow, if they do take place, a certain compromise on the Syrian issue will be found.

At the same time the world press emerged with a so-called secret document, apparently a copy of instructions to the embassies of Saudi Arabia in the Middle East countries. Its content can be summarised as ensuring that all the diplomatic representatives cease gradually financial support for the armed Syrian opposition. In this regard, it can be said that the rulers of Saudi Arabia, who recently sent their defence minister and the King’s son to Moscow for talks, are desperately looking for a neutral way to solve the Syrian problem. The Arab press, especially in Saudi Arabia, has become quite loyal to Russia’s position, the core of which was and remains peaceful negotiations between all interested parties, including al-Assad.

But then, the cold Americans winds blew once again – those that tried to prevent Russian aircrafts from bombing all kinds of terrorist locations on the Syrian territory. And the Saudis, who were put under relatively strong pressure once again began to sing their old song to the tune of their sponsors about the military solution to the Syrian problem as the only way out. Riyadh once again started to declare their support for the forces opposing the authorities in Damascus. During the negotiations between the US Secretary of State, John Kerry, and the Saudi King, an agreement was made on their common position on increasing support for the rebels fighting in Syria, whom they consider as a supposedly “moderate opposition”, who are exercising abuses of power and lawlessness. However, the two sides promised to continue to seek a political solution to the conflict. At least, several telephone conversations were held between the Saudi King and the Russian President, during which there was an exchange of views on the Syrian issue.

The current policy which is so inconsistent and lacks any elementary logic was not only unsuccessful, but plunges Saudi Arabia ever deeper into an abyss of hardship and misery, setting new, complex problems before the King. Primarily, this concerns the economic and financial problems that the once wealthy Saudi society has not yet encountered. As the director of the Middle East and Central Asia Department of the IMF, Masood Ahmed, said in an interview with The Wall Street Journal, the cumulative budget deficit of Middle Eastern oil-exporting countries in the next five years could reach $1 trillion. Moreover, the treasury of the regional leader, Saudi Arabia, is at risk of running dry, and the “kingdom of the welfare state” can expect bankruptcy.
Up to now, financial holes – the budget deficit, which this year is projected to be 21.6 percent of GDP, has been covered by the earlier petrodollar savings. In particular, this summer the Saudi Arabian Monetary Agency was forced to withdraw $70 billion from foreign investment funds assets. It can be assumed that this is only the beginning of the return of capital to their homeland, to tide over the emerging new outgoings. Otherwise, a sharp reduction in expenditure could lead to a social explosion in the Kingdom, whose citizens have become used to living a well-off life during the oil boom.

Saudi Arabia is currently exploring the possibility of higher energy prices for consumers within the country, as reported by the Oil Minister Ali Al-Naimi. Responding to a question about whether the Kingdom is going to reduce energy subsidies in the near future, the Saudi official said: “Your question concerns whether we are considering such a possibility? Yes, we are considering it.” Energy prices in Saudi Arabia are among the lowest in the world. Saudi Arabia is in fact the leader of the Organization of Petroleum Exporting Countries (OPEC). Meanwhile, the Kingdom is losing out on potential revenue by selling oil on the domestic market at a much cheaper rate than on the foreign market. Currently, Saudi Arabia spends about 86 billion dollars a year in subsidies for oil producers.

The significant payments to various Syrian groups, including those that are members of the terrorist organization “Islamic State”, for their promise not to conduct military operations on Saudi territory are a heavy burden on the country’s economy. Large expenditures are directed towards the undeclared war in Yemen, which has no end in sight and which, in the end, threatens the current Saudi regime with huge troubles and problems. Not to mention the enormous increase in military spending. Saudi Arabia are among the world leaders in purchasing weapons. And this started even before their active military operation commenced in Yemen.

One small example: The US State Department has just approved the sale of 4 ships at a cost of $11.25 billion to the Ministry of Defence of Saudi Arabia. Additionally, the deal for the multi-purpose surface ships, spare parts and specialized equipment also includes other types of weaponry, in particular, means of communication and interception intelligence. If these costs are compared with Russia’s failed purchase of two helicopter carriers from France at over 1billion euros, it is clear that Saudi Arabia is not only buying a huge fleet, but also paying Washington for its support.

Not surprisingly, many members of the Saudi Royal Family are concerned about the situation which has come about after the new King Salman bin Abdulaziz Al Saud came to power. According to the Egyptian newspaper, the Egyptian Gazette, the changes that have occurred in the Kingdom’s foreign and domestic policy in less than 9 months of King Salman’s reign have cause a growing number of problems in both the Kingdom of Saudi Arabia and abroad. Dissatisfaction among the Saudis has risen to a new level.

All of this is reflected in a letter that members of the Royal Family received from one of the younger princes. In the letter, which was widely reprinted in the world media, the anonymous monarch justifies the need for change and literally calls for a coup d’etat, which, according to the prince should by carried out by the 13 currently healthy sons of the founder of Saudi Arabia.

“The King in not in a stable position and in reality the son of the King is ruling the Kingdom”, the prince wrote. He called for “the sons of Ibn Saud, from the eldest, Bandar, to the youngest, Muqrin” to urgently convene a meeting to examine the situation and see what should be done to save the Kingdom, to carry out a series of substitutions in high positions in the Kingdom of Saudi Arabia and to verify the decisions taken by members of the Saudi Arabian royal family, irrespective of which they generation belong to.

It is worth noting that the author of the letter refers to a range of reasons for which the current King Salman and his son should be removed from their posts, including their inability to lead or deal with the difficult economic situation in the country caused by the fall in oil prices, the unpopular war in Yemen, the foreign policy failures in Syria and the recent tragedy in Mecca that claimed more than 800 lives. Meanwhile the writer does not explain exactly whom he would like to see in the position of King and Crown Prince. Neither the Royal house, nor the 13 princes, to whom the letter is addressed, have since reacted.

In any case, the current rulers are faced with a number of questions and problems, and the immediate future of Saudi Arabia will depend on how professionally and quickly they are able to solve them.

Victor Mikhin, Corresponding Member of the Academy of Natural Sciences, exclusively for the online magazine “New Eastern Outlook.”