RANE Advisory | April 2, 2018

SAUDI ARABIA: Can Saudi Prince Pull It All Off?

In response to clients’ questions about recent actions taken by the leadership of the Saudi Arabian government and the potential for either domestic unrest or a challenge from within the royal family, RANE reached out to several experts in our network to get their insights.

King Salman and Crown Prince Mohammad bin Salman (MBS) have initiated major economic, social, and political reforms in that have the potential to modernize the country. The moves also pose a threat to the country’s stability given the dramatic changes being introduced.

• The “Vision 2030” reforms are designed to move the Saudi economy away from oil dependency by diversifying its economy and developing public-service sectors such as health, education, infrastructure, and tourism. Also included is increased government spending on the military, manufacturing equipment, and ammunition.

• A number of social reforms are being pursued to change Saudi Arabia’s image into that of an accessible country with a more open and tolerant interpretation of Islam, according to our experts. For example, women are now allowed to drive, are no longer required to wear the hijab, and can now serve as government officials. However, MBS is not a genuine liberal reformer, as evidenced by hiscrackdown on dissent and the fact that harsh restrictions still remain on Saudi women.

• The King, at the request of the Crown Prince, has instituted several major changes in the country’s national security organizations. He replaced the senior leadership at the Ministry of the Interior (MOI) and moved some MOI functions to the newly created Presidency of State Security. The National Guard, Ministry of Defense, and Ministry of the Interior have been brought under the direct control of the Crown Prince and King Salman, but at the cost of some of the stability those institutions had enjoyed in recent decades, according to our experts.

• More than 200 princes and government ministers were arrested and held in November as part of a crackdown on corruption and to refill the state’s coffers, according to media reports, which claim that some assets were seized. Saudi officials portrayed the crackdown as a move toward better governance, but some analysts argue it was designed to neutralize threats from within the royal family. RANE expert John Kidd, a senior analyst from West Sands, LLC, believes the reason is somewhere between the two.

Our experts perceive no sign of new or growing restiveness against the Saudi royal family at present. According to polling data, some of the recent moves are directly in line with what the Saudi population wants to see from its government. RANE will continue to watch for signs of discontent, as major top-down social changes historically do not occur without pushback.

• According to a survey conducted in January 2018, 65 percent of Saudi citizens think their country is heading in the right direction. Most people across the 27 countries polled in that survey think the opposite.

• The key concerns for most Saudis are economic ones, including taxes and unemployment, and are directly addressed by the Vision 2030 reforms.

RANE Advisory | www.ranenetwork.com | [email protected] Top five concerns for Saudi citizens, according to January 2018 Ipsos Public Affairs poll

Saudi Arabia’s Eastern Province has historically been an area of concern because of tension between the Sunni government in Riyadh and the province’s marginalized Shi’a minority. However, according to Kidd, a government crackdown over the past two years has exhausted the province’s potential for militancy and a fundamental destabilization there is unlikely in the next year.

• Issues that have driven unrest in the Eastern Province in the past — economic neglect, political marginalization, and religious discrimination — will not be addressed, but the Saudi government, intent on presenting an image as a stable environment for investment, will vigorously quell any domestic dissent.

• The Crown Prince’s Vision 2030 reforms will benefit infrastructure and oil industry-related development in the Eastern Province, but profits will not stay in the region, and no aspect of the reforms is directed at improving life for Eastern Province minority communities.

• Inciting unrest in the Eastern Province has been a favorite tactic for to cause problems for its regional rival. RANE experts suspect that following government crackdowns on militant elements, Iran will turn its attention to arenas where its resources can produce a stronger effect, including supporting anti-Saudi Houthis in or Shi’a Hezbollah in and .

Conflicts within the Saudi royal family are typically handled behind closed doors, according to our experts, and power changes that make international news such as the recent personnel shake-ups in government ministries often reverberate much deeper within Saudi Arabia.

• In the event dissent grows, the King and Crown Prince may respond by slowing the pace of reforms. But they have already disrupted the status quo, so ceasing or repealing reforms already made is not an option, according RANE experts on the ground in Saudi Arabia.

• RANE experts see MBS’s current extended diplomatic mission abroad as proof that the country is stable, as they do not believe he would leave the country if his position were threatened domestically.

There has been some speculation that a Pakistani brigade of unknown size that recently deployed to Saudi Arabia may be bolstering security around the Saudi royal family. The deployment of a larger Pakistani combat brigade to Saudi Arabia has not occurred since the 1980s.

• and Saudi Arabia are defense partners. RANE experts note that around 1,000 Pakistani advisers and trainers were already in Saudi Arabia, and Pakistani security forces also guard Saudi holy sites.

RANE Advisory | www.ranenetwork.com | [email protected] • In 2015, Pakistan refused to send troops to assist the Saudi-led intervention in Yemen, partly because it did not want to risk conflict with Iran or with its own Shi’a minority. The Pakistani government insisted the troops sent to Saudi Arabia this year would not be deployed outside the country.

Kidd suggests that the Pakistani soldiers could be used as a coup-proof military force loyal to Crown Prince Mohammad bin Salman, designed to preempt dissatisfaction resulting from the Crown Prince’s reforms, particularly those affecting the armed forces.

• Alternatively, he suggests that the Pakistani soldiers could be training a Saudi force that would be loyal to the royal family, or could be used to fight dissent in the Eastern Province or patrol the country’s border with Yemen.

Who is Mohammed bin Salman?

• Mohammed bin Salman bin Abdulaziz Al Saud (MBS), the eldest child of Saudi King Salman bin Abdulaziz Al Saud and his third wife, was born in 1985. He is a graduate of King Saud University in Riyadh, and has never lived or studied abroad.

• MBS entered politics in 2009 at the age of 24. He became the Defense Minister and Deputy Crown Prince when his father assumed the throne in 2015, and he is considered by many to be primarily responsible for the Saudi intervention in Yemen.

• In 2017, MBS was elevated to Crown Prince after his father unexpectedly ousted former Crown Prince Muhammad bin Nayef — who had deep ties in Washington and was a favorite of older Saudi royals — from the position. Muhammad bin Nayef was reportedly under house arrest in June 2017, and his status is not currently known.

• Kidd believes that MBS effectively vanquished his rivals, including ousted Crown Prince Muhammad bin Nayef and his supporters, in 2017. Sources say that MBS may have put his mother under house arrest in 2016, due to her opposition to his reforms, and hidden the move from his father.

• Observers characterize MBS as the true power behind the throne. The Vision 2030 reform is his initiative.

• MBS is seen as an enthusiastic supporter of the Trump administration, partly due to common concerns about Iran, and had been critical of Washington’s foreign policy before the 2016 election. Some analysts suggest that MBS hopes to use the Trump administration to roll back the geopolitical gains that Iran has made since the Iraq war in 2003.

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