Saudi Arabia: 2021 promises to be another grim year

his year has not been an easy one for Saudi Arabia. It ends on a bad note, as most of the promises made by Crown Prince Mohammed bin Salman have either stumbled or been altogether delayed.

The causes are not entirely related to the Covid-19 pandemic that has ravaged the most resilient democracies and economies in the world, let alone fragile, oil-dependent countries such as Saudi Arabia.

A sense of illusory security will prevail in Riyadh as a result of greater cooperation with Israel, and possibly normalisation

The promise to end Saudi Arabia’s dependence on oil is yet to be fulfilled with rigorous diversification projects. With oil prices continuing to plummet, the Saudi leadership has no alternative but to continue to draw on its sovereign reserves and borrow from international money markets.

Neither foreign investment nor local funds can cover the costs of new development projects that the prince had planned. Regardless of the low demand for oil during a pandemic, the crown prince has yet to understand the full implications of a changing market in which Saudi oil is no longer the main source of energy – a different future, envisaged without combustion and pollution.

Saudi Arabia has not succeeded in achieving the level of diversification that would cut its dependence on oil in half. The country may become irrelevant as a source of energy as more industrial countries switch to clean energy sources over the next few years.

The crown prince’s problems are not only about dwindling income from oil and the failure to launch the diversification programmes promised under Vision 2030. He will also be haunted by a lack of consensus over his leadership should his father, King Salman, die in 2021.

In the short term, his detention campaign against his own relatives is likely to intensify and reach a wider circle of marginalised and disgruntled princes, especially wealthy ones. He will find himself compelled to draw on their wealth to prevent them from launching a protest against his leadership, or to keep them under house arrest, as he has done in recent years.

Strained loyalties
The unforeseen global economic shift away from oil will restrain Saudi Arabia’s ability to maintain the loyalty of its citizens when it cannot provide the basic services that they had been used to. Recent taxes imposed on the population, such as VAT, mark the beginning of a troubled state-society relationship, in which disenfranchised citizens are expected to finance an opaque treasury – an unknown quantity of which often vanishes into the pockets of a handful of princes.

Without political representation and transparency, Saudis may begin to ask questions about how their taxes are spent, and insist on having a say in how they are distributed. As the government gives them their salaries as public sector employees, it will take a substantial percentage to bridge the gap between revenues and spending.

The regime shows no signs of willingness to enlist Saudis in the decision-making process. Many will consequently feel even more marginalised and disenfranchised. It will only be a matter of time before they begin to ask serious questions about their future in an absolute monarchy that has resisted every call for political reform.

A decrease in Saudi oil revenues may not be that bad for the Arab region, however, as Saudi Arabia will have less funds to promote reactionary regional policies, such as the ones that derailed the 2011 Arab uprisings, when the leadership poured money to quash the tide of democratisation.

Supporting the re-consolidation of military and authoritarian rule, from Egypt to Bahrain, may not be possible with less cash in the Saudi purse. Continuing military adventures in Yemen will become more dangerous and harmful without substantial funds to cover up blunders.

The Biden factor
While many Arab, Asian and African immigrants will be hurt by the shrinking of Saudi Arabia’s ability to import foreign labour, many in the region will benefit in the long term, as the absolute monarchy will stumble in its attempts to interfere diplomatically with subsidies, or militarily in other country’s affairs. The Arab world will benefit from a shrinking of Saudi monetary resources that have historically supported many dictators in the region.

Since the election of Joe Biden as the future president of the US, the Saudi regime has lost the unconditional support of the departing president, Donald Trump. The latter did everything in his power to shield Saudi Arabia from international justice after the murder of journalist Jamal Khashoggi; he failed to criticise the country’s record on human rights and he never attempted to stop the five-year Saudi onslaught on Yemen.

In 2021, Saudi Arabia will face a new US administration whose leading figures had already made enough noise to worry the crown prince. Bin Salman has every reason to worry about not only the US commitment to protect his hold on the throne, but also Washington’s expected return to negotiations with Saudi Arabia’s archenemy, Iran.

The crown prince will find himself increasingly drifting into the arms of Israel for a false sense of security, based on secret transfers of surveillance and military technology to Riyadh, ad hoc strikes on Iran, and various clandestine cooperation programmes. A sense of illusory security will prevail in Riyadh as a result of greater cooperation with Israel, and possibly normalisation. But real security will remain elusive.

Worse days ahead
In general, 2020 has been a bad year for the ambitious crown prince. His reputation ebbed globally, his purchasing power declined, and his dreams to open Saudi Arabia to the world financially and through tourism are on hold.

The pandemic only exaggerated a trend that had already become visible. Covid-19 cannot be considered the only cause of bin Salman’s anxiety at the moment. The conditions that have caused him trouble will continue to exist in 2021, and they may even become worse.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.

This article was first published on the Middle East Eye