Discussion Board

Rise of Muhammad bin Salman

Since rise of Muhammad bin Salman, dramatic changes happened in economic and culture of Saudi Arabia. He wasted little time consolidating his power. From detention more than 200 princes, ministers and businessmen in one side to approval of women drive and public cinemas in another side. He and his allies control all branches of the security services. He presents himself as a youthful reformer. Saudi people might think Muhammad bin Salman is a superhero, powerful and modern crown prince with just 33. He has astonished people by breaking the rules of religious extremism and pushing for moderate Islam. Most young people feel more delighted and freer. The prince sees himself also as the champion of the young (under-30s form a majority of the population). However, The Saudi people´s true opinion about the kingdom is difficult to read, because they are afraid to speak out and criticize. The prince´s actions are transforming Saudi Arabia into a truly absolute monarchy. Critics of all stripes have been kidnaped or jailed. Several women’s rights activists were arrested. These incidents have made the people either silent or forced them to speak only positive about their system. Saudi media, largely controlled by the state, have blamed “haters” and “ill-wishers” in Qatar and other countries.

The Saudi economy, meantime, is stagnating. Unemployment rose to 12.9% in the first quarter of 2018 and it is about twice as high for the young generation. Prince Muhammad, aware of this situation, hopes to create 450,000 new jobs by 2020. But that largely depends on increased foreign investment, which, in turn, depends on the crown prince showing better judgment. The kingdom is becoming less attractive to foreign workers and businessmen. Insurance and entry fees have increased and utility bills are rising. To avoid the monthly tax, which doubles to 200 riyals ($53) per family member in July, many foreign workers are leaving. Officials expect 700,000 will leave by 2020. Many big firms have already withdrawn from an investment conference in Riyadh scheduled for October 23rd. Some royals wonder if he will end up bringing down the whole regime.

Governments of other countries have more or less clear opinion of Saudi Arabia’s system. Many countries in the Middle East see Prince Muhammad as a destabilizing force in the region. Iran is the first rank objector for Saudi Arabia since it opposes the kingdom strictly and competes for the oil. As Iranian exports have dropped since May, when Mr. Trump announced the sanctions, Saudi Arabian exports have raised remarkably. However, even if Saudi Arabia wants to fill the gap left by Iran, it is not clear if it can manage it because it´s output is so high. The kingdom is already producing more than 10.5m barrels of oil a day. Officials claim that the capacity to produce is around 12m. The more Saudis produce, the less there is in the tank for any additional supply outages.                                                                                                                                                                                Besides Iran, president Erdogan disagrees with Saudi Arabia over its confrontation with Iran, its blockade of Qatar, its rejection of democratically elected Islamist governments and cold war in Yemen. But, on the other hand, Arab rulers, such as Egyptian president Abdel Fattah el-Sisi, King Abdullah of Jordan and Muhammad bin Rashid of Dubai, even Saad Hariri, the prime minister of Lebanon has supported Prince Muhammad in many current issues. America’s actions and behavior has left more instability in the Middle East. The United States has a profound interest in helping Mohammed bin Salman. Recently, President Trump has claimed he wants to get out of the Middle East, however, his priority appears to be selling arms to the kingdom, and enlisting its help in squeezing Iran. He is counting on the Saudis to hold oil prices steady by maintaining global supply, as America hits Iran, their shared enemy, with new sanctions that aim to cut off its oil exports. Mr. Trump sees the kingdom also as an important market for American weapons manufacturers.

The conclusion is that by observing the countries in South and East Asia and their developments, it is indeed remarkable, that Asia has gotten really rich. Not because countries in those areas don’t have political, ethnic and religious differences like other regions, but because in more places they learned to set those differences aside and focus on building the real foundations of sustainable wealth such as education, trade, infrastructure, human capital and, in the most successful places, the rule of law. Most of Asia became wealthy not by discovering natural resources but by using its human resources, both men and women, and giving them the tools to realize their potential.                                                                                                                                                  In contrast, the Middle East has never been a bigger mess. The region of the world that should be naturally rich has made itself poor by repeatedly fighting in different regions and missing its potentials vastly. While many of them are surviving with their oil without building their skills and know-how for the future, the others are facing instability and civil war. The question is how they will manage their economy after the oil ends and if they manage to sit and talk with each other to come forward or will they continue being obsessed with their old style.

 

https://www.economist.com/blogs/economist-explains/2017/11/economist-explains-9?zid=

https://www.economist.com/middle-east-and-africa/2018/10/27/a-journalist-is-confirmed-dead-saudi-arabias-crown-prince-is-defiant

 

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