King Salman’s ascension a year ago after the death of the late King Abdullah opened a period of optimism that a new generation of policy-makers might re-energize the Kingdom amidst a period of rising economic and security challenges, at home and abroad. The king moved quickly to name a new cabinet which included his youngest son and one of his prominent closest advisors Mohammad bin Salman and formed from younger technocrats and conservatives to chart Riyadh on a new course
New global alignments
Salman’s decision to promote two of Washington’s key interlocutors, Mohammad bin Nayef as Crown Prince and Ambassador Adel al-Jubeir (the former Saudi Ambassador to Washington) as Foreign Minister, was a further signal to Washington that U.S.-Saudi relations would not be substantially impacted and that the new King was committed to a renewed partnership despite differences. King Salman importantly visited Washington last June with the Deputy Crown Prince after both the Crown Prince and the Deputy Crown Prince attended the Camp David Gulf summit held earlier in the spring.
In the first year of Salman’s reign, the King has succeeded in streamlining decision-making and projecting an image of confidence and action that appeals to the Saudi public.
However, in the wake of the Iran deal and Washington’s shifting global engagement with the region, Riyadh has further invested in its relations with states that don’t always align with the U.S., such as Russia (Prince Mohammad bin Salman visited Sochi this past summer) and China (Beijing imports the majority of its oil from Saudi Arabia). King Salman hosted earlier this week China’s President Xi for his first visit to the Kingdom. Riyadh has deepened as well its relations with key European states, including France (recently concluding a major defense agreement).
This diversification of alliances has been an attempt by the Kingdom to better position itself for the challenges of the 21st century and responds to the diffusion of global power since the end of the Cold War. Saudi Arabia’s participation on the U.N. Human Rights Council and at the Paris Climate talks have been a clear signal that the Riyadh is further positioning itself to be a critical stakeholder beyond the region.
A new course at home
In the first year of Salman’s reign, the King has succeeded in streamlining decision-making and projecting an image of confidence and action that appeals to the Saudi public. He importantly consolidated the Kingdom’s economic policy (including energy policy) under a single super-committee, the Council of Economic and Development Affairs, chaired by Deputy Crown Prince, Prince Mohammad bin Salman. This Council critically has taken substantive steps to introduce sweeping reforms in the face of low oil prices. These reforms include: austerity measures across the government ministries, initiatives to diversify the economy and decrease youth unemployment, and proposals to introduce taxation. Prince Mohammad has also taken some measures to increase spending in critical areas, notably in improving the Kingdom’s infrastructure and boosting the productivity of critical, but underperforming sectors of the economy.
Despite low oil prices, Riyadh has remained steadfast in ensuring that the Kingdom doesn’t loose market share in the face of growing global competition. While this strategy has taken a toll on Saudi’s expansive foreign currency reserves, it has strengthened OPEC’s position against the at one time strong, U.S. shale industry. The Kingdom has also remained committed to maintaining the Riyal’s peg to the U.S. dollar.
Going into the second year of his rule, King Salman and his son will need to continue to pursue economic reforms and austerity measures to better position the Kingdom in a low oil climate. Riyadh will also have to continue to borrow money both domestically and internationally to finance its budget. The new Council will to need to find ways to diversify the Saudi economy further, privatize certain holdings, and diversify the government’s investment of its revenues. While a Valued Added Tax is being drafted, further taxation would likely prove to be unpopular.
A more assertive position abroad
While King Salman has prioritized improving the Saudi economy, Riyadh has taken a more pro-active position regionally to counter-Iran’s expansive behavior in the face of a perceived U.S. drawback. Saudi Arabia’s multi-national coalition to push back the Houthis and its external ally, Iran from controlling Yemen is one such example of its new assertiveness and independence. Riyadh also has taken a larger role in trying to reach a settlement of Syria’s civil war and recently launched a new global military coalition, headquartered in Riyadh, to address Islamic extremism. Such a coalition could be used to more robustly support Washington’s efforts to counter ISIS. This Coalition could also in the future be an important alliance to push back against Tehran after the Iran nuclear deal. Saudi Arabia continues as well to bolster its support for regional states such as Egypt and Jordan who are facing a number of economic and security challenges.
Despite taking more forward leadership in the region in the absence of a strong U.S. role and a more assertive Russian role (which Riyadh has viewed with both engagement and wariness) to bolster regional states and communities and push back against Iran, Salman has been equally wary of over-drawn foreign adventures, most notably in Yemen and Syria, and has sought to pair his willingness to use force with diplomacy. He’s also indicated that foreign expenditures of these commitments aren’t open-ended and the predominant priority is ensuring the long-term fiscal health and prosperity of the Kingdom at home.
However, Iran’s recent escalation of tensions with the ransacking of Saudi Arabia’s embassy in Tehran and its continued interference in Saudi domestic affairs and in the Arab world means that while Riyadh will unlikely engage in new foreign conflicts abroad, it will continue to have to juggle both domestic and regional challenges.
Overall, King Salman’s first year has repositioned Saudi Arabia to better address the challenges of the 21st century and this next year will be an important test for his leadership.
Andrew Bowen, Ph.D., is a Senior Fellow and the Director of Middle East Studies at the Center for the National Interest.