Saudi Crown Prince Mohammed bin Salman is touring the UK and US in order to shore up support amidst an era of change in the Middle East. Riyadh’s relations with the West are marked by concerns and opportunities.

Within less than a year, the ultra-conservative kingdom of Saudi Arabia has undergone unprecedented change, introducing a crackdown on corruption and improving women’s rights. The driving force behind this is Mohammed bin Salman, the 32-year-old crown prince and son of King Salman. The prince, widely known as MBS, this week started a foreign tour aimed at shoring up support with allies.

A New King In the Making

The pace of change accelerated after Mohammed bin Salman last June ousted the previous crown prince, his cousin Mohammed bin Nayef, in what has been described as a palace coup. Several months later a new anti-corruption commission, chaired by MBS, ordered the arrests of hundreds of senior Saudi figures, including several princes, on corruption allegations. In a dramatic development, the five-star Ritz-Carlton hotel in the capital Riyadh was turned into a luxury prison.

The crown prince and other Saudi officials have defended the crackdown, which they say has earned the state $100 billion in assets through agreements with those held in the Ritz. MBS has spoken of a battle against the “cancer of corruption”. Despite these assurances, many of Riyadh’s allies were left shaken by the drastic measures, voicing concerns over due process.

MBS’ first trip abroad since becoming crown prince will aim to assuage these fears and present Saudi Arabia as a loyal partner and secure place to invest in. The crown prince is spearheading an ambitious economic and social reform plan known as Vision 2030, which aims to wean the kingdom off its reliance on oil.

Having also implemented a shake-up of top military and security posts as part of military reforms, Crown Prince Mohammed is widely seen as the center of power in Saudi Arabia. “He is the de-facto decision maker in the kingdom,” says Gary Grappo, a former US ambassador who was stationed in Riyadh in the past.

The royal trip kicked off in Cairo on March 5, followed by visits to the UK, where the crown prince had a rare meeting with Queen Elizabeth II, and the US where he will meet President Donald Trump. Dozens of Saudi business leaders are accompanying the crown prince on his tour.

What is more, Crown Prince Mohammed met Coptic Pope Tawadros II in Cairo and is scheduled to meet with faith leaders in the UK. Observers see this as part of Saudi Arabia’s efforts to shed its image as an exporter of an ultra-conservative strand of Sunni Islam. In October, the heir apparent to the Saudi throne vowed that the kingdom would return to a “moderate Islam that is open to all religions”.

In line with his son’s reform program, King Salman has curtailed the power of the religious police, and gave women the right to drive in a royal decree issued in October 2017. Last month, women were given the right to serve in the armed forces.

A Difficult Mission

A major problem in Riyadh’s relationship with the West is that the “anti-Qatar narrative failed to convince Washington, London, and other Western capitals to back the… actions against Doha,” Giorgio Cafiero, co-founder of Gulf State Analytics, told The World Weekly.

• Note: Crown Prince Mohammed and his Emirati counterpart Mohammed bin Zayed (MBZ) have spearheaded a blockade against fellow Gulf state Qatar over the latter’s ties with Iran and support for the Muslim Brotherhood, one of the the oldest Islamist movements in the world. Turkey has mainly sided with Doha in the dispute which has driven a wedge between members of the Gulf Cooperation Council, an intergovernmental body. London and Washington have both called for an end to the Gulf dispute.

In London, protesters against the Saudi-led war in Yemen went to Downing Street ahead of the crown prince’s meeting with British Prime Minister Theresa May. Riyadh and several allies intervened in Yemen in March 2015 to restore the internationally recognised government. The war against Houthi rebels and their allies, seen by Saudi Arabia as part of its battle against Iranian proxies across the Middle East, has cost the lives of at least 10,000 people. Yemen remains in the midst of one of the worst humanitarian crises in the world.

Both the UK and US have supported the Saudi-led coalition in Yemen by providing intelligence support and selling weapons. Private companies like the UK’s BAE Systems have over the decades signed arms contracts worth billions of dollars with Riyadh. Various media investigations have found these contracts to be a significant source of corruption.

Support for the Saudi-led war in Yemen has been increasingly criticised as UN officials have identified the coalition as responsible for civilian deaths and possible war crimes. Riyadh has denied the deliberate targeting of civilians.
The Houthis and their allies, observers say, have significantly contributed to the suffering of civilians as well by besieging strategic areas, including Yemen’s cultural capital Taiz, and indiscriminately shelling civilian areas. It is, however, the coalition that has blocked humanitarian access to the country for extended periods by implementing an air, land and sea blockade.

MBS will be keen to avoid critical discussions of the Saudi-led war in Yemen during a tour that is meant to project a modern and business-friendly kingdom. Part of projecting this modern image have been efforts to improve women’s rights and introduce movie screenings and concerts. These measures have been widely hailed.

“The US and UK have long been close allies of Saudi Arabia,” says Adam Coogle, Middle East researcher at Human Rights Watch, “but over the years rarely have they been willing to publicly address serious human rights concerns like the imprisonment of human rights activists and peaceful dissidents… and ongoing systematic discrimination against women.”

A report compiled by several NGOs for the UN Committee on the Elimination of Discrimination against Women said most steps taken to improve the situation of women in Saudi Arabia were “minimal, if not cosmetic, while others lacked implementation.” They argue these improvements were “a facade to show the international community”, distracting from a lack of comprehensive reform in other sectors.

Saudi Arabia has been governed by a social contract in which the ruling al-Saud family provides stability and welfare for the country’s citizens by heavily subsidizing services such as housing and education through its enormous oil wealth. In exchange, Saudi citizens are expected to remain loyal to the royal family, while the ultra-conservative religious establishment provides religious backing for the al-Sauds.

This system, described by some as ‘cradle-to-grave welfare’, relies on a lot of money. When King Salman ascended to the throne in January 2015, he ordered bonuses for public sector employees according to some estimates worth around 70 billion riyals ($18.7 billion). After domestic criticism, the king scaled back an austerity program in September 2017.

Saudi Aramco

MBS has made it his mission to diversify the economy and reduce the state’s budget deficit. Part of this plan is to partially privatize Saudi Aramco, the world’s largest oil company, by listing around 5% on the stock market. Aramco, according to the crown prince’s estimates, is worth more than $2 trillion – an exact value is impossible to calculate for outsiders as a lot of information about the company’s operations remains secret.

An initial public offering (IPO) of 5% could generate between $50-100 billion, which would make it the biggest IPO ever. Some shares are expected to be listed on the Saudi stock exchange, Tadawul, in addition to at least one overseas listings.

Ambassador Grappo says the crown prince’s interactions with Western leaders “will help solidify his bona fides and credibility back home and abroad.” He sees partially privatizing Saudi Aramco, diminishing Saudi Arabia’s reliance on oil and diversifying the economy as major challenges for MBS. “He’ll need to inspire great confidence as it will likely be Western nations’ businesses, banks and investors undertaking a major portion of the investment required to pull off just these three economic feats,” he told TWW.

However, despite the uncertainty over the shake-up within the kingdom, hosting the Saudi Aramco IPO is a lucrative opportunity. US President Trump has urged for the listing to be done in New York, while Prime Minister May has called for it to be in London.

The UK and Saudi Arabia have agreed to a goal of 65 billion pounds ($90 billion) in mutual trade and investment in the coming years.

Both cities are also competing with several exchanges in Asia, the most important buyer of Aramco crude oil. There has also been speculation that stringent transparency rules by some exchanges could lead Riyadh to sell 5% privately, for example to China.

A Risky Strategy

MBS has turned Saudi Arabia into a more assertive player on the world stage, while also starting bold reforms at home. This does not come without risks.

Countering Iran, a longstanding Saudi policy, is a key example. Riyadh has pumped billions of dollars into the war effort in Yemen, which has exposed Saudi Arabia to criticism at home and by the international community. Iran, meanwhile, has provided material and diplomatic support to the Houthis, but according to estimates at a much lower cost. The war in Yemen, Ambassador Grappo told TWW, “shows little prospect of an imminent solution”.

Germany, a major supplier of arms to Riyadh, announced in January that it would stop selling arms to any parties involved in the war in Yemen. Several US senators have introduced a resolution calling for the president to withdraw US forces from “hostilities in or affecting” Yemen apart from forces engaged in the fight against al-Qaeda.

In November, Lebanese Prime Minister Saad Hariri resigned while on a trip to Riyadh, citing an assassination plot against him and stating that Iran was behind unrest in the region. Mr. Hariri’s body language, choice of words and the fact that not even his closest aides knew that he was about to resign have led many to conclude that Riyadh forced his resignation in order to undermine Iran’s allies in Lebanon. However, after weeks of intense diplomacy, Mr. Hariri was able to return to Lebanon and suspended his resignation. He is still in office.

Nevertheless, the task of confidence-building will be “mutual”, says Ambassador Grappo, adding that the West “needs a stable, prosperous and reliable Saudi Arabia that is a full and productive member of the international community.”

Mr. Cafiero concurred, stating the West understood that Vision 2030 is “extremely important for the kingdom’s prospects for long-term stability.” A failure to end Saudi Arabia’s dependence on oil, he told TWW, “will have disastrous consequences not only for the Gulf region, but the world at large, given the extent to which security in the Gulf is linked to global security.”

Governments and markets alike will be eagerly watching what Crown Prince Mohammed will announce next.