Saudi Arabia's succession switch creates fresh set of risks

King Salman of Saudi Arabia, the world's leading oil exporter, has named as his successor his 31-year-old son, Prince Mohammed bin Salman, deposing his nephew, interior minister Mohammed bin Nayef, and relieving him of all responsibilities.

The sudden promotion of Prince Mohammed bin Salman vests close to absolute power in an inexperienced young prince with already unprecedented control over economic strategy and oil policy, as well as defence, and an increasingly hawkish foreign policy.

The crown prince, widely known as MbS, will be the first grandson of the founder of the kingdom, Abdulaziz ibn Saud, to ascend the throne, with power passing to the third generation of the ruling House of Saud. He has made it known he seeks to embody the hopes of a young population, about half of which is under 25 and facing an uncertain future in the post-oil economy Riyadh is trying to create.

MbS is the author of last year's internationally acclaimed Vision 2030, a radical programme to wean the kingdom off what he called an "addiction to oil", by replacing fast-depleting hydrocarbon revenue with income from private investment and the creation of what he hopes will become the world's biggest sovereign wealth fund, built around the part-privatisation of Saudi Aramco, the state oil company. The goal is to quadruple non-oil revenue by 2020 from just over US$40 billion (S$55.6 billion) in 2015, before nearly doubling it again by 2030 - a target of breathtaking ambition.

To get even close to it, MbS will have to unite behind him not just the kingdom but a faction-ridden royal family, cosseted by the purposely blurred lines between the privy purse and the public budget. The decree announcing his ascent unusually revealed that 31 out of 34 members of the Allegiance Council, a sort of royal Central Committee created a decade ago to keep the family united, backed the decision. Yet House of Saud-watchers and Arab officials in close contact with the court say that resentment among branches of the family displaced by King Salman extends to some of MbS' brothers, angered by their father's decision to bestow such power on his favourite son.


Prince Mohammed bin Salman (left) and his cousin Mohammed bin Nayef in a handout picture released by the Saudi Press Agency in March 2015. In trying to reach his non-oil revenue targets, the crown prince needs to unite behind him not just the kingdom but a faction-ridden royal family. PHOTO: AGENCE FRANCE-PRESSE

After more than two years as deputy crown prince wielding extensive powers, there are also questions about MbS' judgment, which will come under even closer scrutiny as he confronts challenges that would test the most seasoned of operators.

The sudden promotion of Prince Mohammed bin Salman vests close to absolute power in an inexperienced young prince with already unprecedented control over economic strategy and oil policy, as well as defence, and an increasingly hawkish foreign policy.

At home he has already had partially to reverse extensive subsidy and benefit cuts on the vast state payroll, which depressed consumption at a time when the economy was already sagging because the collapse in oil prices had cut back public investment. While Prince Mohammed bin Nayef saw off the terror campaign by Al-Qaeda in 2003 to 2006, the new crown prince will be more directly responsible in the confrontation with the more virulent Islamic State in Iraq and Syria, which has turned its sights on the kingdom.

Saudi Arabia also remains bogged down in neighbouring Yemen, in a politically debilitating war that MbS launched against heterodox Shia Houthi forces, intending to draw a quick line against any further expansion of Iranian influence in Arab territory. The crown prince last month even threatened to carry the war into Iran, rather than skirmish through proxies across the region. Predictably, after militant attacks this month in Teheran, Iran's Revolutionary Guard blamed Saudi Arabia and pledged to retaliate.

MbS has built a personal relationship with US President Donald Trump and with Russian President Vladimir Putin. After Mr Trump last month in Riyadh called for a Sunni Arab campaign to isolate Shia Iran, Saudi Arabia and its allies moved quickly to isolate Qatar, accusing the gas-rich emirate of dallying with Teheran and fostering Islamist extremism. Although Mr Trump initially cheered this impetuous move, the US appears to be chary of the blockade of Qatar, which hosts the biggest American base in the Middle East.

The jury is out on MbS before he steps up to the Saudi throne.

FINANCIAL TIMES

A version of this article appeared in the print edition of The Straits Times on June 23, 2017, with the headline 'Saudi Arabia's succession switch creates fresh set of risks'. Print Edition | Subscribe