A week after an unprecedented crackdown on some of Saudi Arabia’s wealthiest princes and businessmen, foreign governments and investors are still trying to answer basic questions about a round-up Saudi authorities describe as an anti-corruption drive spearheaded by the Gulf kingdom’s crown prince.
Is 32-year-old Mohammad bin Salman set on a power grab to ensure his succession will be untroubled when his ailing father dies? Or is he what he says he is, a reformer determined to modernize a kingdom infamous for a sclerotic system of governance that’s weighed down by the demands of different branches of the extended royal family?
Rumors abound in the Saudi capital that the purge is not yet finished and more arrests in the coming days are being predicted by Saudi-based foreign diplomats, who remain stunned by the scale of the crackdown. Young middle-class Saudis, long frustrated by graft and the hidebound ways of the kingdom, are applauding the crown prince’s purge, but foreign investors are cautious, fearing Mohammad bin Salman may have bitten off more than he can chew.
Long viewed as a stable place to do business, the latest purge saw an estimated 500 people arrested, including the country’s richest man, Prince Waleed bin Talal, the billionaire businessman who co-owns the Four Seasons hotel chain and until recently was a major investor in Rupert Murdoch’s worldwide media empire. He was arrested at his luxury desert camp.
Prominent military figures were also targeted, including Prince Miteb bin Abdullah, the minster of the elite 100,000-strong National Guard and son of the late King Abdullah, whose death two years ago led to Mohammed bin Salman’s appointment as crown prince by Saudi’s 81-year-old current monarch.
Air of uncertainty
But the round-up has introduced an element of uncertainty, say analysts. Investors are wary, fearful of advancing projects until they are sure business partners aren’t going to be targeted in any subsequent crackdowns.
There is concern also that there might be a destabilizing reaction to the crown prince’s moves and an insurrection mounted by the old guard.
Some analysts think there’s only a remote chance of a violent pushback by the targeted branches of the family targeted. “The arrests will probably reduce the risk of anyone in the family challenging him in the foreseeable future,” says Jane Kinninmont, an analyst with Chatham House, a British policy research group.
She believes that’s why there was a theatrical element to the crackdown, which she views as a “spectacular action designed to signal radical change” and a dramatic departure from the past.
But investors are likely to continue to be cautious, at least in the short term. The crown prince has amassed plenty of enemies — from other princes to hardline clerics. At the same time he has launched simultaneous and dramatic foreign policy moves in the region, from pursuing a war with Iran-backed Shi’ite Houthis in neighboring Yemen to upending the government in Lebanon as part of a confrontation with Tehran, Saudi Arabia’s main rival in the Gulf.
“No one is going to go there and put $300 million down on a project, if you aren’t sure about the stability of the government,” according to Jean-Francois Seznec, managing director of the Lafayette Group, a U.S.-based private investment company and a visiting professor at the School of Advanced International Studies at Johns Hopkins University. “Investment will slow,” he says.
Too early to tell
“It is too early to say if this is the beginning of a straight-forward anti-corruption drive, or is only an instrument by which the crown prince is going to try to defang his political opposition and centralize power,” according to Gerald Feierstein, a former U.S. ambassador, and now an analyst at the Middle East Institute, a Washington-based policy research group.
Chatham House’s Kinninmont argues the two are not mutually exclusive. “Saudi media portray this as a much-needed battle against corruption, while much of the Western media have viewed it as a political purge. Most likely, it is both,” she says.
The crown prince has been pushing radical reform, including lifting a ban on women driving, curbing the powers of the religious police and launching an ambitious economic overhaul designed to make the country less dependent on oil. He has pledged to steer Saudi Arabia towards a moderate interpretation of Islam, straining the royal family’s historic alliance with the country’s hardline religious establishment.
The House of Saud’s control of the kingdom has been based on twin pillars, oil-wealth, which has allowed it to reward all the extended family, and appeasement of the austere ultra-conservative religious movement known as Wahhabism.
Saudi authorities have moved fast to try to reassure investors that they have nothing to fear from the crackdown, saying the accused will face transparent trials in state courts and not before religious Sharia judges. If that is the case, how far will transparency go and will it include in the future the crown prince overseeing a system of government that is far more far more open to public scrutiny?
The answer to that question will reveal whether Mohammad bin Salman is aiming truly to modernize Saudi Arabia or to shape a regime based on authoritarian populism.
