MENA: Three Things to Watch in 2018
1. Crown Prince Mohammed Will Continue To Generate Headlines As He Makes Aggressive Moves On Reforms And Political Consolidation
Crown Prince Mohammed bin Salman’s emergent regime in Saudi Arabia is likely to be the focus of attention for much of the region and beyond over 2018. While it remains likely that he will accede to the throne on his father’s abdication, depending on King Salman’s health, the prince is already the kingdom’s effective ruler and an early abdication would be intended to smooth the succession rather than evidence of any change in the power structure.
The prince’s domestic proposition is that he recognizes that Saudi Arabia faces a set of challenges – demographic, economic, geopolitical, and social – with which it is at present ill-equipped to deal. In order to address those issues, he has opted to sweep away the sclerotic political decision-making processes in place since the late 1970s which he blames for the country’s current situation. Rather than seeking consensus within the ruling Al Saud and its supporting network of tribal and clan connections, Prince Mohammed relies on a tight group of advisers, as well as external consultants, while appealing directly to popular opinion.
His recent actions, including the almost single-handed reorientation of long- term economic strategy and the mass detentions of political and business figures, are consistent with a belief that the consolidation of power in the hands of a determined individual will allow for better decision-making and more effective implementation of those decisions. Thus far, there is considerable support within the kingdom for measures apparently intended to reduce the level of graft that has become intrinsic to the way in which state revenues are distributed. Moreover, while some of his opponents are characterising his actions as reckless, in fact he is drawing clear lines of demarcation that are intended to reassure potential foreign investors. His anti- corruption campaign has not targeted foreign companies, their key partners, or, perhaps most importantly, any senior executive, current or former, of Saudi Aramco. What is unclear is whether the prince recognises that the exercise of this type of power in this fashion and the aggressive response to even mild criticism pose risks not only to investor sentiment, but to his capacity to attract the type of investment in an “ideas economy” that he claims to be seeking.
2. On Regional Issues, Iran Will Remain The Primary Target
Prince Mohammed is demonstrating a similar predilection for dramatic and assertive moves on regional issues. Frustrated over the quagmire that the Yemeni civil war was becoming, he believed that Saudi military intervention would resolve the conflict quickly, just as he believed that the shock being blockaded by its GCC allies would force Qatar’s capitulation. More recently he forced the resignation of Lebanese premier Saad al-Hariri in anger at what he perceived to be Hizbullah’s dominance of the Beirut government. However, Saudi Arabia’s failure to develop effective alliances with key players in Iraq or Syria has meant that he lacks viable tools to push back against Iran in either of those countries. Meanwhile, the decline in Saudi leverage over key Lebanese political figures has just been demonstrated by Hariri’s decision to revoke his own resignation now that he is safely back home.
Even though his expectations have been confounded in these cases, Prince Mohammed remains convinced that the kingdom must more forcibly assert itself to counter Iranian influence. Lacking the tools to achieve this in places like Iraq – where Iranian influence has completely eclipsed any role that the kingdom might have been able to establish after the fall of the Baath government – or Syria, the most likely theatre for such a confrontation is thus the Gulf.
This is becoming increasingly likely. One of the consequences of the uptick in aggressive, anti-Iranian rhetoric emanating from the kingdom and the US has been to neuter the relatively unconfrontational administration of Iranian President Hassan Rouhani in regional policy terms. Instead of the relatively weak Iranian Ministry of Foreign Affairs, the actions of Iranian agencies in the region are now almost entirely directed by a variety of different bodies. Many of these are offshoots of the sprawling Sepah-i Pasdaran (Revolutionary Guards) organization while others are tied to Iran’s powerful para-governmental economy, which is in turn dominated by religious foundations. While the proliferation of decision-making centers in the Iranian system has facilitated the enormous expansion of the country’s influence in Iraq and to some extent in Syria, it has also crippled the central government’s ability to control those agencies precisely.
3. Although Risks Are Growing, The Lack Of International Consensus Will Limit The Scale Of Confrontation
With the Saudi government now much more likely to seek confrontation with Iran than back away from it, the risks of diplomatic sparring turning into something more concrete are rising. Any direct confrontation, other than low-level naval incidents along the shared maritime border, would be most likely to stem from allegations and even evidence that Iranian agencies had directly intervened either in Bahrain or in the kingdom’s predominantly Shia areas. Saudi and Bahraini accusations of Iranian incitement of their Shia populations are exaggerated but not without foundation, while the Iranian leadership is very keen to capitalize on the current split in the GCC.
However, the scale of any direct confrontation would most probably be limited and its ultimate impact would depend on external support for Saudi demands that international action be taken against Iran. In the absence of any international consensus on that issue, the primary impact that Saudi- Iranian tensions in global terms is likely to be limited to intermittent upticks in international crude markets stemming from perceptions of risks to tanker traffic in the Gulf.
For the meantime, however, Iran is likely to continue to expand its influence in the countries in the region that have substantial Shia populations. In Iraq, Lebanon, and Yemen, Iran increasingly has no viable rival to its ambitions to consolidate its position as the Shia populations’ primary external ally and supporter. Moreover, given the success of Russian, Iranian, and Hizbullah’s interventions in Syria, the most likely obstacle to the advancement of Iran’s ambitions there will probably be Russian insistence on limiting the role of Iranian forces. Even then, Iran’s para-governmental conglomerates are poised to reap the benefits of Syrian reconstruction, deepening the Islamic Republic’s influence far beyond what was the case prior to 2011.