As King Salman bin Abdulaziz al-Saud entered his third month as monarch of Saudi Arabia, the challenges his country faces, both foreign and domestic, must have caused him many moments of quiet reflection at the enormity of the job he has inherited.

The leader’s opening few months have certainly been eventful. Just over 70 days after King Abdullah passed away, his successor and younger half-brother has brought fresh blood into government, appointed as likely future heir to the throne a member of the next Al-Saud generation and injected new energy into the kingdom’s approach to regional affairs.

The latter issue has been forced upon Riyadh by the escalating situation in Yemen. However, leading a regional coalition to deploy air strikes against the Iran-backed Shia Houthi rebels is a clear indication that King Salman has no truck with Tehran’s continued proxy wars on Arab soil and is prepared to steer from the front to counter any threat close to the kingdom’s borders.

Careful planning

“It’s a quiet revolution,” says a longstanding observer of Saudi affairs. “It’s the result of deep thought and careful planning. But it has been done without dividing the ruling elite and the result is something that everyone seems to be happy with.”

When King Salman acceded to the throne in late January, he was quick to name his new government and, despite the opaqueness of the machinations of the kingdom’s political elite, a mix of established figures and the new generation of Al-Sauds was appointed to the cabinet.

Any questions regarding succession were swiftly answered by the reaffirmation of Prince Muqrin as crown prince and the appointment of Prince Mohammed bin Nayef as deputy prime minister and third in line to the throne. Crown Prince Muqrin had been appointed second deputy prime minister and crown prince-in-waiting by King Abdullah in February 2014. Despite there being initial reservations, the 69-year-old former fighter pilot now has a clear path to the throne.

Key fact

Riyadh’s defence spending will rise by 54 per cent in 2015 to $9.8bn

Source: IHS

 

Prince Mohammed bin Nayef is 55, which is regarded as young in Saudi royal circles, and is seen as the kingdom’s foremost voice on anti-terrorism; this expertise led him to succeed his late father by being appointed interior minister in 2011.

King Salman has abolished ministerial committees set up by King Abdullah, including the Supreme Economic Council and the KA-Care Council. In their place, two high-level ministerial councils have been created that will deal with all matters previously processed by the 11 bodies that formed a bureaucratic muddle at the heart of decision-making.

The first is the Council of Political & Security Affairs (CPSA), chaired by Prince Mohammed bin Nayef. Its members include Foreign Minister Saud al-Faisal; National Guard Minister Prince Miteb bin Abdullah and Defence Minister Prince Mohammed bin Salman.

The second new institution is the Council of Economic & Development Affairs (CEDA), chaired by Prince Mohammed bin Salman. It deals with all economic matters, including issues previously handled by the abolished Supreme Petroleum Council. Meeting once a week, the council has a wide-ranging remit and the mandate to coordinate the kingdom’s famously autonomous ministries.

Public spending

With his new government in place, King Salman addressed the nation in March and reasserted that his main priorities were maintaining security in the face of extreme regional threats and continuing the lavish spending on social and conventional infrastructure.

Riyadh had announced the budget for 2015 before King Abdullah’s demise, and the $229bn figure will mean the country runs a deficit of $38bn based on a forecast of revenues of $190.7bn.

Council of political and security affairs

  • President: Prince Mohammed bin Nayef, deputy crown prince, second deputy prime minister and interior minister
  • Prince Saud al-Faisal, foreign affairs minister
  • Prince Miteb bin Abdullah, national guard minister
  • Prince Mohammed bin Salman, defence minister
  • Sheikh Saleh bin Abdulaziz bin Mohammed bin Ibrahim al-ash-Sheikh, islamic affairs minister, endowments, call and guidance
  • Lieutenant General Khalid bin Ali bin Abdullah al-Humaidan, chief of General Intelligence Directorate
  • Adel bin Zaid al-Turaifi, culture and information minister
  • Saad bin Khalid al-Jabri, state minister
  • Musaid bin Mohammed al-Aiban, state minister

Source: MEED

There is little King Salman can do to overturn much of the public spending on social infrastructure and there has been no indication of any reversal in policy on education, health and housing. Riyadh is locked in to several expensive initiatives and the political fallout of cancelling billions of dollars-worth of schemes in key sectors could have dire consequences for the Al-Saud family.

However, with oil prices threatening to sink below $50 a barrel as the year progresses, there have been some indications that less essential domestic projects will either slow to a near standstill or be abolished altogether. Among the likely casualties are the plan to build 11 stadiums across the country and the vast renewable energy programme.

Defence growth

With so much volatility in the region, it is absolutely certain that spending on defence will not be cut; if anything, it will increase. The Global Defence Trade Report issued by US-listed research company IHS in March forecast that Riyadh’s defence spending would rise by 54 per cent in 2015 to $9.8bn.

Council of economic affairs

  • President: Prince Mohammed bin Salman bin Abdulaziz, defence minister
  • Walid bin Mohammed bin Saleh al-Samaani, justice minister
  • Ali al-Naimi, petroleum & mineral resources minister
  • Ibrahim al-Assaf, finance minister
  • Abdullah bin Abdulrahman al-Husein, water & electricity minister
  • Adel bin Mohammed Fakeih, labour minister
  • Essam bin Saad bin Saeed, housing minister
  • Bandar bin Mohammed al-Hajjar, hajj minister
  • Mohammed bin Sulaiman bin Mohammed al-Jasser, economy & planning minister
  • Tawfiq al-Rabiah, commerce & industry minister
  • Abdullah bin Abdulrahman al-Muqbel, transport minister
  • Mohammed bin Ibrahim al-Suwaiyel, communications & information technology minister
  • Majed bin Abdullah al-Qasabi, social affairs minister
  • Mohammed bin Abdulmalik al-ash-Sheikh, state minister
  • Abdullatif bin Abdulmalik bin Omar al-ash-Sheikh, municipal & rural affairs minister
  • Ahmed bin Aqeel al-Khatib, health minister
  • Khalid bin Abdullah al-Araj, civil service minister
  • Adel bin Zaid al-Turaifi, culture & information minister
  • Abdulrahman bin Abdulmohsen al-Fadhli, agriculture minister
  • Azzam bin Mohammed al-Dakhil, education minister
  • Essam bin Saad bin Said, state minister
  • Musaed bin Mohammed al-Aiban, state minister

Source: MEED

This follows on from Saudi Arabia being named as the US defence industry’s largest customer in 2014. Riyadh is now responsible for one in every seven dollars being spent in the global defence industry.

This dramatic growth in spending is a clear indication that King Salman’s pledge to protect the kingdom’s borders is being backed up with huge investment in military hardware. This weaponry is now being put to the test with direct intervention in Yemen in the form of air strikes against the Houthi rebels.

This rapid military response is a clear message to Tehran, and the aggressive doctrine surprised many outside observers while simultaneously delighting domestic commentators. King Salman’s approach to Iran is even more unrelenting than his brother’s. Tehran is seen as the dominant influence on the governments of Iraq and Syria.

Popular move

“Many people have been calling for a more assertive approach [to Iran’s proxy wars] for years and there was a definite feeling that King Abdullah never pushed it far enough,” says a senior Jeddah-based media commentator. “This action has been very popular across the country and people want more of the same if the situation in Yemen continues or if there are any other threats elsewhere.”

Tehran has been a traditional thorn in the side of many Saudi monarchs and it is undeniable that Iran has constantly outmanoeuvred Riyadh on several fronts over the past few decades.

Recent years have witnessed Tehran’s finances and global reputation take a pounding as the international sanctions imposed on it due to its nuclear programme brought Iran’s economy almost to collapse.

However, in early April, a deal was agreed between Tehran and the P5+1 world powers that will see it rein in nuclear enrichment in return for an end to global isolation and freedom to resume oil exports.

“Riyadh knows that the deal will be interpreted by Tehran as a victory and be used as propaganda,” says the Jeddah-based media commentator. “This means that King Salman will be keen to forge stronger ties with Arab states to lessen Iran’s influence across the Arab world.”

Significant test

The priority attached to containing Iran is behind King Salman’s swift action to deal with earlier rifts among GCC leaders. And it cleared the way for a meeting with Bahraini, Qatari and UAE leaders in Riyadh on 21 March.

The action in Yemen, coupled with talks with Egypt, has led to speculation that a pan-Arab military force is becoming more likely.

King Salman’s first few months in charge have been eventful; with the prospect of Iran dumping 35 million barrels of oil on the global market as soon as sanctions are properly lifted, the next few months could be even more challenging.

There is a real chance that oil prices could sink below $30 a barrel, and there will be moves from Tehran to reassert itself on the world stage, which could have consequences across all Saudi Arabia’s borders.

How Riyadh deals with these challenges while financing huge domestic spending programmes will offer a significant test to those running the country, and King Salman may need many more moments of quiet reflection over the next few months.