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Author Topic: Saudi Arabia & the Arabian Peninsula  (Read 28840 times)
G M
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« Reply #100 on: April 20, 2016, 10:01:22 PM »

Actually, if we were to seriously produce oil like we have the potential to do, their usefulness is seriously reduced.


Asked and answered:

Frankly I am not so clear as to why we need to kiss up to the Saudis. ...

... Though we would all prefer them to Iran. [and ISIS and al Qaida and Boko Haram etc.]

Take it one step further, some of the 'moderate' Arab states will soon be allies of Israel, because Israel never was a threat to them and the common enemies Iran, ISIS etc. are.

The Kingdom is a strange place but they are our strategic ally.

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Crafty_Dog
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« Reply #101 on: April 28, 2016, 10:23:39 AM »

https://www.linkedin.com/pulse/saudi-arabia-brink-vikram-mansharamani?trk=eml-b2_content_ecosystem_digest-hero-14-null&midToken=AQEM_FYkB3NwIQ&fromEmail=fromEmail&ut=1uDiFxsOzlN7c1
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DougMacG
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« Reply #102 on: May 03, 2016, 12:15:35 PM »

My former customer, Saudi builder Binladin, reportedly cuts 50,000 jobs.

Construction company Saudi Binladin Group has laid off 50,000 staff, a newspaper reported on Friday, as pressure on the industry rises amid government spending cuts to survive an era of cheap oil.

http://www.cnbc.com/2016/04/30/saudi-builder-binladin-reportedly-cuts-50000-jobs-as-government-cuts-bite.html

(Can't really say no relation to the famous al Qaida leader.)

It's not only North Dakota feeling the squeeze.
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Crafty_Dog
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« Reply #103 on: May 20, 2016, 11:28:07 AM »

Forecast

    Although Islamic State-related attacks in Saudi Arabia have increased over the past year, strikes against hard targets still appear to be out of reach.
    For al Qaeda in the Arabian Peninsula, the end of a more than one-year unofficial truce with the Saudi-led coalition in Yemen puts Saudi targets back in the crosshairs.
    Saudi authorities may struggle to maintain control of the jihadist threat as Islamic State fighters return from Syria and Iraq with more advanced skills.

Analysis

Jihadism has deep roots in Saudi Arabia, the second-largest source of foreign militants in Iraq and Syria since the Syrian civil war began in 2011. Since the mid-2000s, Saudi security forces have contained the jihadist threat in the kingdom, aware of the economic and security dangers it could pose if left unchecked. But in the past year, Islamic State activity in Saudi Arabia — and a recent series of raids against alleged militants — has raised fears that the threat may be growing beyond authorities' control.

Saudi Jihadism: A Chronology

The jihadist threat in Saudi Arabia is nothing new. In mid-2002, al Qaeda in Saudi Arabia launched a campaign of attacks in the country against both foreigners and the Saudi government. Saudi authorities eventually dismantled the group, forcing its members to flee the country. Many relocated to Yemen, where they helped to found al Qaeda in the Arabian Peninsula (AQAP).

Aside from a failed 2006 assault on the Abqaiq oil collection and processing facility, an amateurish attack in 2007 that killed three French citizens, and a foiled assassination attempt against Saudi Prince Mohammed bin Nayef in 2009, Saudi Arabia has been eerily quiet. But the calm was shattered in 2015 when militants associated with the Islamic State began bombing mosques in Saudi Arabia's restive Eastern Province in an effort to inflame sectarian tensions in the kingdom.

Before long, the attacks spread beyond Eastern Province and Shiite targets. After a series of raids in Taif in early July 2015, Saudi officials stopped a man wearing a suicide vest at a roadblock in Riyadh on July 16. To avoid capture, the man detonated his device, setting off a government crackdown that led to the arrest of over 400 alleged Islamic State supporters within two days.

The following month, a suicide bomber detonated explosives inside a mosque in Abha, a city in western Saudi Arabia. The attack killed 15 worshippers, including 10 members of a special Saudi state security unit, and wounded many others. Since then, three other attacks against Shiite mosques in Eastern Province have occurred, along with a handful of small bombings in Riyadh and several assassinations of police and security officers. In addition, a number of raids against Islamic State members have been conducted in Riyadh, Dammam and Asir.

A raid outside Mecca on May 5 sparked a firefight that left four Islamic State fighters dead. Saudi security forces fatally shot two of them — one of whom had been named a suspect in the Abha mosque bombing — and the remaining two detonated suicide bombs to avoid capture. The same day, two other Islamic State members were allegedly arrested in Jeddah. Three days later, two gunmen killed a security officer who thwarted their attempted attack on a police station outside Taif.
A New Generation

These attacks differ from al Qaeda's operations in the early 2000s, which targeted foreigners and employed large vehicle bombs. Al Qaeda's Saudi branch understood the importance of expatriates to the Saudi economy and sought to cripple it by driving them and their families out of the country. Al Qaeda's campaign included assassinations, armed assaults on expatriate housing compounds and even an attack on the U.S. Consulate in Jeddah. In April 2004, the U.S. Department of State issued a travel warning, advising U.S. citizens to defer travel to the country, and ordered all nonessential diplomatic and consular staff to leave Saudi Arabia.

The threat environment could change even more as Islamic State fighters return from Iraq and Syria, bringing with them experience gained on the battlefield. Like the previous generation of al Qaeda operatives in the kingdom, the Islamic State fighters could use their honed skills to conduct more complex and strategic attacks. Both groups have a history of attacking tourist attractions in Egypt and Tunisia to undermine those nations' economies. A more sophisticated Islamic State campaign might echo previous al Qaeda initiatives, targeting expatriates to impair the Saudi economy.

Don't Forget al Qaeda

In addition to the growing Islamic State menace, Saudi Arabia faces a renewed threat from AQAP. Following the March 2015 Saudi-led intervention in Yemen's civil war, al Qaeda and the Saudi coalition reached an unofficial truce: The Saudi coalition would refrain from attacking the group in exchange for the jihadists' cooperation in fighting Houthi forces and former Yemeni President Ali Abdullah Saleh. AQAP benefited greatly from this arrangement, seizing the opportunity afforded by the chaos to snatch up large quantities of money, weapons and manpower while it controlled Mukalla. Despite losing several key leaders to U.S. airstrikes, the group is now arguably stronger in terms of men and resources than it has ever been.

But the truce fell apart on April 25. Coalition forces entered Mukalla after AQAP withdrew to avoid heavy casualties. As a result, the group will likely begin to attack coalition forces. Furthermore, it could draw on its increased might to relaunch efforts to export terrorism to Saudi Arabia. Since Saudis have always constituted an important component of AQAP, the group could try to use its ties in the kingdom to facilitate new attacks.

Despite the surge in jihadist activity in Saudi Arabia over the past year, there is currently no sign that Saudi authorities will lose control of the threat. Nonetheless, potential targets in the kingdom must practice heightened awareness as they look for signs of change in the jihadist threat, such as attacks on oil infrastructure or expatriates, the use of larger and more sophisticated explosive devices, or increased surveillance on possible attack sites.
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Crafty_Dog
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« Reply #104 on: May 20, 2016, 07:49:42 PM »

second post


18WednesdayMAY 2016

POSTED BY MISHGEA | May 18, 2016 11:33:21 | ECONOMICS
≈ 28 COMMENTS

Liquidity Crunch or Worse

Saudi Arabia burnt through its reserves faster than anyone thought.

In signs of a huge liquidity crunch, at best, the country has delayed paying contractors and now considers paying them in IOUs and tradable bonds.
In retrospect, the Saudi threat to dump US assets looks more ridiculous than ever.

Please consider Saudi Arabia Considers Paying Contractors With IOUs.

Saudi Arabia has told banks in the country that it is considering giving contractors IOUs to settle some outstanding bills, according to people with knowledge of the discussions.  A projected budget deficit this year is prompting the government to weigh alternatives to limit spending. Contractors would receive bond-like instruments to cover the amount they are owed by the state which they could hold until maturity or sell on to banks, the people said, asking not to be identified because the information is private.

Contractors have received some payments from the government in cash and the rest could come in “I-owe-you” notes, the people said.
The government started delaying payments last year to prevent the budget deficit from exceeding $100 billion after the oil slump.

Beyond a Liquidity Crisis

Deficits don’t shrink if you delay paying the bills. Deficits arose because more money was spent than collected.  On May 17, the Senate Passed a Bill Allowing 911 Victims to Sue Saudi Arabia.  Obama threatens a veto. Meanwhile, Saudi threatens to dump $750 billion in U.S. securities and other American assets if the bill becomes law.

Does Saudi Arabia even have $750 billion. Color me skeptical.

Saudi Arabia’s bluff that it would sell US assets if the Obama signed the bill seems more ridiculous than ever.

For discussion of Saudi involvement in 911 and the alleged dumping threat please see Understanding the Saudi, Chinese “Economic Nuclear War” Threat; Saudi 911 Round-Up.

For discussion of Saudi Treasury holdings, please see Treasury Department Finally Discloses Saudi Treasury Holdings – Incorrectly?

There is no “nuclear” economic threat by Saudi Arabia or China as some have proclaimed.

Mike “Mish” Shedlock
 
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ccp
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« Reply #105 on: September 22, 2016, 06:39:26 PM »

I don't at this point, agree.  This opens up a whole can of worms. This could very well come back to bite us.   Sounds like a big money grab to me.

 My mind could be changed possibly:

https://www.conservativereview.com/commentary/2016/09/obama-is-defending-the-saudi-government-agains-911-families

And families were already compensated from donations:

http://money.cnn.com/2011/09/06/news/economy/911_compensation_fund/
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Crafty_Dog
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« Reply #106 on: September 22, 2016, 09:01:27 PM »

Please post in the Legal Issues in the War on Islamic Fascism thread as well.

FWIW, at present, I lean towards opposing this bill.
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ccp
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« Reply #107 on: September 28, 2016, 08:27:21 PM »

One would think this strategy comes from the LEFT.  Instead this time it is driven by the Right in an ass backwards way to spite Obama.  I dunno .

Apart that this sets a precedent that will be used against us Saudi Arabia will retaliate:

http://www.breitbart.com/national-security/2016/09/28/saudis-allies-warn-us-retaliation-911-bill/
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Crafty_Dog
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« Reply #108 on: October 20, 2016, 12:20:22 PM »

Good morning. As it contemplates an initial public offering of its state-run oil company, Saudi Arabia launched the sale of $17.5 billion of debt Wednesday, people familiar with the situation told the Journal, in what would mark the largest emerging-market bond issue ever. It is the kingdom’s first international bond sale, a bid to support a sweeping effort to keep its economy afloat as oil income dwindles.
The sale is the latest example of a Persian Gulf state turning to international markets to offset declining oil revenues. Other oil exporters from the Gulf region raised $20 billion in total through international bond issues earlier this year. The issue would exceed Argentina’s $16.5 billion debt sale as the biggest from an emerging-market economy. For better or worse, there are $67 billion in orders for the debt, which seems to indicate a certain comfort level at nearly four times oversubscribed. The global plunge in oil prices has cast doubt about investor demand for shares in Saudi Arabian Oil Co., the world’s largest player.

 
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Crafty_Dog
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« Reply #109 on: February 17, 2017, 12:19:03 AM »

http://www.dailywire.com/news/13535/islamophobic-saudi-arabia-deports-40000-muslim-michael-qazvini?utm_source=facebook&utm_medium=social&utm_content=102516-podcast&utm_campaign=beingconservative
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Crafty_Dog
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« Reply #110 on: May 19, 2017, 08:36:56 AM »


By Karen Elliott House
May 18, 2017 7:10 p.m. ET
12 COMMENTS

Riyadh, Saudi Arabia

President Trump will receive an effusive welcome here from his royal hosts determined to underscore that once again Saudi Arabia and the U.S. are close allies. Barack Obama favored Iran, but that’s over. King Salman, 81, is gathering 50 Islamic leaders to meet Mr. Trump. This unprecedented assembly is intended to show not only that Saudi Arabia is the leader of the Islamic world but that Muslim leaders support the U.S. against Islamic State terrorists.

While the elderly monarch is host, the indisputable power behind the throne is his young son, Deputy Crown Prince Mohammad bin Salman, 31. He is orchestrating a two-day summit spectacular that will star Donald Trump and the new face of Saudi Arabia—a country now enjoying once-forbidden entertainment and a much larger role for women, who may be allowed to drive as early as this summer. Conservatives seethe but can’t block change.

The young prince and the president have much in common. Both are outsiders, brash, unorthodox and new to politics. Each faces strong opposition at home. Both seek to spur economic growth by reducing the role of government. And each is fighting orthodoxy: MBS, as the prince is known, wants to curb the role of religion and tradition, which inhibit modernization, while Mr. Trump battles leftist orthodoxy and political correctness. Both are smart marketers.

Mr. Trump’s presence is an opportunity for the prince to show off his modernization effort. An extravaganza featuring something for everyone—the Harlem Globetrotters taking on a Saudi basketball team, car races, country singer Toby Keith —is intended to convince Americans there is a new, open Saudi Arabia and Saudis that mixing cultures and sexes isn’t evil.

How can the son of a king be an outsider? In a culture that reveres age, especially among the royal family’s thousands of princes, the appointment last year of a young man who isn’t a senior prince, nor even his father’s eldest son, came as a shock. Like Mr. Trump, Mohammed bin Salman faces a “resistance” in the form of determined opponents among his royal relatives. Social media has created a “virtual opposition” by enabling disgruntled citizens to express their views.

So both the prince and the president seek success to bolster their leadership, easier to achieve in diplomacy than domestic affairs. Given the badly frayed state of U.S.-Saudi relations, Mr. Trump is guaranteed a win, at least with Saudis, because he isn’t Barack Obama. The president has further pleased Riyadh by making this his first stop on his first foreign trip. No president has ever put Saudi Arabia first so visibly.

But the Saudis want concrete support once Air Force One lifts off for Israel, Rome and then a NATO summit in Brussels. Both countries see Iran as a threat, but the U.S. president demands more burden-sharing from allies. So the prince, who also is defense minister, is said to be ready to invite the U.S. military back to Saudi bases vacated in 2003 in the face of opposition to foreign troops in the land of the two holy mosques. Riyadh is fighting a costly war against Iran-backed Houthi rebels in Yemen, and the prince wants more U.S. support.

If the leaders agree to return the U.S. military here, it would mark a significant new commitment to Saudi Arabia’s defense—and surely be seen by Iran as a provocation. It would be a clear triumph for both leaders—and a repudiation of Mr. Obama’s exhortation that Saudi Arabia “share the neighborhood” with Iran.

The U.S. wants to curb Iranian expansion but may be cautious about new entanglements as Saudi-Iranian tensions are rising. Prince Mohammad recently slammed the door on any dialogue with Iran, insisting that Tehran seeks domination of the Muslim world. “We know we are a major target,” he said. “We will not wait until the battle is in Saudi Arabia, but we will work so the battle is there.” Iran immediately warned that if Riyadh persisted with “such stupidity,” nothing will be “left in Saudi Arabia except Mecca and Medina.”

Beyond bases and Islamic nation support in the fight against ISIS terrorists, King Salman seeks to tie the House of Saud to the Trump family. The king has just named another of his sons, Khalid, 29, a former fighter pilot, as ambassador to the U.S. Sending his son to Washington is a very personal gesture to a president with family working in the White House.

Prince Mohammad faces much tougher domestic challenges than President Trump does. The prince has to transform an economy and society long addicted to oil revenues, which have collapsed, and persuade coddled Saudis they must work. Mr. Trump is trying to raise U.S. GDP growth to 3% from 1%; Saudi Arabia has no growth. Mr. Trump seeks to spur U.S. energy production, while the prince is suppressing Saudi production to stabilize prices, in part weakened by growth in U.S. oil production. The U.S. got good news that unemployment is down to 4.4%. Saudi unemployment officially is 11%, but among the 70% of Saudis under 30 the true figure is triple that.

Mr. Trump, for all the angry opposition at home, is more secure than the deputy crown prince. Should his father die, a new king may remove Mohammad bin Salman. Some Saudis believe King Salman will promote MBS to crown prince and thus next in line to be king—but he hasn’t yet done so.

Regardless of these uncertainties, Mohammed bin Salman is confidently pushing ahead with ambitious plans to transform Saudi Arabia. Like Mr. Trump, the prince needs some clear wins over the next several years—an end to the costly Yemen war; successful privatization of Aramco, the national oil company, and other government companies set for public sale. He must persuade skeptical citizens that his plans will in coming years provide Saudis a prosperous life without dependence on oil.

Ms. House, a former publisher of The Wall Street Journal, is the author of “On Saudi Arabia: Its People, Past, Religion, Fault Lines—and Future” ( Knopf, 2012).
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Crafty_Dog
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« Reply #111 on: May 19, 2017, 09:33:41 AM »

second post

https://clarionproject.org/5-things-trump-saudi-arabia/
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Crafty_Dog
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« Reply #112 on: May 24, 2017, 11:38:04 AM »

https://www.wsj.com/articles/why-opec-plans-oil-cuts-into-2018-aramcos-ipo-1495567353?mod=e2tw
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Crafty_Dog
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« Reply #113 on: May 25, 2017, 02:16:38 PM »

http://www.huffingtonpost.com/alastair-crooke/isis-wahhabism-saudi-arabia_b_5717157.html
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ccp
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« Reply #114 on: May 25, 2017, 04:10:54 PM »

I am not sure I disagree with Rand on this one.  I understand the bolstering up of Saud against Iran and *maybe * but on the other hand Osama Bin Ladin was a Saudi.  Why would not believe the arms will simply get siphoned to our enemies?  I know the Sauds showed off a building with 200 computers to combat terror but...........

http://www.newsmax.com/Newsfront/senators-trump-arms-sale/2017/05/25/id/792425/

I would sign off on this if Netanyahu feels it is a good idea.  Just  my take .
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Crafty_Dog
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« Reply #115 on: May 25, 2017, 04:34:53 PM »

http://www.huffingtonpost.com/alastair-crooke/isis-aim-saudi-arabia_b_5748744.html
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Crafty_Dog
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« Reply #116 on: June 05, 2017, 01:06:01 AM »

http://www.bbc.com/news/world-middle-east-40155829
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Crafty_Dog
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« Reply #117 on: June 05, 2017, 12:25:44 PM »

https://www.nytimes.com/2017/06/05/world/middleeast/qatar-saudi-arabia-egypt-bahrain-united-arab-emirates.html?emc=edit_ta_20170605&nl=top-stories&nlid=49641193&ref=cta&_r=0

also see

http://www.telegraph.co.uk/news/2017/06/05/saudi-arabia-allies-break-diplomatic-ties-qatar-links-terror/

from 2016

http://mobile.reuters.com/article/amp/idUSKBN12Z2SL
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Crafty_Dog
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« Reply #118 on: June 05, 2017, 02:35:03 PM »

third post

http://www.independent.co.uk/news/uk/home-news/home-office-terrorist-funding-report-saudia-arabia-focus-not-publish-conservatives-government-a7766381.html
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G M
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« Reply #119 on: June 05, 2017, 02:38:37 PM »


We are long part the point where it is time to recognize that the Saudis are just ISIS with better P.R.
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Crafty_Dog
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« Reply #120 on: June 06, 2017, 03:43:30 PM »

I have always said that a key to understanding Trump is in his life experience with "The Apprentice".  The values of the show are quite Machiavellian.

http://thehill.com/policy/defense/336555-pentagon-cant-square-trump-comments-on-qatar
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Crafty_Dog
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« Reply #121 on: June 21, 2017, 01:01:55 PM »

https://www.nytimes.com/2017/06/21/world/middleeast/saudi-arabia-crown-prince-mohammed-bin-salman.html?emc=edit_na_20170621&nl=breaking-news&nlid=49641193&ref=cta
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« Reply #122 on: June 23, 2017, 10:46:03 AM »

 Saudi Arabia's 'Mr. Everything' Is Now Crown Prince, Too



After months of speculation and palace intrigue, Saudi King Salman shook up the kingdom's line of succession on June 21 by naming his powerful son, Mohammed bin Salman, crown prince and removing all titles from Mohammed bin Nayef, the former crown prince. This is the second time Salman has overhauled the line of succession and the Saudi government since taking the throne in January 2015. The move is a controversial one, considering it cuts large and powerful segments of the royal family out of the succession plan. And should the young bin Salman ascend the throne, it could mean Saudi Arabia will be ruled for six decades by father and son.

Today's announcement has several important implications. But none is as important as the amount of trust being placed in bin Salman, who has already amassed enough power to be dubbed "Mr. Everything" by some Western governments. As bin Salman has concentrated his power, bin Nayef has been increasingly sidelined. Today's reshuffle will only remove him from power even further, ousting him from his position at the head of the Interior Ministry and from all other leadership roles.
The Next King

If bin Salman becomes king, he will be the youngest Saudi ruler in modern history, able to potentially preside over decades of policy and reform in the kingdom. The crown prince is known for spearheading the country's economic reform, an agenda he will likely continue to push, and he may well turn his attention to effecting social change as well.

Perhaps more important, bin Salman has a vested interest in trying to solve Saudi Arabia's long-term economic and social challenges, including its overreliance on the oil sector and growing calls for more social liberties. Unlike Saudi leaders who have come before him attempting reform, he doesn't have the luxury of kicking the can down the road; any procrastination would create problems that are his to fix later on.
The Price of Reform

Still, change will come at a price. Any effort to push the boundaries of social reform in the kingdom risks ruffling the feathers of the conservative clerical establishment, which many in the royal family view as the foundation of the House of Saud's legitimacy and support. Many Saudis are firm believers in the conservative social fabric of the country and could resent swift adjustments to social strictures. As a result, any reform must be undertaken carefully while gauging pushback from the public.

In fact, bin Salman already has had to retract some of his suggestions for remedying Saudi Arabia's economic ills: In April, the king reinstated public sector bonuses, seven months after they were eliminated to improve the budget deficit. Popular resistance also prompted Salman to replace the water and electricity minister in April of last year when Saudis protested higher utility prices on Twitter.

Just because bin Salman is now closer to the throne doesn't mean he will have an easier time pushing through his reforms. If the reshuffle has upset other members of the House of Saud — particularly third-generation descendants of King Abdulaziz Ibn Saud who have been completely shut out of the line of succession — they will find ways to hamper the crown prince.

Nevertheless, bin Salman has made a name for himself at home and abroad. Not only has he been instrumental in leading the economic reform called for under the Vision 2030 platform, but he also has made his mark on Saudi Arabia's foreign policy and regional defense strategy in his position as the country's defense minister. He has been particularly instrumental to the kingdom's intervention in Yemen and to its increasingly aggressive stance toward Iran. (Last month he promised to move the fight against Tehran inside Iranian borders.)

Bin Salman has also worked hard to build a close relationship with the United States. But bin Nayef's unseating removes a known partner to U.S. counterterrorism efforts. Bin Salman has skillfully portrayed himself as someone who is fully aligned with the United States in fighting terrorism, but he lacks the decade of experience that bin Nayef accumulated in his campaign against al Qaeda. Moreover, Saudi Arabia's intervention in Yemen, which was one of the first moves bin Salman made as defense minister, has proved costly and has become less and less popular. Bin Salman still faces the risk of blowback on that front.

With a long-term vision for reform, bin Salman has quickly risen within the halls of power. In doing so, he joins the ranks of other Gulf Cooperation Council leaders such as his new counterpart, Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan. But Saudi Arabia's economic and social issues are far more difficult than those facing the United Arab Emirates, where Al Nahyan's role is secure and well established. So although bin Salman is currently next in line for the throne, whether or not he actually becomes king will depend on how well he navigates the challenges of being crown prince — and how well he addresses the kingdom's problems with concrete action.

======================================================================================

 

It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

In the absolute monarchy of Saudi Arabia, the king is the ultimate decider. On June 21, King Salman implemented a significant decision by shaking up the line of succession to the kingdom's throne with the announcement that his nephew, Mohammed bin Nayef, would be removed from his role of crown prince in favor of his own son, Mohammed bin Salman. The elevation of his scion capped a two-year period during which Salman handed him successively greater power and more leadership responsibilities. While the shift marks a major change for the succession path, it follows a road the king has long traveled.

Several previous personnel and ministry makeovers since Salman took the throne in January 2015 have emphasized that economic reform is the kingdom's top priority. Amid the first major rounds of government streamlining, the king named bin Salman the head of the Council of Economic and Development Affairs, adding to his other official titles such as minister of defense. In April 2016, the massive Vision 2030 economic reform plan was announced, and Mohammed bin Salman has been a public face for reform ever since.

Before he announced the reshuffle at the top, King Salman had already begun gutting the formal and official powers that Mohammed bin Nayef held. Over the previous weekend, the name of the Bureau of Investigation and Public Prosecution was changed to simply the Bureau of Public Prosecution, and it was removed from the jurisdiction of the Ministry of Interior, which had been led by bin Nayef before Salman stripped him of all titles. The bureau was instead put under the control of a prosecutor who reports directly to the king. That move was likely driven by two motives. It could be seen as a streamlining driven by economic reform goals, especially since the bureau investigates mainly domestic economic fraud cases (in addition to doing some terrorism investigations). The new crown prince, hoping to guide Saudi Arabia smoothly through economic transformations and being aware of the growing demand among Saudis for transparency, has prioritized anti-corruption policies. But the changes to the Bureau of Public Prosecution clearly played into palace politics as well; any shifting of power, even slight, away from bin Nayef benefitted bin Salman. Other overhauls of Saudi agencies within the past year, including changes implemented in November 2016 and April 2017, reinforced bin Salman's authority within the government, especially on economic and defense matters.

Perhaps the most critical component of the economic reform program that bin Salman is spearheading is the move to put 5 percent of the state-owned Saudi Arabian Oil Co., or Saudi Aramco, up for an initial public offering. The sale, expected to bring in between $25 billion and $100 billion, will be the financial engine that helps power the country's economic reform. The money it generates will go into the Saudi Public Investment Fund, which will be used to pay for the country's strategic investments domestically and abroad, underpinning its economic reform, diversification and transformation initiatives.

Bin Salman's economic plans are ambitious — already, the Public Investment Fund has invested in Uber and put $45 billion into the SoftBank-led tech investment fund worth roughly $100 billion that was launched last month. And the key to success is maximizing Saudi Aramco's valuation so the kingdom can reap as much reward as possible from the IPO. State-owned oil companies often fare worse than their private brethren in financial markets because they present political risks, especially given the large contributions they make to the broader national economy. With this in mind, and under bin Salman's leadership, Riyadh has sought to maximize Saudi Aramco's value while reducing its tax burden.

To that end, Riyadh cut the oil company's tax obligation in March from roughly 85 percent to 50 percent. That move increases the company's revenue earnings by 333 percent, which, in theory, should triple the valuation of Saudi Aramco and its stock offering. Outside estimates suggest that this could have pushed the company's valuation to between $1 trillion and $1.5 trillion, giving the IPO a value of between $50 billion and $75 billion. However, bin Salman thinks that the worth of the country's crown jewel should top $2 trillion. So Riyadh is planning even more ways to increase it, including tax breaks for the company's heavily subsidized domestic fuel sales.

Though bin Salman has been actively lobbying for the IPO, he has faced internal challenges from allies and members of the royal family who are sensitive to any decisions, such as making a portion of Saudi Aramco public, that could cut their influence or could trim their share of the proceeds. In their eyes, the state-owned company's wealth belongs to the royal family. And beyond tension within the royal family, the crown prince has been butting heads with the Saudi Aramco leadership. Last week, The Wall Street Journal reported that Saudi Aramco's executives had briefed the Saudi Cabinet on the potential location of the IPO: The company's leadership wants to go public on the London Stock Exchange, because they see it as the least risky decision. Bin Salman, however, prefers to list the IPO on the New York Stock Exchange.

A New York-based IPO listing is indeed a much riskier move and could open up Saudi Aramco's shares to class-action lawsuits and potentially even damages under Justice Against Sponsors of Terrorism Act court cases. Moreover, Saudi Aramco would need to comply with the U.S. Securities and Exchange Commission's rules for oil companies, which require countries to report booked reserves. For the good of the IPO, Saudi Arabia has already allowed third-party reviews of its reserves (which is not an SEC requirement), but the country has long regarded the size, status and cost of its oil reserves as a state secret. The SEC also typically requires oil companies to move reserves into production within five years or remove them. For Riyadh, which intends to take a long-term view on oil production, that would not sit well.

But there are grander plans in the works when it comes to bin Salman's preference for a U.S.-based IPO. In addition to being in charge of economic reforms, bin Salman also holds Saudi Arabia's defense portfolios, and in both areas, his worldview is clearly aligned with Washington's. On the security front, Saudi Arabia has been leaning heavily on U.S. backing for counterterrorism and other initiatives to curtail Iran's influence in the region. This dynamic is playing out in the current Qatar-Gulf Cooperation Council crisis. Meanwhile, on bin Salman's 2016 trip to the United States, he made a raft of deals with U.S. tech companies (including Uber) while visiting Silicon Valley, signaling that he's interested in aligning with the United States economically as well.

To bin Salman, the Saudi Aramco IPO is not only a way to finance Vision 2030, but it is also a way to get closer to the United States, which is why he's pushing for a New York listing. That's a much weightier role for Saudi Aramco than its corporate leadership has seen for it thus far, and it comes with risks the company may not be eager to take. But ever since taking charge of Saudi Arabia's economic agenda, bin Salman has been on an almost uninterrupted ascent. And with his most recent promotion within the Saudi government, there is little to suggest that he will have trouble getting his way with Aramco.
 
« Last Edit: June 23, 2017, 10:51:13 AM by Crafty_Dog » Logged
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« Reply #123 on: July 03, 2017, 09:41:19 PM »

A lot of subtleties in this one

The Peril of Saudi Expansion in the Gulf of Aqaba
by Cynthia Farahat
American Thinker
June 26, 2017
http://www.meforum.org/6792/saudi-gulf-of-aqaba
 
Originally published under the title "Gulf of Aqaba Treaty: a Saudi Repudiation of the Camp David Accords."
 
After more than a year of a heated debate, Egypt finally ceded two small Red Sea Islands to Saudi Arabia, giving KSA control over the Straits of Tiran and the Gulf of Aqaba. These waterways separate the Sinai Peninsula from the Arabian mainland and portions of the coastline are owned by Egypt, Israel, Jordan, and Saudi Arabia. Giving ownership of Tiran and Sanafir Islands and control of the gulf and straits to Saudi Arabia is a strategic mistake and a security threat for five reasons.

1) Almost every regime in Saudi Arabia has furthered expansionist, imperialistic agendas. Historically, Saudi rulers have attempted to lead the Muslim Umma (nation) by conquest or political and religious imperialism. King Salman bin Abdulaziz Al Saud's seizure of power in 2015 wasn't smooth, there were and still are attempts to overthrow him.

The Saudi internal conflict will most likely escalate after King Salman's historic precedent to move the Saudi succession from the house of Abdulaziz ibn al-Saud to the house of Salman. King Salman may believe that asserting his territorial control of Gulf of Aqaba will help him strengthen his domestic position by increasing his regional and international power. Whether the Tiran treaty, and succession coup stunt works or backfires is yet to be seen.

Nearly all Saudi rulers have furthered a religious imperialistic agenda.

2) King Salman has allegedly agreed to a portion of the Camp David Accords, which guarantees Israel unfettered access through the Straits of Tiran. This acquiescence creates a serious catch-22 for the King. While the deal increases King Salman's regional power, an agreement with the Jewish state threatens his domestic authority, because he is bound by Islamic Sunni jurisprudence.

For example, the Saudi view of treaties with Israel was expressed by King Salman supporter and Saudi celebrity Sheikh, Salman al-Ouda. When Mr. al-Ouda was asked about the legitimacy of treaties with Israel, he answered with a Fatwa issued in 1988-1989 and signed by 60 Sunni scholars. It declared jihad against Israel adding, "under no circumstances is a person or an entity to recognize Jewish authority over any fraction of the land of Palestine."

If King Salman were to actually abide by any element of the Camp David Accords, his rule would become illegitimate according to Saudi Arabia's fundamentalist Islamic system. These are the views Saudi rulers indoctrinate their citizens to adopt as the sole legitimate Islamic position towards Israel.

3) According to the Sunni Saudi narrative, suicide bombings against Jews and non-Muslims is a legitimate form of dissent. For example, a member of Saudi Arabia's Supreme Council of Scholars and advisor at the Saudi Royal Court, Abdallah Ibn Man'a, previously stated in an official Fatwa, "The best form of jihad for Allah, is martyrdom in his cause. Whoever dies in such an operation, is a martyr."
 
 
Saudi Arabia's King Salman (left) and Egyptian President Abdel Fattah al-Sisi in Cairo, April 8, 2016.

Moreover, Saudi Arabia indoctrinates its security officers into adopting the belief in suicide bombings. For example, former security police officer and current Muslim sheikh Sami bin Khalid Awad el-Hamoud received his Master's degree in Islamic jurisprudence from King SaudUniversity in Riyadh. His thesis was titled, "Suicide Operations: Its Forms and Its Jurisprudence," where he argued that any region governed by non-Muslim laws is a "house of war," where jihad in all its forms should be exercised.

Since Salman has never shown any intention of abandoning Islamic jurisprudence, which is Saudi Arabia's raison d'être, his only solution under Sunni theology would be to officially agree to the accords, but unofficially continue to support militant Islamic activities.

It's puzzling why Egypt and Israel would agree to further associate with King Salman, who was accused by German intelligence of financing terrorism in Pakistan and Bosnia. While Israel is officially granted freedom of passage in the Gulf of Aqaba by the Camp David Accords, there is absolutely no evidence that Salman will abide by the accords or that he would not abuse his power in the Gulf of Aqaba. This would deeply endanger both Egypt and Israel.
 
4) The possibility that King Salman will facilitate a jihadist migration into Sinai, given his history as a terror financier, is not far-fetched. The presence of more jihadists in Sinai would endanger both Egypt and Eilat. Sadly, this scenario is likely given the fact that KSA plans to build a bridge linking Sinai to Arabia. Many have taken KSA's newfound control of the Gulf of Aqaba at face value and celebrated it as a Saudi adoption of part of the Camp David Accords. The treaty should be more accurately viewed as a Saudi repudiation of the accords, given the negative possible outcomes for both Egypt and Israel's security.

A warning about Saudi control of Tiran and Sanafir, was communicated in a 1957 CIA intelligence brief titled, "Prospects of an Armed Clash in the Gulf of Aqaba." The brief warned -- "Saudi Arabia, which controls the east coast of the Straits of Tiran, could conceivably take unilateral action to prevent entry of Israeli or Israeli-bound vessels into the Gulf." The briefing continued, "In the event that Saudi forces were to occupy the islands they might attempt to control shipping through the straits of Tiran from positions on the islands." It's still 1957 in Saudi Arabia, and if Salman and his son are overthrown, the possibility of replacing them with an Iranian friendly option, such as Prince Ahmed bin Abdel Aziz al-Saud, would mean that a Saudi-Iran coalition could be created.

5) Signs of other security concerns caused by the treaty have already begun to manifest. The Muslim Brotherhood's Turkey-based Egyptian Revolutionary Council (ERC) has basically declared jihad in Gulf of Aqaba in an official statement on its official Facebook page. The ERC called upon Egyptians living in the cities overlooking the Red Sea to "struggle to liberate" the islands and the Gulf of Aqaba and treat them as "occupied territories."

Giving ownership of Tiran and Sanafir Islands to Saudi Arabia is a strategic mistake.

In another veiled call for terrorism, the statement also urged citizens to "treat all Saudi companies and institutions, as occupying forces." Not only does this destabilize Egypt's security, more dangerously it can inspire a coup d'état in Egypt. A coup could be launched with the excuse of defending Egyptian land, which may work given President el-Sisi's plummeting popularity after the treaty signing.

The issue of the Red Sea islands is part of a broader and reoccurring question of whether or not the free world should be making deals and treaties with Islamic theocracies. The international community would be well advised to refrain from further official treaties with Sunni and other theocratic nations, until these regimes reform their governments and recognize the modern international laws and treaties, to which they have already committed. Until that time, it is irresponsible to make treaties, which have repeatedly backfired. Saudi control of the Gulf of Aqaba, is almost as dangerous to regional peace as President Barack Obama's Iranian nuclear deal.

Cynthia Farahat is a fellow at the Middle East Forum and a columnist for the Egyptian daily Al-Maqal.
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« Reply #124 on: July 19, 2017, 05:45:32 AM »

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It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

The diplomatic crisis in the Gulf Cooperation Council (GCC) has taken another turn. The Washington Post reported Sunday that the U.S. intelligence community had information suggesting the United Arab Emirates arranged a cyberattack on Qatar's state news agency in late May that set the dispute in motion. Unnamed U.S. intelligence officials claimed that Abu Dhabi orchestrated a breach of the Qatar News Agency's website and social media accounts to post erroneous statements from Qatari Emir Sheikh Tamim bin Hamad al-Thani expressing support for Iran, Hamas and Hezbollah. The United Arab Emirates, along with Saudi Arabia, Bahrain and Egypt, then used the false quotes as a pretext to sever diplomatic and economic ties with Qatar. The revelation doubtless will further complicate relations in and beyond the GCC. At the same time, however, it's hardly a surprise.

Though Emirati officials have flatly denied allegations of their involvement, Qatar's leaders have had no trouble believing Abu Dhabi could be behind what they described as a "shameful act of cyber terrorism." The United Arab Emirates, after all, has a long-standing reputation for meddling — along with Saudi Arabia — in Qatar's affairs. Early into their statehood in the 1960s and 1970s, Qatar and the United Arab Emirates quibbled over their territorial boundaries. Riyadh wound up the clear winner in the disputes, but Abu Dhabi benefited as well. Qatar accused the United Arab Emirates and Saudi Arabia more than 30 years later of trying to instigate a countercoup against Emir Sheikh Hamad bin Khalifa al-Thani, who had recently overthrown his father. When his son, the current emir, then usurped his father in 2014, Abu Dhabi and Riyadh tried to bring the new leader to heel. They limited their relations with Qatar, demanding that Doha change what they considered destabilizing policies. The efforts met with some success, but they also set the stage for the current crisis in the GCC.

In light of its history with Qatar, the United Arab Emirates' alleged involvement in the hacking scandal seems par for the course. Abu Dhabi's deep distrust of Islamist and opposition movements has made it wary of Doha, which it sees as a force for instability in the region. From the United Arab Emirates' perspective, Qatar's support for groups such as the Muslim Brotherhood, the Taliban, Hamas and Hezbollah — as well as the leeway the country gives its media — encourage extremism and subvert order in the region. Abu Dhabi will tolerate only so much, as its past interferences in Doha's affairs have demonstrated.

Of course, pinning down a clear attribution for a cyberattack sometimes proves impossible. A media platform makes an easy target for a skilled hacker, and determining the United Arab Emirates' level of involvement in the the alleged breach will be tricky, to say the least. Though the new intelligence implicates Abu Dhabi as the coordinator of the attack, evidence has yet to surface that it carried out the hack. A third party, for instance a Russian mercenary hacker, may well have committed the intrusion. Russia's potential involvement in the incident would align with Moscow's strategy to destabilize the United States' strategic relationships, this time in the Middle East, and to pit the GCC members against one another.

Either way, the incident will make it next to impossible for the United Arab Emirates and Saudi Arabia to muster greater U.S. support for their anti-Qatar initiatives. And the irony is that the United States' apparent support for Riyadh and Abu Dhabi's anti-terrorism efforts helped catalyze the crisis in the first place. By focusing on the fight against Islamic extremism during the Riyadh summit in May — just days before the alleged hack — U.S. President Donald Trump may have inadvertently sent Saudi and Emirati leaders the message that they had his backing, no matter what. The Pentagon and the State Department, however, took a more balanced approach to the crisis in deference to the United States' delicate relationship with Qatar, home to one of the largest U.S. military bases in the Middle East. (If the United Arab Emirates and Saudi Arabia decided to run with the White House's seemingly unwavering support despite the rest of the government's hesitation, they weren't the first U.S. allies to do so. The seemingly mixed messages coming out of Washington have created plenty of confusion on the international stage over where the United States stands on issues such as Russia and North Korea.)

Revelations over the hack also stand to change the already shifting relationship between the U.S. intelligence community and that of the United Arab Emirates. The United States depends on its ties with the United Arab Emirates, Bahrain, Saudi Arabia and Qatar to ensure regional security, as well as its own national security. The details about the alleged hack won't change that. But the incident will probably damage the trust that Washington and Abu Dhabi share, even aside from the fact that U.S. officials leaked information about the hack to the press.

In the GCC, likewise, the episode has shaken the already battered bonds of trust between the bloc's members. The UAE foreign affairs minister made reference on Monday to a possible "refashioning of the GCC" and said that its annual summit, scheduled for December, is unlikely to occur if the dispute continues. The diverse bloc has endured its share of problems in the past, but the latest upset could leave more damage in its wake than previous crises have. And relations in the GCC are likely to get worse before they get any better, jeopardizing future efforts at economic and security cooperation among the Gulf states.
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« Reply #125 on: September 15, 2017, 01:12:07 AM »

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Sep 14, 2017 | 23:24 GMT
Saudi Arabia's Next Generation Makes Ready
A portrait shows King Salman bin Abdul-Aziz Al Saud Salman (R) and Crown Prince Mohammed bin Salman.
(AMER HILABI/AFP/Getty Images)
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It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.
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Change is coming to the kingdom of Saudi Arabia, and it may soon reach the top of the nation's monarchy. Amid the sweeping economic and political shifts underway throughout the tightly controlled country, anticipation is building about further adjustments to come. Chief among them is the king's impending abdication, which he is rumored to be planning for the near future in order to clear a path to the throne for new Crown Prince Mohammed bin Salman.

The king's departure would come at a time when the nation is struggling to enact an ambitious and much-needed plan for economic reform. Many of the program's details are unclear or unsettled, and Riyadh is so determined to find the most effective mix of measures that it is heavily revising its National Transformation Plan a little more than a year after its introduction. Like its Gulf neighbors, Saudi Arabia has a penchant for drafting five-year economic initiatives: It has done so repeatedly since 1970. However, it has rarely revisited those plans so soon after implmementing them. As Riyadh rethinks its approach, it will likely set more achievable targets for employers in the private sector while scheming up new ways to bring in revenue from sources other than the oil on which it currently relies. Even the centerpiece of the kingdom's multilayered reform package — the initial public offering of a portion of state-owned energy giant Saudi Arabian Oil Co. — may be delayed until 2019, a year after its target deadline.

Riyadh's attempt to overhaul the Saudi economy has come alongside an effort to revamp the nation's politics. In addition to updating the rules of succession, King Salman bin Abdul-Aziz Al Saud Salman named Mohammed bin Salman crown prince. Having already streamlined unwieldy ministries and established governing committees over the past two years, the freshly appointed prince wasted no time in creating a security directorate that united some of the intelligence functions of the kingdom's investigative police under his control. The king's expected abdication will mark an even more momentous political change, ushering to the throne the youngest Saudi king in nearly a century and the first monarch from the third generation of Saudi Arabia's founder, Abdulaziz Ibn Saud.

The king's decision to step down is not a matter of if, but when. The real intrigue, however, lies in the changes that it heralds at the country's core, in the strict social mores and political Islam that form the backbone of Saudi society. To smooth the way for the kingdom's approaching leadership transition, the crown prince is likely tightening his grip over political expression, even as he tests the waters of social reform.

This crackdown was made clear in a recent string of arrests that raised questions about the motives behind them. So far this month, authorities have detained dozens of activists, scholars and popular clerics, some of whom are connected to the Muslim Brotherhood-aligned Sahwa movement. Of course, there could be a simple explanation for the arrests: They may merely be part of Saudi Arabia's ongoing dispute with Qatar. The sheikhs in question publicly advocated mending ties with Doha, and Riyadh doubtless found the clerics' stance troubling — particularly since they boast millions of Twitter followers and the ability to shape public opinion.

By the same token, it's logical to expect the crown prince to try to rein in popular dissent. Given Twitter's popularity in Saudi Arabia, the ruling family has every reason to silence influential voices that spread narratives contradicting Riyadh's own. Protests are not unheard of in the kingdom, especially with regard to labor issues. And although mass demonstrations against the ruling family are rare, calls for popular dissent have circulated widely on social media channels in recent weeks. Whether the public will actually answer those calls with action is unclear, but the possibility is one Riyadh cannot afford to ignore at such a critical juncture.

Nevertheless, the recent arrests could also portend a larger, more gradual change underway. Much like the neighboring United Arab Emirates, Saudi Arabia may be adopting a more stringent stance against Islamist movements that resemble the Muslim Brotherhood and its anti-establishment ideology. The detainees, after all, belonged to the ranks of Saudi Arabia's independent clerics rather than those who work closely with the royal family and rely on Riyadh for financial and political support. The fate of the prisoners' independent peers in the months ahead will be an important indicator of whether some strains of political Islam are truly falling out of favor in the kingdom — and whether, by extension, a more liberal social atmosphere is in the offing.

Meanwhile, Stratfor sources indicate that when the crown prince takes the throne, he plans to separate the titles of "king" and "custodian of the two holy mosques," which are currently intertwined. (The latter refers to Saudi Arabia's control over Mecca and Medina, two of Islam's holiest sites.) Though Saudi monarchs have used the second moniker only since the 1980s, it is a centuries-old label intended to communicate the kingdom's religious legitimacy and power in the Islamic world. Should the crown prince abandon it, the move would position the king as a secular civil leader rather than a guiding spiritual figure. And though a small adjustment in some ways, it would make a big statement by a young ruler seeking to forge a new path for an ever-changing kingdom while managing dissent along the way.
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« Reply #126 on: October 24, 2017, 01:19:39 PM »

•   Saudi Arabia: Saudi Crown Prince Mohammed bin Salman has said the government will eschew extremism and pursue a more moderate version of Islam. The country’s clerics and state institutions – historically, along with oil revenue, the pillars of government control – are the object of his comments. Though this is a logical next step in Saudi Arabia’s reform agenda, the crown prince has taken it faster than we expected. We need to understand how the government intends to make these reforms palatable since they risk destabilizing the country.
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« Reply #127 on: November 05, 2017, 09:11:27 AM »

Wow big news:

one Maria Bartiromo's favorite guests (among others) just got arrested:

https://apnews.com/0a56ff948429490bbb24b5ff57d4f08a

Be interesting to hear the upcoming analysis of this.


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« Reply #128 on: November 05, 2017, 04:36:29 PM »

https://www.nytimes.com/2017/11/05/world/middleeast/saudi-crown-prince-purge.html?rref=collection%2Ftimestopic%2FSaudi%20Arabia&action=click&contentCollection=world&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection

Apparently Trump is for it.

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« Reply #129 on: November 05, 2017, 06:21:11 PM »

The two may be related:

https://www.youtube.com/watch?v=MoN4dZHaX6w


https://www.theguardian.com/world/2017/oct/24/i-will-return-saudi-arabia-moderate-islam-crown-prince

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« Reply #130 on: November 06, 2017, 10:14:02 AM »

The Saudi Cauldron
Weekend events show the Middle East conflicts to come.
Saudi Crown Prince Mohammed bin Salman meets with Lebanese Prime Minister Saad Hariri in Riyadh, Oct. 30.
Saudi Crown Prince Mohammed bin Salman meets with Lebanese Prime Minister Saad Hariri in Riyadh, Oct. 30. Photo: Dalati Nohra Associated Press
By The Editorial Board
Nov. 5, 2017 6:05 p.m. ET
30 COMMENTS

Authoritarian governments tend to be most vulnerable when they are trying to change, so the weekend events in Saudi Arabia are worth watching for more than the usual royal family Kremlinology. They reflect the drive for Saudi reform and the contest between the Saudis and Iran for regional influence.

Saudi authorities made a wave of arrests Saturday, including members of the royal family and cabinet members. The targets include Prince al-Waleed bin Talal, a billionaire investor in Apple and Twitter and once a major investor in the Journal’s parent company, News Corp .

The arrests are being advertised as part of an anti-corruption campaign endorsed by Crown Prince Mohammed bin Salman, who is trying to consolidate power as the heir apparent to his father, King Salman. The Crown Prince has been making enemies among royals no longer in favor and the arrests are a sign that he is brooking little dissent as he tries to reform the Kingdom’s economy and even some of its social mores. While the U.S. has a stake in the Kingdom’s successful evolution, the arrests are a sign that the transition will be rocky.

All the more so given that Iran will try to exploit any instability. That’s the message sent by the resignation of Lebanon’s Prime Minister Saad Hariri Saturday on a trip to Saudi Arabia. He said he feared an assassination plot and he blamed Iran for causing “devastation and chaos.” Iran and its Hezbollah militia in Lebanon blamed the Saudis and U.S., and the resignation ends the alliance between the Sunni Muslim Mr. Hariri and the Shiite Hezbollah. Israel welcomed the resignation, and one reading is that this will open the way for Israel or Saudi Arabia to attack Hezbollah to reduce its growing influence in Syria and the Levant.

Meanwhile, the Saudis shot down a missile aimed at Riyadh that was fired from Yemen by Houthi rebels allied with Iran. The missile launch shows the Houthis are far from defeated in their war with a Saudi-led coalition in Yemen.

Behind all this is the effort by Iran, backed by Russia, to exploit the opening created by the fall of Islamic State to dominate the region. Israel and Saudi Arabia can’t let that happen, and with the U.S. seemingly on the sidelines, expect more conflict to come.

Appeared in the November 6, 2017, print edition.
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« Reply #131 on: November 06, 2017, 01:22:17 PM »

Being the peaceful and rational people we know them to be, I'm sure this will all turn out fine, and not a civil war that spawns WWIII or anything...



The Saudi Cauldron
Weekend events show the Middle East conflicts to come.
Saudi Crown Prince Mohammed bin Salman meets with Lebanese Prime Minister Saad Hariri in Riyadh, Oct. 30.
Saudi Crown Prince Mohammed bin Salman meets with Lebanese Prime Minister Saad Hariri in Riyadh, Oct. 30. Photo: Dalati Nohra Associated Press
By The Editorial Board
Nov. 5, 2017 6:05 p.m. ET
30 COMMENTS

Authoritarian governments tend to be most vulnerable when they are trying to change, so the weekend events in Saudi Arabia are worth watching for more than the usual royal family Kremlinology. They reflect the drive for Saudi reform and the contest between the Saudis and Iran for regional influence.

Saudi authorities made a wave of arrests Saturday, including members of the royal family and cabinet members. The targets include Prince al-Waleed bin Talal, a billionaire investor in Apple and Twitter and once a major investor in the Journal’s parent company, News Corp .

The arrests are being advertised as part of an anti-corruption campaign endorsed by Crown Prince Mohammed bin Salman, who is trying to consolidate power as the heir apparent to his father, King Salman. The Crown Prince has been making enemies among royals no longer in favor and the arrests are a sign that he is brooking little dissent as he tries to reform the Kingdom’s economy and even some of its social mores. While the U.S. has a stake in the Kingdom’s successful evolution, the arrests are a sign that the transition will be rocky.

All the more so given that Iran will try to exploit any instability. That’s the message sent by the resignation of Lebanon’s Prime Minister Saad Hariri Saturday on a trip to Saudi Arabia. He said he feared an assassination plot and he blamed Iran for causing “devastation and chaos.” Iran and its Hezbollah militia in Lebanon blamed the Saudis and U.S., and the resignation ends the alliance between the Sunni Muslim Mr. Hariri and the Shiite Hezbollah. Israel welcomed the resignation, and one reading is that this will open the way for Israel or Saudi Arabia to attack Hezbollah to reduce its growing influence in Syria and the Levant.

Meanwhile, the Saudis shot down a missile aimed at Riyadh that was fired from Yemen by Houthi rebels allied with Iran. The missile launch shows the Houthis are far from defeated in their war with a Saudi-led coalition in Yemen.

Behind all this is the effort by Iran, backed by Russia, to exploit the opening created by the fall of Islamic State to dominate the region. Israel and Saudi Arabia can’t let that happen, and with the U.S. seemingly on the sidelines, expect more conflict to come.

Appeared in the November 6, 2017, print edition.

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« Reply #132 on: November 07, 2017, 03:55:42 PM »

The last time that a major Sunni power fought a war in Yemen, many unanticipated bad things followed.  That was Egypt in the 1960's.  I'm more concerned about the Saudi-Iran conflict and the various proxy wars that could spin out of this conflict than I am concerned about the Nork's.

Egypt's failures in Yemen led it to gin up conflicts - one of which was the Six Days War.  Just sayin' ...
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« Reply #133 on: November 07, 2017, 07:18:02 PM »

Some random thoughts:

*There was a high level meeting with the US a couple of days before this night of the long scimitars.  Green light given?

*This followed closely on the heels of the Crown Prince calling for a return to moderate Islam.  Combine this with what may be the populist play of going after corruption -- this  may be the support the CP seeks to break the power of the Salfist-Wahhabis.

*The CP may be intensely motivated by desire to meet President Trump's call  to "Drive them out".  Trump and America are very popular right now with this faction in Saudi Arabia.  I was greeted quite warmly by rich Saudis a couple of times while in Amman.

*With the accidental  wink ? helicopter crash it may be worth noting that some or all on board had dealings with the Podesta Group.
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« Reply #134 on: November 07, 2017, 10:15:15 PM »


Nov 8, 2017 | 01:23 GMT
Saudi Arabia: Where Ambition and Geopolitics Align



Change is in the air in the desert kingdom of Saudi Arabia. Three days of palace intrigue in Riyadh have captivated Saudis and foreign observers alike as dozens of princes, ministers and former officials were swept up in an anti-corruption campaign led by young Crown Prince Mohammed bin Salman.

The crackdown is certainly driven by the legitimate motives of restructuring the royal family's patronage networks and curtailing corruption. However, it is also designed to cement the powerful prince's status at the top of the country's economic and political hierarchy. For years bin Salman and his father, King Salman, have meticulously planned the young ruler's rapid ascent to the throne. But their quest to consolidate power is as much a product of Saudi Arabia's geopolitical environment as it is of their personal ambition.

With a New Generation, a New Balance of Power

The Salmans' attempt to amass power has been years in the making. Because Saudi Arabia's founder, King Abdulaziz, had 36 sons, much of the kingdom's contemporary history has been characterized by competition — and alliance-building, often along maternal lines — among the family's various branches. Control of certain positions or institutions would often go to specific bases of royal influence. For instance, former Crown Prince Sultan bin Abdulaziz led the Defense Ministry for nearly 50 years before passing it to his brother, the current king. In much the same way, former King Abdullah eventually handed the reins of the Saudi Arabian National Guard to his son. Some princes even managed to carve out their own roles in the kingdom's economy, though certain sectors, including the all-important oil industry, remained in the hands of technocrats.

This patchwork power structure created an informal system of checks and balances that prevented any single royal faction from dominating the country. As a result, sweeping change in Saudi Arabia has historically required consensus among the ruling family. But that system now seems to have run its course. The sons of the kingdom's founder are aging, and his grandsons are eager to claim their birthright. As they do, King Salman has taken it upon himself to restructure the House of Saud and the balance of power within it.

Since assuming the throne in January 2015, the king has worked to reorganize the Saudi state under the control of his son Mohammed — the oldest of the founder's grandsons — while eliminating challenges from familial rivals. In fact, just hours after taking office, King Salman named Mohammed bin Salman defense minister, giving him a leading role in the country's military apparatus. In the years that followed, the crown prince also became the face of the kingdom's Vision 2030 plan for economic reform and the head of several important economic councils, including the newly created supreme council of the Saudi Arabian Oil Co.

Mohammed bin Salman quickly rose to prominence, but it wasn't until this year that he was able to unseat two of his greatest competitors. In June, the king passed over the powerful Mohammed bin Nayef, who controlled the Interior Ministry and thus some of the country's intelligence services, to name bin Salman crown prince. By the following month, the newly appointed ruler had built a security directorate that gave him additional oversight into the investigative functions of the Saudi intelligence community. Bin Salman then removed Prince Miteb bin Abdullah from his post at the head of the Saudi Arabian National Guard in November, curbing his cousin's clout while enhancing his own in the process.

A Need for Reform Rooted in Geopolitics

But there is more spurring the crown prince's activities than a simple generational shift. Today the Saudi kingdom faces the biggest economic crisis it has encountered since the discovery of oil in 1938. Stubbornly low crude prices have slowed the country's oil-dependent economy, and though they may temporarily rise — indeed, on Nov. 6 prices reached their highest peak since June 2015 — it is clear that oil will not reliably fuel Saudi Arabia's economic growth as it once did. Bin Salman, who is only 32 years old, will doubtless preside over the rocky economic transition ahead as the importance of oil in the global energy mix diminishes over the next few decades.

The fiscal challenges this adjustment has caused have already forced Saudi Arabia to tighten its belt. Earlier this year, Saudi officials slashed certain subsidies and at one point even considered canceling all of them. But as difficult as the reduction in oil revenue and social spending has been for Riyadh, finding a new economic model to replace its current one, oriented around petroleum exports, will be even harder.

In all likelihood, a massive reform package like the Vision 2030 program that seeks to leverage the kingdom's strength — massive financial reserves that can be funneled toward investment — may be its best chance for growth in the long run. And as Saudi Arabia searches for ways to boost its labor productivity, it will have greater economic incentive to encourage the participation of women in the workforce and in public life. All of these changes are significant and sensitive issues that Saudi Arabia's next ruler must grapple with over the next decade or two. And all are problems the crown prince cannot address from a position of weakness, since their solutions are likely to alienate some of the country's most influential factions.

... sweeping change in Saudi Arabia has historically required consensus among the ruling family. But that system now seems to have run its course.

Beyond the domestic forces shaping bin Salman's economic policies, there are also external forces pushing the crown prince to adopt a more aggressive foreign policy. Saudi Arabia's goals of combating terrorism and curbing the ability of regional rivals, such as Iran, to aid militant groups throughout the region have pushed Riyadh to remain engaged in a costly war in Yemen. Meanwhile, Tehran's growing political and security ties to places like Iraq, Syria and Lebanon have fueled Riyadh's fears that Iran is gaining influence in the Middle East at Saudi Arabia's expense.

Bin Salman has already proved more than willing to challenge Iran in the places where it has most sway, especially with a mighty ally — Washington — at his back. Wary of the ways in which Iran might use its ties to militias in Iraq, Syria and Lebanon, the United States has supported Saudi Arabia's aspirations of regional dominance. Though the crown prince would likely stick to his assertive tactics abroad with or without Washington's approval, the heft of U.S. support has certainly aided his endeavors.

A Risky Gamble

Overhauling the kingdom's traditional methods of decision-making carries certain risks. The swift upset of patronage networks and power channels is bound to invite pushback from the Saudi elite. So far it is unclear whether bin Salman intends to shrink the circle of power to a group of his closest advisers, or to monopolize power himself. But what it is clear is that the crown prince is betting on his popularity among Saudi citizens — many of whom support his anti-corruption drive — to provide the mandate he needs to rewrite the kingdom's social contract against the wishes of its leaders.

After all, in a post-oil era, Saudi Arabia can no longer afford to offer the type of generous handouts that have long kept a healthy distance between the country's government and those being governed. Instead, the kingdom will need a different social contract that demands more trust between Saudi citizens and officials. Bin Salman is well aware of this need, and to a point he has been successful in his pursuit of the strength required to fulfill it. But only time will tell whether he will achieve the same success in cultivating his people's confidence in those who rule them.
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« Reply #135 on: November 07, 2017, 10:37:17 PM »



*With the accidental  wink ? helicopter crash it may be worth noting that some or all on board had dealings with the Podesta Group.


Al-Arkancide?

Ron Brown unavailable for comment.
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« Reply #136 on: November 09, 2017, 08:18:09 AM »

Billionaires are not going to take this lying down:

https://www.dailymaverick.co.za/opinionista/2017-10-03-are-saudi-reforms-doomed-to-fail/#.WgRhKVw-epo

http://www.reuters.com/article/us-saudi-economy-total/oil-major-total-sees-challenges-to-saudi-reform-drive-idUSKBN1D22TH

"   The kingdom has also sunk hundreds of millions of dollars into the development and construction of a new Red Sea beach resort which “allows” women to dress in swimwear,  "

Wow!   I am waiting for a pin up calendar : " The girls of Saudi Arabia " (hasn't anyone with wondered what is under all those black robes?)

ps:   I hope I don't get beheaded for the thought.
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« Reply #137 on: November 14, 2017, 11:40:54 AM »

http://www.jpost.com/Opinion/Our-World-Pining-for-fig-leaves-514163


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« Reply #138 on: November 14, 2017, 09:01:47 PM »

second post

Highlights

    Despite the recent hype surrounding so-called new cities, the concept has ample precedent throughout history.
    The challenge new cities face is attracting businesses and people to relocate there, either with government policy or with seamless connection to an existing economic center.
    Saudi Arabia will probably struggle to meet these criteria and, by extension, to achieve its goals for Neom, the high-tech megacity it plans to build.

With all the news coming out of Saudi Arabia over the past few weeks, it would be easy to overlook the announcement of the country's latest proposal for a new megacity. Crown Prince Mohammed bin Salman recently revealed his plan for a $500 billion project to build a brand-new, robot-powered metropolis that, according to a promotional video, "will change the way we live and work, forever." Neom, as the city is to be named, is in many respects like several other so-called new cities proposed or underway in Saudi Arabia and around the world. China unveiled a similar plan this year to turn land 100 kilometers (about 60 miles) south of the capital into a megacity, the Xiongan New Area, that is intended to serve as the new site of Beijing's nongovernmental functions. Not to be outdone, India's prime minister has launched the "Smart Cities" program, which aims to construct 100 new urban areas across the country. New cities are being promoted as the wave of the future.

Despite the name and the timing of these announcements, however, "new cities" aren't really so new. History is full of examples of governments and urban planners creating cities out of nothing, with varying degrees of success. A look back at the triumphs and troubles of new cities past sheds light on the prospects of future developments of the sort, including Neom.
Building for a New Political Landscape

Perhaps the most common and recognizable form of new city is the master-planned political capital. For countries with disparate and often competing regions and interest groups, founding a new national capital is a natural solution. If an established major city were named the capital, the government could be perceived to favor that city and its interests over those of other parts of the country. A new city, on the other hand, could serve as neutral territory among the nation's various interest groups. The strategy has a good track record. Washington, D.C., which came about as a compromise between the northern and southern United States, offers the most famous modern example. But the capitals of countries such as Brazil, Australia, Pakistan and Nigeria all arose from similar considerations. The presence of a national government in a city provides a strong growth stimulus for that place, provided the organs of government fully relocate there.

Governments develop the second kind of new city to slide around their own regulations. Countries may establish special economic zones — areas in which trade is more open — as a comfortable middle ground between strict government control over the economy and liberalization. For the leaders of states with heavily regulated economies, embracing free trade nationwide may seem like an invitation to economic and social upheaval. Special economic zones offer some benefits of global trade while minimizing the risks. Establishing the zones in existing major cities, however, would entail some of the same social and economic challenges that widespread liberalization would pose, and it could also give certain interest groups in the country an advantage over others. To avoid these problems, governments in this position often opt to develop new cities for special economic zones to mitigate the fallout on existing cities.

Shenzhen, China, exemplifies this tactic. In 1980, the city — then a tiny market town with a population of 30,000 — became the center of China's first special economic zone, opened to facilitate more liberal trade with the international community. Today, Shenzhen is home to more than 10 million people, a prominent outpost in China's growing high-tech economy and the country's most successful new city. Much of its staggering growth owes to the specific economic conditions under which it was founded. One could argue that a more economically open zone in 1980s China ­— an enormous country whose reclusion was the only constraint on its latent manufacturing capacity — was bound to boom no matter its location. Absent these conditions, a special economic zone probably couldn't achieve the same results. Adding a zone with marginally more liberal trade regulations likely would yield only a marginal gain for countries that already have mostly liberalized their economies. By the same token, states without very much economic potential locked away under restrictive policies won't derive much benefit from creating a special economic zone.

Building for the Modern World

A third kind of new city has less to do with government and politics than it does with logistics. Many cities around the world sprang up long before the dawn of modern business, and, as a result, they are ill-suited to the demands of today's industries. Older cities are often overcrowded, hard to navigate, and short on the physical space and amenities modern companies need for their day-to-day operations. Building a new city nearby offers a way to alleviate these problems while also relieving some of the population pressure on the established urban hubs. In India, the city of Delhi has undergone this process at least twice in its history: New Delhi formed in the early 20th century to ease the crowding in Old Delhi, and in the late 20th century, the city of Gurgaon developed with a similar goal in mind. Shanghai's Pudong district is an archetypal example of this pattern. Located just across the river from historic Shanghai, Pudong provided the modern amenities — and impressive skyline — the city needed to thrive in the 21st century.

The practice of building new cities to complement or upgrade existing ones isn't limited to the developing world, either. Many European capitals have added modern high-rise business districts, such as Canary Wharf in London and La Defense in Paris. Dozens of master-planned regional subcenters, such as Century City and Irvine, sprouted up across the Los Angeles area in the latter 20th century, seeking to supplant and improve on the old urban core. Many advanced economies have gone even further and largely "redeveloped" their traditional urban cores, flattening what was there and rebuilding to improve the areas for modern business.

Putting Neom in Context

Of these three strategies, Saudi Arabia's plan for Neom most closely fits the third. The kingdom's megacity is meant to be a modern environment built to accommodate the modern world more effectively than its other urban centers can. I recently spoke with Shirish Patel, an experienced Indian urban planner and one of the chief architects of Navi Mumbai, about how to develop such places. By the 1970s, Bombay, as it was then called, was running out of room to build adequate housing and transportation infrastructure, situated as it is at the tip of a long, narrow island. Patel and his colleagues decided to build a well-planned new metropolis, Navi Mumbai, across the bay from the old city center to extend and ultimately supersede it.

During our conversation, Patel identified three key conditions that are critical for a new city to be successful, if it's not planned as a political center. First, a substantial number of business operations must move there. Second, the new city must offer convenient transportation to a vibrant established economic area, facilitating the transfer of business activity. Finally, a special regulatory environment could help make the new place more attractive to people and companies. Navi Mumbai struggled to achieve these fundamental goals, though the city generated enough revenue to finance its construction. The bridge and high-speed ferry proposed to connect the old and new Mumbai never materialized; businesses kept the bulk of their operations back in the old city, moving mainly back offices to Navi Mumbai. And while the government provided some incentives to draw residents and businesses across the bay, it neutralized that effort by continuing to encourage development in the old city center.

Considering what it takes for a new city to thrive, Neom's chances for success look dim. Saudi Arabia is not planning to move its capital to the new development. A special economic zone around Neom would do little for the city's prospects, since the kingdom’s economy is already mostly open to the world. Furthermore, Neom will be located far from the other cities in the country, meaning it won't be able to lean on their economies very much as it works to build its own.

Given the factors working against it, Neom's best hope is that major domestic and international businesses relocate there. The Saudi government may try to cajole the country's companies to set up shop in the city. But what will encourage the rest of the world's businesses to move in? Most multinational corporations currently maintain their regional headquarters across the border in the United Arab Emirates. Persuading them to uproot their operations from the neighboring state, with its established cluster of business and financial hubs, its comparatively liberal society and its relatively warmer ties with the region's Shiite communities, will be a steep task for Riyadh.

A new city called Neom may well come to fruition in some form or another. The odds are slim, however, that it will live up to its promises as a sprawling urban landscape 33 times the size of New York City, spanning three countries and pioneering nine different cutting-edge industries. Contrary to what the promotional video touts, Neom will probably never become the "place where we can prepare together for the next era of human progress." Nevertheless, it will provide a valuable lesson to future city builders.
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« Reply #139 on: November 15, 2017, 10:48:33 AM »

second post

The recent spate of arrests in Saudi Arabia caught global businesses and diplomats off guard. Crown Prince Mohammed bin Salman rounded up dozens of the kingdom's most influential people, including members of the royal family, and reportedly threw them in five-star detention at Riyadh's Ritz-Carlton Hotel on suspicions of corruption. Bin Salman also recently ordered the arrests of prominent clerics, activists and scholars. Continuing a pattern the young crown prince has established in his rise to power, the surprise move demonstrates bin Salman's intention to tighten his grip over Saudi Arabia's political, economic and security institutions.

As the dust settles, international investors are wondering what will be the fallout of the corruption accusations against Prince Alwaleed bin Talal bin Abdulaziz al-Saud, one of the world's wealthiest entrepreneurs and a cousin of bin Salman. Bin Talal's Kingdom Holding Company (KHC) manages more than $12.5 billion in investments across 13 distinct sectors worldwide, according to its website. In addition, the prince, one of Twitter's top five shareholders, invested $300 million in the social media platform in 2011 and holds stakes in Apple Inc., Citigroup Inc. and the Walt Disney Co, as well. But bin Talal, whom Forbes calls one of the world's most intelligent and creative investors, is famous not only for his investments in banking, real estate and media. He is also renowned as a philanthropic mogul, and his arrest sent shock waves through that powerful and prestigious amalgam of public and private sectors.
Portrait of a Philanthropist

In 2014, the Wealth-X and UBS Billionaire Census ranked Saudi Arabia 10th among the 40 countries and territories with the most billionaires in their populations. The report counted 57 billionaires in the kingdom — bin Talal among them — whose collected wealth totaled $166 billion. The Saudi prince fits the international profile of an ultra-high net worth individual who is philanthropic. One of 35 percent of the world's billionaires with his own foundation, bin Talal is active in the philanthropic sphere, contributing to numerous charities. And like others in this category of philanthropists, he sees his giving as a means to preserve his culture and values for future generations. But rather than channeling the bulk of his philanthropic contributions into one or two causes, like education and health — as many of his peers do — bin Talal gives to more than 100 organizations through his foundation, Alwaleed Philanthropies.

Alwaleed Philanthropies supports an array of causes, including health, women's empowerment, education, cross-cultural bridge building and disaster relief. In 2013, the organization donated 1.5 million Saudi riyals (about $400,000 at the time) to address the harsh conditions in which some 46,000 Syrian refugees were living after a winter storm froze much of the Middle East. Partnering with other charitable organizations such as Food Banking Regional Network and Save the Children, bin Talal's foundation provided "food, medicine and clothing," along with health care services, to people living in refugee camps, according to a press release from Alwaleed Philanthropies' website.

Sometimes the aid isn't welcome. During a ceremony of condolence at ground zero in October 2001, for example, bin Talal offered a check for $10 million to assist New York City in the aftermath of the 9/11 attacks. Then-Mayor Rudy Giuliani refused the gift, citing the prince's comment that the United States needed to "address some of the issues that led to such a criminal attack." Bin Talal's statement continued:

    "While the U.N. passed clear resolutions numbered 242 and 338 calling for the Israeli withdrawal from the West Bank and Gaza Strip decades ago, our Palestinian brethren continue to be slaughtered at the hands of Israelis while the world turns the other cheek."

Although some observers characterize the prince as a candid, flamboyant social liberal, the motive behind his philanthropy is based in his faith. On his website, bin Talal quotes the Prophet Muhammad, saying, "The wealth of a man will not diminish by Sadaqah (charity)." He goes on to assert the role of personal responsibility in managing global crises:

    "The myriad challenges facing the world cannot be left to governments alone. It requires the concerted efforts of each and every one of us who can participate in the search for solutions on both a local and a global scale. … Alwaleed Philanthropies supports and initiates projects around the world, regardless of gender, race or religion. We collaborate with a range of philanthropic, governmental and educational organizations to combat poverty, empower women and the youth, develop communities, provide disaster relief and create cultural understanding through education. Together, we can build bridges for a more compassionate, tolerant and accepting world."

Laying a Broad Foundation

The foundation partners with a diverse array of organizations, including the Danish Refugee Council, the New Zealand Red Cross and the King Hussein Cancer Center in Amman, Jordan. In December 2005, bin Talal gave $20 million to expand Georgetown University's Center for Muslim-Christian Understanding, which was subsequently renamed in his honor. The endowment was the second-largest single gift in the university's history, according to the center's website. In response to the prince's arrest, John Esposito, the center's director, told me:

    "In light of the 9/11 attacks, the impact and importance of Muslim-West relations was magnified. Alwaleed generously endowed new centers ... (in the Middle East and North Africa) in American Studies so that students in (the) Arab world would understand America and the West better and then four centers (in the West) so that students in (the United States, United Kingdom and Europe) would understand Islam and Muslim-West relations better."

In 2015, bin Talal even pledged to donate his $32 billion fortune to charity after his death. He has said of his foundation's activities:

    "Our work is only just beginning. With the mounting problems of understanding, equity, poverty and disasters facing the world, our work is more necessary than ever before. Building on our proven history, we will continue to play an active role, finding intelligent solutions to the world's most pressing issues with empathy, dedication and commitment."

An Arrest Felt Round the World

Since the cascade of high-profile arrests in Saudi Arabia, thousands of bank accounts in the kingdom have been frozen. Saudi Attorney General Saud al-Mojeb insists that the frozen accounts are strictly personal and that businesses and financial institutions will be "free to continue with transactions as usual." But under which category will Alwaleed Philanthropies be assessed? Already, KHC's shares have plummeted on the Saudi stock exchange, despite al-Mojeb's assurances Nov. 9 that the corruption sweeps wouldn't hurt business in the kingdom.

The challenges of understanding, equality, poverty and disaster are on the rise worldwide, and governments are not positioned to solve the existential problems of hunger, homelessness and climate change. Though bin Talal's philanthropic efforts can't cure all of the world's ills, they make a difference in a handful of crucial areas. Where will his beneficiaries look if his accounts are frozen, and if his promised $32 billion posthumous charitable gift shrinks or evaporates? To what degree will other philanthropists of his financial stature step in? Even without the recent arrests in Saudi Arabia, we are already standing at the breech.
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« Reply #140 on: November 15, 2017, 11:45:10 AM »

Saudi Arabia's Strategic Miscalculation in Yemen
by Hilal Khashan
Stratfor Worldview
November 10, 2017
http://www.meforum.org/7008/saudi-arabia-makes-strategic-miscalculation
 
 
Saudi Arabia is embroiled in a war in Yemen that it can't win.

Saudi Arabia seems to have bitten off more than it can chew in Yemen. On March 26, 2015, the kingdom launched Operation Decisive Storm, a broad Arab-Islamic initiative ostensibly aimed at reinstating the government of Yemeni President Abd Rabboh Mansour Hadi, whom insurgents had forced from the capital, Sanaa, a month earlier. More than two and a half years on, Saudi Arabia is no closer to its goal, embroiled in a war that it can't win.

How did the country wind up making such a strategic blunder? Going into the conflict, its leaders were well aware of the steep odds against the operation's success — of Yemen's unconquerable terrain and intractable tribal machinations. The Saudis tend to equivocate in their explanations of what drove them to intervene in the war-torn country in the first place. But a look at the kingdom's history and founding ideology offers insight into Riyadh's dilemma in Yemen.

A Legacy of Conquest in the Arabian Peninsula

Saudi Arabia's history is one of bloodshed. The alliance that Muhammad ibn Abd al-Wahhab formed in the mid-18th century with the founder of the first Saudi state, Muhammad ibn Saud, established the kingdom's policy to pursue its objectives by force rather than diplomacy. By the end of the 1700s, Wahhab's followers would put that policy into action. They invaded Kuwait in 1793, laid siege to Ras al-Khaima (now part of the United Arab Emirates) in 1799, entered Bahrain in 1801, attacked Karbala, in modern-day Iraq, in 1802, and briefly took Basra and Jeddah the next year. In 1818, the Egyptian army destroyed the Saudi state, but the country emerged in its modern incarnation at the turn of the 20th century.

And like its predecessors (including the second Saudi state, which lasted from 1824 to 1891), the new kingdom had a penchant for war. The Saudis brought the Hashemite Kingdom of Hejaz to its demise in the 1920s through a series of gruesome massacres, and the next decade, they took on Yemen. During the war of 1934, Saudi Arabia seized Asir, Jizan and Najran from its southwestern neighbor, driving a permanent wedge between the two countries. Abdulaziz ibn Saud, founder of the modern Saudi state, reportedly told his sons on his deathbed nearly 20 years later that to maintain their country's strength, they must keep Yemen weak.

Origins of a Conflict

When a group of revolutionaries deposed Yemen's monarch in 1962, a civil war broke out between Yemeni royalists and advocates of a republican system of government. Saudi Arabia's leaders, worried that the political upheaval could seep into their territory, sided with the royalists in the eight-year conflict.
 
Saudi-backed royalists in Yemen, 1962.

After the two sides reached a compromise to end the war, Riyadh's military involvement in Yemen gave way to a subtler intervention. Saudi Arabia worked to buy influence with the country's various tribes and in the 1990s threw its weight behind Islah, an Islamist party with ties to the Muslim Brotherhood, to counter President Ali Abdullah Saleh's General People's Congress.

Around the same time, the Houthi movement emerged among Yemen's Zaidi Shiite population, preaching peace, tolerance and cultural openness. The movement had evolved into an insurgency by the early 2000s, despite its pacifist claims, and in November 2009, the Houthis seized a mountainous section of Saudi Arabia's Jizan province, near the border. From Saudi Arabia's perspective, the incursion — retaliation against Riyadh for allegedly allowing Yemeni army units onto Saudi territory to carry out strikes against the Houthis — violated the tacit conditions of the truce it made with Yemen after the 1934 war. And so, it struck back, launching its first military offensive in nearly two decades. Though the brief conflict highlighted the limitations of their military capabilities, the Saudis nevertheless felt certain that a full-blown war was inevitable.

The alliance between Muhammad ibn Abd al-Wahhab and the founder of the first Saudi state established the kingdom's policy to pursue its objectives by force.
 
Houthi fighters in Sanaa, shortly after their capture of the Yemeni capital in September 2014.

The Yemeni Revolution of 2011 laid the groundwork for the next clash. The uprising, during which Saleh stepped down from power, filled many Yemenis with hope that their country would establish a modern, independent political system. But the transition fell short of the population's expectations: The new president, Hadi, encountered numerous challenges to his rule, and Yemen soon descended into chaos. A few years later in September 2014, the Houthis took control of Sanaa, and in February 2015, they unveiled a constitutional declaration to transform the country's political system.

For the Saudi government — which views the monarchy's continuity as the key to the kingdom's security — the Houthis' revolution hit too close to home. Riyadh worried that the Houthi takeover in Sanaa would galvanize Saudi Arabia's Zaidi and Ismaili Shiite population near the Yemeni border. In addition, the Houthis' long-standing ties with Iran heightened the kingdom's concerns over Tehran's expanding influence in the region. Saudi Arabia and its coalition partners, including the United Arab Emirates, Qatar, Kuwait, Bahrain, Egypt, Sudan, Morocco, Jordan and Pakistan, began their operation against the Houthis the following month. If air power could achieve spectacular victories in the Six-Day War of 1967 and in Desert Storm in 1991, the Saudis reasoned, an air campaign would work in Yemen, as well.

A Coalition of Uncommon Interests

Compared with the coalition's leader, however, its other members had less at stake in Yemen. Most of Saudi Arabia's partners, in fact, were reluctant to join the operation at all. Bahrain, Kuwait, Jordan and Morocco limited their involvement in the war against the Houthis. Egypt and Pakistan refused to send ground troops to the fight. Sudan, by contrast, sent thousands of troops to Yemen, if only so that Riyadh would intercede on its behalf and persuade Washington to suspend the sanctions against it. Saudi Arabia and the United Arab Emirates were the only states in the coalition invested in the war.

But even they had different reasons for entering the conflict. Saudi Arabia's aims for Operation Decisive Storm and its successor, Operation Restoring Hope, were to crush the Houthis, sever their ties to Iran and secure the Saudi-Yemeni border in Jizan and Najran. The United Arab Emirates, on the other hand, had its own priorities in mind. Abu Dhabi, unlike Riyadh, isn't interested in driving the Houthis out of the Yemeni capital. Emirati leaders fear that doing so could give Islah — which they view as a threat to their own stability — a place in Yemen's political future. After making a perfunctory bid to train Yemeni troops for an offensive to retake Sanaa, Emirati forces turned their attention instead to southern Yemen. There, they worked to secure control of the Arabian coast and the strategic Bab al-Mandab Strait, a critical conduit for international trade. The United Arab Emirates is also keen on preventing the Yemeni port of Aden from competing with the Jebel Ali port, near Dubai.

The War That Cannot Be Won

Because of their diverging interests in Yemen, Saudi Arabia and the United Arab Emirates have differing levels of commitment to the conflict, too.
 
Saudi Crown Prince and Defense Minister Mohammed bin Salman

Abu Dhabi's crown prince announced on Twitter in June 2016 that his country would end its military involvement in Yemen, though it would continue "monitoring political arrangements" and "empowering Yemenis in liberated areas." Saudi troops, meanwhile, have continued their fight in the state, pursuing goals that seem more distant by the day.

Saudi Defense Minister Mohammed bin Salman knows the kingdom will probably never defeat the Houthis in Yemen. Saleh tried and failed to rout the movement six times between 2004 and 2010. And despite adamant declarations to the contrary, bin Salman wants to end Operation Restoring Hope. The young crown prince already has undertaken unprecedented reforms to modernize the Saudi economy, empower the country's women, and combat corruption and nepotism. But he has yet to overcome the legacy of blood and iron on which Saudi Arabia was built.

Hilal Khashan is a professor of political science at the American University of Beirut and a fellow at the Middle East Forum.
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« Reply #141 on: November 24, 2017, 08:13:18 PM »

A History of the Saudis’ Rise on the Arabian Peninsula

Nov. 16, 2017 Only the Saudis have managed to maintain long-term control over much of the peninsula.

Summary

Saudi Arabia is in a state of flux. A royal family purge, including the arrests of several high-profile elites; economic malaise, due to a dramatic slump in oil prices; and social reforms, including expanding rights for women, have all combined to create a sense of uncertainty around the kingdom’s future.

But Saudi Arabia, and its previous incarnations, has faced down serious challenges before. Although the modern Saudi state was founded less than a century ago, the Saudi clan has dominated the Arabian Peninsula for nearly three centuries. Various empires and tribes have sought to bring the region under their rule, leading to disintegration and a constant struggle for power throughout much of its history. Only the Saudis have managed to maintain long-term control over much of the Arabian Peninsula.

But the two principal factors that Saudi power rests on – religion and oil – are not what they used to be. The peninsula is thus likely to fragment once again – a condition that was the historical norm prior to the Saudis’ reign. In this report, we look at the foundations of the kingdom, the rise of the Saudis on the Arabian Peninsula and how the country got to where it is today.

Defining the Arabian Peninsula

The modern Kingdom of Saudi Arabia is the heart of the Arabian Peninsula, which stretches from the Levant in the north to the Gulf of Aden and the Arabian Sea in the south, and from the Red Sea in the west to the Persian Gulf in the east. Contemporary Saudi Arabia is composed of two main, very distinct regions: Hejaz, a cosmopolitan area located along the Red Sea, and Nejd, an arid, desert area consisting of multiple valleys buried in the interior of the peninsula. Nejd begins where the mountains of Hejaz taper off and extends to the oasis region of Hasa along the eastern coast. The Nafud and Rub al-Khali deserts constitute its northern and southern peripheries, respectively.

(click to enlarge)

In 622, the entire peninsula was brought under the control of the first ever Muslim polity (founded in Medina while the Prophet Muhammad was still alive), but the area broke up after his death a decade later. Immediately after assuming his position as the first caliph, Abu Bakr faced rebellion from several tribes, many of which hailed from Nejd. Though these rebellions were put down, Arabia would quickly lose its significance within the caliphate as it extended its reach into the areas taken from the Byzantine and Sassanid empires. The political capital shifted to Damascus and then to Baghdad, leaving Arabia – particularly Hejaz – as an important religious component of the caliphate but far from its political center.

For much of Islamic history, the various imperial dominions that held power in the Middle East – the Umayyads, the Abbasids, the Fatimids, the Ayubids, the Mamluks, the Ottomans – sought control over the Hejaz region, which contains the holy cities of Mecca and Medina, because of its religious significance. Powers that dominated the Persian Gulf exercised influence on the east coast of the peninsula. But Nejd was an obscure, mysterious and foreboding place located deep in the interior of Arabia and closed off from the rest of the world. All of this would change in the mid-18th century, when the Saudi clan and the Wahhabi sect emerged from the region.

Saudi Rule Emerges

For centuries, the tribes in Nejd constantly fought for power. Meanwhile, beginning in the late 10th century, Mecca and Medina in Hejaz were managed by Arab rulers known as sharifs from the Hashemite clan (whose descendants rule modern-day Jordan). It was not until the Ottomans established their control on both the west and the east coasts of the Arabian Peninsula in the mid-16th century that Nejd became the focus of a major power. The empire wanted to control the interior of the peninsula, but the inhospitable terrain and low return on investment made it a low priority.

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The Ottomans dedicated far more resources to expanding into Europe and pushing northward beyond the Black Sea basin. Nevertheless, they had an opportunity to expand into Nejd because they controlled both coasts, since the region was far more accessible from Hasa in the east than it was from the west. (Previous empires maintained power only in Hejaz.) But the Ottomans were held back by their need to focus on the wars with the Safavid Empire north of the Persian Gulf.

By the late 17th century, Ottoman power began to wane. The empire’s authority in Arabia never extended far beyond the coasts. In fact, its local allies on the coasts, including the sharifs in Hejaz, became increasingly independent. By the early 18th century, tribes from both Hejaz in the west and Hasa in the east tried to expand into Nejd, heightening the tribal conflict in the region. Meanwhile, the decline of the Ottoman Empire left the economy in Arabia in shambles. The tribes in control of the oasis towns of Uyaina, Qasim, Diriyah and Riyadh sought to defend their holdings.

Diriyah, located on the outskirts of Riyadh, became a pivotal town when Saud bin Muhammad, the founder of the Saudi dynasty, became its emir in the 1710s. When he was killed in 1725, his son, Muhammad bin Saud, succeeded him as emir, but not before a bitter power struggle involving tribal warlords from neighboring areas. An economic downturn led to a decline in commerce, which intensified tribal warfare and anarchy in the interior. Another generation would pass before order would be established.

During this time, Muhammad ibn Abd al-Wahhab, the founder of the ultraconservative branch of Islam known as Wahhabism or Salafism, returned to his native Nejd after studying at seminaries in Iraq, Iran, Syria and Egypt. He began preaching a puritanical interpretation of Islam, which conflicted with the prevailing Sunni creeds at the time.

He was forced to flee and, in 1744, settled in Diriyah, in Nejd region. He entered into a pact with its ruler, Muhammad bin Saud. This was the foundation of the alliance between the Saudis and the Wahhabis that continues today. Together, they oversaw the founding of the First Saudi State in 1744 and launched a jihad to spread the new ideology throughout Nejd and beyond. This was a turning point in the history of the Saudis; without the Wahhabi religious ideology, they would have been just another warlord clan among many in Nejd. The goal was to first conquer all of Nejd and then move on to Hejaz, freeing it from Ottoman rule. By 1808, both regions had been brought under the authority of the First Saudi State.


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The Saudi-Wahhabi alliance posed a major threat to the Ottomans, whose power had declined by the early 19th century. The Ottomans had lost control of Egypt to an Albanian governor, Muhammad Ali Pasha, on whom they had to rely to confront the Saudi threat. In 1811, Muhammad Ali Pasha sent a task force led by his son Ibrahim Pasha to retake Hejaz from the Saudis.

After seven years of war, the Egyptians destroyed the First Saudi State. The Egyptians, however, weren’t interested in maintaining an enduring presence in Nejd. This enabled the Saudis to regroup six years later under the leadership of Turki bin Abdullah, the grandson of Muhammad bin Saud, and seize control of Riyadh from the invading forces, leading to the establishment of the Second Saudi State in 1824. This state was much smaller and weaker than its predecessor because of internal strife and the Egyptians and Ottomans’ support of rival tribes, especially the al-Rasheeds of the northern Hail region. In 1891, the al-Rasheeds were triumphant and the Saudis were driven into exile in Kuwait.


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Founding the Modern Kingdom

A decade later in 1901, Abdulaziz bin Abdulrehman, the future founder of the modern Saudi kingdom and the son of the last ruler of the Second Saudi State, sought to reconquer the lands of his forefathers. He took control of Riyadh in 1902 but didn’t seize the east coast from the Ottomans until 1913. Abdulaziz also wanted to take control of Kuwait, but the British opposed the move. They didn’t want to jeopardize relations with other rulers they supported, especially the Hashemites, who had helped London defeat the Ottoman Empire.

The collapse of the Ottoman Empire along with the British and French move to divide their Arab holdings weakened the position of the Hashemites, and in 1923, the British allowed Abdulaziz to move on Hejaz. Until then, Abdulaziz had been taking control of territory around the Hejaz region, including the region of Asir – south of Hejaz and north of Yemen – which he conquered in 1920. But six years later, his forces took Hejaz. With the holy cities firmly in their hands, the Saudis could now claim to be not just rulers of an Islamic state but also leaders of the Islamic world.

In 1927, the British recognized the Kingdom of Hejaz and Nejd via the Treaty of Jeddah. The two regions would remain separate domains for five years, at which point they were formally unified during the founding of the Kingdom of Saudi Arabia. By the early 1930s, the Saudis were in firm control of much of the Arabian Peninsula. This was a historic moment, for until then, no single regime since the time of the prophet could claim authority over the entire area.

But the kingdom was still a weak state that relied on the British for its security needs. Islam alone would not be enough to maintain stability and unity in the country over the long term, especially given the fragmentation of the Muslim world. The third Saudi incarnation was threatened by the emergence of competing forces, especially secular Arab nationalism in Egypt and Baathism in Iraq and Syria, during the interwar period.

The Saudis had tried and failed twice before to hold on to control of a Saudi state. What made this time different, however, was the discovery of oil in Saudi Arabia in 1938 by Standard Oil. Production did not begin until 1949, and it took another decade for the oil sector to be nationalized, but the Saudis eventually became the world’s largest producers of crude oil. Together, the country’s rich oil reserves and religious primacy in the Muslim world helped sustain the Saudi monarchy for decades. In addition, the wealth created from the oil sector enabled the kingdom to project power and influence throughout the region and beyond. Following the end of World War II, the United States effectively became the Saudis’ security guarantor, making up for the fact that the kingdom’s military, despite its massive oil wealth, was weak.

Abdulaziz bin Abdulrehman didn’t live to see his kingdom flourish. His sons took over the monarchy after his death in 1953, but they had many internal problems to contend with – both from within the royal family and from radical elements of the religious establishment. These resulted in multiple crises over the decades, including the 1964 forced abdication of Abdulaziz’s first successor, King Saud bin Abdulaziz; the 1975 assassination of King Faisal bin Abdulaziz, who succeeded Saud; the 1979 siege of the Grand Mosque in Mecca by religious extremists; dissident movements in the 1990s; and the rise of al-Qaida in the 2000s and the Islamic State in the 2010s.

Uncertainty Ahead

To be sure, the Saudis have faced significant domestic crises in the past. But they now must also deal with numerous external problems: the proliferation of jihadism, the erosion of state authority in the Arab world, the rise of Iran and its Shiite Arab allies, an emergent Turkey and the divergence of interests with the United States. All of this comes at a time when the kingdom is at a historic impasse, with power shifting to the third generation of Saudi monarchs. Making matters worse is that funds from the kingdom’s most important revenue source, oil, are drying up because of depressed oil prices.

Members of the Saudi royal family perform prayer on the first day of Eid al-Fitr in the Great Mosque in the old City of Riyadh on Aug. 19, 2012. FAYEZ NURELDINE/AFP/Getty Images

The Saudis are having to burn through cash to maintain stability at home. With a large youth population – at least two-thirds of all citizens are under the age of 30 – the social and cultural fabric of the country is shifting. Religion unified warring tribes in the past, but its less likely to hold together the more modern and youthful kingdom that’s emerging today. If anything, it can be used by jihadist extremists to challenge the Saudis’ leadership role in the Muslim world.

For these reasons, the crown prince and future king, Mohammed bin Salman, has been making unprecedented moves against the religious establishment as well as the royal family itself, including imposing social reforms and arranging the arrests of dozens of princes and senior officials. For now, it seems the young prince doesn’t face any serious resistance, but it’s still early in the process. Whether the Saudis can survive this test as they have survived other challenges over the past 300 years remains to be seen.


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Regardless of what happens to the Saudi monarchy, the Arabian Peninsula as a whole is already showing signs of fracture; the war in Yemen and the Arab blockade of Qatar are just two signs of this fragmentation. The crisis in Saudi Arabia threatens to accelerate that process. But this is nothing new; the relative resilience of the Saudi regimes of the past 300 years have actually been an anomaly.

Arabia has been geopolitically significant at two points in history: in the 7th century with the rise of Islam and in the 20th century with the discovery of oil. At other points, only the region’s coastal areas were relevant. The weakening of the Saudi state will return the peninsula to this state of affairs, with the coasts once again becoming the centers of power and the interior becoming a broken remnant of its former self.
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« Reply #142 on: November 24, 2017, 08:31:58 PM »

Second post

Nov. 16, 2017 Iran has been quiet about Moscow and Riyadh’s newfound friendship – and the weapons that friendship has procured.

By Jacob L. Shapiro

Last month, well before Saudi Crown Prince Mohammed bin Salman purged the government of potential rivals, his father, King Salman, did something unprecedented as well: He visited Russia, Saudi Arabia’s erstwhile enemy. After the visit came the usual slew of announced business deals that promise a lot but deliver little. On Nov. 13, however, Russia’s Federal Service for Military-Technical Cooperation announced that it would provide Saudi Arabia with its sophisticated S-400 air defense missiles. King Salman’s visit appears to have delivered real cooperation.

A Relationship Redefined

That Saudi Arabia and Russia would redefine the nature of their relationship is surprising in its own right. These were two countries firmly on opposite ends of the Cold War. But even more jarring is that Iran, Saudi Arabia’s regional rival, has been silent. Iran and Russia have a complicated relationship in their own right, one marked for centuries by suspicion and distrust. But in recent years they had set aside their differences, becoming military allies to save Bashar Assad and destroy the Islamic State. Now, Russia is promising to supply Iran’s biggest enemy with air defense missiles – and Iran hasn’t made a peep. Something doesn’t add up.

Consider Russia’s position in the Middle East. Most observers claim that by partnering with Iran to save the Assad regime, Russia enhanced its influence in the region at the expense of the United States. This is a misunderstanding. Russia’s intervention was actually pretty limited. At the height of its involvement, it had only 30-75 fighter jets and helicopters operating in the country. Its commitment was small but successful, insofar as it prevented the Syrian government from falling and the Islamic State from rising.

But it did not undermine U.S. strategic goals in the Middle East. If anything, it enhanced them. When the Syrian civil war started, the U.S. was determined to remove Assad. Yet there weren’t enough moderates for it to train and arm, and in any case, the Islamic State looked as though it may take Damascus for itself. And so the United States prioritized its fight against IS over its fight against Assad. Russia was, in effect, helping the U.S. do its dirty work. For all the bluster surrounding their relations, the U.S. and Russia have been coordinating their efforts in Syria in pursuit of a common goal for years.
Russian S-400 Triumph medium-range and long-range surface-to-air missile systems ride through Red Square during the Victory Day military parade in Moscow on May 9, 2017. NATALIA KOLESNIKOVA/AFP/Getty Images

Now that Assad has been saved and the Islamic State’s caliphate vanquished, the question is: What comes next? With IS out of the picture, the U.S., Saudi Arabia, Israel, Russia, Turkey and Iran – which had if nothing else a common enemy – no longer have a reason to cooperate with one another. Life after IS is actually more difficult for Russia than life with it. Iran, Turkey and Saudi Arabia are all competing to fill the power vacuum left by the group’s departure, and Russia’s long-term interests don’t align with any of theirs.

Unlike the Islamic State, all three countries have the power to threaten Russian interests directly. Take Turkey, for example. It can cut off Russia’s access to the Mediterranean by closing the Bosporus. It competes with Russia in the Caucasus. And as it strengthens, it will begin to project power into the Balkans, another region in Russia’s sphere of influence.

Iran, like Turkey, has interests in the Caucasus. It also shares a border with Central Asia and Afghanistan – another Russian sphere of influence where Iran can cause serious problems for Moscow.

And Saudi Arabia, for its part, poses two challenges of its own. First, Saudi Arabia can still influence global oil prices, where even small fluctuations can hurt the Russian economy. Second, Saudi Arabia is the worldwide leader in exporting jihadism, a threat to a country like Russia, which has a large minority Muslim population that is fast increasing.

Russia has met these challenges not by choosing one country to align with but by trying to forge better relationships with all of them. Its relationship with Turkey is rocky but sustainable. (In fact, in September, Turkey signed its own agreement to receive S-400s from Russia.) Its relationship with Iran is solid but not without drama. A Russian announcement in August 2016 that it was using an Iranian air base for attacks in Syria set off a short-lived political controversy in Iran, sparking backlash from Iranian politicians who felt Russia’s use of the base violated Iran’s Constitution. Now Russia is reaching out to Saudi Arabia, and besides the agreements on military cooperation, Moscow secured a promise from King Salman during his visit last month to stop Saudi proselytizing to Muslims in Russia.

Russia is cultivating other ties too. Officials from Moscow have met with Israeli Prime Minister Benjamin Netanyahu several times this year and have kept lines of communication open over Hezbollah’s potential acquisition of advanced weaponry. Russia has also expressed some support for various Kurdish groups vying for independence in the region. Moscow has, for example, kept open its embassy in Irbil, the capital of Iraqi Kurdistan, throughout the contentious independence referendum.

And while Russia has said it does not support the PYD, the Kurdish political party in northern Syria, in its push for independence, it nonetheless invited the group to a congress comprising all relevant parties to discuss Syria’s future – much to the chagrin of Turkey, Iran and anti-Assad Syrian opposition groups.

Silence and Blindness

Russian foreign policy can be disruptive, but it would be a mistake to think of it as monolithic or unchanging. The Cold War, for all its faults, simplified foreign policy. (Simple doesn’t mean easy.) It was unclear whether the U.S. or USSR was more powerful. Regions like the Middle East became battlegrounds to see which one was. The U.S. had its allies (Saudi Arabia, Israel, Turkey) and the USSR had its allies (Egypt, Syria, Iraq). Sometimes countries switched sides, but ultimately it was a zero-sum game, with each side trying to weaken the other.

But the Cold War has been over for more than two decades. Today’s Russia is not yesterday’s Soviet Union. The U.S. and Russia actually share some long-term interests in the Middle East. Neither wants to see any one country dominate the entire region. Washington and Moscow want parity; they prefer that the region’s countries compete with one another rather than cause problems for them. In a perfect world, the U.S. would be embroiled in the Middle East and Russia would be free. But theirs is not a perfect world, so Moscow’s primary objective is to make sure the problems and ambitions of the Middle East stay in the Middle East.

This altogether different strategy of containment brings us back to Iran – and its silence on the budding Saudi-Russia friendship. Iran does not think it needs to attack Saudi Arabia head on. The government in Tehran believes Saudi Arabia will eventually collapse under the weight of its own problems, and that, in the meantime, the best thing Iran can do is engage Saudi Arabia in expensive and time-consuming proxy wars. Iran may not particularly like Russia’s providing Saudi Arabia with S-400s, but it can look past this particular issue because none of its red lines have been crossed. Russia is, after all, still playing an important role in helping the Assad regime – a key Iranian ally – retake the parts of Syria it has lost in the war. That is worth more right now than a public denunciation of some missile acquisitions.

But just because Iran is silent doesn’t mean it is blind to what’s happening. And just because Iran and Russia have cooperated in recent years doesn’t mean their relationship is ironclad. Russia cannot be everything to everyone in the region, and at some point it will be forced to make difficult decisions. In the meantime, pragmatism reigns. By improving relations with Saudi Arabia, Russia is hedging the bets it placed on Iran. By keeping quiet, Iran continues to reap what benefits it can from Russia’s moves. News about the S-400s doesn’t change much, but it underscores just how quickly change can come
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« Reply #143 on: December 06, 2017, 08:35:37 AM »

The Rapid Rise of Mohammed bin Salman
By Jay Ogilvy
Board of Contributors
Jay Ogilvy
Jay Ogilvy
Board of Contributors
Saudi Defense Minister and Crown Prince Mohammed bin Salman, center, stands for a photo-op with his counterparts from other countries in Saudi Arabia's Islamic Military Counterterrorism Coalition at a meeting in Riyadh.
(FAYEZ NURELDINE/AFP/Getty Images)
Contributor Perspectives offer insight, analysis and commentary from Stratfor’s Board of Contributors and guest contributors who are distinguished leaders in their fields of expertise.


Something extraordinary is happening in Saudi Arabia. The new crown prince, Mohammed bin Salman, or MbS, as many call him, has embarked on changes that could alter the world.

Breaking Taboos

His ambitious plan for the kingdom's future, Saudi Vision 2030 — worked out with help from the consulting firm McKinsey & Co. — envisages a whole panoply of reforms. The measures range from health care and education initiatives to a $500 billion project to build a new city to proposals for treating the Saudi economy's "addiction to oil." Along with reform, MbS is taking on his country's cultural and political taboos. He wants to break the taboo against selling off any part of the Saudi Arabian Oil Co., better known as Saudi Aramco, by floating an initial public offering for less than 5 percent of the huge company. Proceeds from the sale would go toward creating the world's largest sovereign investment fund, which, as MbS described in his first interview on Al-Arabiya television, would "take control over more than (10) percent of the investment capacity of the globe" and "own more than (3) percent of the assets on Earth." MbS is also breaking the long-standing taboo that forbids women from driving.

And perhaps most significant, he wants to break the hold of the hard-line Wahhabi clerics who came to power in 1979, when militants occupied Mecca's Grand Mosque at the time of the Islamic revolution in Iran. Public entertainment has been banned since then, but MbS will bring it back. As he said to a gathering of some 3,500 visitors he hosted at an economic development conference Oct. 24, Saudis "are returning to what we were before — a country of moderate Islam that is open to all religions and to the world ... We will not spend the next 30 years of our lives dealing with destructive ideas. We will destroy them today." He then vowed to "eradicate the remnants of extremism very soon."

MbS doesn't stop at tough talk; he's equally fond of tough action. In early November he had his minions round up more than 200 of the kingdom's rich and powerful, including 11 princes, and imprison them in the lap of luxury at Riyadh's Ritz-Carlton hotel on corruption charges. "My father (King Salman) saw that there is no way we can stay in the G-20 and grow with this level of corruption," MbS said in an interview with Thomas Friedman. "In early 2015, one of his first orders to his team was to collect all the information about corruption — at the top. This team worked for two years until they collected the most accurate information, and then they came up with about 200 names." The crown prince told Friedman that 1 percent of the people arrested for corruption were able to prove their innocence, and 4 percent insisted they would try to do so in court. Yet the remaining 95 percent of the detainees agreed to return a total of about $100 billion to the kingdom's coffers. As Friedman put it tersely, "You don't see that every day."
Sharp Elbows

The anti-corruption campaign is hardly the crown prince's only tough action. His main rival for the throne once his father dies is said to be under house arrest. The Saudi air campaign in Yemen, meanwhile, is creating a humanitarian disaster. In a long piece in Buzzfeed on Nov. 27, Borzou Daragahi quotes a Western diplomat who served for years in Saudi Arabia:

    "There were all sorts of stories about his personal behavior. It was ambition. He had very sharp elbows. That's what people thought of him, and they didn't want to cross him. What you see is someone who is incredibly ambitious and is prepared to put heat on people to get his own way."

Another person interviewed for the same piece confirms the diplomat's assessment:

    "He doesn't even say, 'Hi' … He says, 'You. What do you have? You. What do you have?' He doesn't have time for niceties. He just gets into business. He's on some kind of turbocharge. He's hyper and he wants to get things done and he doesn't want anyone to stand in his way. If anyone stands in his way, he takes them out."

These accounts don't describe a nice person. In fact, some people in and out of the kingdom see the crown prince as a bully. (He has, however, won over the kingdom's vast youth population, a largely underemployed, increasingly well-traveled, foreign-educated group with waning patience for the heavy hand of the Wahhabi fun police.) But hold on. There may be another interpretation of the young crown prince's haste. Yes, he is a man in a hurry. Then again, Saudi Arabia is in so many ways behind on the arc of history — as a country, as an economy and as a society — that the shake-up MbS is carrying out may be just the kind of "turbocharge" it needs.

When asked how much risk would be involved in his Public Investment Fund, he responded, in characteristic fashion, by asking, "What will the size of the risk be if we did not take such a step?"

Mohammed bin Salman's Growing Power
Thinking Big in a Hurry

Is it a power-hungry personal ambition that drives MbS, or is it a sense of mission? Much of what I read about him reminds me of another man in a hurry, Elon Musk, the founder of Tesla, Space-X, SolarCity and the Boring Company. Like MbS, Musk is known for working incredibly long hours. And like MbS, Musk is very demanding of his employees. Interviewed by Ashlee Vance for his book on Musk, a senior employee at Tesla said, "Some people thought Elon was too tough or hot-tempered or tyrannical … (b)ut these were hard times, and those of us close to the operational realities of the company knew it. I appreciated that he didn't sugarcoat things." Vance summarizes Musk's drive for excellence:

    "Either you're trying to make something spectacular with no compromises or you're not. And if you're not, Musk considers you a failure. This position can look unreasonable or foolish to outsiders, but the philosophy works for Musk and constantly pushes him and those around him to their limits."

Neither man is shy about splashing money around. Musk took delivery of a McLaren sports car, one of only 62 in the world. While on vacation on the French Riviera, MbS took a fancy to a 134-meter (440-foot) yacht and sent his agents aboard to buy it for $550 million the same day. If it ends up serving as a roving embassy where the crown prince can entertain other heads of state in a secure environment, it might actually be a good investment, not a frivolous whim.

Both men think big — really big. But that is precisely what some challenges demand. The barriers to entry in the space industry and the automobile industry are immense. You can't get into those industries by taking small, incremental steps. That's why Khalid Al-Dakhil, a Saudi author, historian and columnist for pan-Arab newspaper Al-Hayat, may have gotten it wrong by saying, "When you want to make changes, especially political and constitutional, you always face resistance. So you want to take it step by step."

As Brinley Burton wrote for NBC News, "'Transformation' is a mantra that follows MbS around." Likewise, Google co-founder Larry Page, one of Musk's good friends, says, "That's why I find Elon to be an inspiring example. He said, 'Well, what should I really do in the world? Solve cars, global warming, and make humans multiplanetary.' … (N)ow he has businesses to do that."

Some understand the truly systemic dimensions of the struggle in the kingdom. "We are witnessing an emergence of a new social contract in Saudi Arabia, economically and socially," Ibrahim al-Assil, a fellow at the Middle East Institute in Washington, said to Newsweek. "Saudi Arabia is facing many challenges in a region that is full of turmoil and conflicts. Economic reforms won't be sufficient if it's not accompanied by social reforms."

Machiavelli's (Crown) Prince

The sheer scale of the interlinking challenges that MbS is facing call to mind a famous quotation from Niccolo Machiavelli: "One always ought to remember that there is nothing more difficult to undertake, nor more dangerous to administer, nor more unlikely to succeed, than to introduce a new political order." Machiavelli is, of course, famous for endorsing the kind of "sharp elbows" that MbS and Musk wield. As he put it:

    "It is essential to understand this: that a prince — and especially a 'new' prince — cannot always follow those practices by which men are regarded as good, for in order to maintain the state he is often obliged to act against his promises, against charity, against humanity, and against religion."

The descriptor "Machiavellian" is often associated with treachery. But we owe to our own Philip Bobbitt a reinterpretation of Machiavelli that shows how he crafted his philosophy entirely in the service of the public good. He was not interested in defending the power of the prince for his own sake; he was interested in the good of the whole. As Bobbitt notes in his book Garments of Court and Palace: Machiavelli and the World That He Made, "Then, as now, the emergence of a new constitutional order loomed over men whose eyes were firmly fixed on the ground, even as it was shifting beneath them."

Like Friedman in his Nov. 8 New York Times column on MbS, I worry that the Saudi crown prince's ambition and the bad advice of others might lead to war with Iran. And yet, like Friedman in a later column from Nov. 23 — written just after spending over three hours with MbS — I come away rooting for the man.

I'll give the last word to Friedman, whose words, published on Thanksgiving morning, probably didn't get the exposure they deserve:

    "I never thought I'd live long enough to write this sentence: The most significant reform process underway anywhere in the Middle East today is in Saudi Arabia. Yes, you read that right. Though I came here at the start of Saudi winter, I found the country going through its own Arab Spring, Saudi style.           

    "Unlike the other Arab Springs, all of which emerged bottom up and failed miserably, except in Tunisia, this one is led from the top down by the country's 32-year-old crown prince, Mohammed bin Salman, and, if it succeeds, it will not only change the character of Saudi Arabia but the tone and tenor of Islam across the globe."
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« Reply #144 on: December 26, 2017, 02:36:46 PM »

Saudi Arabia released 23 of some 200 individuals detained in November under Saudi Crown Prince Mohammed bin Salman's anti-corruption crackdown, Reuters reported Dec. 26. The individuals were held in the Ritz Carlton and secured their release after agreeing to a settlement with the government to relinquish assets and money in exchange for their freedom. Other suspects will be released in the coming days and trials are expected to begin for those who deny the corruption charges. Those detained in November included members of the royal family, prominent businessmen and government officials.
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« Reply #145 on: December 27, 2017, 12:34:43 PM »



The Price of Freedom for Saudi Arabia’s Richest Man: $6 Billion

Talal is trying to hold on to his company after crown prince’s corruption crackdown
 Margherita Stancati in Riyadh,

Updated Dec. 23, 2017 2:50 p.m. ET

Saudi authorities are demanding at least $6 billion from Saudi Prince al-Waleed bin Talal to free him from detention, people familiar with the matter said, potentially putting the global business empire of one of the world’s richest men at risk.


The 62-year-old prince was one of the dozens of royals, government officials and businesspeople rounded up early last month in a wave of arrests the Saudi government billed as the first volley in Crown Prince Mohammed bin Salman’s campaign against widespread graft.

The Saudi government has disclosed few details of its allegations against the accused, many of whom have since been released from detention in a makeshift prison at the Riyadh Ritz-Carlton after negotiating financial settlements. The $6 billion Saudi officials are demanding from Prince al-Waleed, a large stakeholder in Western businesses like Twitter, is among the highest figures they have sought from those arrested, some of the people familiar with the matter said.
 
Business Empire

Prince al-Waleed bin Talal has built a vast network of holdings across the world.

The Price of Freedom for Saudi Arabia’s Richest Man: $6 Billion


The prince’s fortune is estimated at $18.7 billion by Forbes, which would make him the Middle East’s wealthiest individual. But Prince al-Waleed has indicated that he believes raising and handing over that much cash would be an admission of guilt and would require him to dismantle the financial empire he has built over 25 years, other people said.

Prince al-Waleed is talking with the government about instead accepting as payment for his release a large piece of his conglomerate, Kingdom Holding Co., people familiar with the matter said. The Riyadh-listed company’s market value is $8.7 billion, down about 14% since the prince’s arrest. Kingdom Holding said in November that it retained the support of the Saudi government and that its strategy “remains intact.”

Prince al-Waleed, currently chairman of the company, would want to stay on in a leadership role in the new state-backed company, one person close to him said.

“Keeping [the empire] under his control, that’s his battle,” the person said.

According to a senior Saudi official, Prince al-Waleed faces accusations that include money laundering, bribery and extortion. The official didn’t elaborate.

Salah Al-Hejailan, a lawyer who has worked with Prince al-Waleed in the past and remains in contact with his family, said that “there are no formal accusations” against the prince, and that the prosecutor would only open a judicial case against him if no understanding is reached.

The Saudi government is merely “having an amicable exchange to reach a settlement” with the tycoon, said Mr. Al-Hejailan, adding he wasn’t currently retained by Prince al-Waleed.



A hallway of the Ritz-Carlton Hotel in the Saudi capital, Riyadh, where dozens of royals, officials and businesspeople have been detained since early November.
A hallway of the Ritz-Carlton Hotel in the Saudi capital, Riyadh, where dozens of royals, officials and businesspeople have been detained since early November.  Photo:  GIUSEPPE CACACE/Agence France-Presse/Getty Images 
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The prince has indicated to people close to him that he is determined to prove his innocence and would fight the corruption allegations in court if he had to.

“He wants a proper investigation. It is expected that al-Waleed will give MBS a hard time,” said a person close to Prince al-Waleed, referring to the crown prince by his initials, as many do.

Kingdom Holding, the Saudi Royal Court and the Saudi Embassy in Washington didn’t respond to requests for comment.

Saudi officials have said they expect the state to receive tens of billions of dollars from settlements with those arrested last month. Prince Miteb bin Abdullah, once seen as a leading contender to the throne, paid more than $1 billion to secure his release in a settlement with the government, said senior Saudi government advisers.

The detentions are part of a large-scale shake-up of Saudi society engineered by 32-year-old Prince Mohammed. He is also allowing women to drive next year, opening movie theaters for the first time in decades and orchestrating the public listing of the state’s oil company to raise cash for an economic transformation.

Prince Mohammed has also moved quickly to consolidate power in a royal family in which different branches often ran pieces of the government as private fiefs. In the past two years, the crown prince has taken control of internal security services, national defense and the economy from uncles and cousins who had long been in power.

Prince al-Waleed, a cousin to the crown prince, has never been seen as a contender for the throne because his father, Prince Talal bin Abdulaziz, called for liberal social and political reforms in the 1960s and fell out of favor.
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Like his father, Prince al-Waleed has long been an outspoken advocate for social reforms, such as allowing women to drive. He is also a sort of independent Saudi ambassador to the global business world, amassing big stakes in companies such as Apple, General Motors and News Corp. (all of which he has sold). News Corp is the owner of The Wall Street Journal. Currently, he is a major shareholder in Twitter, the ride-sharing service Lyft, AccorHotels and the Four Seasons Hotel & Resorts. His company’s skyscraper, Kingdom Centre, is one of Riyadh’s most striking landmarks.

Some people close to Prince al-Waleed say they believe his high profile helped turn Prince Mohammed against the tycoon. Kingdom Holding has long acted like an arm of the Saudi state, striking deals that could have also been done by the crown prince or the kingdom’s own sovereign-wealth vehicle, the Public Investment Fund.

On a holiday that took him through nine countries this summer, Prince al-Waleed met the president of Portugal and the prime minister of Albania. In September, he sat down with French President Emmanuel Macron to discuss a “strategic alliance” with France, according to a news release about the meeting issued by Kingdom Holding.

Kingdom had been talking to France’s sovereign-wealth fund, its partner in a $400 million fund to invest in Saudi businesses, about bringing the Saudi government into the deal, people familiar with the matter said, adding there had been no progress on the matter since the prince’s arrest. A spokesman for the French fund declined to comment.

Inside the Ritz-Carlton, Prince al-Waleed has been allowed limited communication, is eating what people close to him call his “diet food” and exercising.

Prince al-Waleed’s arrest took his international business partners by surprise and cast uncertainty over the future of his company. Prince al-Waleed had expressed support for Prince Mohammed’s reform plans, and Kingdom Holding appeared likely to play a role in carrying out pieces of the economic and social change under way. Now the prince’s international business dealings have stalled, though the Kingdom board met in Riyadh on Wednesday, its first publicly announced meeting since Prince al-Waleed’s arrest.

Prince al-Waleed’s media company Rotana had been in talks with French conglomerate Vivendi to set up a joint venture with Saudi Public Investment Fund to sell music and open cinemas in Saudi Arabia, according to people familiar with the matter. But his arrest has scuttled any further discussions, they said. A Vivendi representative confirmed that Prince al-Waleed and Vivendi Chairman Vincent Bolloré held talks but said the venture was “not followed up” and “is not on agenda.”

It appears unlikely Prince al-Waleed had any inkling he was under investigation or faced imminent arrest, according to people close to him.

About a month before the arrests, he sent a text message—reviewed by the Journal—to Bakr bin Laden, the chairman of the massive construction firm Saudi Binladin Group, congratulating him on having been cleared of wrongdoing in relation to a crane collapse in Mecca. Prince al-Waleed told Mr. bin Laden in that message that it was now time to get back to work on the Jeddah Tower, a partnership with Kingdom Holding that would be the world’s tallest building when completed.

The tower remains unfinished. Mr. bin Laden is detained at the Ritz with the prince.

Write to Margherita Stancati at margherita.stancati@wsj.com, Summer Said at summer.said@wsj.com and Benoit Faucon at benoit.faucon@wsj.com
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Crafty_Dog
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« Reply #146 on: January 04, 2018, 08:34:49 AM »

    Saudi Arabia's 2018 budget calls for spending a record amount of money, and based on precedent, actual spending will likely eclipse that figure.
    About 20 percent of the budget is devoted to military spending, but it also includes a substantial increase in spending on programs benefiting the populace.
    The careful introduction of new tax measures and a levy on expatriate workers are part of the government's unprecedented push to expand non-oil revenue.

 

Saudi Arabia laid out the biggest spending plan in the kingdom's history in absolute terms when the government published its 2018 budget in late December. After two years of austerity measures and budget deficits following the oil price dive in 2014, the sizable amount of slated expenditures for this year could seem counterintuitive. Yet the amount of planned spending fits with the current turning point for the Saudi economy, which ranks as the world's 20th largest in terms of gross domestic product, and meshes with plans laid out by Crown Prince Mohammed bin Salman for the country's long-term economic future. But the budget also extends state support to Saudi citizens even though weaning its citizenry from their reliance on subsidies is a long-term reform goal. Moreover, to pay for its spending plan, the government is counting on untested new revenue sources, including newly instated taxes.

A Familiar Spending Strategy

The 2018 budget follows familiar patterns of heavy state-backed development, which has been the story of Saudi Arabia's economic growth since the 1950s. As in the past, the 2018 plan calls for high government expenditures relative to GDP, with a total projected outlay of 978 billion riyals ($261 billion). And if the usual practice holds, actual expenditures are guaranteed to eclipse the budgeted amount. The major breakdown of projected spending reveals a pattern that could also have been expected in previous decades. In 1970, the year Saudi Arabia first published a five-year economic development plan and began to take a strategic approach to its budgets, it spent the most on defense, public utilities, education and transportation investments. Similarly, defense spending, at 21 percent of total expenditures, represents the largest slice of the 2018 plan. In addition, the kingdom is increasing the amount of money spent on infrastructure by 86 percent and is boosting the amount devoted to municipal services. Even in the midst of aggressive economic reform, Saudi Arabia is spending big.

Saudi Arabia: Spending Estimates by Sector

The government in Riyadh continues to view its spending as a necessary bridge to keep the economy moving and spur growth until it can lean more on the private sector. While the budget expansion may be expensive today, the state views it as a logical investment in developing the non-oil sectors of its economy with an eye toward culling the budget deficit by 2023. The spending plan relies on the assumption that oil prices will remain stable enough through 2018 to enable the government to funnel oil and non-oil revenue into developing industries such as manufacturing, mining, tourism, finance and technology. Its goal also includes shoring up state-backed enterprises like the postal service, airports and utility companies, all with an eye toward a privatization push beginning over the next year.

An Optimistic Commitment to Reform

Saudi Arabia's willingness to spend big signals optimism that its economic reform efforts so far are working. The kingdom managed to reduce its budget deficit in 2017 to 230 billion riyals (8.9 percent of its 2017 GDP) from the 2016 shortfall of 297 billion riyals, which represented 12.8 percent of GDP. The projected deficit for 2018, 195 million riyals, would represent a further drop. The shrinking deficits help make the goal of erasing budget deficits by 2023 more realistic, though this will, of course, depend on the price of oil. Price increases over the past year and the stability offered by the OPEC production deal helped Saudi oil revenue reach 440 billion riyals in 2017, a trend that Saudi Arabia is confident will continue. Although the goal of its economic reform plan is to decrease the kingdom's dependence on its oil industry, oil revenue will remain a key component of the Saudi economy for many years to come.

Saudi Arabia's Proposed Aggressive Deficit Reduction

Similarly, 2017 achievements with respect to non-oil revenue helps make 2018 goals seem more realistic. In achieving revenue of 256 billion riyals in 2017, Saudi Arabia exceeded its goal for non-oil income by roughly 30 percent. Growth in that area is expected to continue in 2018, with projected non-oil revenue of 291 billion riyals. Even if it doesn't hit that level, continuing growth in non-oil sectors will be crucial for Saudi Arabia to be able to moderate the rate that it must spend its foreign exchange reserves. The initial public offering of Saudi Aramco, expected to occur later this year or in 2019, will be another means by which Saudi Arabia hopes to increase non-oil revenue. The proceeds of the sale are destined to swell the coffers of one of the country's sovereign wealth funds, the Public Investment Fund, eventually enabling it to generate even more non-oil revenue. But significant returns on non-oil investments made by the fund could take years to materialize.

Prioritizing Saudi Citizens

One major way Saudi Arabia hopes that big spending will pay off is in maintaining and deepening the population's trust in the government. Programs benefiting its citizens in 2018 include a 32 billion riyal cash transfer program designed to offset the cost of new taxes for lower- and middle-income families, and a 169 percent increase in spending on economic resources and public programs. Saudi Arabia will carefully communicate to its citizens which austerity measures it will stick with and which will be repealed or adjusted — another familiar aspect of Saudi budgeting. Based on past reactions, government officials are wary of the social unrest that could result from reducing welfare programs too fast, despite their steep price tag.

Saudi leaders are also sensitive to public perception of government spending priorities, especially since the amount it has budgeted for defense in comparison to what it plans to spend on other domestic needs, like education, risks upsetting Saudis. The total bill for the Saudi-led military intervention in Yemen is unknown, but it's part of the reason that Saudi Arabia continues to divert at least a fifth of total government expenditures to the military. As the Yemen conflict gradually grows more unpopular, so too does the likelihood that Saudi citizens will find ways to decry their government's spending plans.

New (and Risky) Measures

An increasing reliance on tax revenue represents an area in which Saudi authorities are breaking from the budgetary norm, presenting the risk that they could be moving too swiftly to achieve their goals. The country will seek to double the amount of non-oil revenue derived from taxes from 97 billion riyals today to 189 billion riyals by 2020. The issue of taxation, however, is so sensitive in Saudi Arabia that the Ministry of Finance has taken care to promise "no new taxes" over the remainder of 2018 beyond those it has already announced. While an income tax isn't part of the plan, a 5 percent value-added tax and new excise taxes took effect Jan. 1. The government's careful approach to the issue stems in part from the fact that the introduction of any new taxes shifts citizens' expectations of their government and introduces the issue of government accountability in a way that Saudi leaders haven't had to deal with before.

It's clear that the government doesn't want to hit its own citizens with too many financial burdens even though it's willing to squeeze expatriates for money.

One other source of new non-oil revenue will come from a levy imposed on Saudi businesses that employ workers from other countries. That income stream is a pillar of what the Saudi government terms "maximizing government revenues." The levy is essentially a monthly tax on businesses that will increase annually. The rates that the businesses will be charged fluctuate depending on the ratio of expatriate employees to Saudi ones and are designed to bring in tens of millions of riyals in revenue in its first year, increasing to hundreds of millions in future years. Beyond revenue, the levy represents an effort to increase employment of Saudis and reduce the country's unemployment rates from 12.6 percent currently to 10.6 percent by 2020. The effort to counter austerity measures with heavy spending only extends to Saudi nationals, not to expatriates. It's clear that the government doesn't want to hit its own citizens with too many financial burdens even though it is willing to squeeze expatriates for money, knowing they have less leverage to demand anything in return from the government. The new levy could backfire if it quickly reduces Saudi businesses' willingness to hire expatriates or stokes expatriate flight from the kingdom. Unless Saudi citizens possess the job skills to replace foreign workers who leave private companies, private sector productivity could drop at companies struggling to balance employment ratios.

Another new and risky aspect of this year's budget is its emphasis on public-private partnerships. Saudi Arabia aims to increase private sector's contribution to the kingdom's GDP from current levels of around 40 percent to 65 percent by 2030. This will require significant cooperation between private sector businesses and the government. The extent to which those businesses will buy into in the government's plan and trust what it's doing is unknown, but cash incentives promised by Riyadh will certainly help persuade them to cooperate. The government, however, has failed to issue clear regulations, instructions or guidelines for exactly how the private sector is expected to use the cash. It hasn't addressed exactly how international investors can participate, either. The uncertainty introduces risk: Because private sector businesses don't know how to move forward, privatization plans are likely to hit snags as companies struggle to adapt.

Between managing domestic, social and political changes and pursuing an aggressive foreign policy, Saudi leaders have their work cut out for them. The country's large economy gives them the ability to pursue so many projects at the same time. Because the kingdom is a mover and shaker in the Middle East, it's critical to follow where its economy succeeds, and where it falters. An examination of the spending laid out in its 2018 budget shows that although Saudi Arabia is making progress toward shifting the onus of its economy to the private sector, the state is still the primary engine of growth and will remain so for a long time to come.
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Crafty_Dog
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« Reply #147 on: January 17, 2018, 08:57:46 AM »


Saudi Arabia: Corruption Crackdown Moves One Prince to a Harsher Prison
(Stratfor 2018)


In Stratfor's 2018 Annual Forecast, we noted that Saudi Arabia will wrestle with tricky reforms at home under the guidance of Crown Prince Mohammed bin Salman. Specifically, we said that the kingdom will take notable strides toward designing a new social contract that adjusts what citizens expect of their government, and vice versa. The recent developments in the anti-corruption crackdown are part of this social contract.

See 2018 Annual Forecast

Saudi Arabia is taking its anti-corruption crackdown seriously. Saudi billionaire investor Prince Alwaleed bin Talal bin Abdulaziz al-Saud was transferred to the maximum security al-Ha'ir Prison on Jan. 13, where several al Qaeda and Islamic State suspects are also held. It's a marked change in venue: Bin Talal was previously confined at the Ritz-Carlton Hotel. Reports have emerged that bin Talal had made a counteroffer of unspecified terms for his release, rumored to involve him offering assets of his choosing. But Saudi Arabia's attorney general turned him down, and now bin Talal will remain in al-Ha'ir until the next round of negotiations.

Bin Talal is the highest profile holdout from the initial November crackdown. But recent arrests prove that the Saudi government isn't done targeting its royals as it cracks down on corruption and reworks the country's wasta, or social influence networks, to better favor Crown Prince Mohammed bin Salman.

It appears bin Talal was hoping the international investor community and his powerful foreign friends would pressure the Saudi government to release him. But while investors and two former French presidents have expressed concern about bin Talal's detention, no movement to free him has emerged.

Instead, his transfer to al-Ha'ir shows the Saudi government is unconcerned with international opinions. Rejecting bin Talal's initial counteroffer also shows the government is willing to play hardball to extract what it sees as fair compensation for the crimes the prince is charged with. But there's little incentive for the government to hold him indefinitely or drag the matter on to a formal trial. A settlement would speed things along calmly as Saudi Arabia embarks on an ambitious reorganization of the country's economy and society. Bin Talal's case could still upend that calm, however, as the community of international investors look to see if his arrest is related to an authentic corruption purge — in which case a stronger rule of law with better investment conditions will emerge — or if he's simply been targeted for political reasons.

But with no political power in Saudi Arabia, bin Talal has to make a deal. That means negotiating what price he must pay to leave his new, more austere jail.
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