Enter The Prince of Arabia
Enter The Prince of Arabia
Muhammad bin Salman inherits his ancestors’ failure to do as Pharaoh did when he used the good years to prepare for the bad ones
Change, nobility’s most dreaded fear, is upon the dunes of Arabia.
Like Pharaoh and Ahasuerus, King Salman woke up one night sweating between his silken linen, marble floors, and gilded bathtubs, and asked what the Israelite king whose name he bears asked in his own twilight: “The man who will succeed me,” the one who “will control all the wealth that I gained… who knows whether he will be wise or foolish?” Foolish or wise, the installation this week of Muhammad bin Salman as Saudi Arabia’s heir apparent is about much more than biology, though his sidelining at 32 of the 57-year-old cousin who was in line to succeed the king is surely a story in its own right.
At stake is an absolute kingship that could span a good half century, presiding over a country whose role in shaping our region’s future will be decisive, for better or worse.
If it’s up to the prince – an unorthodox, energetic and ambitious enemy of the status quo – it will be for the better. Reality, alas, might prove stronger, and sadder, than his good intentions and bright dreams.
The good news is that the frail, 81-year-old Salman realized his succession must skip a generation, if the kingdom is to endure history’s tests. The bad news is that the problems might lie not in one generation’s age but in an entire system’s decadence.
Histroy’s tests are already here.
Economically, the petroleum that has been the kingdom’s bloodline for the past 80 years is losing its magic. And politically, the Arab masses that have been dormant for decades have woken up, kindling civil wars all about the kingdom and inspiring restlessness within the realm itself.
Oil’s plunge, from $112 per barrel four years ago to $42 this week, is not about a circumstantial dynamic, like a major client’s recession, drought or war, but about the rise of alternative energy sources, from the sun and the wind to the rocks that shelter shale.
The suddenness of this collapse has caught the kingdom completely unprepared.
Having approved spending plans based on much higher revenue forecasts, Riyadh soon stared at a gaping budget deficit equal to 13% of its gross domestic product, and ladled from its coffers a staggering $116 billion, 16% of its foreign currency reserves.
These numbers have since improved a bit, but the general picture did not. The arrangement whereby the Saudi population is untaxed, while oil generates 80% of the kingdom’s income and 90% of its exports, is unraveling.
The combination of market mayhem, Arab upheaval, and fiscal dehydration means that the crown prince’s forebears failed to do what Pharaoh did when he used the good years to prepare for the bad ones.
Clearly aware of all this, the crown prince resolved to be his own Joseph.
Realizing the gravity of his country’s ailments, Muhammad unveiled last year a road map that shows he understands the problems better than some older people in his father’s court.
In a handsomely published booklet aptly titled “Vision 2030” he said plainly that the kingdom must prepare for the post-oil era, and vowed “to promote and reinvigorate social development in order to build a strong and productive society.”
It is a pragmatist’s manifesto, worthy of the prince’s business-minded attitude toward Israel and his confrontational treatment, as defense minister, of the aggression his country faces from Iran.
Like Japan’s Emperor Meiji and Turkey’s Kemal Ataturk, who led their countries’ dramatic modernization drives, Muhammad bin Salman craves an educational revolution, which means “a modern curriculum focused on rigorous standards in literacy, numeracy skills and character development.”
Realizing the Saudi economy must start manufacturing, he called “to localize over 50% of military equipment spending by 2030.” Detecting the kingdom’s untapped tourism potential, his plan aims to “multiply today’s 8 million Muslim annual pilgrims to 30 million by 2030.”
And scoffing at the royal family’s penchant for secrecy, the prince announced plans to sell on an unspecified stock exchange 5% of Aramco, the kingdom’s oil company, which he believes is worth $2 trillion, meaning this will be history’s largest- ever initial public offering.
Yet a closer look at the plan brings to mind a heart patient refusing to undergo open-heart surgery.
Industrialization cannot begin with production of jets, radars or guided missiles, as the blueprint implies. It has to start the way it started in Japan, China and Turkey, with mass production of shirts, plates and chairs.
Yet mass industrialization is a threat to the royal house because it would empower millions who in due course would threaten the nobility’s power. “The simple people will be able to assume any position,” the Japanese emperor’s corresponding plan stated in 1868, realizing modernity will not win before feudalism’s defeat. The Saudi plan is to defy this law of economic nature.
The refusal to part with patronage is also why the plan emphasizes tourism, with an obviously unrealistic goal of nearly quadrupling the industry in just over a decade. The new hotels on which this wish relies would be a proper continuation of the economy of cronyism to which the regime is accustomed. Factories, by contrast, would encourage creation, reward merit, and fuel social mobility.
Fear of surgery’s pain is evident also in the prince’s refusal to cut his country’s astronomical military spending – the world’s highest per capita – and even more so in his vow that “there will be no taxes on citizens’ income or wealth, nor on basic goods.”
For someone born into a culture of freely flowing fortunes, it is apparently difficult to accept that a nation’s income must reflect its people’s work, and that the people’s work can be monetized only through income tax.
This refusal to drink the potion is why the share-offer idea is so tempting for the prince, who last year was so blinded by the sight of a 440-foot yacht sailing in southern France that several hours later he bought it for $550 million. Cover deficits? Sure, just go to the stock market and dole out $100b.
Prince bin Salman, and with him the Arab world’s entire power structure, will rise or fall according to his willingness to empower the masses at the royal family’s expense.
For “the prince,” as Machiavelli observed in his wise-ruler’s manual, must “avoid those things which will make him hated.”