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Mohammed bin Salman has a problem his royal purge can't solve Open in fullscreen

Courtney Freer

Mohammed bin Salman has a problem his royal purge can't solve

The Saudi stock market tumbled 9.2 percent at the start of trading on Tuesday [AFP]

Date of publication: 12 March, 2020

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Comment: The crown prince's second royal purge consolidates power within the kingdom, but won't protect him from plunging oil prices and a vulnerable economy, writes Courtney Freer.
In the wake of the latest arrests in Saudi Arabia of senior members of the ruling family, including former crown prince and interior minister Prince Mohammed bin Nayef, speculation is mounting about the health of King Salman and potential coup attempts. 

Indeed, many Saudi watchers have posited that Crown Prince Mohammed bin Salman (MbS) imprisoned potential challengers to the throne because his father King Salman has fallen into ill health, but we have no confirmation of this theory. In fact, the king made a public appearance on the Sunday following the arrests to swear in new ambassadors, suggesting that his health has not driven MbS's recent consolidation of power.

We also have no credible indications that there was an organised coup attempt over the weekend that the arrests took place. Instead, it seems that MbS saw an opportunity to eliminate potential political rivals, particularly Mohammed bin Nayef and those close to him and King Salman's brother Prince Ahmed bin Abdulaziz, who was said to be an obstacle to MbS's succession.

In this way, then, MbS is able to anticipate challenges to his rule when the time for succession arrives.

Ultimately, the latest arrests highlight once again the extent to which MbS has truly consolidated power: the arrests in the Ritz Carlton in November 2017 in an anti-corruption shakedown showed his dominance over the business elites; his arrests of political prisoners, including women's rights activists, Islamists, and other reformers demonstrated his dominance over independent voices inside the kingdom; the killing of Jamal Khashoggi, which the CIA and UN attributed to MbS, and news of the tracking of Saudi dissidents worldwide demonstrated his primacy over Saudi free thinkers, even outside the physical confines of the kingdom.

With these arrests completed, there is no other credible domestic challenger to his rule

The arrests of senior members of the ruling family, then, can be seen as the next logical step in MbS's consolidation of power among the fractious, and quite large, ruling family. With these arrests completed, there is no other credible domestic challenger to his rule.

The arrests also underline how much power MbS has particularly compared to his father, particularly given that the king's 77-year-old brother was among those detained. At this point, there exist no challengers to the throne, and so succession appears to be settled in Saudi Arabia.

The timing of the arrests can be further explained by the fact that Saudi Arabia, indeed like the rest of the world, is likely to encounter an economic slowdown in the face of coronavirus. Saudi Arabia is of course especially economically vulnerable, given its continued reliance on hydrocarbon resources, as the price of oil appears in free fall and currently stands at an anaemic $33.25 per barrel.

MbS could anticipate that economic stagnation and the consequent potential failure of his Vision 2030 are the only issues that could now potentially unseat him from power. Certainly, MbS has demonstrated through the latest arrests that he holds absolute power in terms of policymaking, and therefore would likely bear the brunt of fallout from long-term economic stagnation.

Read more: Saudi Aramco to increase oil production amid coronavirus slump

MbS, while able to control domestic politics and much of Saudi foreign policy at the moment, is unable to similarly manage global oil prices, yet seems determined to attempt to do so. Indeed, the week following the arrests, at the OPEC summit in Vienna, Russia refused Saudi Arabia's call to reduce oil production in the face of diminished demand after coronavirus.

As a result, we saw the 
largest drop in oil prices since the US-led coalition against Iraqi occupation entered Kuwait in 1991. MbS's Saudi Arabia has responded by threatening to flood the market with more crude production yet granting discounts on official pricing as of next month to its confirmed buyers - a situation that would be unsustainable in the long-term for Saudi Arabia, despite its foreign reserves of $502 billion.

Supply shock therefore remains a genuine prospect. Already this week, the Saudi stock exchange 
Tadawul lost more than 15 percent of its value in two days, leading to a suspension of trading on Monday since its shares fell by 10 percent, hitting a limit; Saudi Aramco's stocks also dropped below their IPO price for the first time.

While MbS has demonstrated through his latest arrests his ability to manage and indeed control domestic policymaking and secure his place in line for succession, he likely faces his biggest challenge with the plunge in oil prices.

Notably, this issue cannot be resolved through arrests or further tightening of the political space, but rather requires major domestic progress toward economic diversification, as well as international cooperation among OPEC, at a time of nearly record-low oil prices.


Dr Courtney Freer is a senior advisor at Gulf State Analytics and a research officer for the Kuwait Programme at the London School of Economics and Political Science. 

Follow her on Twitter: @CourtneyFreer

Opinions expressed in this article remain those of the author and do not necessarily represent those of The New Arab, its editorial board or staff.

 

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