Middle East Notes and Comment: Widening the Aperture with Saudi Arabia

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Widening the Aperture with Saudi Arabia: The US government needs to focus its attention on Saudi Arabia as a whole, rather than the crown prince alone.

Secondhand in Demand: A new trend of used food markets is arriving in Egypt and the Gulf as the poor struggle to make ends meet.

New Critical Questions: Iran's Brinkmanship: This piece answers questions about last week's attack on oil tankers near the Strait of Hormuz. 

In Case You Missed It: Haim Malka guest hosts an episode of Take as Directed, the podcast of the Global Health Policy Center.

In the Media: I give my take on the Trump administration's Iran policy, and the potential for Russian interference in future U.S. elections.

 

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Widening the Aperture with Saudi Arabia

By Jon B. Alterman

If there is a current U.S. strategy toward Saudi Arabia, it seems an awkward blend of blandishments, critiques, and neglect. While the bilateral relationship has always been complicated, it is especially fraught now. Dangerously, the U.S. government appears to have been personalizing the relationship, stressing the White House’s ties to the Saudi crown prince. U.S. interests require a broader approach, but the relationship appears to be narrowing.

It is worth recalling just why the U.S.-Saudi relationship matters to the United States. It is not, as many assume, simply because Saudi Arabia sells the United States a lot of oil. In fact, U.S. reliance on Saudi oil has declined dramatically in the last decade. And while the Saudis still view the Kingdom’s relationship with the United States as strategically critical, they have long abandoned the quest to be America’s largest foreign oil supplier and increasingly look to Asia for new growth markets.

Still, Saudi Arabia is a key supplier not only to U.S. allies in Asia, such as South Korea and Japan, but also to China and India. Its reserves are vast. Saudi Arabia’s ability to open its oil taps stabilizes oil markets and insulates those markets from disruption due to weather, politics, or mechanical failures. U.S. protection of the Saudi oil trade not only helps stabilize U.S. markets, but also helps secure U.S. allies and builds allied support for the United States.

Saudi Arabia is also a powerful global actor, with one of the 20 largest economies in the world and a per capita GDP (PPP) higher than any large economy except the United States. Decision making is centralized, meaning very large decisions can be made swiftly. The Saudi government is also a major global investor, with tens of billions of dollars invested around the world, and tens of billions of dollars of private wealth invested as well.

Saudi Arabia is a diplomatic heavyweight in the Middle East, using its wealth and custodianship of Muslim holy sites to sway its neighbors. There are few things that the United States seeks to do in the Middle East that are not made easier by Saudi cooperation, and few things that are not made harder by Saudi obstruction. While the United States does not do everything in the region in collaboration with Saudi partners, the diversity of aspects of intergovernmental coordination—on economics, finance, counterterrorism, security, intelligence, diplomacy, and a whole host of other activities—rivals any other government in the world.

For all its strengths, Saudi Arabia suffers from severe weaknesses. Principal among them is a domestic economy that relies on a low-wage, high-productivity foreign workforce supporting a high-wage, low-productivity Saudi workforce. While that equation worked in the past, when the Saudi population was smaller and had lower expectations for government services, it is not sustainable. The transition away from that bargain—forcing Saudis to work harder, smarter, and better; adjusting Saudis’ expectations for work environments and job security downward; substituting inexperienced Saudis for experienced expatriates; and coping with the economic impact of a foreign worker exodus—is painful. That transition not only jeopardizes private sector profits, but also jeopardizes public sector services. Managing the transition will take decades, and we are only in the early stages.

And here is where Saudi Arabia’s problems grow more complicated. Crown Prince Mohammed bin Salman is the architect, the face, and the chief proponent of Saudi Arabia’s transition program, Vision 2030. Initiatives carrying his imprimatur sail through bureaucratic obstacles, and his organizational, financial, and moral support for change has swelled public enthusiasm, especially in the Kingdom.

And yet, identification with the crown prince is a liability as well. The involvement of his close associates in the murder of Washington Post columnist Jamal Khashoggi; his leadership of Saudi efforts to fight what has emerged as an inconclusive war in Yemen; his direct participation in the confinement of the prime minister of Lebanon; his connection to the sudden detention of hundreds of wealthy Saudis in Riyadh’s Ritz Carlton hotel under corruption charges; and his links to the imprisonment of more than a dozen Saudis advocating greater rights for women have made him a problematic patron.

The enthusiasm of Western tech investors, universities, and museums, so evident in his U.S. tour last spring, has evaporated. So, too, have evaporated Western hopes for a Saudi cultural renaissance that brings greater liberalism and tolerance through marrying Western and Saudi institutions. The preponderance of Western investment interest in Saudi Arabia now is among banks and the oil industry, the same foreign investors who have stood by the Saudis for decades but who do little to diversify the Kingdom’s footprint.

Around the time of the crown prince’s U.S. visit last year, many Americans equated the him with necessary reforms in Saudi Arabia. “We have to help the crown prince succeed,” they said. It was a mistake to focus on the individual and not on the mission.

Similarly, it is a mistake now for Americans to abandon interest in the Saudi reform project because of its connection to the crown prince. Saudi Arabia is a big country, and it affects a wide range of U.S. interests. The reform imperative is recognized, and it has broad support in government, in the business community, and among the public at large.

At the same time, it is important for Saudis to understand that as much as reform is necessary, the crown prince cannot be its principal ambassador to the world. The last two years have left durable marks on his reputation and have unified an array of Saudi Arabia’s foreign critics harboring a diverse set of grievances. While governments often accommodate themselves to people they perceive to be autocrats, companies and cultural institutions that see themselves as bridges to the future jealously guard their reputations. The latter are vital to Saudi Arabia’s transition.

Saudi Arabia is too important a country to the United States for its fate to rest on one man. The sooner Americans focus their attention on the Kingdom as a whole, the better. The Saudi leadership owes it to its citizens to facilitate that transition.

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Secondhand in Demand

By Daniel Sharp
“The Egyptian citizen doesn’t deserve defective food, because he is not a defective citizen,” a Ten at Night reporter insists to his Egyptian audience while airing an exposé on the growing demand for outdoor markets selling secondhand food at slashed prices.

Vendors purchase their goods—such as leftover cheese, expired pastries, and fish well past its prime—from factories, restaurants, and hotels. Not so long ago, such food was destined for pigs that were raised by Egypt’s large community of garbage collectors. Vendors now resell it to Egypt’s poor at heavily discounted prices. So-called secondhand food markets are increasingly common and can be found across Greater Cairo, from the Thursday market downtown to the Monday market in Giza.

Poor Egyptians have long relied on government-subsidized food. Beginning in 2016, the IMF encouraged, and the Egyptian government adopted, economic reforms that sharply trimmed the rolls of Egyptians eligible for food subsidies. Some say they now resort to these markets to make ends meet.

Markets for expired food products are also becoming more visible in Saudi Arabia and Kuwait, but they primarily serve expatriate workers. In Jeddah’s al-Sawarikh Market, foreign laborers search for the least-spoiled vegetables between stacked cans of expired goods. As one shopper explained to a reporter, “Saudis do not come here. Saudis are full.”

News reports warn of the immediate and long-term health risks of eating expired and contaminated food, but the poor say they have few alternatives. Government austerity and ten-year plans have not accounted for their needs, they say, and the markets are vital for their survival.

This article is part of the CSIS Middle East Program series Mezze: Assorted Stories from the Middle East.

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New Critical Questions: Iran's Brinkmanship

Jon Alterman released a new Critical Questions discussing last week’s attack on two oil tankers near the Strait of Hormuz. In this piece titled, “U.S. Response to Iranian Brinkmanship,” Alterman argues that, if Iran is culpable, the attack may be an attempt by the Islamic Republic to start talks with the United States from a position of maximal strength. “Iranians have often approached negotiations not by behaving well and trying to create a positive climate but instead by behaving poorly and making the first concession to return their behavior to the status quo ante.” Read the full piece HERE.

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In Case You Missed It 

Haim Malka was a guest host for an episode of the Global Health Policy Center’s podcast, Take as Directed, in which he spoke with directors from the United Nations Relief and Works Agency for Palestine Refugees about the future of the organization and how it is adapting to new challenges.

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In The Media

Jon Alterman spoke to the New York Times about Russia’s potential to hack the next election. “The core paradox is the Russians are less interested in specific outcomes than they are in bending the nature of political discourse in the United States." 06/04/19

“If you make threats and then people decide you aren’t going to follow through...the options are either to make larger threats or to stop going down that road at all,” Jon Alterman told the Washington Post when asked about Trump’s approach to Iran. 05/17/19