Widening the Aperture with Saudi Arabia

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 jeopardizes not only private sector profits but also 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 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 is 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.

(This commentary originally appeared in the June issue of Middle East Notes and Comment, a newsletter of the CSIS Middle East Program.)

Jon B. Alterman is a senior vice president, holds the Zbigniew Brzezinski Chair in Global Security and Geostrategy, and is director of the Middle East Program at CSIS.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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Jon B. Alterman
Senior Vice President, Zbigniew Brzezinski Chair in Global Security and Geostrategy, and Director, Middle East Program