Recap: What are the Saudi reforms?

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With all that's going on recently, it's important to clarify some previously made points about the Saudi Arabian reforms.
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The Need for Reforms

As we discussed in the very first episode of our podcast, Saudi Arabia is in the middle of a necessary transformation. It has historically been funded completely by surpluses from oil sales, rendering its economy addicted to oil. Being a rentier state creates a certain type of dynamic between a state and its citizens – rather than accountability of the state to those who fund it with their taxes, the state is their employer.

The Saudi government realised long ago that for many reasons – including oil price instability, the rise of shale gas, electric vehicles and a global transition to cleaner sources of energy – they could not remain dependent on income from fossil fuels. To do so in the 21st century is a short path to economic suicide. This awareness has existed for years, but only now have they gathered the will to act. The result is Vision 2030 – a comprehensive plan to make the Saudi state sustainable for the future.

The core of Vision 2030 is a diversification of the Saudi economy. Its core objective is to create new sources of income for the government, including taxation of companies and salaries, to reduce the state’s dependence on oil. This is paired with creating new sources of jobs for the population to reduce the amount of support they need from the state, whose bureaucracy was designed to operate like a welfare system, providing pointless jobs in order to (inefficiently) distribute money.

Diversifying the economy means facilitating the rapid growth of entire new sectors. Entertainment and tourism are obvious candidates and low-reaching fruits, as well as encouraging more entrepreneurship and business creation. Growing the workforce and getting more Saudis on private sector incomes also means opening the doors for the 50% of society who were previously marginalised – women. This would create more economic activity and hence a bigger tax base for the government.

Both of these things – growing the entertainment and tourism sectors and getting women into the workforce – would be impossible in a country still in the grip of a conservative religious establishment, hence the social part of Vision 2030. The Saudi economic transformation needs a concurrent social transformation – nothing less than a fundamental change in the way society works. To facilitate women’s entry into the workforce in large numbers, the government had to allow women to drive. This and other changes, such as allowing entertainment sector to grow (concerts, theatres and arts) and facilitating foreign tourists to come, mean a reduction in the powers of the religious establishment. It long ago became more of a liability than an asset, and the role it played in creating legitimacy for the government is being filled by an increasingly assertive nationalism – a topic which we plan to cover soon.

What’s NOT Changing – Politics

Here is the problem MBS wants to do all of this without changing the social contract of the country. He wants to give up absolutely none of the government’s centralised top-down authoritarian control, and keep the relationship between the citizens and the government exactly the same as it has been historically.

The old social contract: We spend oil money on you, and you remain obedient and silent. Your livelihood for your loyalty. The new social contract MBS wants: You work a job, you earn a living, you pay your taxes to the government… and still give it your absolute loyalty, obedience and silence.

In other words, taxation without representation.

Citizens who are used to getting everything from the government, are now paying the government, and expected to have no opinion on what the government does. We all know how that ends up.

Asserting Authoritarianism

That’s why this vision has been accompanied by massive crackdowns and repression. In order to create such a large transformation over such a short period of time with no need to persuade anyone, MBS has decided that he needs total centralised control over society. The purges and arrests have targeted anyone who could threaten that – liberals or religious conservatives, intellectuals or social media influencers, religious reformers or feminists. He shut down every kind of independent voice or power centre, so that nobody could compete with him or defy narratives – whether independent economists, liberal theologians, respected journalists, activists or bloggers; all were silenced and disappeared.

You probably caught the jailing of almost all of Saudi Arabia’s feminist activists last year – Loujain al-Hathloul, Eman al-Nafjan, Samar Badawi, Nassima al-Sada and many more, young and old. Even though the government fulfilled their demand and ended the ban on women driving, their ability to wage such a campaign makes them a threat. Essam al-Zamil, the young entrepreneur and economist who tweeted an opinion that the Aramco IPO didn’t make sense, was arrested and later charged under terrorism laws. Religious scholars have been locked up – not only hardline Wahhabis who opposed the social reformation, but even Arab spring-supporting people like Salman al-Odah, who refused to join in the media assault on Qatar and is now facing the death penalty, or Hassan al-Maliki, a prominent advocate of tolerance.

This crackdown culminated in the brutal and outrageous pre-meditated murder and dismemberment of Jamal Khashoggi, the respected senior journalist and Washington Post columnist, in the Saudi consulate in Istanbul. His killers have so far been sheltered, and any investigation into the chain of command – widely known to run all the way to MBS personally – has been blocked.

MBS is a threat

Make no mistake about it, the Saudi reforms are vital. The country has no future without reducing its dependence on oil, and if it does not succeed in enacting the reforms the consequences could be catastrophic when the current model fails. A reduction in the control of religious authorities and in the support of dogmatic conservative Islam around the world is also welcome.

But Mohammed bin Salman is an existential threat to the Saudi reforms, as Iyad El-Baghdadi argued last June. The assumption that it is possible to enact deep-rooted economic and social reforms without any political reforms is not only incorrect, but also dangerous and deeply destabilising. This danger has only been amplified by the unwillingness of the world for so long to act – it made him think he can get away with anything.

We’re not against the Saudi reforms – they’re an existential necessity. And that’s why the authoritarianism of Mohamed bin Salman must be stopped.

Find Out More

We covered all of this, and more, in the inaugural episode of the Arab Tyrant Manual Podcast in 2017. We would go on to cover MBS and his crimes in episodes 278, and 17 of the podcast, and have more planned.