Home > Economics - General > After the Sauds

After the Sauds

February 27th, 2011

The downfall of the Gaddafi dictatorship now seems certain, despite brutal and bloody attempts at repression. The failure of these attempts kills off what was briefly the conventional wisdom, that dictatorships in the region can hold on if they “don’t blink“. At this point, Gaddafi and his remaining supporters will be lucky if they can make it to The Hague for their trials, rather than sharing the fate of the Ceaucescus.

Now a new conventional wisdom seems to be emerging, at least according to this article in the NY Times. The central idea is that while dictatorships (more accurately perhaps, tyrannies, in the classical sense of monarchs who have seized their thrones with no prior hereditary claim) are doomed, but that monarchies can survive with cosmetic concessions. In particular, on this analysis, the US relationship with the House of Saud can go on more or less as before.

There’s an element of truth here, but the central claim is wishful thinking


The element of truth is that the Arab monarchies have good prospects of survival if they can manage the transition to constitutional monarchy. And it makes sense for them to do so. After all, a constitutional monarch gets to live, literally, like a king, without having to worry about boring stuff like budgets and foreign affairs. And, in the modern context, the risk that such a setup will be overthrown by a military coup, as happened to quite a few of the postcolonial constitutional monarchs, is much diminished. By contrast, there’s no such thing as a constitutional dictatorship or tyranny and no way to make the transition from President-for-Life to constitutional monarch. That’s not to say all the monarchs in the region will survive, or for that matter, that all the remaining dictatorships will fall. But the general point is valid enough. But it doesn’t yield the kind of conclusion implied by the conventional wisdom.

The first big difficulty is with the assumption that the monarchs can retain sufficient power to be useful allies of the kind US foreign policy has traditionally sought, particularly in the global South, – in control for the long term, and not too worried about popular opinion. That seems unlikely to me. Monarchs who want to survive should be looking to transform themselves into ornamental figureheads/elder statesmen, not just sacking their existing governments but holding free elections to pick new ones and handing over effective power. That shouldn’t be too hard in, say, Morocco or Jordan, but it will imply that existing relationships with the kings of those countries will be about as valuable as close personal ties with Queen Beatrix of the Netherlands.

The other big problem is that this can’t easily be done in Saudi Arabia. There are not even the forms of a constitutional government to begin with. Worse, the state is not so much a monarchy as an aristocracy/oligarchy saddled with 7000 members of the House of Saud, and many more of the hangers-on that typify such states. These people have a lot to lose, and nothing to gain, from any move in the direction of democracy.

The absence of any kind of organised opposition may allow the Sauds to hang on through the current crisis, but assuming that democratisation is successful elsewhere, the regime will stand out as an indefensible medieval anachronism. And in the new international environment, any forceful measures to suppress dissent will carry huge risks, while effect support from the US can no longer be counted on. I’d put the life expectancy of the regime in months or maybe years, but not in decades. In particular, it’s hard to imagine the monarchy outlasting the current King, Abdullah, aged 88 (according to Wikipedia, his brother and heir aged 82, enjoys the flattering title “Prince of Thieves“).

What would the Middle East be like, if Arabia were no longer ruled by the Sauds? No doubt experts have written on this, but a cursory Google didn’t find any, so it’s open for blog speculation.

First up, among Western concerns, is oil. Saudi Arabia has already ceased to play the central role it once held in oil markets. It seems pretty clear that they can’t raise output much beyond current levels. If the downfall of the Sauds were chaotic, output might fall, and world prices rise. But as far as oil consumers are concerned, what you lose on the short-term roundabouts you gain on the long-term swings. Arabian oil is very easy to extract, so sooner or later, all of it will be. In the hoped-for event of an effective global price/constraint on carbon emissions, the oil left in the ground will be in more marginal (eg deepwater) locations or from sources like tar sands.

Second, there’s the geopolitics. The conventional ‘realist’ view is that Saudi Arabia counterbalances Iran, which will therefore gain from the end of the Sauds, as well as from the fall of Mubarak and others. I think this is silly. Anyone can see that the Iranian Basij are the same as the goons used by dictatorships elsewhere in the region. They managed to beat pro-democracy protestors last time, but it will be more difficult to pull that off again. The range of sanctions applied to Gaddafi, notably including the seizure of assets in previously secure boltholes like Switzerland, suspension from UN committees, and even the threat of war crimes trials, will be triggered much faster in future cases, as the group of potential targets shrinks.

Similarly, while Saudi Arabia has not exactly been friendly to Israel, it has been more subject to US influence than any likely successor regime will be. But again, the big effect for Israel will be the demonstration effect as more and more dictatorships and absolute monarchies fall. Why should Palestinians, alone in the region, be denied a democratic government and recognised international boundaries?

Finally, there’s the US. Despite past support of many of the dictatorships that are now disappearing, and particularly of the Sauds, there are plenty of examples (Indonesia, Phillipines) suggesting that the successor regimes won’t necessarily be hostile. But the rationale for decades of US policy has collapsed. Uncounted billions (counting Iraq, trillions) of dollars have been spent on the premise that the US has a vital interest in determining political outcomes in the Middle East. Yet in the current upsurge the US Administration has been reduced to the role of a bystander at a sporting event of which they don’t know the rules – cheering on whoever seemed to be winning at any given moment (the rightwing opposition has been even more obviously bemused). [The NYT analysis has the headline "Trying to Pick Winners", clearly in the trackside sense of betting rather than in the industrial policy sense of selection]

In an important sense Saudi Arabia is the centrepiece of US Middle Eastern policy[1]. More than any other state in the region, and perhaps in the world, Saudi Arabia is a creation of US policy. A democratic Arabia, if it emerges, will be just another moderately problematic trading partner. After the Sauds, there will be no real reason for the US to have a Middle East policy, just as it no longer has, in any effective sense, a Latin America or Europe policy.

fn1. Obviously, Israel is central but in the opposite way – Israeli governments and parties and Israel-oriented political actors exert a lot of influence on US policy, but not vice versa. And despite the expenditure of trillions of dollars and the loss of thousands of lives, US power to influence outcomes in Iraq is modest and rapidly declining.

Categories: Economics - General Tags:
  1. Ikonoclast
    February 27th, 2011 at 19:39 | #1

    I doubt that the current revolutions sweeping the Arab world will lead to democratisation of the Arab world. Depending on the country involved they are more likely to lead to any or all of theocratic regimes, inter-tribal wars, protracted civil wars, failed states and regional war. The reasons for this are complex but at the heart of it is peak oil and peak food. The M.E. is primed to descend into an interminable period of anarchy, breakdown and progressive collapse. World civilization will follow suit. As I have bet in a previous post, the world economy will contract this decade and be smaller in 2020 than in 2010.

  2. melanie
    February 27th, 2011 at 20:45 | #2

    I think this is a very good analysis. Israel and its apartheid approach to the Palestinians will be left standing on a very shaky limb. The current revolutions across northern Africa and in Bahrain will probably not lead to ideal democracies, but as anyone who has studied history knows, democratisation is a long and bumpy road. Moreover, classifying all these countries as one is a mistake. Ikon is wrong on this one.

  3. Donald Oats
    February 27th, 2011 at 21:51 | #3

    I wonder how much of the “facebook revolution” is being helped along by neo-con supporters (from inside the USA)? We’ve seen astroturfing phenomenon in action where individual firms feel under threat (big tobacco, big pharma, big military); the use of automated sock-puppets has been widely suspected for some time; use with Republicans determined to undermine their competitor Democrats; so why not suspect the use of such techno-propaganda in trying to stir up the locals in the dictatorship countries? It isn’t that the neo-cons can by themselves pick a winnable fight with the dictatorships, but they can certainly persuade people that there is greater support for serious on-the-street protests, etc. The goal would be to provide the impetus over a tipping point, to “helpfully” keep the momentum going forwards.

    But what would the motive be, the motive for neo-cons trying (from opposition, no less) to encourage locals to overthrow cruel bastard dictators that originally were helped to power by the US (Republicans?) in the first place? Well, the odds are that at least one of these countries will end up with an overtly anti-American Muslim dictatorship/demotatorship. And then once the Republicans get back into power, it is just another “reason” to resume the attacks on individual states in the Middle-East. If the protestors are brutally put down and a dictatorship holds its ground (eg like Gaddaffi is attempting to do), then once Republicans are back in office they can point to the brutal dictator that the Democrats failed to do anything about, and can use the brutality itself as a reason to attack and continue holding an overt military presence within Middle East countries.

    I love a good conspiracy, or even a bad one :-)

  4. February 27th, 2011 at 23:14 | #4

    The UN just voted unanimously to freeze Libyan assets and put travel bans on the regime leaders and cronies (apparently they also referred Libya to the International Cricket Council). The US position?

    “US ambassador to the UN, Susan Rice: ‘When atrocities are committed against innocents, the international community must act with one voice – and tonight it has’.”

    Last weekend the UN voted on a resolution to make a clear statement that continued Israeli construction on Palestinian land was illegal and should stop. The security council vote was 14 Yes, 1 No.

    Because the US has a veto power it killed the resolution with its one vote. The US position as put by Rice?

    “our opposition to the resolution before this Council today should therefore not be misunderstood to mean we support settlement activity. On the contrary, we reject in the strongest terms the legitimacy of continued Israeli settlement activity.”

    See, they had to vote against it because they agreed with it. Wonder why the middle east hates the US so much?

    As Pilger recently wrote: “fascists”.

  5. February 28th, 2011 at 07:28 | #5

    “More than any other state in the region, and perhaps in the world, Saudi Arabia is a creation of US policy”.

    I don’t know about that – Taiwan and South Korea are both examples of states that were created (and are largely maintained) through conscious US policy choices. States such as Iraq and Kuwait only exist in their current form thanks to U.S. action.

  6. February 28th, 2011 at 08:41 | #6

    If Gaddafi is held criminally accountable for barbarism, by reference to the ICC a very dangerous precedent has been set for those who conduct their violent policies with a sense of legal impunity. As for letting the ball go through to the keeper one week in relation to Israel and been strident on the principle on humanitarian law in relation to Gaddafi’s murders the next, hypocrisy is the way things are now done. The day of reckoning in regard to Iraq and other crimes, not least the drone murders in Afghanistan, will surely be coming. The ongoing democratic revolution, particularly in Egypt, will change the rules and the game. (Then again as the puppets fall, including the House of Saud, the sock puppets will rise.)

  7. wilful
    February 28th, 2011 at 08:52 | #7

    Taiwan created by US policy? That’s a new one to me.

  8. jquiggin
    February 28th, 2011 at 09:02 | #8

    Megan, I don’t think “fascist” is a useful description of the US action here, and I request that you stop using it as a generalized term of abuse. “Hypocrites” would, as wmmbb notes, be more appropriate.

  9. Peter T
    February 28th, 2011 at 13:42 | #9

    I think the analysis might be a bit too general. Patronage-based politics works quite well if the patronage net is large enough and reasonably responsive to pressure. The Philippines, for instance, is a long way from democracy as we understand it, but it muddles along. Iran is deeply divided – if the middle class were not agitating for more access, the rural and urban poor would be rioting. It’s not a dictatorship, but a very fractious polity. So Saudi might survive, on the basis that 7000 family plus dependents plus hangers-on is a large fraction of the politically-significant population. We have not heard much about Sunni grievances. We do hear about the Shia in the eastern provinces, but that’s as much religious as anything else, and deeply contentious. Many Sunnis regard Shia rule as fundamentally illegitimate – which drives much of the fighting in Iraq. Giving them a share in power might spark civil war (much as would granting true Palestinian autonomy do in Israel).

    In any event, the next few decades are really going to test the Middle East – oil exports declining, water shortages, population pressures increasing. I can’t see this a hospitable ground for democracy.

  10. Aidan
    March 1st, 2011 at 08:45 | #10

    I was amazed to hear there were many pakistani and bangladeshi workers stranded in Libya*. Are these high-skill high-wage workers? If not, why does a country that has a 30% unemployment rate** use cheap imported labour? I know the answer: more profits for the oil companies, which means more kickbacks to the regime.

    I’d be pretty pissed off seeing all that oil leaving and not even getting a job out of it.

    * http://twitter.com/#!/bencnn/status/41788790989135872
    ** http://www.indexmundi.com/libya/unemployment_rate.html

  11. March 1st, 2011 at 10:05 | #11

    That’s all very well in the long run, but presumably any chaos in Saudi Arabia would send the oil price skyrocketing for a period. The major question is probably whether that is before or after late 2012 – if before we might be looking at a Palin/Gingrich/Huckabee presidency, with much wider problems. If it’s afterwards there’ll be a brief bout of pain which will encourage a lot more investment in renewables, with long term benefits for all.

  12. Peter T
    March 1st, 2011 at 19:42 | #12

    Aidan

    The Pakistanis and Bangladeshis in Libya are mostly either manual workers or skilled trades people doing the jobs that young educated Libyans don’t want (truck drivers, welders, machinists, mechanics and so on). The story is the same across the Middle East – as it was In Europe: manual work lacks prestige, so immigrants are brought in to do it, while the natives staff the bureaucracy (same trend here). You can find plenty of local PhDs, but a local tradie is a rarity. The oil companies just live with it.

  13. Alice
    March 1st, 2011 at 21:14 | #13

    @Aidan
    I think this statement of Aidans almost goes for a lot of the moddle east – not just Libya
    “I’d be pretty pissed off seeing all that oil leaving and not even getting a job out of it.”

    You could ask the average Saudi the same question and would likely say they wish the US would get lost as well (despite the high loevel business / oil deals).

    Im starting to wish the US would get lost as well. All they have is a strong military, a desire for oil and a brute force attitude to getting and keeping it, while their own country’s natives are no longer doing so well. So much for an economy built on cheap oil. Have they got anything else to offer other countries except muscle and miltary equipment?

    I am disappointed in the US. It cannot even look after its own people or production and ruins other country’s production (and people) with its false free market ideologies that permeate other western economies (like Australia) and the IMF and the World Bank.

    The US hero of WW2 doesnt exist. That was what I was taught in school in history – how naive was I?

  14. paul walter
    March 1st, 2011 at 22:23 | #14

    Alice, I was watching the circus with Gaddafi on ABC. A wily old bird, like the other old plutocrats throughout the region. But what really took my breath away was the utter hypocrisy from the US UN ambassador, in berating the
    Gadfly for not quitting Libya, after the US’s performance over Mubarak, let alone the role of the USA in installing and propping up all the tinpots who they regard as”allies” throughout the region.

  15. Alice
    March 2nd, 2011 at 07:58 | #15

    @paul walter
    Paul – after watching Assange and the Wikileaks show on TV the other night and the sickening footage of helicopter targetting in Iraq leaked to Wikileaks from within US defence (and how precise and destructive it can be), the fact that the US can do apparently now do little about the situation in Libya except engage the media with empty “berations” by the US UN ambassador whilst that mad dog continues to unleash all sorts of horror on Libyans as evidenced by the mass exodus

    well I just cannot subscribe to the view that the US is “doing all it can” to help Libyans.

  16. gerard
    March 2nd, 2011 at 11:23 | #16

    apparently the Saudi Prince Al-Waleed bin Talal is Newscorpse’s second biggest shareholder.

  17. Ikonoclast
    March 2nd, 2011 at 14:07 | #17

    @Alice

    When we see what US “help” really means, I think any nation being left alone by the US probably has at least one less problem to worry about. There is no way that US “help” for any Middle East Arab or Islamic nation will ever be constructive for the ordinary people there.

  18. paul walter
    March 2nd, 2011 at 21:20 | #18

    Interesting comment, Gerard.

  19. paul walter
    March 4th, 2011 at 01:24 | #19

    I think the single worst thing to come of the recent events in Egypt in this case, was the refusal of America to accept a competent technocrat, Al Baradei, who could have performed the function that Prof.Quiggin assigned the monarchies in some other countries, as a mechanism to transfer a given country to democracy.
    The Americans always back off regime change unless its in their interests (Iraq), on the basis that there is no alternative, but in Egypts case there was a means to democracy and the US was finally forced to overtly demostrate its aversion to regime change-and democracy- when its one of their own puppets under threat.

Comments are closed.