Saudi Arabia and the implications of Vision 2030

In April of this year Saudi Arabia and France agreed on military cooperation aimed at increasing capacities within the kingdom.  This move will reduce the kingdom’s direct reliance on US military support and is in line with its efforts to improve economic, political, and economic resilience in future years.

The kingdom of Saudi Arabia is facing a multitude of strategic challenges that Crown Prince Mohammad bin Salman is seeking to address coherently under his Vision 2030 for the future of the country. The US will need to show stronger diplomatic support for Saudi Arabia to remain a trustworthy partner, as the recent efforts to increase domestic military capacity are also a sign that the Saudi allegiance to the US might be wavering.

The strategy underlying Vision 2030

Vision 2030 stipulates that Saudi Arabia will fundamentally reform its economy to move away from over-reliance on oil revenue. Hence, Aramco, the giant Saudi state-owned oil company is meant to become a more diversified company seeking to play a major role in industrial policy of the country.

In this vein, Muhammad bin Salman has announced that the Kingdom will look to become a more diversified investment powerhouse using its public investment fund. Further, it is planned for the country to play a key role in international trade due to its valuable strategic positioning at the intersection of three continents.

In addition, the Crown Prince plans to put a major focus on increasing employment opportunities within the Kingdom, in a society that has exceptionally low labour market participation and a very young population. These two factors are believed to have majorly contributed to the public discontent sparking the Arab Spring.

This set of reforms can be understood as Bismarckian politics, aimed at ensuring the security and ongoing prosperity of the Kingdom in the face of a young and growingly demanding population, with the shadow of the Arab Spring still very present in the minds of key decision makers. Hence, the drive to improve conditions and opportunities for the population is meant to legitimise the ruling class and social reforms are enacted from above to reduce pressure from below.

The move to diversify the economy is long overdue, and is particularly timely, as oil prices become increasing volatile and its future demand weakening rapidly. This represents not only an economic challenge, but also a diplomatic one, as US interest in the region could conceivably decrease in line with the importance of oil.

Finally, the Kingdom has no interest in losing the race over supremacy in the region to Iran, which in the eyes of Saudi Arabia, has the potential to become an existential threat. The deal with Iran under the Obama administration has strained the relationship with the Saudis. The US used to clearly commit to the country’s supremacy in the region. When US-president Obama effectively suggested for Saudi Arabia to “share the region” with its religious and political arch nemesis Iran, he gave rise to concerns that the US might not be a reliable partner anymore.

Vision 2030 can therefore be seen as a wholesale strategy to increase the independence and security of the ruling class of Saudi Arabia from the potential dangers from within and without. Correspondingly, the turn to increase military production capacities within the country represents a key part of that strategy. The Saudi Military Industries Company (SAMI) that was set up in 2017, will be the vehicle to reduce reliance on outside support.

The US has significantly undermined its trust with the Saudis, as the agreement with Iran, as well as the lack of US support for former allies during the Arab Spring were clearly seen as indicators for the potential volatility of US allegiance to the Saudi family.

Yet, Saudi Arabia remains an integral partner for the US. As it is explicitly pointed out in the Vision 2030 statement, Saudi Arabia is the birthplace of Islam and therefore carries massive weight in the ideological direction of the religion. As a result, Saudi Arabia is a key partner for the US in its efforts to curb Islamic Radicalism.

Further, the US has no interest in further conflict and will therefore be forced to abstain from policy that might destabilise the region. Further military cooperation is imperative to ensure diplomatic trust between the two countries. Yet, this will be connected to significant political costs domestically for the US. Nevertheless, key policy objectives of the US are tied to the survival of the present ruling class of Saudi Arabia as both revolution and the likely chaotic aftermath, as well as further escalation of military conflict would be much costlier.