The oil consumption cutbacks worldwide reveal the dangerous contradictions to be found in the Saudi identity, compounded by the kingdom’s foreign policy.
There are three main streams of Saudi Arabian foreign policy, and all three have their source in domestic policies.
The first is stream is economic and is defined by the Saudi’s evolving relationship with the United States since the 1930s. When the first king, Abdulaziz, was told about the fortune under the desert, his reaction was to suggest that it would be better to leave it there as his first priority was maintaining the piety of his subjects. Over time, he was talked out of this approach. In order to avoid partnering with the two Western powers that had been interfering in Arab affairs at the time – France and Great Britain – Abdulaziz established a partnership with a conglomerate of US oil companies that has dominated the world’s oil business ever since.
Thus while originally seeking domestic economic development, the kingdom is now thought to have foreign currency holdings of $584 billion (€527bn, the fourth largest in the world, behind China, Japan and Switzerland). But neither Washington nor Riyadh openly reports the actual figures, so it is impossible to tell how much of those holdings are in US dollar securities. Moreover, the $584 billion only accounts for the Saudi central bank reserves. The state-owned oil
company, Aramco, is valued at 10 trillion dollars (€9 trillion), making it the most valuable company in the world. Added to that are the assets of other state-owned industries and financial bodies as well as the private fortunes of various members of the royal family, who are for practical purposes an extra branch of the government. Paradoxically, there is still widespread poverty, with average incomes falling due to the recent fall in oil prices (the Saudi government does not issue statistics, but it appears hat about 20% of the population lives in poverty). The education system concentrates on religious subjects and thus does little to prepare Saudi citizens for employment. And yet this is not as great of a problem as one might imagine since nearly all productive work is done by foreigners.
The second stream is the kingdom’s competition with Iran for influence in the region. This dynamic developed after the Islamic Revolution in Iran in 1979, but it is rooted in Saudi Arabia’s uneasy relationship with its Shia population. There are several dimensions to the Saudi-Iran rivalry, the most recent being a proxy war in Yemen. Saudi Arabia can bring enormous resources to bear, including high-tech weapons bought from the West. Even so, Iran’s influence in Iraq, Syria and Lebanon is considerable, and the Iranian gerontocracy seems to have a much better grasp of the region’s power politics than do the wealthy Saudis. The third stream, the one most vital to the kingdom’s traditional values, is the global policy of promoting Wahhabism.
The Saud family has been spreading this interpretation of Islam since the 18th century, and its partnership with the clergy is certainly more important than its partnership with American oil companies. The royal family has appealed to the authority of the clergy in times of crisis, and the loyalty of the clergy has been rewarded with vast resources for promoting their message of jihad around the world. This partnership is currently in a difficult predicament because there is no real theological difference between the Saudi doctrines and those of Islamic State. There is, however, one very important political difference which is the key to understanding the kingdom’s position in the Islamic world.
If you want to read it all, purchase the entire issue in pdf for just three euro
The oil consumption cutbacks worldwide reveal the dangerous contradictions to be found in the Saudi identity, compounded by the kingdom’s foreign policy.
