Originally published on the CGS blog on December 17, 2015.
There are two major issues in the Middle East that pose dangers to international trade, security, and economic well-being. In a prior post, I addressed the difficulties and dangers of international jockeying over Syria getting out of control. Here I address the concern that the combination of despotic, repressive family rule and archaic Wahhabi Islam in Saudi Arabia may lead to continuous civil unrest in Europe and beyond, as well as a severe disruption of oil supplies from the Persian Gulf region with massive economic consequences worldwide.
Saudi Arabia is a tough nut to crack, and in economic terms, a much larger one.
As long as the current royal family stays in power and there is a large profit margin in Saudi oil (and no major breakdown in the Persian Gulf area–from hostilities over Syria, for example), international oil markets are likely to remain stable.
But a portion of the oil profits go to support of a form of Islam (Wahhabi/Salafi) which is deeply opposed to the modern world order in Europe, the United States, Africa, Indonesia, and even in Russia.
Impartial commercial risk analysts have noted that Saudi Arabia is considered one of the worst violators of human rights in the world and is among the most prolific users of the death penalty. There is severe gender inequality, a lack of religious freedom, and the Shi’a minority (comprising around 10 percent of the population) is believed to be economically and politically marginalized by the Sunni elite.
Though near term prospects for Saudi Arabia and its current rulers may be rated as stable, loss of royal control is assessed as possible in some circumstances. A popular uprising in the country or major fissures in its governance, which interrupted Saudi oil exports, could set oil prices soaring worldwide. In the extreme, this would be seen as a massive risk to the world economy.
The United States has a history of making contingency plans for potential disruptions of Saudi oil flows. However, such plans could involve major interventions and an expensive active role with potential blowback. And contingency plans do not always fully anticipate the scope and complexity of the events they attempt to address.
A prolific analyst argues that pressures on oil prices combined with the social welfare costs of the Saudi population, the costs of supporting Wahhabi jihadism abroad, internal backlash against the Saudi regime by Wahhabi hardliners, and the “overhead” or parasitism costs of a huge royal family put Saudi rule at substantial risk in coming years.
Those who make it their business to assess political risks for companies with substantial assets at stake internationally cannot afford to wear blinders; they see what many public office holders apparently are reluctant to say.
The royal family, and the entire country, depend upon the industrialized world to make wealth out of Arabian oil. But Wahhabi/Salafi Islam is a major threat to political stability in the Middle East and a disruptive factor in Europe. And the royal family has from its inception leaned upon Wahhabi Islam to maintain its control of the population of the Arabian Peninsula.
The relationship between the royal family and the Wahhabi/Salafi movements has more than one facet.
The royals clearly try to suppress challenges to their control from any direction, including jihadi Islamists dissatisfied with their perceived accommodations of the infidels abroad. There is some evidence that they and the clerical establishment may attempt to put a moderate face on Islam when ISIL/Al Qaeda cruelties become embarrassing.
But substantial sums nevertheless flow into exporting the Saudi brand of Islam. Prominent Saudi clerics have displayed an aggressive sectarian orientation regarding countries the royals need not further antagonize at this time. Clerical calls against women driving cars in Saudi Arabia illustrate the far removal of the Saudi clerical establishment from global norms at this time. It is also far removed from reported behaviour of privileged Saudi youth. The clerical establishment is thus an anchor for the royals, but also a ball-and-chain.
A path to resolving this Arabian puzzle could be peaceful evolution toward a form of constitutional monarchy. This could include some caps on the royals’ take from the treasury, gradual but consistent liberalization in Saudi Arabia, and curtailed funding for the worldwide spread of the Wahhabi social control system. In the long term, both the royals and the citizens of Saudi Arabia are best served by blending into the world culture rather than milking it while simultaneously trying to subvert it.
There needs to be more explicit, public recognition of the Saudi dilemma and the associated Islamic dilemma. There is no need to condemn all of Saudi Arabia or all of Islam; to be clear, my opposition is to ISIL/Wahhabi culture that violently rejects all forms of governance other than obsolete caliphates and promotes complete male subjugation of female sexuality wherever it is manifested outside of Saudi Arabia.
Though the royal family’s money can be rewardingly spent and reliably invested in the global system, the world should deal with them amicably as just one element in global hydrocarbon supply systems, subject to external and internal constraints in a world moving toward expanding options to fossil hydrocarbons as rapidly as technically and economically feasible.
As a global citizen, do you agree with these views? Comment and let us know!
