The Business Year

AT THE FORGE

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s Saudi Arabia’s military campaign continues in Yemen, the Kingdom is seeking to reload its diplomatic arsenal to help transform it into a great power. In December 2018, Ibrahim Al-Assaf was appointed minister of foreign affairs, picking up an enormous portfolio of serious problems and potential opportunit­ies. Al-Assaf’s appointmen­t comes amid Vision 2030, the glasnost-like effort to open up the Kingdom. Saudi officials are likely to employ strategies in the financial, military, and cultural spheres to make Vision 2030 translate to greater influence and security for the Kingdom. These efforts have become more urgent in the wake of the September, 14 2019 attack on a Saudi Aramco oil refinery, temporaril­y shutting down a substantia­l chunk of the Kingdom’s refining capacity and jolting oil prices up.

The US blames Iran for the attack, a charge Iran denies, and announced its intention to deploy forces to the Kingdom and the UAE to take a “defensive” posture against Saudi Arabia’s rival across the Gulf. These escalating tensions mean that Saudi Arabia’s diplomatic efforts, and avoiding a catastroph­ic region-wide war, matter more and more to realizing Vision 2030 goals.

AGLOBAL FINANCIAL STRATEGY

If the past two years were about attracting the global financial community through glossy roadshows and conference­s, new concrete measures are necessary now to position the Kingdom as a global investment powerhouse. The first step, in this sense, was increasing the 15% share of internatio­nal Assets-Under-management held by the Public Investment Fund. Between 2017 and mid 2019, the Kingdom’s sovereign wealth fund increased its direct investment­s in Korea, Russia, France, Egypt, and engaged in two large funds, one with Japan’s SoftBank, and the other with US private equity firm Blackstone.

REGIONAL MILITARY STRATEGY

The advancemen­t of a local defense program will not loosen Riyadh’s relationsh­ip with Western arms manufactur­ers. Saudi Arabia’s military campaign in Yemen, as well as projection of regional dominance in Egypt, still depends on US and UK. If either Washington or London halts the flow of spare parts and logistical support, the Royal Saudi Air Force will be grounded. Despite loud protests by members of US Congress over tens of thousands of civilian deaths in Yemen, US President Donald Trump has remained defiant about continuing the sale of weapons to the Kingdom. If Trump loses his re-election bid in 2020, a new US president could make new demands of Riyadh or place new restrictio­ns on military support. Saudi Arabia has also forged an alliance with Israel against Iran, but Israel’s unpopulari­ty across Muslim countries may complicate the Kingdom’s soft-power strategy.

ISLAMIC CULTURAL STRATEGY

Saudi Arabia sees political Islam as a serious threat to its internal security, and has worked to undermine Islamist politician­s across the region, especially in Egypt, where it backed a counter-coup against Muslim Brotherhoo­d prime minister Mohamed Morsi in 2013. As a part of Vision 2030, Saudi Arabia has offered an alternativ­e to Islamism in the form of more liberal policies that replicate the benefits of a free society without the unpredicta­bility of free elections.

Saudi Arabia has an advantage in this soft-power effort, as it is the “Land of the Two Holy Mosques” at Mecca and Medina, where millions of Muslims make the Hajj pilgrimage each year. The Hajj gives the Kingdom a chance to showcase its system to the global Islamic community. New tourist visas will allow more people to see Saudi Arabia for themselves, beyond the negative headlines generated by regional conflicts. If the frequency of those headlines declines, Saudi Arabia’s soft-power efforts will become more effective. ✖

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