Saudi Arabia is no longer ‘too big to fail’

Saudi Arabia is no longer ‘too big to fail’

December 5, 2018 0 By Michel Santi

Is Saudi Arabia still an important partner to the US? The question answers itself, at least partially, with the Middle East having drastically changed since the strategic and fundamental alliance made in 1943 by President Franklin Roosevelt and King Abdulaziz Ibn Saud. It’s now a distant time when FDR boldly, vociferously claimed that “the defence of Saudi Arabia is vital to the defence of the US”. It’s also a long time since the Cold War, when the US had a strong ally in Saudi Arabia determined to halt the advances of the Soviets into the Persian Gulf. And far gone the good old days when America would send 400,000 soldiers to protect the Saudis and their neighbours from the wrath of Saddam Hussein.

In truth, the ambitions and initiatives of the US’s foreign policy have been greatly watered down, proportionately to how dependent the country is on Middle Eastern oil. This is because the undeniable, inalienable fact is that the US is now the world’s leading oil producer, ahead of Saudi Arabia! This pact made between Roosevelt and Abdulaziz that had as its basis a convergence of objectives – Saudi oil in exchange for American protection – therefore no longer serves any purpose. It was made to battle a common enemy, the Soviet Union. It could even be described as an ideological objective, with Washington hoping to gain the support of the Saudis to topple Saddam, to then establish a democracy in Iraq that would spread throughout the region. Now, the US has no need for Saudi oil and has come back down to Earth after very long and tenuous ventures in Iraq and Afghanistan.

Funnily enough, Saudi Arabia now finds itself even more dependent than before on American protection, at a time when its leaders are trying somehow to maintain domestic peace and stability. However, the drama for the Saudis is that American interests are now in stark contrast on the crucial matter of petrol tariffs, tariffs that the Saudis would like to be as high as possible to finance their regime, and that Donald Trump wants to decrease further for his own domestic economic interests. This Saudi Arabia that currently counts 32 million inhabitants – half of whom are less than 25 -, 9 million of whom are foreign nationals, doesn’t look much like the one founded in 1932 anymore, a kingdom made up of a million impoverished nomads.

However, the regime’s fundamentals have stayed the same because it’s still as dependent on its oil revenues. And it’s not Prince Mohammed’s (now affectionately referred to as “MBS”) gargantuan projects that will change the game since his “Vision 2030”, his appetite for nuclear plants and other technological city at 500 billion have been criticised as neglecting the daily needs of his compatriots, who were not asking for much, out of fear for their livelihoods. The staggering costs of his megalomania and the nonsensical war in Yemen could have been used to modernise the economy and make it less dependent on oil revenues by creating jobs for Saudi citizens, who are extraordinarily dependent on the generosity of the government.

Today, the only argument in favour of keeping the Saudi royal family in place is negative, based on a fear of the unknown, and of the arrival in the country of a chaos similar to Syria’s and Iraq’s. But it is impossible to build and grow on these bases, as Trump so crudely and lucidly outlined: “the kingdom might not last for two weeks without us.”

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