Saudi Arabia’s New Strategic Calculus

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TIME: 12:30-13:30, Monday 1st August 2016

VENUE: The Henry Jackson Society, Millbank Tower, 21-24 Millbank, London, SW1P 4QP

SPEAKER: Andrew Bowen, Global Fellow, Middle East Program at the Woodrow Wilson Center for International Scholars

CHAIR: Davis Lewin, Henry Jackson Society

Davis Lewin:

Ok, I think this is working. Very good. Well, ladies and gentlemen, once again delighted to welcome you to the Henry Jackson Society and to see you all here. It’s a particular joy today, both in terms of my interest in the subject, of course, and I think most British observers and international observers will be interested in the subject, but Andrew is as it happens an old friend. And in a way I think having studied together, we can now finally assume that something has gone ok given that we’re sitting up here, which is of course always a nice feeling. He’s the Global Fellow in the Middle East Programme at the Woodrow Wilson Centre for international scholars, a majorly influential think tank in Washington D.C. He’s also a member of the John Hay Initiative’s counter-terrorism working group and a senior advisor to Greenmantle, a geopolitical advisory firm. He writes weekly for Al Arabia and regularly and comments on regional international politics as well as the economics of the Arabian Gulf, featured in Foreign Policy, Foreign Affair, CNN, The National Interest and other outlets. And without further ado may I ask Andrew to discuss the challenges that Saudi Arabia faces in successfully achieving its vision for 2030 and what the Kingdom’s prospects may be for the future. Andrew

Andrew Bowen:

Thanks Davis. It’s great to be here and also with the Henry Jackson Society and the mission and the value of the organisation is much needed in this time of Donald Trump and people like Nigel Farage. But I think it’s a good moment to be here where there’s organisations like Henry Jackson who argue for, if maybe I’m over exaggerating but, conservative internationalism and kind of an active role in the world which is quite critical. But, looking at more broadly, Saudi Arabia, it’s an interesting moment just in terms of 5 years or so on from the Arab uprising, Arab Spring, to go from now. You look at 5 years ago when everyone was kind of writing articles about the decline, the anachronistic notion of monarchies in the Persian Gulf and how these were kind of the hold outs, the ones that were not the ones generating new ideas, that it would be Cairo and potentially Damascus or others or Baghdad that would be the leading areas of looking at the average age of the Gulf monarchs at the time. With King Abdullah and uncertain succession it’s interesting 5 years on as we see the collapse of the Syrian state, the , arguably, collapse of the Iraqi state and the mess of what Egypt is these days. That really the kind of new leadership, arguably, is now coming from people under the age of 40, whether it is Sheikh Tamim in Qatar or Deputy Crown Prince Mohammed Bin Salman in Riyadh, and then the long long time Crown Prince Mohammed Bin Zayed. So, it is kind of quite a shift and one of the areas I would argue that has had this kind of going forward on the obsession on Saudi Arabia up until, and still is, is always been about this whole Royal succession. On who will succeed? Will there ever be a transition to the younger generation? And arguably, so far it has been a much more sudden and frankly more smooth transition so far. I think there is still to say is whether or not the Deputy Crown Prince will succeed his father is still a large question mark, and whether or not he would succeed as a Crown Prince or remain as Crown Prince if Mohammed Bin Nayef were to become King is still an open question. But I think that the period now is say, it is an important moment to see as a country like Saudi Arabia and others are facing such deep strategic challenges. Both on the rise of Iran which has been not as empowered as Khomeini may have thought with the Iranian nuclear deal, but is certainly empowered in a way and definitely in the end of this waning Obama days of kind of giving the Iran a much more free hand in the region than any of his predecessors had ever done. So I think I kind of going forward in that kind of context Vision 2030 arguably emerged from, would it have happened in a time of high oil prices? Probably not. So the question is, is it too little too late? I think that it certainly was a much needed set of economic reforms and I think that is something that looking at long term demographics in the Kingdom, looking at oil consumption, changing structure of the oil market, these reforms were needed. And unlike at other times there’s certainly a deep degree of political will behind them. That despite differences between, arguably, that the press sometimes likes to focus on between Mohammed Bin Zayef and Mohammed Bin Salman, they’re both very much committed to restructuring the Saudi economy and that is something where there should be a degree of confidence that there is some leadership that supports these initiatives. And I think that one of the under-emphasised points but is [inaudible] in Saudi and also with MBS’s team and MBN’s and others, there’s really an emphasis on the shifting of the social contract in the Kingdom away from the old contract which is basically deference to the monarchy and the emphasis of the role of religious legitimacy in the state to actually being more that the Saudi state actually delivers, that MBS delivering opportunities or the promise thereof that the 60%-70% of the population is under the age of 40, that this is now the future of Saudi Arabia. The success of the Saudi state will be judged by what is the first and foremost priority of delivering to this younger generation who has felt stifled, who has felt like there were not many opportunities. And certainly this has had the mandate that arguably the Deputy Crown Prince is moving forward on and these reforms are not under represented, it’s the fact that the socio-economic angle, the fact that the power of religious authorities in the Saudi state are being much more curtailed than they were at other points and the focus now is if you are going to college, your 20-21 you can look forward to Riyadh that there be economics as prioritised over traditional politics and security, in a sense that the Deputy Crown Prince has focused on, on his most recent visit to the United States, going to the visit was more about Silicon Valley than it was about Washington. And that is something that is a big shift from, and it was a bit more so than even going to Houston. So I think in that sense really, Saudi is going on new footing and in a relatively turbulent international markets. Like the facts is if you look at the price of oil the price of, that it’s still not a very stable period to do these economics reforms. So I think in that sense there will be pressure in the coming 6-12 months to really see, a year since this past June when the first implement in the national transformation plan is, is what was really delivered? Where is it headed? Where is the government by McKinsey? Is it succeeding or is it failing? And I think that is a going forward, a point where the Deputy Crown Prince and others in Riyadh will have to assess. But to note briefly a few points on the economic reforms then some of the, and then will probably focus a little bit about the and conclude with some points about how the economic, degree that the economic transformation plan is corresponding with a new strategic outlook on foreign policy. On the economics I think that we’re going to see in the coming months a roll out of a transformation plan for Aramco which will see Aramco being turned into a conglomerate that Aramco will allow the Gulf to diversify from purely being an oil services company to looking at everything, to conventional, potentially nuclear to wind and renewables. A big emphasis on how do you make Saudi a more diverse energy producer. I think that combined with that is this continuing focus on that Riyadh are no longer [inaudible] producer in international energy markets and the focus will be to continue to be a, to whether low oil prices to maintain its market share. So it is kind of market share maximising strategy as much as that term ‘market share’ is often slightly deceptive in the sense that it’s basically selling contracts. Although what is already Saudi Arabia has a sizeable market share position and it is more that the emphasis is on maintaining in the long term in as in markets in India grow and China and other regions that Saudi Arabia have preferential contracts over Iran. I think Iran is not still, like maybe Wednesday when they announced the oil supposedly the new oil contract rules. Still Iran is not necessarily a market share competitor with Saudi Arabia at this stage but certainly with Libya potentially coming back online in the coming weeks and others the focus is not so much a cutting to raise prices charity but maintaining over the long run a predominance in the market share that would, they initially were expecting this to cut out American shale but you’re seeing an introduction now in recent oil prices with an increase of American shale with the adjustment on that. But in the long term that is kid of the broader strategy from that kind of strategy you gradually, by 2030, you try to invest a majority of that wealth into jumpstarting a more entrepreneurial Saudi economy. This kind of will, can you capitalise a $2 trillion sovereign wealth fund purely from Aramco IPO, I think those numbers are very optimistic. I think it will be lower than, the capitalisation will have to come from other places from real estate reforms but it’s still a big question of how Aramco will be valued and how much of their upstream assets are actually put into an evaluation. So, I think that in that sense looking at kind of the goal of having an investment fund that will then kind of not only fund the budget, will fund some of the Saudi monetary authority to defend the peg as well as kick-start local investment. You’re concentrating a lot of responsibilities for an investment fund, that if you’re an investment fund manager it would be quite a headache to do. It’s not like in the Norwegian case or the Qatari case where despite in Qatar their cutbacks in the public sector and private sector, but they’re not touching the Qatari investment fund. I think there will eventually need to, how do you have this public investment fund both capitalise but also, in the longer term, shift it to being a more of a stable source of knowing where the bottom line is? And then more broadly, looking at one area, say for example, beyond renewables and diversification is trying to build a local defence industry is one such area to say that the UAE has had over a decade in doing this. Saudi Arabia is very optimistically thinking that you can have a development of a local defence industry to essentially supplement the existing, there are initiatives like that. There are initiatives on tourism to buy, six flags may open in Saudi Arabia in the coming years. Attempts to increase local tourism, increasing liquidity in local markets to build a further bond market. So a lot of these things are doing a lot of much needed reforms to address the issue that, if you’re a young Saudi who can’t afford housing, which is too high, or you don’t have much entertainment, it’s costly to travel, you look over to Bahrain or UAE. They’re certainly addressing things like entertainment, on housing, on job creation and potentially Apple and others, the increasing number of companies and global companies that can enter the market. I think the big roadblocks still of Vision 2030 have to do largely with human capital. I think that the capitalisation of the Saudi, the human capital still a long way off. In a sense, that can you effectively by 2030 have a diversified economy, reforms of ministries. I think this is a longer term project. This is probably more a Vision 2050 than a vision 2030. But I think it’s, and how do you actually get, well-educated ambitious Saudis to back home and to not only be in the private industries but actually join ministries, actually want to be, then reforming restructuring of ministries where there is not, there are few opportunities for growth, for a Saudi to advance. So, questions like that are regulatory. Like, how do you create a more atmosphere that it doesn’t hurt entrepreneurship? I think those, big questions such as that still need to be worked at for it to really be a vibrant, diversified economy. In that sense I’m slightly more, I think I’m more, thinking that it will be much longer than 2030 and arguably the success rate should probably be ideally between 20-30%. I think that would be a standard barometer of success for Vision 2030. And then the last few notes, though more broadly, as they are balancing trying to turn the Kingdom into a more regional economic hub, [inaudible] the Deputy Crown Prince is taking much more risks, strategic risks. And one is in the area of, in this perceived environment of a US drawback there’s much more of an assertiveness coming from Riyadh in saying we need to take security risks that in the absence of the US playing a defined role that they can count on, such as in Yemen, and looking at areas like Syria and all this is going towards a broader breakdown in Saudi-Iranian relationship to the point that it’s probably the worst it’s been in many many years. And that is something where balancing at the same time that Iran that as Saudi is being more bullish on its economic position and it’s also willing to take risks to also further push back Iran, which is increasingly being perceived as a strategic competitor that they cannot actually work with. I think there was an initial period under King Salman where he was willing to look at an improved relationship with Iran on areas where they could work together, but it’s clearly coming to a case where Ayatollah Khomeini has no interest in having an equal partnership with Saudi Arabia in their view. And that actions like in Yemen and other places show that with Iran no longer, in their view, being conventionally really being deterred by the United States that Saudi Arabia needs to try to be more assertive in its environment. And I think the number 1 I heard from Iranian policy makers is this feeling of while they’re kind of certain on what the US will be doing, they’re uncertain of what Saudi Arabia’s doing and I think that strategic uncertainty the boldness of taking risks is something that actually is causing more of a concertation in Tehran than, well they kind of know [inaudible] who they can read pretty easily. And in that sense that combined with this ideologically overtones of the Saudi-Iranian relationships deteriorating is making it a much more of a hot flash kind of environment where places like Yemen places like it’s becoming increasingly you look at kind of even deterioration of opposition politics in Bahrain there is a growing confrontation. The question that I think Saudi has to approach from is coming from at the moment an asymmetric non-strategic advantage in the sense that if you look at pure conventional power of Saudi Arabia greatly overwhelms the capacity of Iran, but in terms of missile defence [inaudible] conventional deterrents but asymmetric deterrents you look at Lebanon you look at Syria, Iraq, the entire region. There’s not the, and that is deeply unsettling and that is why you see that kind of in the past 6 months an improvement of probably even the UAE Turkish relationship, there’s a decreasing in tension between the UAE-Qatari relationship. But also more broadly, an attempt by King Salman to even look at the wake of the failed coup attempt. The immediate, the Turkish military attaché in Riyadh who was accused of being part of the coup was quickly handed over by Saudi Arabia to Turkey and that the commitment in King Salman’s initial statement backing Erdogan that it is a focus now for the Saudis of who can be reliable partners in the region at a time when they feel the United States is no longer as reliable. And I think that goes to Russia as a question there’s not a naivety on Russia but there is a clear sense that with Moscow that while there can’t be as much trust own strategic areas, there are certain areas you have to deal with Russia. Russia is taking a more surrogate position in the region whether it’s for good or for ill, but to say that while the United States, it’s a big question mark and I think to conclude going up to January 2017 is quite a critical time not only for the Iranians and President Assad who are wanting to make as many gains as possible before it may be a secretary Clinton Presidency or a Donald Trump, I think there’s also though a feeling that in the GCC that what are the long term looking at the relationships of [inaudible] and new American administration and how will they approach Iran. And as a result of that, what then would be Saudis commitment on foreign commitments in the region. [Inaudible] could say the US can afford to take a more committed position on Syria, but that’s. I think at moment it’s kind of taking both risks at home and abroad to try to strategically navigate a relatively time but ironically despite people like Joe Biden and others who think that these are anachronistic creations but its interesting seeing the Gulf States are now really arguably in a position now of more entrepreneurship and innovation than probably most of the region. And that’s something to conclude

Davis Lewin:

Well, thank you Andrew. I’m going to take the prerogative for people to form their questions in their minds and ask you a few questions myself first if you’ll allow.

Given that you’re somebody out of all of the people I know that knows the Saudi government best, can you perhaps say a few words about what you see the internal dynamics of them and what to watch out for going forward in terms of questions of governance in the Kingdom?

Andrew Bowen:

I think one point on that is the question is regardless of whether or not with the King’s health if we say take 1-5 year outlook, where will… A, I think that it is important to see who will [inaudible] succeed King Salman. If it is the Crown Prince Mohammed Bin Nayef I think there is a, there could be arguably stable transition. I think that there are also questions that have to be asked about will the Crown Prince necessarily succeed King Salman. I think that’s still an open question. I think that there are those in the royal family who probably are not as supportive of or willing to defer right now but feel MBS’s reforms and actions are potentially are ones that they feel are troubling or unsettle moves by the royal family to that MBS has taken on [inaudible] royal reforms of patronage and other things has been greatly shifting the Saudi government to being more of a technocratic cabinet compared to what it once was. So, the old system of how you kind of appease different members of the family, how you, that system the rule [inaudible] rewritten. And equally so I think in that case then there is a degree of uncertainty on the future direction in that regard on whether or not you take a more this kind of liberal, neo-liberal economic path. I think either with MBS or MBN it will likely continue down that path. The question is, if it’s not MBS or not MBN would another Prince take a more kind of traditional approach? Take away the risks. Or if MBN were to become King and MBS is less in power would MBN take as many of the economic risks? Particularly on renovating the social contract as MBS is doing. I think those are questions that, to watch. But I think there are also economic pressure that keep these reforms continuing to go.

Davis Lewin:

My second question is from now how would you asses their performance in terms of these new more assertive regional, should we call them excursions and their presence obviously in [inaudible] but Yemen but also thinking about getting off in Syrian [inaudible]. How are they doing, as far as you’re concerned?

Andrew Bowen:

I think they’re certainly, there are both gains and losses. I think that arguably Yemen, the currently the talks which are stalled that are going back. I think frankly they’ll reach to a point where the Houthis regain probably an area where they initially started off. But with more autonomy for the Houthis than you have in Sanaa and other places. I think that the whole initial fear that this was going to be the, Yemen would be the strategic air that suddenly derailed the Deputy Prince was over speculation. I think that certainly Yemen is not that, a lot of risks have been taken. I think that the ability to actually change the balance of power on the ground in the region has not strategically happened, gone the best way. I think more broadly though Saudi Arabia’s new economic policies I think are giving the Kingdom more of a balance to that. But the fact is that the Iranian regime has made substantial, it would be disingenuous to say that Iran is on the, Iran has made substantial gains and that the balance of the power in the region probably at times is in favour of Iran. And I think that going into this Saudi has been playing a difficult hand, I would arguably say, well in the sense of, particularly with uncertainty on the US commitment on taking reforms as well. I thin k that looking at Damascus to Baghdad the states of the Iranian advance is something that is, has always been a difficult environment to navigate.

Davis Lewin:

Prime Minister Netanyahu of Israel last took up a version of rapprochement between him and Saudi Arabia and others in the States potentially in light of threat from Iran. How do you see that, is that reality? Is it diplomacy? What’s your assessment?

Andrew Bowen:

I think certainly it’s a common strategic goal, at the moment on Iran. And whether that turns into a substantive relationship, there are still a lot of roadblocks. One is the status of the peace process. The kind of deterioration as well of the Palestinian authority does not make it easier. Also conflicting GCC interests within the Palestinian, the future of the Palestinian movement further stresses that. I think the, until there is a movement on the peace process I think that will be a fundamental limitation to any of these negotiations. And I think it doesn’t outweigh the question to have to ask, is what is the benefit for the GCC to have normalised relations with Iraq, with Israel beyond the status quo? If the status que means that there could be opportunities for deepening security, cooperation or areas of common, that’s one thing. But will it reach to a point where we suddenly have a normalised relationship? I think there’s still area to go.

Davis Lewin:

And before we turn to the audience, I have one more, and it wouldn’t really be an HJS meeting if we didn’t hear from these topics. I am struck by the fact that , you’ve spoken at one point of the McKinsey route to trying out these reforms in a way, but I wonder if you can say something about these other two parameters that haven’t come up. Number 1 being the human rights situation internally in Saudi Arabia. Whether there has been a [inaudible] loosening, how you see, what your assessment is of that. And number 2, the rising of the tiger of radical Islam that Saudi Arabia is of course very adept at [inaudible] the Wahhabi strain but also in terms of going quite close to al Qaeda in terms of its Sunni allies in the Syrian theatre and so on and so forth, so perhaps some comments on that.

Andrew Bowen:

Sure, on the status on human rights, I think that one area you look at and it depends on what area to focus on, but one is the advancement of opportunities for women in participation in society is greatly a priority of the Deputy Crown Prince. I think that these reforms, and even the attempts of [inaudible] to try to push even the most focused on reform on, I think are more significant than the women’s right to drive is more, was pulling back the religious police from the streets and no longer giving them the authority to arrest people, to detain people and now you can actually even in [inaudible] you can now kind of sue the religious police or you can take them to court. So, I think in that sense there is a, and the push, the recognition that women need to be a more greater part of the workforce, I think there is a lot more opportunity for both socio-economic advancement, for the role of women in society and probably at any other point. So I think in that regard there is. I think there certainly have also been kind of broader reforms of how the state handles, like with the shift in, I think there could arguably say that reforms take time and the idea that Saudi Arabia will suddenly transform overnight into a liberal democracy that represents all the values and ideals of what maybe here or in the United States, arguably for Donald Trump, but are things that take that are different societies different time. But I think on the advancement of opportunities I think are quite there and this is a new generation. When you have someone who is under the age of 35 leading economic reforms, this is a new generation and new opportunities. So, I’m on political on Islam and, not really Islam as much, but there Islamic radicalism is a deep challenge – particularly in areas like Syria. And the lack of as much as, I don’t know if the, but I sometimes arguably would say the opportunity, the in power, moderate, secular Syrian opposition were from the early days and I think that the challenge right now is if you’re trying to push back, if the larger enemy is Iran and Syria you have to find some partners on the ground. Do you want these people to be necessarily to be governing the state? Probably not. I think that, as well, you look at, I think there are overly comparisons of Dash and our Isis and Saudi Arabia. There is a kind of a sense that an Islamic State that takes and chooses and kind of has, I don’t think it’s particularly fair to say that Isis and Saudi Arabia, Wahhabism is the same thing. But there is a challenge I think that from the Saudi perspective of as long as states such as Iraq and Syria are warzones, it gives opportunities for extremists to thrive. Like I think one initiative that the Riyadh has been doing of late is that, big emphasis on countering ISIL on twitter; the Saudis are cooperating now with twitter where there counter ISIL centre is flagging tweet and their relationship with twitter is they are now banning people from the internet, which is a very, kind of realising that there has to be a war on social media against radical extremist voices combined with when tracking better and also imprisoning and going after those within the Kingdom who are returned to the Kingdom, there’s that focus as well. And I think you now have, for example, committees now on, a committee, a fatwa committee of different ministers that reviews some of the public fatwas, the fatwas that go out. SO, there has been a big attempt by MBS to really clamp down on this kind of radical jihadists and their voices who take advantage of that space.

Davis Lewin:

Ok we’ll start with the gentleman over here, but if you could be so kind and tell us who you are and whether your present an organisation.

Question one:

[Inaudible]. My name is [inaudible] and I’m a journalist [inaudible]. [Inaudible] with regard to the US-Saudi relationship after the ousting of the Muslim Brotherhood in Egypt. The [inaudible] is the Saudis felt that they could be the next [inaudible] while the Americans see differently. And in this respect there has been this kind of change to [inaudible] to the extent that trying to create some kind of balance between the relationship with Egypt and the relationship with the United States. Now, how effective do you see this? And how do you see the Saudi [inaudible] with regards the Muslim Brotherhood, they feel the Muslim Brotherhood will take away legitimacy as an Islamic representative. This is point number one. Point number two is: there is a great deal of restlessness within the Saudi Arabia [inaudible] and this has [inaudible] it’s causing them a big deal of [inaudible]. They feel like if Mohammed Bin Salman takes over in this [inaudible], that will be the end of this [inaudible] dynasty and the creation of the Salman dynasty which will offend so many people. Can you please shed more light with us?

Andrew Bowen:

I think one areas on the relationship, the Saudi-Egyptian relationship that Sisi, Sisi has many benefits but also many costs. Looked at when the Deputy Crown Prince was in Cairo, I think it was to ride around after the failed island exchange. So far, Sisi’s promise to return the islands that were technically which were originally under Saudi, always part of Saudi Arabia according to [inaudible] given under Egyptian protection during I believe the 1930s or 49s, but that protests against MBS on the streets, it was kind of a, where Sisi kind of over, looking at Sisi when balancing his own state. I think that the viewpoint on, and it’s a viewpoint Washington as well, really as much as President Obama finds Sisi a very, not a great person to stomach both in terms of how poorly he is managing the Egyptian economy and how he’s handling that what is the alternative at this point. That viewpoint is not as completely far off than many of his supporters have as well. You have a kind of a poor weak man’s Nasser in Egypt who is expensive, who is not running the state well and is also very stubborn and does not actually treat any of his partners with much respect. So that is the viewpoint going forward on Egypt that it’s a different stance to what it was now. On the relationship with the Ikhwan, I think Saudi Arabia has always taken a slightly different view than the UAE has on the Ikhwan in saying it’s certainly, that you cannot completely exclude the Ikhwan from society. The idea of that, you can’t build some of these states, like there it’s more of pragmatic approach. I think the current view from Riyadh is so the Ikhwan is on the back step right now, it’s not as big a threat now. You look at their state in Egypt and other places. It’s not as existential a threat as it is for the UAE and others. So, there is a difference there. I think there is certainly a concern that the Ikhwan could be an alternative, but at the moment the Ikhwan are not really seen as a credible alternative. I think it was one thing when they ere royal and a higher row, it’s a different thing when they’re being rounded up. I think the view point though, the reason why there is an improved relationship between Saudi Arabia and Turkey, despite President Erdogan’s on the AKP is that the Saudi’s are a more realistic [inaudible] on the diversity, on the politics in the region and how you have to have, what are the bigger challenges? Iran in their viewpoint is a bigger challenge than the Ikhwan. And then the question about the…

Question one continued:

[Inaudible]

Andrew Bowen:

There is certainly, it is a break of tradition right now and I think there is a question of how you… Mohammed Bin Nayef has no male heirs so, certainly with Mohammed Bin Nayef you’re not going to have a Nayef dynasty. While there probably is this kind of focus right now on the Salman… I think somewhat this is an over, I think a lot of royal politics watching has always been “oh what are the [inaudible] doing?” or “what is this doing?” or “what is that doing?” and I think a lot of it is over royal gossip that can be translated then into, is it really that MBS is thinking right now that someday it will be forever the Salman branch? I have not gotten that impression, I think that this is, I think the capable people who are running, the King has a bold economic vision and his son is a very kind of entrepreneurial person, so I think that’s partially the… Does that mean that 50 years from now there will be another Salman? I think that’s too…

Davis Lewin:

The lady here.

Question 2:

[Inaudible] from the [inaudible]. You mentioned that the Saudis were trying to distance themselves from Islamic radicalism in some way. But what role does Wahhabism play in laying the ideological groundwork for terrorism? It is said that 70% of mosques around the world are financed by Saudi Arabia, and a lot of the thinking that goes on in these mosques may be leading to terrorism. If that is so, does that not undermine Saudi Arabia’s own interests?

Andrew Bowen

I think one thing to think about though is kind of looking at taking political Islam as its own ideological roots, its own socio-political context that emerged post-1970, in the late 1970s onwards in places like Afghanistan and other areas. I think certainly, I sometimes worry about over trying to look at purely roots of different interpretations of Islam as the root causes of people like Osama Bin Laden and Daesh who are using, who are taking advantage of their own agendas, like how much is ISIS really a deeply, like certainly they can arguably say others won’t do and others about the language the methodology but I think that we see groups like Dash thriving in areas that have deeper challenges, and that is the socio-economics of the collapse. You look at even some of the, you look at the background of 9/11 hijackers: pretty well-off individuals. It’s not like, these are not like the, like I think that [inaudible] as well kind of taking advantage of opportunities. And that’s where I sometimes take the broader, maybe a focus should be that it’s not suddenly, it’s more how do we build more sustainable societies in places in Syria and Iraq so that, in Yemen, in places where, so that you don’t have people like Baghdadi and others who can take advantage of whatever it is they want to take from the Quran and other places to justify their actions? I tend to think that there’s a broader socio-economic, when you have a collapsed state you have a, extremism can be justified by many things.

Question three:

[Inaudible], I am also member of international institute for strategic studies. [Inaudible] personally think that Saudi society is basically very unstable oil price lower and longer for longer time, this exploding population which government of Saudi Arabia has to bribe to get the support because it’s an [inaudible]  other places. I think it’s just, we can’t be able to maintain this status maybe in 4/5 years’ time and apart from that, if you look at certain issues it will be next [inaudible] at least 7,000 Saudi princes from the royal clan, if you like, living [inaudible]. Next [inaudible] it will be 70,000. How the hell they can manage unless they are democracy?

Andrew Bowen:

I think that one thing is if you look at the empowerment of the new cabinet, they’re all really technocrats. You look [inaudible], the people who are coming to positions of governing state are not the 70,000 princes. And in that sense, really, there is an empowering of the best talent. The one advantage of when you have 70,000 well educated princes is you no longer have the sense of entitlement. That it’s a lot easier that they can be involved in government or they can be fired from government. And I think in that regard, there are both opportunities, I would arguably say that the Saudi government these days is a much more of a talent driven at the top level, ministerial organisation that’s based on performance more so than… And I think message being told now, to the royal family, right now is that you can live a comfortable upper-middle class lifestyle as a Saudi Prince, but you’re not going to no longer this is not a welfare driven state purely for the royal family. I think that’s been message that the Deputy Crown Prince has been emphasising from taxing, now you have to pay for electricity as a Prince. And I think the one area where I am optimistic on is if the reforms are being driven that are targeting giving opportunities for 70% of the population that are under the age of 40, more opportunities, then that I think is a positive direction. I think that if this is, I don’t know if the goal is a liberal democracy, I think that’s a little bit of a, I think that would be slightly a, I don’t think that is a goal. I think that as a successful, potentially, a viable more diversified, economically prosperous state, I think that they are making much needed reforms.

Question four: 

My Name is Aziz Al Bashir and I’m a PhD student at [inaudible] university. I have two questions. First question is, I’m sure you’re familiar with the television interview that MBS, Mohammed Bin Salman, gave with [inaudible] not long ago. And he talked about this desire to build up the military industry within the Kingdom, he said something like “how can it be we have the third largest military budget and we can’t even build our own rockets.” Now, I mean, this is very interesting because as you mentioned now, Saudi Arabia has a very significant qualitative edge over a conventional military edge over its main rival in the region of Iraq. Do you think that this desire to develop these weapons will be at the hindrance of this qualitative military edge? It will lower this qualitative military edge? The second question is what the gentleman mentioned here about the Saudi-Israeli rapprochement. Now, do you see the Arab peace initiative as a framework that these two countries, as well as the greater Middle East, can cooperate and if so, what can the Saudis or the Arabs and the Arab Peace Initiative negotiate on or be willing to negotiate with and change within the Arab Peace Initiative? Because the discourse was that, Israel would say, “this is a zero sum game, we’re not going to accept this [inaudible] take it or leave it.” Can the Arabs and Saudi Arabia have a change within the Arab Peace Initiative? Thank you very much.

David Bowen:

On the local industry, I think it’s to complement one goals to complement existing industry. It’s not like overnight Saudi Arabia is going to be developing their own F-35. Certainly there are areas that, I think that one is driven by need for more self-reliance and resiliency in a changing geo-strategic environment. There are areas, I think, that are more tangible. I think this will take a very long time, but areas, how you develop better cyber capabilities. How do you develop more small arms? I think there are certain areas where local Saudi defence industry could be successful. This is not to say that it will completely transition from the current market space. [Inaudible] but I think that his emphasis was more, like you look at kind of the why isn’t there, you look at the manufacturing base in the Kingdom more broadly. Why isn’t there more, what is that the [inaudible] manufacturing base in the Kingdom is also virtually non-existent as well. And I think that that’s kind of the emphasis. I think on the Arab Peace Plan, more broadly the challenges, it’s an offer that’s not really attractive right now for Israel. And understandably the original idea was that you had Israel’s neighbours taking part who could guarantee a degree of security for Israel. And you look at like Syria are in no state to do that, you look at kind of, they already have a Israel already has a good relationship with Egypt. So in that regard, one of the broader things about recognition. Recognition, it’s hard to say what recognition will come when you have parts of Syria and Iraq under the role of Daesh. Like I think there needs to be a fundamental re-calibration of a) what do you really get from the Arab Peace Plan? I mean because the current state, you kind of get the same from the current status quo. Like suddenly I don’t know in that regard I think one area that could be worked on is you have an improvement now between, of relations prior to the coup and I think will continue between Erdogan with Jerusalem and Ankara. Areas of negotiation on aid to the Gaza strip. I think there can certainly be ways of looking at how better to stabilise the West Bank and the Gaza strip and areas where, in that regard I think that in the long-term you could kind of [inaudible] areas to reach there but I will get to a point where the full original terms of the peace process can be, the air peace initiative but they’re settling the [inaudible] other things. [Inaudible] frankly off the table. So, I think it will try to create diplomacy but I personally don’t get the sense that there’s much momentum on either side for that.

Question six:

David [inaudible] from [inaudible]. Saudi Arabia’s had some criticism in terms of being less than overly accommodating of Syrian refugees. Can you say something about what your [inaudible] response has been to the Syrian refugee crisis?

David Bowen:

I think that the mistake, in part, of often times of how the Syrian refugee story or the Yemeni refugee story is covered in a lot press is that Saudi Arabia does not actually classify people they take into the country as refugees. I think Saudi Arabia has taken, they take them into, give them homes opportunities, jobs. Not been building a refugee camp. So often at times, this narrative that Saudi Arabia is not doing anything for Yemenis and Syrians, the number of Yemenis they’re taking in and resettling and giving jobs and opportunities is quite substantial. So I think that it’s kind of a, it’s just because they, this idea that you need to be seen as taking care of refugees as you put them in flimsy, tented camps living on the side of post neolithic existence which is happening in places like Jordan for a Syrian refugee. Compared to a home, a job and opportunity, I think it’s slightly, that Saudi Arabia is taking much better steps, I think for taking care of both Yemeni as well as Syrian refugees.

Davis Lewin:

Gentleman at the back.

Question seven:

My name’s Dave Sullivan, I don’t represent any organisation. Could you perhaps comment on two political, fairly recent political developments? Number: [inaudible] which will enable the families of victims of 9/11 to sue Saudi Arabia directly. Ok, that’s the one factor.  The other is of course, and in the last couple of weeks, we had published the 28 pages from the 9/11 report that were kept secret. It’s still heavily redacted but, let me put it this way, if 15 of the 19 hijackers were from Malawi and a report like the 28 pages came out, Malawi wouldn’t be on the list of one of the states that support terror.

Question eight: 

I have two questions. One is related to Saudi Arabia’s [inaudible] policy and [inaudible] today. Your thoughts in the emergence [inaudible] from the King and what kind of role that plays in cleansing Saudi Arabia’s image in the world, especially after their intervention in the Yemen and clear violations of international marine law. What are your thoughts on that?

Andrew Bowen:

So, I think one point of clarification on the bill: the White House, President Obama has not supports the bill, so that’s one point. And I think Senator Schumer the incoming leader, successor to Harriet Reed but also a writer into that legislation that if it goes through Congress it would greatly limit that bill. But more broadly on the 28 pages, I did a piece in Foreign Policy on this in response to Simon Henderson, from the Washington institute, who also has his own particular set of views but I don’t think there was much there, there. In the sense you like at kind of you look at the 28 pages which was the original goal of, were a number of un-investigated leads that fell out of the purview of the commission and then for the past ten years President George W. Bush made the decision to keep it secret. I think actually that may have been a mistake to actually, by the Bush White House, to keep it so [inaudible] because it kind of created this like mythology that George W. Bush was shielding the Saudi Royal family from a lot of nefarious things, but then in [inaudible] period you have the CIA inspector general investigation, you had the DNI, you had the FBI, you had a Congressional investigation. A number of investigations, more investigations than the Benghazi investigations, but it all kind of came back and said the original ideas that were proffered as un-investigated leads, they did not actually find much there there. And I think that is something to say like the point of the 28 pages is there wasn’t a smoking gun. I think that’s on the pages itself but on the King Salman centre which does humanitarian work I think there are a lot of different organisations that do excellent work in trying to, education. I don’t know if it’s a… I think that also Yemen is a very complex in terms of the number of actors fighting in the war, so, and that’s where I would just say on that point.

Davis Lewin:

Well, ladies and gentlemen. I must say, adding my own twist to this in a way that, one of the things that is difficult about the area of work that the HJS operates in is the eternal challenges that this kind of policy area throws up. And certainly the world hasn’t gotten any less easy to manage in a way I think [inaudible] one of the interesting things in this of course is how unbelievably unpredictable it is, because if you would have spoken about Saudi Arabia and Israel and the terms that we have today, even 5 years ago it would have been absolutely laughable and just completely unimaginable in that way. So, I’m always thankful for the guidance of people like Andrew, who have a much better understanding of the internal dynamics over there than I do myself and indeed want to ask you to join me in thanking in the usual way for this very comprehensive overview. Thank you.

HJS



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