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Saudi Arabia is a kingdom in retreat

By Alon Ben-Meir - posted Tuesday, 19 April 2016


The religious system is often run contrary to the social, political, and economic aspirations of the young, and is leading to a growing resentment which is becoming increasingly troublesome for the government.

The looming economic crisis: With estimated oil reserves of 270 billion barrels, the fall of oil prices has had an unprecedented effect on the Saudi economy. The oil crisis has inflicted major economic disruption, forced the government to cut subsidies and curtail many development projects, and reduced its international stature and ability to exert influence over other Arab states.

Although the Saudis have nearly $660 billion in cash reserves, the government has withdrawn roughly $70 billion to make up for shortages in the fiscal 2015 national budget. If the price of oil decreases further in the next few years, the Saudi economy could go bankrupt.

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There is massive inequality between the various classes. Nearly one fifth of the population lives in poverty, especially in the predominantly Shiite south where, ironically, much of the oil reservoirs are located. In these areas, sewage runs in the streets, and only crumbs are spent to alleviate the plight of the poor.

While the poor are getting poorer, thousands of princes and princesses live lavishly (mostly in Europe), spending hundreds of millions of dollars and occupying opulent villas, which further drains economic resources.

Being that Saudi Arabia has and continues to be almost completely dependent for revenue on oil exports, which has more than covered its national budget, it had no compelling reason to develop diversified industries.

Moreover, the Saudis became increasingly dependent on millions of foreign laborers, who are subjected to abusive, slave-like conditions, to do the 'dirty work' that Saudi citizens are unwilling to undertake.

The hostile rivalry with Iran: The relationship between Sunni Saudi Arabia and Shiite Iran has always been characterized by tension and mistrust. The quiet enmity came to the fore in the wake of the 2003 Iraq war and the growing influence of Tehran over the Shiite Iraqi government.

This was further aggravated with the eruption of the civil war in Syria, where Iran supported the Assad regime with money, military equipment, training, and subsequently foot soldiers, while the Saudis provided similar aid to the rebels opposed to Assad, short of dispatching ground troops.

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The enmity between the two countries took another turn for the worse when it was suspected that Iran was pursuing a nuclear weapons program, which Riyadh viewed as a direct threat to its national security. Despite the Iran deal, the Saudis remain deeply skeptical about Tehran's ultimate intentions.

The Iraq war also ignited the dormant millennium-old religious conflict between Sunnis and Shiites, and Syria and Iraq became the battleground between the two sects, where the bloodshed continues unabated, claiming the lives of thousands each year.

The execution of the Saudi Shiite cleric Sheikh Nimr al Nimr-an icon who called for addressing human rights violations in Saudi Arabia, was charged with incitement and treason, and sentenced to death along with 46 others-further deepened the animosity between the two countries. This caused unrest among Shiites in the country, sparked protests in Tehran, and was condemned by the international community.

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About the Author

Dr. Alon Ben-Meir is a professor of international relations at the Center for Global Affairs at NYU. He teaches courses on international negotiation and Middle Eastern studies.

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