Saudi Arabia’s Foreign and Domestic Dilemmas

Even before 9/11, the Kingdom of Saudi Arabia faced increasingly obvious foreign policy and domestic challenges. The year since then has brought many of these challenges to a head, confronting the Saudis with the urgent need to make some very difficult adjustments in both their foreign relations and domestic compact of governance.

During the Cold War, Saudi Arabia shared with the West an overriding interest in blocking Soviet imperialism and frustrating the spread of the godless communist ideology. The United States was the logical partner for the Kingdom, not only because it was the most powerful Western country but also because it was far away and had no history of imperial ambition or ideological agendas in the region. The basic bargain of Saudi-American relations was thus simple: in return for preferred access to Saudi oil, the United States undertook to protect the Kingdom against foreign threats. (This bargain proved its worth in the defense of Saudi Arabia in the 1960s against Nasser’s Egypt, in the 1980s against the Ayatollah Khomeini’s Iran, and — most notably — in the 1990s against Saddam’s Iraq.)

The growing American identification with Israel after the mid-1960s troubled Saudis and caused occasional flare-ups in their relations with the United States, e.g., in 1973. In normal times, however, even severe differences over Israeli-Arab issues could be, and were, subordinated to the imperative of maintaining a common front in the Cold War and against regional challenges to Saudi security. By the mid-1970s, the United States had further insulated the Saudi-American relationship from the contradictions inherent in the U.S. alliance with Israel by launching active mediation of a “peace process” in the Levant. This offered the only prospect of a negotiated solution there. It made it easier for the two countries to set aside differences over substantive issues even after the common interests of the Cold War had disappeared.

The failure of the U.S. and Saudi-led coalitions to devise and implement a war termination strategy to follow the expulsion of Iraqi forces from Kuwait at the end of February 1991 facilitated Saddam’s unexpected retention of power in Iraq. This, in turn, frustrated U.S. plans to deter future aggression from either Iraq or Iran without establishing permanent garrisons in the Gulf. Saddam’s defiant efforts to reassert Iraqi sovereignty engendered continuing low intensity conflict between U.S./UK air forces attempting to back up U.N. weapons inspections and Iraqi air defense units. As time went on, the Saudi public became increasingly opposed both to sanctions against Iraq and to U.S. warplanes (with token British assistance) killing Iraqis from Saudi bases. Only the fact that both activities were pursuant to U.N. resolutions made them politically justifiable to the Kingdom.

The collapse of the Israeli-Arab peace process as the millennium ended left the U.S.-Saudi relationship without a policy framework by which to finesse increasingly emotional differences over the mounting carnage of the al-Aqsa intifada, in which the number of Palestinian dead and wounded, as usual, greatly outnumbered the number of Israelis. The Bush Administration demanded an end to violence by Palestinians but ignored the violence against Palestinians inherent in the Israeli military occupation and imposition of settlements.

Ordinary Saudis linked the apparent American indifference to the death and suffering of Arabs in the occupied territories with American policies that brought death and suffering to the Iraqi people. The result was rising pressure on the government of Saudi Crown Prince `Abdullah to justify the traditionally close Saudi-American relationship to his citizenry. By the eve of 9/11 he had confronted President Bush with Saudi objections to U.S. policies affecting Saudi interests.

The September 11 suicide attacks on the United States by extremist Muslim terrorists, most of them Saudi nationals, led fairly rapidly to U.S. solidarity — first on the emotional level and then as a matter of policy — with Israel as a fellow victim of suicide bombings by Muslim extremists. It also provided an opportunity for an onslaught of criticism of Saudi Arabia in the American media, often by commentators whose imaginations far outran their knowledge of the Kingdom. Their attacks featured the elements of Saudi culture and society most objectionable to liberal democratic ideology — the peculiar intolerance of Saudi Islam, the alleged anti-Jewish and anti-Christian bias of the educational system, and the subordinate status of women — to paint a portrait of the Kingdom as an enemy, rather than a friend. The Christian right joined with the Zionist left to identify Saudi religious particularism with both terrorism and anti-Americanism.

The Saudi response was halting and confused, revealing the embarrassing extent to which the Kingdom has, unlike its detractors, lacked a long-term strategy directed at building public understanding and sympathy among Americans. This is not to say that Saudi Arabia has done nothing. It has opened itself somewhat to the foreign press. It has sent a series of prestigious delegations, led by leading businessmen and including female spokespersons, to the United States. It has reviewed and corrected the most objectionable features of its school curriculum.

These are useful moves, ably carried out by those entrusted with them. They seem, for the first time, to acknowledge the imprudence of relying on the U.S. Administration and a few powerful American friends to protect the relationship from public scrutiny or criticism. But no long-term strategy of broad Saudi reengagement with the United States through public diplomacy has yet emerged. Almost by default, anti-Saudi views are gaining a currency and reaching audiences in the United States, including among U.S. officials, that would have been unimaginable a few years ago. Trends are running against the restoration of sound Saudi-American ties.

On the popular level, Saudis and Americans are now seriously estranged. Outrageous, albeit uncommon, but widely publicized harassment of Arabs and Muslims by U.S. airline and airport security personnel, as well as by immigration, customs and law enforcement officials, has emerged as a powerful inhibition on Saudi travel to the United States. The frightening possibility of arbitrary detention without access to the legal process is a further deterrent to visitors.

Freezes of financial assets on the basis of undisclosed evidence of alleged connections with organizations or individuals suspected of terrorism have led to concern about the political risk of Muslim investment in the United States. The result has been substantial disinvestment in U.S. financial assets by Saudi nationals. The Saudi authorities have been unable to halt a woman-led boycott of U.S. products and investments in the United States, directed at registering objections to U.S. support for Israel as it kills and maims Palestinians. U.S. exports to Saudi Arabia are falling rapidly.

In this context, the unconditional American embrace of Ariel Sharon’s policies toward the Palestinians and U.S. threats to invade, occupy and reform Iraq over Saudi and other Arab opposition have placed a very heavy, and possibly unsupportable, burden on bilateral relations. Much as it would prefer a return to business as usual with the United States, Riyadh has yet to develop a strategy for accomplishing this. It has been forced, for the first time, to contemplate options for cutting dependence on the United States.

In the era of American hegemony, there are no obvious alternatives to the United States as the ultimate guarantor of the Kingdom’s security. As they ponder their limited choices, Saudis seem, nonetheless, to be working on diluting overdependence on the United States, favoring Britain and France even as they develop new relationships with Brazil, China, Germany, Japan and Russia.

Meanwhile, as part of Saudi Arabia’s deteriorated image internationally, concerns about its political stability have reemerged. Most of the factors cited in this regard reflect the biases of Saudi Arabia’s critics rather than the Kingdom’s realities. The most surprising thing about Saudi Arabia in the past has been its boring stability despite the stupefying pace of its modernization. There is no reason to doubt that this will continue to be case. The principal threat to Saudi stability is, in any event, not the religious disaffection or anti-monarchical Islamic republicanism posited by Likud and its American fellow travelers. It is the Kingdom’s fiscal crisis.

The Saudi fiscal system, which relies almost entirely on royalties from oil production rather than taxes for its revenue, can no longer meet the rising demands of a rapidly growing population and a prospering private sector. The Saudi paradox is that the more the Kingdom’s private sector thrives, the more the government must spend to provide it with the services it needs, so — in the absence of any link, in the form of taxes, between private incomes and government revenue — the nearer bankruptcy the government finds itself. Absent a tax system, moreover, Saudi Arabia lacks the financial leeway to buy its way out of its policy dilemmas, as it has sometimes been able to do in the past. Nor does the Kingdom have the cash surplus it would need to cultivate immediate alternatives to the United States as a supplier of defense goods and services.

The basic bargain of governance in Saudi Arabia has cast the government as a dispenser of largesse and charity for the needy. If the government cannot discharge these responsibilities without introducing income and other taxes, the compact of governance — the relationship between rulers and ruled — will have to be renegotiated. If Saudis were required to pay taxes, they have quietly made clear, they would expect a larger role in determining government policy. (No taxation without representation is a principle with universal appeal.)

Not having been taxed, Saudi Arabians have not considered representation worth struggling for. But, as fiscal circumstance compels the Kingdom to contemplate putting in a tax-based revenue system, Saudi Arabia’s rulers must also consider how best to empower more representative forms of government at the provincial and national levels. They will also have to justify the tax system they proclaim by significantly reducing, if not eliminating, government waste, fraud, mismanagement and public procurement rake-offs. Saudis, like others, will pay taxes to fund the efficient conduct of government business but not to reimburse ministries for royal or bureaucratic rip-offs of their budgets.

My clear sense is that the Crown Prince and those around him are not at all intimidated by the prospect of fiscal and political reform. Indeed, they very much want to carry out such reforms. But reform under the best of circumstances is stressful. Under circumstances in which Saudi Arabia must at the same time rethink and realign its international relationships because Saudi-American relations continue to deteriorate, it could prove fatal.

As both an American and a longstanding friend of Saudi Arabia and its ruling family, I believe strongly in the importance of reknitting Saudi-American ties. As an erstwhile diplomatic professional, I have no doubt that this is doable. Cooperative ties have served both countries well. They are vastly preferable for both to strain in the bilateral relationship. But this is not the only reason for both sides to make a serious effort to reverse current negative trends in the relationship. Prospects for the reforms the Crown Prince and others of like mind in the Kingdom want to carry out rest in no small measure on restoring the health of the Saudi-American relationship. To do this will, however, require a breadth and depth of mutual engagement and long-term commitment that, unfortunately, neither side has yet to demonstrate.

Ambassador Chas W. Freeman, Jr., USFS (Ret.)

Washington, DC

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