PROSPECTS 2005: Saudi regime to weather insurgency

Analysis

Following insurgent attacks in Riyadh, Al-Khobar, Yanbu and most recently Jeddah over the past 18 months, analysts in the US government and commentators outside it question the stability of the Saudi regime.

Stable outlook. Despite the spectacular nature of the attacks by al-Qaida and its confederates, they pose no immediate threat to the regime:

• The attacks show no signs of mobilising large numbers of Saudis to support the opposition.
• With oil prices high, the rulers have plenty of grease to lubricate the wheels of governance.
• While family dynamics could change with the death of a senior prince, the al-Saud are currently united enough to prevent debilitating factional infighting.
• Relations with the United States, unsettled since the September 11 attacks, look to be steady and supportive with the re-election of President George Bush.

The most interesting question in 2005 is whether the Saudis will continue their very cautious efforts at political and economic reform, or take the insurgency as a reason or excuse to scale them back. There will be indicators in both directions, but the overall tendency will be against change and reform.

Terrorist threat. The regime faces a serious but limited violent opposition, either directed or inspired by al-Qaida. It scored a number of successes against that opposition in 2004, killing or capturing 17 opponents from its 'most wanted' list. Those opponents did launch a number of gruesome and successful attacks in 2004, but most in the first half of the year (see SAUDI ARABIA: Security forces fight long war - November 30, 2004). The attack in early December 2004 on the US consulate in Jeddah, while professional and damaging, killed no Americans and was ended by Saudi security forces within three hours.

If the insurgents are able to maintain or increase the pace of attacks, it would indicate that the Saudi security forces have not turned the corner in their fight against them. However, it would not mean that the regime was crumbling. Islamist insurgencies took years to pacify in Syria, Algeria and Egypt, with much more violence than has been seen in Saudi Arabia (see SAUDI ARABIA: Security takes precedence over reform - May 14, 2004). There will be more violence in 2005 in Saudi Arabia, but not enough to shake the regime.

Oil price impact. Political stability is strengthened by high oil prices. With every indication that oil prices will find a new equilibrium above 30 dollars per barrel in 2005, the regime has plenty of money to spread around. The fiscal situation is improved, some of the government debt acquired in the 1990s is being retired and patronage networks can be well maintained (see SAUDI ARABIA: Oil windfall threatens reform momentum - November 18, 2004). Moreover, because general economic indicators in the country closely match oil prices, the overall economy is in decent shape, while the stock market has boomed. Long-term problems of youth unemployment and demographic pressures on the infrastructure remain (see SAUDI ARABIA: Long-term instability threatens regime - September 17, 2004), but the short-term economic picture for 2005 is positive. While this reduces the pressure on the government to undertake structural reforms, it does help stabilise the political situation.

Al-Saud split? The most serious threat to immediate political stability is a split within the ruling family that leads either to wider political conflict or stasis in decision-making. While there are differences among the senior princes, they are not of a magnitude to lead to open family conflict. It is possible that 2005 will finally see the death of the infirm King Fahd, but succession should be smooth, as Crown Prince Abdallah has been managing governmental affairs for some time. As long as he is willing to appoint Defence Minister Prince Sultan as crown prince, there should be no significant family squabbles over succession.

Political reform? There will be municipal elections in early 2005, spread out by region from February to April. This is a significant but limited step. Only one-half of the members of the municipal councils will be elected; the others appointed by the government. The powers of these municipal councils remains unclear. Parties are still illegal, and it does not appear that partisan lists will be allowed to campaign together or that country-wide political trends will emerge from these local contests.

The combination of the fear generated by the insurgency and confidence induced by increased oil prices has led the government to put limits on the tentative steps towards political liberalisation of 2003 and early 2004. A number of prominent liberals were arrested for advocating political reform, and those who did not recant remain on trial. The more open political atmosphere of that period, with petitions circulated and greater press freedoms, has been curtailed. With the democratic experiment in Iraq experiencing such problems, it does not seem that regional events will pressure the Saudis to be more open to real reform (see SAUDI ARABIA: Reform drive runs into the sands - October 22, 2004).

Islamist allies. Islamists are a more important constituency for the rulers than liberals. Separating Islamist activists from the violent insurgents has been key to limiting the latter's appeal. Since 2001, the al-Saud have been very successful at coopting their Islamist critics. However, last month a number of these important Islamist critics issued a fatwa supporting the Iraqi insurgency and the participation of Saudis in it. This judgment was rejected by the government and its religious officials, but if it marks the beginning of a split between the government and the Islamists, it could presage problems for the government. While not accepting their view of Iraq, the government will do what it can to keep the Islamists on its side.

US relations. While US public and elite opinion have been strongly anti-Saudi since the September 11 attacks, the Bush administration has worked to protect the relationship from damage, while pressing the Saudis to cooperate more fully on terrorism. Since the emergence of their own violent opposition in 2003, the Saudis have been more forthcoming, stabilising the relationship. While the Saudis will be subject to occasional rhetorical pressure from Washington on human rights and political reform, the administration evinces little desire to push the Saudis towards fundamental political change. With oil prices high and Iraq a continuing problem, Washington has little leverage on Riyadh. Bush will most likely exempt the Saudis from any serious pressures he may seek to place on other Arab regimes for democratic reform.