Report

Saudi Arabia Unveils Economic Reform Plan

After weeks of hinting, Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman announced the kingdom’s expansive economic reform program yesterday, which has been dubbed “Vision 2030.” Though Saudi Arabia still derives more than 90 percent of its budget from oil and natural gas sales, bin Salman said that the plan could end Saudi reliance on ...

GettyImages-524092328

After weeks of hinting, Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman announced the kingdom’s expansive economic reform program yesterday, which has been dubbed “Vision 2030.” Though Saudi Arabia still derives more than 90 percent of its budget from oil and natural gas sales, bin Salman said that the plan could end Saudi reliance on oil income within four years. The plan also calls for developing the Saudi private sector, growing it from 40 to 60 percent of GDP over the next 14 years, as well as reducing unemployment and increasing women’s employment.

Much of the plan hinges on privatizing government assets, including education, healthcare, and most importantly Saudi Aramco, the national oil company. Under the plan, Aramco will become a holding company listing 5 percent of the company on stock exchanges in Riyadh and one other city, possibly New York. According to bin Salman, Aramco is worth between $2 and $3 billion, which could bring Riyadh up to $150 billion in an initial public offering. “Mohammed bin Salman wants to light a fire under a system that is accustomed to moving at a glacial pace. His thinking is sound. His timeframe less so,” one expert told the Financial Times in response to the plan.

Hundreds of Arrests in Cairo Despite Few Protests

Several planned protests in Cairo yesterday didn’t occur because of an increased police presence in public squares. Though activists organized rallies on social media to protest their dissatisfaction with President Abdel Fattah el-Sisi’s policies, many were dissuaded by barricades, armored vehicles, and police officers blocking popular squares. One protester told the New York Times that she spent hours wandering the city “trying to find somewhere we can put a toe without getting shot or arrested.” Approximately 240 people were arrested in the protests that did materialize yesterday, according to an activist group. In addition, 43 journalists were also arrested, seven of whom remain in jail today, according to the Egyptian Journalists Syndicate.

Headlines

  • Emirati-backed pro-government Yemeni forces retook the country’s largest oil terminal yesterday, one day after entering the city of Mukalla after it had been mostly vacated by al-Qaeda in the Arabian Peninsula.

 

  • Thousands of protesters marched from Baghdad’s Tahrir Square to the entrance of the Green Zone at a rally organized by Muqtada al-Sadr; the protest is a response to the Iraqi parliament’s stalemate on anti-corruption reforms, which includes a new cabinet put forward by Prime Minister Haider al-Abadi.

 

  • Iran summoned the Swiss envoy, who represents U.S. interests in Tehran, and threatened to bring the United States before the International Court of Justice for “theft” in response to a Supreme Court decision allowing $2 billion in frozen assets to be used in settlements paid to families of Americans killed in Iranian-supported attacks.

 

  • Israeli security forces arrested three Palestinians in the West Bank city of Nablus suspected of planning a terrorist attack in Jerusalem.

 

  • U.N. Syria envoy Staffan de Mistura, who has been continuing talks with the Assad regime delegation since the opposition withdrew from discussions, will brief the U.N. Security Council on the state of the peace talks tomorrow evening.

 

Arguments and Analysis

Why two islands may be more important to Egyptian regime stability than billions in Gulf aid” (Laurie A. Brand and Joshua Stacher, Monkey Cage)

“Until now, the post-July 2013 Egyptian military-security regime had been largely successful in repressing dissent, whether through its brutal assault against members, both real and imagined, of the now-outlawed Muslim Brotherhood, or through harassment, arrests and worse of laborers, civil society activists and human rights workers. Using a legitimation strategy that wrapped various policy initiatives in hyper-nationalism and portrayed opponents of any sort as traitors, the regime managed to convince large swaths of the population that it was the only force powerful and patriotic enough to defend the country against the remnants of the Brotherhood or the even bloodier insurgents in Sinai claiming affiliation with the Islamic State militant group, also known as ISIS, ISIL and Daesh. However, Sissi and his advisers failed to appreciate the implications or logical outcome of a legitimation strategy so completely grounded in nationalism when they announced the return of Tiran and Sanafir. The history of the control and sovereignty over the islands is complex, evidenced by the flurry of justifications and stinging critiques that followed. But for the vast majority of average Egyptians, these islands are part of the national territory. School instructors were reportedly flummoxed by the announcement that what they had been teaching from government-approved textbooks for decades was suddenly incorrect and were uncertain how to respond to their students’ questions. None of this would matter much if the islands had remained solely a source of “academic” controversy. They did not.”

 

Updating U.S. Saudi Ties to Reflect the New Realities of Today’s Middle East” (Brian Katulis, Rudy deLeon, Peter Juul, Mokhtar Awad, and John Craig, Center for American Progress)

“If fully implemented, these reforms would alter the basic terms of the Saudi social contract and could lead to wider progressive social change in the Kingdom. ‘What is missing from the current Saudi economy,’ one Saudi official said, ‘is the idea of what Saudis can do for their country and their economy.’ The partial privatization of Saudi Aramco, for instance, would require an unprecedented level of transparency for the Kingdom and more predictable business laws and regulations. A more open and competitive Saudi economy could make it difficult to sustain gender-based restrictions that currently prevent Saudi women from seeking work and maintaining employment. Although it is far from guaranteed that economic reform will lead to political and social change, support for the new Saudi leadership’s economic reform program should be a top priority for the next administration — especially in the context of a new bilateral strategic dialogue with Riyadh. American policymakers should encourage their Saudi counterparts to couple their economic reforms with progressive political and social change by reminding them that social progress in Saudi Arabia will make the Kingdom more attractive to American businesses and more conducive to sustainable economic growth.”

-J. Dana Stuster

FAYEZ NURELDINE/AFP/Getty Images

Trending Now Sponsored Links by Taboola

By Taboola

More from Foreign Policy

By Taboola