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Saudi Crown Prince Mohammed bin Salman (MBS) has launched a dramatic programme of domestic reform in the traditionally conservative Kingdom.
Economic reforms are essential to rescue Saudi Arabia from unsustainable oil-dependency. The oil sector represents around 70 per cent of Saudi government revenue but due to unstable prices, the value of oil exports has fallen from $337bn in 2012 to $158bn in 2017. Saudi Arabia’s population is soaring, having doubled from 16m in 1990 to more than 32m today and forty per cent of under 24’s are unemployed.
BICOM’s research team has published a new briefing analysing the risks and opportunities for British interests in the region, including how changing Saudi strategy could transform Israeli-Arab and Israeli-Palestinian relations.
Saudi Arabia’s foreign policy interests now increasingly overlap with Israel. Covert cooperation between the two states has expanded significantly, but without concrete progress on Israeli-Palestinian peace talks, it will remain limited and secretive. Anything else is high risk with low reward for Saudi rulers.
- Saudi Arabia needs to undergo rapid internal reforms to its unsustainable economic and social model by reducing its dependence on oil and creating economic opportunities for its large youth population – both men and women. This presents potential trade and investment opportunities for British companies, but the risks of economic failure or domestic backlash are significant.
- Meanwhile, US retrenchment and growing regional threats have also prompted a more diverse and proactive regional policy, especially to contain the influence of Iran, but with risks of overreach or miscalculation.
- Saudi interests increasingly overlap with those of Israel, especially regarding Iran, but only up to a point. Without progress on the Palestinian issue, Israel-Saudi cooperation will remain limited and covert. Meanwhile, Israel is concerned about Saudi acquisition of advanced weaponry and its ambition to match Iran’s nuclear capability.
To unleash the potential of Saudi Arabia to play a constructive role in regional stability, the UK, along with the US and other Western governments will need to commit to a coordinated, long-term regional strategy to contain the threats posed by Iran and its proxies as well as Sunni Jihadists.
You download the full briefing below.