Saudi Arabia’s Crown Prince Offers Bread and Circuses – But Is It Enough to Keep His Country Onside?

The atmosphere outside the purpose-built, 15,000-seat stadium that hosted heavyweight contenders Antony Joshua and Andy Ruiz in December was unusually civilized for a boxing match. Families with young children strolled through the Diriyah Oasis, a manicured park designed to celebrate the cultural significance of the Kingdom of Saudi Arabia’s birthplace. Young couples – the men mostly sporting spotless white thawbs, the women in flowing black abayas – chatted over coffees and ubiquitous bowls of dates. Luxury cars lined the parking lots. Smiling security staff waved arrivals so seamlessly into the two entry queues that you barely noticed you were being split into the “all-male” and “women and families” categories that were until recently separated by partitions in cafes and restaurants. 

Welcoming the Wild West

This was the first time Saudi Arabia had opened its doors en masse to Western visitors – the tourist visa was introduced just two months prior – and to showcase a sweaty, lightly-clad, contact sport, no less. This heavyweight championship rematch was another step in Crown Prince Mohammad bin Salman’s (MBS) grand modernization campaign, alongside easing gender restrictions and green-lighting cinemas and music concerts. If the idea was to challenge stereotypes of the desert Kingdom, it was working: there was even a sprinkling of rain. 

And then, a moment of crisis ruptured the calm. Two clearly intoxicated Englishmen screaming profanities broke into a fistfight right outside the stadium just minutes before the Crown Prince (and the event’s orchestrator) were due to arrive. The effect was shock; alcohol is illegal in Saudi Arabia and scenes like this are practically unheard of. People stared and security guards closed in. Perhaps this meeting of cultures wasn’t quite as friction-free as it had first appeared. 

Saudi Arabia Shells Out Big Bucks for Bread and Circuses

Reported to have cost over $40 million, the biggest bout of the year is one of the more expensive major sporting events to be staged in Saudi Arabia, but it’s far from the only one. From 2018 to 2019 the country also hosted a European golf tour, a prestigious horse racing event with a $20 million prize, Amir Khan’s WBC international welterweight title fight,  Formula E Diriyah E-Prix, a Supercoppa Italiana match between Juventus and AC Milan, and even a WWE event featuring a female wrestling match for the first time in the country’s history, albeit with the competitors wearing more modest outfits than usual. 

Not everyone is happy about this, of course. Human rights groups frequently criticize the choice to host international sporting events in Saudi Arabia as attempts to “sport-wash” a reputation scarred by ongoing abuses. These include the arrest and imprisonment of women’s rights activists, writers, bloggers and government critics, as well as the high-profile October, 2018 murder of Washington Post journalist Jamal Khashoggi at the Saudi Arabian embassy in Turkey. 

Meanwhile, while younger Saudis tend to be broadly positive about the country’s recent modernization and liberalization efforts – MBS enjoys a 90 percent approval rating among those aged 18-24 – some older and more conservative counterparts grumble that the changes are too much, too soon. It’s true that social norms are changing rapidly, at least by the standards of this deeply conservative country. Many of Riyadh’s gleaming SUVs are now driven by women, mixed-gender pairs sip lattes in Starbucks and, occasionally, you even see a woman without a head covering. None of this seemed imaginable just four years ago. 

MBS’ Modus Operandi

If MBS is aware of the old guard’s muted objections against his campaign of change, he hardly seems perplexed. The Crown Prince made his position clear almost as soon as he took office. In November 2017, he grabbed international attention by holding some of the country’s most senior princes and elite businessmen under arrest in the Ritz Carlton hotel – part of an anti-corruption drive lauded by international monitors that successfully recovered over $106 billion. 

Clearly, the Crown Prince was not concerned about ruffling feathers, and at first it paid off. His efforts were met with praise from the international community: human rights groups welcomed the lifting of the ban on women driving in 2017, for example. Others were encouraged by the environmental implications of Vision 2030, MBS’s ambitious plans to overhaul Saudi’s economic system and diversify away from oil. The plan involves boosting non-oil industry sectors such as defense, manufacturing, renewable energy and tourism, including high-profile entertainment and sporting events.

Very quickly, though, it became apparent that liberalization in Saudi Arabia would only happen on the precise terms and timelines dictated by MBS. The Crown Prince is regularly accused of arresting his critics and was even accused by Lebanon of holding their Prime Minister hostage

Even after the driving ban was lifted, the activists who had campaigned for this languished in prison. The most notable of these is Loujain al-Hathloul, a 30-year-old woman’s rights activist who has been detained for several years and is believed to have suffered torture at the hands of Saudi authorities while in prison. The message is clear: change is coming, but only when and how MBS decides it. Any deviation will be viewed as dissent. 

The Cracks Start to Show

Ultimately, it was the brutal murder and dismemberment of Washington Post journalist Jamal Khashoggi, whose column criticized the regime, at the Saudi Consulate in Instanbul in 2018 (and MBS’s suspected involvement) that sent the Crown Prince’s reputation into free-fall. Riyadh initially denied that the execution had taken place at all, but was forced to backtrack when it emerged that the embassy was bugged and hidden microphones had recorded the entire affair. 

This grisly discovery obliterated the carefully crafted “reformist” image that MBS had presented to Western governments. MBS maintains that he knew nothing of the murder – he says it was carried out by rogue agents – but in a report for the UN by special rapporteur Agnes Callarmand found “strong evidence” that this was an extrajudicial killing ordered by senior Saudi authorities, most likely MBS himself. International public opinion turned against the regime, the country dropped eight points in the Press Freedom Index (from an already-low 172 to 180) and the US congress debated whether to discontinue sales of weapons to Riyadh. 

“You cannot do something like what happened with Jamal and expect people to be like: that’s fine, absolutely no problem,” says Michael Stephens, a Research Fellow for Middle East Studies at the Royal United Services Institute (RUSI). “You know, it just doesn’t work that way. Why? Because of the egregiousness of the offense and the fact that Khashoggi was closely connected to many people. “

The Khashoggi affair hasn’t only left a lasting stain on MBS’s reputation among his would-be allies; it has also given his regional rivals more ammunition. Both Qatar and Turkey used the incident to discredit MBS, with Turkish President Tayyip Erdoğan, a long-standing critic of the Crown Prince, capitalizing on the killing to publicly berate the young Saudi leader.

What Happens When the Money Stops Flowing?

While MBS has fallen from grace on the international stage, he has so far kept criticism at home to a minimum. Part of this is self-censorship, but certainly not all of it; the groundswell of support among younger Saudis is in earnest. 

Why wouldn’t it be? Saudis are increasingly cosmopolitan in their outlook. The country is fast emerging as one of the world’s largest (and highest spending) outbound tourism markets. University students study abroad at five times the OECD average. Women make up half of all entrants to the tertiary education system, although they are still underrepresented in the workforce. While many Saudis are quick to emphasize that they are proud of their culture and don’t want to see it eroded, it is hardly surprising if younger generations with connections abroad are open to new ideas, as well as more opportunities to put their extensive education to use. 

Until now, Saudis also enjoyed enormous financial freedoms to compensate for other restraints. The Saudi leadership has historically issued extremely generous state subsidies to its population in exchange for loyalty – an arrangement known as Saudi’s Social Contract system. Healthcare and education through to university level are free for all citizens. Around 90,000 Saudi students studying overseas receive government grants that take care of full tuition, a comfortable stipend to cover living costs for themselves and dependents, and ever so often, unexpected gifts of thousands of dollars — essentially, a reward for being unofficial brand ambassadors for Saudi Arabia abroad. Combined with the reintroduction of concerts, cinemas and other light entertainment to the Kingdom, it’s easy to see how MBS has kept this section of society so sweet.

But now the system is under threat. As much of the globe went into coronavirus lockdown in the first quarter of 2020, demand for oil dwindled. In March, MBS initiated a global oil price war, much to the dismay of Russia and the US. Saudi’s decision to sell its crude oil at a reduced price while increasing production sent the global price of oil plummeting. “Saudi Arabia gambled that it would be able to do a showdown with Putin and it basically didn’t succeed in getting him to step back,” says Dr Roxane Farmanfarmaian, a lecturer at Cambridge University’s department of Political and International Studies.

Oil Revenue Isn’t Easy to Replace

MBS’s long-term plan may be to unhook his country’s economic performance from oil, but for now, the two are very much intertwined. As global oil prices fell to an all-time low, government revenue was slashed by 22%, piling financial stress on the Saudi economy, which already under pressure due to huge public expenditure incurred by Vision 2030. The truth is that Saudi Arabia is further away from diversifying (the economy) than it’s probably been ever since MBS took control of this issue,“ says Stephens. 

This is already inhibiting MBS’s ability to win over the population with lavish spending. Riyadh recently announced that it will be tripling the rate of VAT and suspending the living allowance stipends introduced to support government workers in 2018. It’s one thing for MBS’s modernization vision to falter; for it to fail without the financial security blanket that Saudis have come to expect could have a huge impact on his support base at home. 

Shrinking Influence Abroad

Compounding the issue is the expensive, relentless war next door in Yemen, which has already cost the Kingdom $265 billion and counting.

Five years into the conflict, Saudi Arabia has failed to quell the Houthi rebel presence in Northern Yemen and MBS has lost his key ally in the Yemen fight: the United Arab Emirates (UAE). Reports of airstrikes killing civilians have drawn widespread condemnation; the UK government has been banned by its own Supreme Court from selling weapons to Saudi Arabia that could be used in Yemen.  

MBS also risks appearing to have been outmaneuvered in Yemen by his number one enemy, Iran, which provides unofficial support to Houthi rebels, enabling the fighting to continue and draining Saudi resources. It’s an effective strategy, according to Farmanfarmaian. “The moves of Iran generally have to be viewed as very, very well considered overall,” she says. 

Yemen: Saudi Arabia’s ‘Afghanistan’

“I think it’s going to be their Afghanistan,” says Stephens, referring to the US’s two decade-long conflict. “If Saudi Arabia went into this war to stop Iran having a foothold in Yemen, then they failed. “

Even Iran’s other enemies are loath to be Saudi Arabia’s friend. When the Iran-backed Houthis launched a major drone strike on an Aramco oil facility on Saudi Arabian soil in September 2019, the US chose not to step in to lend military support for a counterattack on Iran. Farmanfarmaian believes MBS’s oil price war was motivated partly out of revenge against the US, another major oil producer, for this slight — but if so, it backfired. Rather than re-establishing Saudi Arabia’s global influence, this tit-for-tat approach pushed MBS further into the cold. In May 2020, Washington announced its decision to withdraw its Patriot air defense system, used to protect Saudi from Iranian attacks. The US is also considering withdrawing other protective US military equipment from the Kingdom.

“MBS is trying to push his weight around at a time in which Saudi Arabia’s voice probably never mattered less,” says Stephens. He believes that underpinning all this is the “basic truth” that the country is a decreasingly important player on the world stage. “Saudi Arabia is no longer the big daddy that it was,” Stephens says.

Too Many Yes-Men

So what exactly is driving this self-destructive hubris? Stephens believes it comes down to the reluctance of MBS’s inner circle to dare contradict or question their prince. “There is a culture of fear. I have seen it. It’s very negative actually because it is creating a ‘Yes Man’ approach to politics,” he warns. 

This culture of appeasement means the leadership rarely gets to hear about outside criticism, concerns or the way external stakeholders truly view the kingdom. Hedge funds and asset managers outside the country, for example, quietly warn investors to “dodge, stay clear. Don’t get involved. Don’t be part of this,” says Stephens – but these reservations are unlikely to ever reach MBS’ ears. 

When he came into power, Saudi Arabia’s Crown Prince inherited a vast playground in which even the most extravagant ideas could be backed up by near-unlimited wealth. With his rivals subdued and even his aging father King Salman suspected to be semi-imprisoned in his palace, there was no-one to caution the young royal against doing whatever he wanted. Slowly but surely, however, MBS is discovering for himself that no matter how iron-fisted his rule at home, there are limits to his power abroad. Without money or friends, the game could soon be up.