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Saudi’s economic problems 30, August 2011

Posted by thegulfblog.com in Saudi Arabia.
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While in Carrefour this week standing at the checkout there was a burkad up woman in front of me with her 10-ish year old child. For seemingly no reason other than boredom (the queue was taking ages) the girl started to cry those pathetic, ‘I can’t really be bothered to put my all into it, I just want some attention’ type of crocodile tears. Any parents, those with experience of younger siblings or ten year old children will know what I’m on about.

In response, the mother thrust a Galaxy chocolate bar into the little girl’s hand: she continued to cry. A second Galaxy bar was offered: no dice. Then a king size Lion bar and a Galaxy chocolate drink carton were offered. A moment of indecision swept across the little girl’s face: should she relinquish here clearly superior bargaining position for just two Galazy bars, one king sized Lion bar and a Galaxy drink, or ought she push straight onwards and upwards…a kilogram or two of Cadbury’s, a gallon of Coke, a hectare of Choco-Choco Puffs or a Porsche Cayenne…clearly it was all within her reach. But, magnanimous in her humiliation victory, she accepted her bounty, the non existent tears stopped welling and a brooding scowl resumed its place.

This atrocious parenting (yes, I said it) is a mirror image of Saudi Arabia’s recent policies. In its desperate desire to appease the youth (in particular) in the Kingdom, the government has given out all the Galaxy and Lion bars in the land. Hunger sated for the moment and the restlesness in the Kingdom subsided.

But just as the parent in Carrefour will likely be reaping the whirlwind of such short-termist decisions for years to come, again, so too it is the same for Saudi. Indeed, the headline grabbing snippet from a recent article in Foreign Policy notes that Saudi will need an oil price of $320 per barrel of oil by 2030 if its ever more distended budget is to be balanced.

Aside from this acutely alarmist and selacious figure, the article is full of interesting snippets suggesting just how screwed the Kingdom is challenging the coming years will be.

  • Government spending now rising at 10% per year
  • Add to this the great $130bn giveaway of 2011
  • Funding the counterrevolutions around the Middle East – many billions
  • 1/3 of budget spent on defence – rise versus the supposed growing Iranian threat?
  • A crushing growth in domestic oil demand
  • “One of the world’s least energy-efficient economies”
  • OPEC competition from a revatilising Iraq, a post-revolutionary Libya and possibly Venezuela
  • The growing spectre of non-OPEC oil supply growing

The good news is that these problems coming home to roost are some way off. If Saudi Arabia takes bold and decisive action now, it may well be able to find a suitable and sustainable long-term footing. The bad news is that this will never ever happen. So the Kingdom will rumble on, spending ever more wildly beyond its means until it eventually tries to chronically hike up the price of oil. When this fails or forces meaningful diversification (of supply or from oil) then one needn’t be a savant with clairvoyant talents to work out just how bitterly the powers that be will root for their own survival.

Hat tip: Abstract JK

 

 

 

The Saudi-Egyptian Causweay 17, July 2011

Posted by thegulfblog.com in Egypt, Saudi Arabia.
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So plans are vaguely afoot for Saudi Arabia and Egypt, or rather Saudi Arabia, to build a causeway linking the two countries together. What a wonderful joint venture undertaken in the spirit of good, fraternal and long-term friendship.

What, do we think, are the odds of this actually coming to pass; of it actually being built? Snowball’s chance in hell? Accrington Stanley winning the Champion’s League? Me ever finishing my sodding PhD? Sumfin’ like that, methinks.

Saudi women driving: I’m caring less and less 22, June 2011

Posted by thegulfblog.com in Saudi Arabia.
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I get regular emails sent to my Gulfblog.com account from various sources. One of them, curiously, is AIPAC with its own  unique brand of selective vision. More recently I keep getting press releases regarding Hilary Clinton and the current issue of women in Saudi driving.

While technically and wholly rationally I think that women driving in Saudi is probably important as another baby-step in the direction of reform, more generally, I am simply caring less and less about the issue. Not because I think that it is not an important issues, not because I think women should not be able to drive and not because I am some kind of misogynistic prat, but because it is so clearly pathetically unimportant right at this very minute. Of course I am referring to the execution of the Indonesian maid recently who, from what I can see, had no due process of any meaningful description, no consular assistance and was being abused by her employer.

So in this light I just can’t get ‘enthusiastic’ about reform for women driving. Moreover, I think it is really rather awful for the driving issue to have grabbed the world’s attention as ‘an issue’ when such acts of barbarity continue in Saudi. Clearly, a maid having her head cut off is not newsworthy enough and once again Saudi rights trump those of the lowly maid.

Women driving: reform in KSA? Long, long way to go 19, June 2011

Posted by thegulfblog.com in Saudi Arabia.
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My overriding reaction to these stories of women in Saudi Arabia driving is, well, somewhat dismissive. Yes, I understand that changes can only come incrementally and I realise that this could be a highly symbolic moment.

But, to bring the discussion back to earth with something that, well, matters I note that on Saturday an Indonesian woman in the Kingdom was beheaded for murdering a Saudi woman. Of course, she was a maid. I know basically nothing more about this crime and I’ll keep my own thoughts and prejudices to myself about this incident. But in this light, does it remotely matter if a few women go driving?

I’m wrestling with my own pessimism here, I suppose. Logically evaluating the trajectory of these things and recognising that, as I note, things take time, I suppose that I realise that Saudi just has its own pace. Still, probably wrongly, I just can’t get past their sporadic acts of utter brutality and unfairness and so simply couldn’t give a hoot about some Saudi women driving around.

Update

I’ve just come across another word or two surrounding this executed maid. It seems that she was not allowed or offered consular assistance by the Saudi authorities. In a capital case. Revolting.

The same article notes that in a separate case, the Saudi appeals court overturned  a three year sentence for a Saudi woman accused of torturing her Indonesian maid who was admitted to hospital with broken bones and burns to her head and face.

What can one say to this? It’s all just beyond despicable.

Throwing money at ‘strippers’: a Saudi party 5, June 2011

Posted by thegulfblog.com in Saudi Arabia.
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This video puts my parties to shame. I just cook some food, put on some music (not too loud) and sit around and chat. Rarely do I invite tens of strippers and just about never do I toss around bundles of cash. Guess I’m getting old.

And lest any Brit watch this clip and get smugly smug, I remind you of this.

Iranian flotilla heads for Bahrain 16, May 2011

Posted by thegulfblog.com in Iran, Saudi Arabia, The Gulf.
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An Iranian naval convoy of activists, students and professors is heading to Bahrain to protest at what they see as the legitimate demands of the Shia population there being ruthlessly oppressed with the open support – if not direction – of regional allies, notably Saudi Arabia.

The flotilla insists that it will ask for permission to enter Bahraini waters, which will surely be refused.

This action will now be the face of Saudi claims that Iran is interfering in Bahrain’s domestic politics, a view that is utterly entrenched in the Kingdom and elsewhere throughout the Gulf. Indeed, overall there has been little appreciation that the Shia in Bahrain may have legitimate grievances that ought to be given a voice. Instead many Gulf countries, strongly led by Riyadh, Abu Dhabi and of course Manama have been propagating the notion that practically all of the troubles are down to Iran.

Technically speaking, this incident should pass without a hitch. First, the flotilla will never be granted access to Bahraini waters, which they claim they will seek. And second, the Bahraini (or Saudi) ships which will intercept them should they progress further will surely be aware that there will be approximately a million cameras on the Iranian boats ready to capture any images of ‘unprovoked brutality against a humanitarian convoy’.

Yet this overlooks two things.

Firstly, one must not forget what a profound mess the Middle East’s best trained armed forces made of a flotilla intervention last year.

Secondly, there is a wholly poisonous Sunni-Shia, Arabian Gulf-Persian Gulf atmosphere in the region at the moment. Moreover, Saudi Arabia appear to be edging away from simply following the American lead and are striking out on their own in terms of a more muscular, assertive foreign policy. Under these circumstances, not only is it unfortunately possible to see them using this example of ‘Iranians entering GCC waters with…umm…hostile intent’ as an excuse to act but more generally in this febrile atmosphere I would not remotely put it past Saudi or Bahraini sailors to take a pot-shot just for the hell of it.

KSA refusing overfly for Libyan rebels 8, May 2011

Posted by thegulfblog.com in North Africa, Qatar, Saudi Arabia.
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Reports indicate that the acting foreign minister of the Libyan rebels has cancelled a trip to Qatar after Saudi Arabia refused him permission to overfly the Kingdom.

Traveling with the acting foreign minister were three other members of the rebels National Transitional Council who were held at Cairo Airport for 20 hours (I think we can all relate to that pain) before finally being sent back to Libya.

It seems that Saudi Arabia’s intrinsic fear of change and anger towards that little upstart of a country – Qatar – continues to shine through. Mature stuff.

Hat tip:

@DohaNews

Jeddah’s mile high tower 14, April 2011

Posted by thegulfblog.com in Saudi Arabia.
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Plans are seemingly afoot to build a $26 billion mile-high sky-scraper perferator in Jeddah in Saudi Arabia. It will be  something like twice as tall as the Burj Khalifah in Dubai which is already really rather tall.

This is the latest installment in the perennial game of mine’s-bigger-than-yours that goes on in the Gulf, be it with buildings, car license plates, cities or attractions.

This project will not go well and I would be surprised if it were built. Jeddah has suffered from devastating floods in recent years and I’d wager that its residents would far rather that its lake of human waste was properly dealt with than a staggeringly expensive substitute for someone’s masculinity was erected in the city. If this thing is built, it will soon become the symbol and very personification of the catastrophic waste and indulgence of Saudi Arabia’s elite.

Hat tip: Abstract JK

 

 

Problems on the horizon for the Gulf States 10, April 2011

Posted by thegulfblog.com in Bahrain, Qatar, Saudi Arabia.
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Born in an era when the German Mark was trading at over four trillion to the Dollar and the League of Nations still sought to regulate international alliances, Saudi Arabia’s King Abdullah, who has lived through the inauguration of fifteen US Presidents, is truly a man of a different age.

Given what one might – rightly or wrongly – expect from a Saudi King who is nearly a nonagenarian, steeped in the austere, conservative Wahhabi culture of Saudi Arabia, some of his policies have been relatively enlightened. For example, he founded the King Abdullah University for Science and Technology (KAUST), which is a resolutely co-educational campus where Saudi’s feared mutaween (religious police) are not allowed to go, where women can drive and are not mandated to cover their hair.

A Shia Lens

Yet one sphere in which Abdullah certainly is hawkish and conservative is that of Saudi foreign policy towards Iran. Here Abdullah appears to subscribe to the notion that Iran is perennially seeking to undermine Arab societies in some way, shape or form. Unprecedented in modern times, the Saudi Arabia-led intervention in Bahrain exemplifies this logic, with Bahrain seen as the front line of a cold but warming war which must be defended against Iran at all costs.

Three primary currents of fear – noted in their order of their priority to the Saudi government – drove this extreme policy.

Firstly, Riyadh fears that the establishment of any kind of meaningful Shia participation in Bahrain’s government – let alone a representative Shia Parliament – may allow, if not actively encourage, some kind of a militant Shia beach-head on Saudi Arabia’s doorstep. The notion that a Bahraini Hezbollah could emerge, or that some units of the Iranian Revolutionary Guard Corps (IRGC) could be covertly based in Bahrain, but a few kilometres from Saudi Arabia’s key oil fields, is immiscible to Saudi Arabia’s core security purview.

Secondly, Abdullah does not want to see the installation of a Shia-led government in Bahrain at the expense of the Sunni Al Khalifah family’s power. Such an upheaval could be interpreted as the first step towards the emasculation of royal power in Bahrain, and Riyadh is loath to allow such a precedent to be set.

Finally, Saudi Arabia wants to avoid the establishment of any kind of strong Shia-led government so close to its own Shia population, lest contagion spreads and they too begin to demand more rights.

These events take place in the context of what many in the region see to be growing Shia power, as encapsulated by the notion of a Shia crescent ‘enveloping’ the region, as suggested by Jordan’s King Abdullah II in 2004. The recent expulsion of three Iranian diplomats from Kuwait convicted of spying for the IRGC [1] exacerbated tensions and further fostered notions of Shia encroachment.

This Shia lens through which many people in the Gulf (certainly not just Saudi Arabia) view regional politics means that, for example, the protests in Bahrain are not seen as a disenfranchised sector of society complaining and demanding equal opportunities and fair representation, but necessarily instigated by Iran. ‘You see the same people on the streets of Bahrain as on the streets of Iraq … these people … [are] sent by Iran to cause trouble’ as one Kuwaiti put it, linking the narrative of Iran fostering sectarian strife in Iraq with Bahrain. [2]

Is It Merited?

In many ways, this kind of vilification of Iran is exactly what Tehran wants. It strives to foster a reputation for itself as a mighty state with elite and highly capable armed forces, whose sole goal is to propagate the Revolution and the velayat-e faqih rule of law.

In reality, Iran is – to a large degree – a paper tiger. Considering that it is arguably the richest state on earth in terms of oil and gas deposits, economically it is surprisingly weak with a GDP per capita of around $11,000, high unemployment and inflation. Socially, it has the world’s highest rate of human capital flight (often referred to as ‘brain-drain’) and the world’s highest proportion of opiate drug-users. [3] Politically, the country is riven with conflict, as evidenced by the million-strong protests after the stolen election in 2010. Militarily it is outspent five to one by the UK, and even by the comparatively tiny United Arab Emirates (UAE). Moreover, as General Petraeus recently bluntly stated ‘The Emirati Air Force itself could take out the entire Iranian Air Force.’ [4]

Asymmetrically, Iran needs to be taken seriously: the Islamic movements that it spawned and still supports in the Levant are arguably as strong as they have ever been and contribute to Iran’s deterrence. Also, its IRGC irregular forces have been relatively well-funded when compared with its traditional armed forces, and it would be foolish to underestimate them.

Nevertheless, this Iran – the Iran reliant on endless rhetorical bluster and a desperate showmanship striving to live up to several thousand years of a proud and strong civilisation whose key strengths today are, in fact, ambiguity and other asymmetries of power – bears little resemblance to the perfidious and powerful Iran as envisaged by some Gulf Arabs.

A Rock And A Hard Place

Whatever the true extent of Iranian power and their actions on the Arab side of the Gulf, the simple fact is that Saudi Arabia acts as if their threat were compelling and imminent. This may have unforeseen implications for regional security.

The Gulf Co-operation Council (GCC) met recently, and issued a joint statement in which Iran was accused of ‘blatantly … interfering in Kuwait’s affairs’ and of ‘continuous … interference in the domestic affairs of the GCC countries … and [instigating] sectarian sedition between … [GCC countries'] citizens.’[5] This is unusually aggressive and inflammatory language from the GCC States and reflects the point of view of Kuwait, Saudi Arabia and the UAE more than Qatar or Oman.

Though Doha and Muscat may well be as uneasy about Iran’s motives or actions in the Gulf as other GCC members, they deal with Tehran in a different way, taking, where possible, more conciliatory approaches. For Qatar, the fact that they share and jointly exploit the world’s biggest gas field with Iran plays a key role in this decision and Qatari authorities are understandably wary of antagonising Iran.

Qatar and Oman will be under pressure to tow the GCC line, as they have in this instance. Saudi Arabia, the UAE and Kuwait will want a united GCC front against Iran. While these two states will follow this to some degree, it would require a full reappraisal of their foreign policy towards Iran if this trend of difficult relations between the GCC and Iran were to continue. They are thus left with some difficult decisions, which might give them no choice but to antagonise either their fellow Arab States or Iran.

Notes

[1] Habin Toumi ‘Kuwait to expel three Iranian diplomats involved in spy ring’ Gulf News 31 March 2011 http://gulfnews.com/news/gulf/kuwait/kuwait-to-expel-three-iranian-diplomats-involved-in-spy-ring-1.785663

[2] Personal interview (March 2011)

[3] For more statistics like this see ‘Iran is a Paper Tiger’, Intelligence Squared Debate, 24 February 2011

[4] Josh Rogin, ‘Petraeus: The U.A.E’s Air Force could take out Iran’s', Foreign Policy, 17 December 2009 <http://thecable.foreignpolicy.com/posts/2009/12/17/petraeus_the_uaes_air_force_could_take_out_irans>

[5] GCC states condemn Iran’s blatant interference in Kuwait’s affairs, Kuwait Times, 5 April 2011  <http://www.kuwaittimes.net/read_news.php?newsid=MTI3NDY1Njg5MQ>

The Iranian response to KSA & UAE intervention in Bahrain 17, March 2011

Posted by thegulfblog.com in Bahrain, Iran, Saudi Arabia.
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Iran to respond to regional invaders

…was the title of an article on Iran’s Press TV.

The first line of the article is a quote from Hossein Naqavi, a member of Iran’s Majlis Committee on National Security and Foreign Policy:

The Saudi’s should know for a fact that Tehran will use all the power and potentials at its disposal to halt the oppression of the people of Bahrain.

Does any of this really need much analysis?

The only caveat to this that I’d make is that Iran is usually 95% bluster and barking (“all trousers” as we say) and 5% bite. These bellicose statements were guaranteed to come from Tehran. Actually how much truth there is to them is most certainly a different question.

Without wishing to state the obvious, the longer Saudi troops are in Bahrain, the greater the risk of Iran’s meddling. Not only will the opportunity of funding some group to take pot-shots at Saudi troops grow exponentially by the day, but Iran just sitting back as its local hegemonic rival stamps its authority on a patch of the Gulf to which Iran feels…umm…attached, would be seen as a sign of Iranian weakness and thus unacceptable.

Watch this space for the first signs of some Iranian money slithering its way towards Haq or some other Shia group.

 

 

 

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