Why is MBS Acting Now to Shake Up the Kingdom, Shore Up the Crown Prince's Authority?
The Houthis have a history of launching missile attacks with impeccable timing, including insider or signals intelligence revealing rocket strikes when troops are concentrated at facilities inside Yemen or near the war torn nation's long and porous border with the Kingdom. Since 2015, the Saudis have managed to keep the extent of their killed, wounded and missing in action out of the Western press, but their PR/think tank flacks and Washington lobbyists have proven less successful at blaming the Houthis and Yemeni resistance for a humanitarian catastrophe. Cholera is widespread in Yemen as is malnutrition in what was before 2015 was already the poorest and most food insecure state in the Arab world. Both in the U.S. and UK, the role of massive Western arms sales to the Kingdom in fueling the conflict has come under criticism from human rights organizations, along with the Royal Saudi Air Force's bombing of civilians.
From Weak Oil Prices to Bloated Subsidies and Military Expenditures:
The Enormous Socio-Economic Pressures on the Saudi Kingdom
As we've argued here at RogueMoney, the recent and unprecedented visit by a crowned Saudi King to Moscow was a sign of Riyadh's desperation to extricate itself from the Yemen quagmire, as well as maintain oil price agreements with the Russians. The shift towards diversifying the Kingdom's massive NATO arms buying spree to include Moscow's superb S400 air defense systems is another marker of desperate times for the (out)House of Saud. For many months, as Bloomberg has reported, Moscow's crude has been steadily supplanting Saudi oil in the critical Chinese market. Recent deals by the Kingdom to purchase shares of refineries in China have not reversed the trend of steadily eroding market share.
As reported earlier this year by Team RogueMoney's Mideast correspondent The Prince, the young Crown Prince's ambitious agenda to IPO the Kingdom's crown jewel Aramco and usher in a less oil-dependent, Dubai-style future for the Saudi people has stalled. The construction of MBS proposed mega city on the Red Sea coast, not far as missiles fly from the Yemen war zone, is likely a pipe dream until the conflict can be settled. The Kingdom is likely twenty years too late to follow in the footsteps of the UAE, and its foreign labor-dependent and somewhat pampered population is unsuited for manufacturing, whether skilled or unskilled.
MBS has sought to shake things up by raising fuel duties on what had previously been heavily subsidized gasoline, and recently announced a return to 'moderate Islam' after decades of the Sauds supported the terrorism-promoting Wahhabist sect. The Saudis feud with gas rich regional rival Qatar has fizzled out, and quiet diplomacy appears underway via Egypt, Turkey and other mutual partners of Riyadh and Doha to save face, after Saudi bullying of the Qataris predictably failed. To demonstrate its turn from the 8th to 21st century, the Kingdom sought positive publicity by allowing (veiled and fully covered) women to drive and attend sporting events in gender segregated seating sections. However, as the Russian Analyst reported in December 2015, the Kingdom's long term financial outlook is far more grim than widely acknowledged.
Where Does the Tottering Saudi Kingdom Go From Here?
The Question Team RogueMoney Will Be Addressing in the Coming Week
Desperation and defeat, can either motivate MBS and his father's advisers to change course and continue their petrodollar-dumping pivot eastward, or double down on what hasn't worked: full spectrum confrontation with Iran and its proxies from the Levant to Yemen. It remains to be seen if the resignation of Saudi-financed Lebanese politician Saad Hariri announced just after visiting the Kingdom is part of the stage-setting for a second Israel-Hezbollah War. Certainly, the Saudi Goliath's humiliations at the hands of Yemeni Davids must give Israel pause about committing too much to prop up a weak Arabian (peninsula) horse. Nonetheless, the Hariri resignation coinciding with a rapid consolidation of power by MBS, coming a week after President Trump's son in law Jared Kushner reportedly visited Saudi Arabia, will fuel speculation that the White House and Riyadh are coordinating their next move/s. And RM's W the Intelligence Insider is not the only person who is warning these political shakeups may be clearing the decks for the next effort to achieve a solution to the region's problems by military means...