News that Saudi Arabia's proposed share-sale of state-owned oil giant Aramco may be in trouble seems to fit a recent pattern, in which lofty dreams of a wholesale reshaping of society have come crashing to earth. From the inception of the ambitious Vision 2030, the brainchild of Crown Prince Muhammad bin Salman, brutal economic realities have combined with an entrenched mentality of government entitlement to put the brakes on any hopes that the project would enjoy a smooth ride. From the beginning, some economists called into question the very attainability of the targets, while others turned a skeptical eye on the jargon-filled technocratic advice given by hired American firms. There was further concern over opening up the books on the opaque Saudi Aramco, whose proposed sale (in part) represented a key component of the plan. But the size of the offering itself, compounded by legal questions, has now thrown into doubt the ability of the London exchange, at least, to manage the project.
This would be only the latest setback to Muhammad's plan. Earlier, the government was forced to backtrack from measures to cap salaries and reduce benefits for civil servants, after a major outcry. Given that the essence of Vision 2030 is a move to a post-oil economy, with a greater reliance on the private sector to provide employment, this was a significant setback, highlighting the difficulty Saudi will have in weaning a citizenry long accustomed to government largesse off their high expectations. Low oil prices, the mainstay of the national economy, will need to recover to a much greater extent if the Kingdom's economy is to be put back on an even keel. The immediate danger, despite the clear need for drastic change if long term economic health is to be realised, is that the people will lack the patience to see the project through. In a country where many regard a government job for life as a birthright, and subsidies for education and health care are taken for granted, imposing the discipline for a shift away from a culture of entitlement may be the greatest challenge.
Dissatisfaction with the measures being implemented by the crown prince, however, risk rupturing the unstated social contract between citizens and royals, whereby political acquiescence is expected in return for economic welfare and stability. An extended period of low energy prices, combined with an inability to meet the targets of Vision 2030 (as well as its dependent shorter term goals) could bring social instability and challenges to royal rule. It is unclear how seriously Muhammad takes these concerns, or whether he believes a campaign to crack down on dissent is sustainable indefinitely. So far, he seems confident in his ability to carry through the proposed reforms, whilst swatting away any perceived criticism. How far a heavy-handed approach will work in the face of general and sustained economic discontent is an open question. The Al Saud are nothing if not adaptable and politically agile, but this would be uncharted territory. During the Arab Spring, the first signs of political activism were easily bought off by King Abdallah; empty coffers would render the same tactic impossible in another case.
Thus far, intolerance for dissent has taken the form of a crackdown on two flanks - the religious establishment and relatively secular liberals. Both paid the price for implied criticism of Saudi policies last month, when a security sweep netted a number of high-profile clerics, intellectuals, and scholars, each of whom had apparently questioned the wisdom or motive of recent government decisions. In the short term, such silencing will have the desired effect - the authorities have the upper hand and the backing of the majority, who are weary of overbearing religious discipline but for the most part view Western liberal ideas with suspicion. Unaccounted for, is the broader impact of an authoritarian policy in an economic downturn.
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