In
the six weeks before Khashoggi’s disappearance, MBS not only
managed to anger the U.S. military-industrial complex but the world’s
most powerful bankers.
by
Whitney Webb
Part
4 - Trouble in neoliberal paradise
While it
is impossible to know MBS’ exact reason for getting cold feet in
his once-ambitious plans to privatize the kingdom, we can guess.
Indeed, there is a reason that MBS’ elders in the Saudi Royal
family have long rejected neoliberal reforms and the mass
privatization of their economy.
A 2016
report from Foreign Policy succinctly states why past Saudi Royals
have avoided “free-market reforms” as the older generations of
the House of Saud “understand the fragility of a monarchy whose
brittle pillars rest on the quiescence of conservative clerics and a
merchant class hostile to the free-market reforms that will undercut
their privileges.” However, far more Saudis than just the
“merchant class” have grown accustomed to the largesse of the
Saudi state, as the majority of Saudi citizens benefit from Saudi
state spending in the form of fuel subsidies, loans, free land, and
public-sector jobs, among other boons. Indeed, half of the entire
Saudi population is currently on welfare — welfare that depends on
the wealth of the Saudi state and its oil revenue — while
two-thirds of Saudis work in the public sector.
Of
course, sharing oil profits with robber barons — as would have been
the case in the partial privatization of Saudi Aramco — would
reduce the amount of money the Saudi government dedicates annually to
welfare programs and public-sector jobs to a significant degree.
Notably, Vision 2030 also included “austerity programs” as part
of its implementation, including tax increases and a significant
reduction in the fuel subsidies given to ordinary Saudis.
However,
less than a week after a handful of those austerity measures were
implemented earlier this year, the Saudi government quickly eased
them by increasing state-job salaries and launching a new economic
stimulus program, after a “very negative” public response.
Despite
the government’s efforts to assuage the anger that austerity had
caused, it was not enough and the outcry continued, forcing the Saudi
government to fire the country’s water minister to absorb some of
the outrage. The fierce public response seems to have given MBS his
first real inkling that his “ambitious reforms” to privatize
Saudi Arabia would not be so easy to implement, no matter how hard he
had worked to crush dissent.
Another
indication of why MBS backed out of privatization plans can be seen
in what happened to other countries when their young princes,
championed as “ambitious reformers,” had drunk the “McKinsey
Kool-Aid.” As Salem Saif wrote at Jacobin, many of the Arab
countries that had previously followed McKinsey-drafted plans for
neoliberalization subsequently “became epicenters of the Arab
Spring. Bahrain, Egypt, Libya, Yemen — each was convulsed by
demonstrations, often animated by economic grievances.”
In
contrast, Saudi Arabia, with its state-owned and state-managed
assets, had remained largely immune to these economically-spurred
uprisings throughout the Middle East.
However,
earlier this year, MBS learned the hard way from the hostile
reception to his privatization rollout that being the West’s
neoliberal darling comes at a high price, one that could imperil not
just his position as Crown Prince but the entire Saudi government.
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