Saudi Arabia: Autocratic tendencies test international opinion as Khashoggi affair explodes

Published in GSN, 18 October 2018

The disappearance and likely murder of the high-profile Saudi commentator is emblematic of the growing crackdown on dissent around the region, as younger generation autocrats concentrate their power. Riyadh was caught off-guard by the strength of international reaction to the Jamal Khashoggi affair, which has tested the west’s flirtation with Crown Prince Mohammed Bin Salman to an unprecedented extent – forcing other uncomfortable stories emerging from the region further down the news roster, including the spying charges placed against British academic Matthew Hedges in Abu Dhabi

Riyadh is still in crisis recovery mode as the regime triesto find a way to explain the disappearance and apparent murder of prominent critic Jamal Khashoggi, after his visit to the Saudi consulate in Istanbul, Turkey on 2 October. While Riyadh initially claimed Khashoggi – who in the past year had been a periodic columnist for the Washington Post – had left the building, it was unable to provide any evidence of that; Saudi spokesmen were unable to counter speculation that Khashoggi was brutally murdered by a team of Saudi agents that flew into Istanbul that day.

Intelligence services in Turkey – a key ally of Saudi Arabia’s Gulf Arab rival Qatar – have been leaking information freely, including lurid details of what have been presented as Khashogghi’s last minutes captured on tape (either from his Apple Watch, in the semi-official version, or perhaps more likely from routine bugging of the consulate building by intelligence services). Saudi official denials of no involvement in Khashoggi’s disappearence wilted as evidence mounted that senior Saudis were most probably involved in the murder of a liberal member of the Saudi establishment, who became increasingly dissident – but, as befits a Saudi insider, never anti-regime – under the de facto rule of Crown Prince Mohammed Bin Salman (MBS).

Among uncomfortable revelations for Riyadh, the two Gulfstream IV jets which allegedly carried the hit squad to Istanbul are ultimately owned by the Public Investment Fund (PIF), the state-owned fund which MBS has used as a key vehicle for his ambitious ‘Vision 2030’ economic and social policy.

The Turkish daily Sabah newspaper – which is close to the Ankara government – published the list of 15 men it alleged formed a hit squad suspected of killing Khashoggi inside the Saudi consulate in Istanbul. One is a relatively high-profile autopsy expert at Saudi Arabia’s internal security agency, Salah Mohammed Al-Tubaigy, and another appears to be a lieutenant in the Royal Saudi Air Force.

Transactional Trump

Saudi Arabia still has a useful ally in the shape of Donald Trump; after his initial protestations that the truth would out, the US president typically set out to shoot the messenger – MBS and the kingdom being “guilty until proved innocent” – and apply his ‘transactional’ style of government, in which the progress of a $110bn defence programme was paramount, to preserve American jobs. Trump has floated the idea that unspecified “rogue elements” may have been responsible for any murder.

As tensions ratcheted upwards, Trump sent his secretary of state Mike Pompeo to Riyadh on 16 October for talks with King Salman, MBS and foreign minister Adel Al-Jubeir. Brief official US read-outs from those meetings referred to agreement on “the importance of a thorough, transparent, and timely investigation”. But the secretary of state was criticised for a declaration after these meetings that he didn’t want to talk about facts and the Saudis “didn’t want to either”.

The affair has shaken the White House, with Pompeo due to meet Trump on his return to Washington DC as GSN went to press. While the president remained publicly supportive of MBS, CNN – no friend of Trump – reported a source telling it that “Pompeo’s meeting with the crown prince was tougher than it appeared to be”. It reported: “Behind the smiles, which dropped as soon as the photo op ended, the source said, Pompeo told the royal his future as king depends on his handling of Khashoggi’s suspected murder and that he had to ‘own’ what happened, even if he hadn’t known.” According to this version of events, Pompeo “stressed that time is short and that the Saudis have to deal with the people involved sharply… [Otherwise] the US will have to deal with this… [and] will take action because the world will demand it and that President Trump’s hand will be forced by the global pressure.”

Trump’s continued support may provide the diplomatic lifeline Riyadh needs to get through this episode, but there are bound to be costs – especially if Democrats take control of Congress (or at least the House of Representatives) after the mid-term elections in November. Even before Americans go to the polls, the Khashoggi affair has contributed to a bipartisan consensus marking a much harder line on Saudi Arabia – and specifically MBS – and, also on Trump, whose close ties to the Al-Salman, cultivated by his son-in-law Jared Kushner (GSN 1,066/3), have been widely remarked on.

With the elections hoving into view, Trump will have been especially mindful of an official Saudi statement, unprecedented probably since the 1973 Arab oil embargo, that the kingdom would retaliate against any punitive measures linked to the Khashoggi affair. The statement observed the menacingly obvious: that the Saudi economy “has an influential and vital role in the global economy.” Suggesting a willingness to use the weapon of oil if necessary, the 14 October statement said: “The kingdom also affirms that if it receives any action, it will respond with greater action, and that the kingdom’s economy has an influential and vital role in the global economy.”

For Riyadh, which never takes criticism well at the best of times, attack may be the best form of defence In its statement the government affirmed its “total rejection of any threats… whether by threatening to impose economic sanctions, using political pressures, or repeating false accusations.”

This fits into a wider pattern of behaviour, in which even mild criticism of Riyadh is met with an overwhelming diplomatic response, as in the recent incidents with Canada and Germany (GSN 1,065/14). While Canada is still being frozen out by Riyadh until it apologises for its foreign minister calling for action on Saudi dissidents, Germany has managed to restore relations, albeit by a grovelling apology. It was notable of Saudi Arabia’s economic muscle and hold over allies, that Canada has received little international support during its diplomatic standoff with Riyadh.

An opinion column by Saudi-owned Al Arabiya News Channel general manager Turki Aldakhil, which also appeared on 14 October, cited “decision-making circles within the kingdom” who were discussing pushing oil prices to $200 a barrel, switching the pricing of crude out of dollars and into alternative currency such as the Chinese yuan and a rapprochement with Tehran so that “Iran… will become closer to Riyadh than Washington”. Senior advisor at the Saudi embassy in Washington Faisal Bin Farhan said “this article in no way reflects the thinking of the Saudi leadership”. If not, it certainly gave a flavour of the mood.

The family’s questions

The Khashoggi family have called for answers, releasing a statement on 16 October in which they said: “The strong moral and legal responsibility which our father instilled in us obliges us to call for the establishment of an independent and impartial international commission to inquire into the circumstances of his death.”

The Khashoggis are a large and long-established business family, who prospered under traditional Al-Saud patronage. Jamal may be remembered as a ‘dissident journalist’ and was at times active on the liberal fringe of Saudi society – as during his editorship of brief Al-Watan newspaper during King Abdullah Bin Abdelaziz’s reign; but he was also a member of the ruling establishment, whose CV also included spells working in Washington and London embassies for then ambassador Prince Turki Al-Faisal.

The Khashoggis have been much less comfortable under MBS’s tenure: an article in The Independent online newspaper suggested the family had previously fallen out with MBS over an unspecified business deal. Other business families have also privately complained of falling out with the crown prince over his demands for a slice of the action.

It may be impossible to hold MBS or anyone else in power in Riyadh directly responsible for Khashoggi’s demise. The PIF link to the two planes that took the 15 Saudi agents to Istanbul is, at most, circumstantial. One senior GCC intelligence officer with wide experience of covert operations said the Khashoggi operation looked like a classic case of officers blindly following orders and being unwilling or unable to question those instructions. “There are so many basic breaches of elementary tradecraft in the way the operation was conducted and security breached, that they must have been frightened to deviate from the instructions given to them by their principal,” said the officer. “Turkey has a substantial criminal underworld which could for a fee have easily murdered Khashoggi without leaving any fingerprint whatsoever.”

What next for MBS?

The Khashoggi affair has raised questions about the future of MBS, with some observers suggesting he may have finally over-reached himself. King Salman’s involvement in trying to clear up the mess – the 82-year-old monarch also had a telephone conversation with Turkey’s President Recep Tayyip Erdogan on 15 October – was reminiscent of the way in which he asserted his authority over Saudi policy towards the Palestinian issue over the summer, apparently moving his son to the sidelines (GSN 1,064/4).

One distinguished observer commented that MBS became Salman’s favoured son because he stood up to his powerful father, unlike his brothers and other Saudis. This has shaped MBS’s character, the observer said: “MBS is someone to whom no one has ever dared to say ‘no’.” As GSN has charted, MBS is the model of a modern autocrat – mixing political intolerance and an inability to take criticism, with a pragmatic form of top-down economic liberalism and populist social reform.

MBS’s intolerance of criticism has seen religious leaders and ordinary citizens arrested for expressing often mild criticism of official policy. Thus economist Essam Al-Zamil has been accused of joining a terrorist organisation and meeting with foreign diplomats – common charges levelled against regime critics. The actual line Al-Zamil appears to have crossed was his public critique of MBS’s much-vaunted (and now stuttering) plans to list Saudi Aramco shares.

Questions are being asked as to whether King Salman might rein in his son, or whether a sufficient number of Al-Saud would back a wider family coup to replace MBS. The conventional wisdom has it that, as defence minister, MBS controls the armed forces – including the Saudi Arabian National Guard, despite reports of stirrings within its tribal ranks –who are loyal. He has also taken control of the commanding heights of the economy. Meanwhile, gestures such as his opening up of entertainment have won him some popular support in the youthful 33m population; the business community may have been horrified, but his arrests and gilded (for most) imprisonment of billionaires last November was very popular with many students. This adds up to an unprecedented concentration of power – enough to make many Al-Saud hungry for a change of direction, but also sufficiently prudent to persuade many they cannot outgun the ruthless young heir apparent.

MBS’s stock had anyway been falling in the west, and while Trump will remain supportive of his key allies, the Al-Salman, other partners (including elements of official Washington) are likely to show greater reserve. Viewed from Riyadh, one shock of the Khashoggi affair is that the journalist’s disappearance could so quickly have gained global prominence, with many analyses placing MBS at the centre of events. The crown prince may not be able to use his favoured formula of lying low on his luxury yacht as crisis breaks, only to appear all smiles later.

Scrutiny of the Yemen conflict is more intrusive. The detention last November of Lebanese prime minister Saad Hariri is being invoked as an example of MBS’s tendancy to believe he can act with impunity. Governments may even ask questions about what happened to such respected old friends as former crown prince Mohammed Bin Nayef Bin Abdelaziz, a hero in the war on terror who was so rudely placed under house arrest by MBS.

MBS is under pressure as never before since emerging as the key power behind the throne in 2015. Whether he emerges less convinced he can act with virtual impunity is another question.

There are also questions over the career of ambassador to the US Prince Khalid Bin Salman. MBS’s younger brother has proved a generally popular figure in Washington, but he left for Riyadh on 11 October. There were suggestions that he was not due to return – although ‘KBS’ may yet be given a more prominent role at home.

Economic impacts

The Khashoggi affair’s economic impact could have more long-term ramifications for MBS and his reform programme. The kingdom has been struggling to attract international investors in the wake of the round-up of 200 leading business and royal figures last November (GSN 1,048/1). That happened just after the first Future Investment Initiative event was held in Riyadh; this glitzy mega-conference, designed to showcase the opportunities on offer in the kingdom, attracted scores of chief executives from leading multinational companies. A follow-up conference is due to take place in late October (GSN 1,059/11), but the Khashoggi affair has threatened to derail MBS’s ‘Davos in the Desert’, as dozens of high-ranking delegates and speakers have announced they were pulling out.

Other deals have been put on ice. Serial entrepreneur Richard Branson released a statement on 11 October saying he was suspending talks with Riyadh over the PIF’s proposed $1bn investment in his Virgin Galactic space travel business. “What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” savvy self-publicist Branson said.

With the Saudi Aramco initial public offering in limbo, there are serious questions about the prospects for the wider Vision 2030. Some sources say sufficient other projects are going on to mean a failed Aramco IPO would not be as wounding as international analysts suggest. But others say valuable reforms are being submerged in the Saudi bureaucratic labyrinth.

In an interview with Bloomberg, just as news of the Khashoggi affair was emerging, MBS was adamant Vision 2030 was on track, saying the Aramco IPO would go ahead in 2020-21, that unemployment would fall to 7% by 2030, while inward investment would rebound this year, growing by 90%.

The anti-corruption drive had yielded dividends, MBS told Bloomberg: $35bn had been transferred from those arrested and held at the Ritz-Carlton last year, with 40% in cash and the rest in assets, now held by Istidama. (Istidama Holding Company is a so far little-known entity set up by the Ministry of Finance to park the proceeds of settlements agreed between the government and individuals detained in the corruption purge.) Of those arrested, eight are still in custody, MBS said.

In his Bloomberg interview, MBS was reticent about what Khashoggi’s fate, saying: “We are very keen to know what happened to him… My understanding is he entered [the consulate] and he got out after a few minutes or one hour.” MBS’s lack of understanding has placed the crown prince’s reputation, and much more, in jeopardy.