Foreign Policy Imperatives of Saudi Arabia
Dr. Rosemary Hollis

Imperatives and Constraints

Geopolitical constraints:
Geopolitical constraints have played a major role in dictating Saudi Arabia’s future. Most of Saudi Arabia is desert, and what agriculture exists is rapidly using up future reserves of ground water.

The Saudi society is tribal. Moreover, there is a great contrast between the various geographic areas. Hijaz, for example, is the cosmopolitan part of the kingdom as it is visited throughout the year by pilgrims from all over the world. In contrast, the Najd area is more isolated. The rich minority and the Shi’ite tend to concentrate in the eastern provinces.

Saudi Arabia is huge in relation to its population of seven million (12 million including foreigners). The Bedouins represent about a quarter to one third of the population. The manual labor is performed mainly by foreign workers work from Asia, and domestic chores are carried out almost entirely by Filipino servants. Any form of skilled work is usually carried out by workers from the rest of the Arab World and the West.

Although Saudi Arabia has a dwindling supply of water, there is a massive natural abundance of oil, which has led to the establishment of a huge petrochemical industry and the accompanying influx of foreign employees.

Alliances:
Sheikh Al-Saud is in alignment with Yemen, Oman, the United Arab Emirates and Brunei, which has more oil than Saudi Arabia. The country also has alliances with the British.

There exist two basic sources of leadership legitimacy, namely, religion and oil.

Oil is a gift: Saudi Arabia has long borders with socialist Yemen, which has a population of approximately 16 million. The Saudis, due to their relatively low number, are constantly afraid that they might be obliged to share their wealth.

The point of legitimacy of religion: The Saudis’ puritanical religion (wahhabi) has come under constant criticism by the Shi’ite and Iran since the Iranian revolution: the Iranians claim that theirs is the purer form of Islam. Iran, which is run according to the national interests of the revolution - which has an implicit ideological commitment - objects to the presence of a monarchy in Saudi Arabia. The latter, meanwhile, considers Iran ideologically hostile as proven during the l987 Hajj riots.

Regional threats:
From the Saudi perspective, Iraq is not to be trusted. The long borders with Yemen are carefully guarded, and revolutionary Iran is still regarded with caution. After the end of the Gulf War in 1992, the US helped the Saudis prepare for a list of threats which include the following:

The Saudis are worried that Socialist South Yemen could one day control access to the Red Sea, to which the Saudis need access in order to secure freedom of passage to the Gulf.
Sudan is also in the midst of an Islamic revolution, and has good relations with Iran.
Saudi Arabia has always been suspicious of the Hashemites who might pose an indirect threat, since historically Sharif Hussein was ousted from the Hijaz.

Saudis feel vulnerable and perceive their surroundings as hostile. Saudi Arabia was agitated by the unity of North and South Yemen which came about with the end of the Cold War. Now Saudi Arabia has relations with South Yemen, which has declared an end to hostility. From the Saudi point of view, two Yemens are better than one.

Economic imperatives:
Saudis feel a sense of panic from being surrounded. Also the sense of fear that everyone wants what they have has made it difficult to diversify the Saudi economy. Foreigners are only allowed up to 49% of the joint venture companies, and they are not allowed to own land. Saudis will not accept portfolio investments and bankers are not able to get holders to own state economic assets.

The restrictions on opening the Saudi economy has caused the Saudis to borrow money to balance budget deficits. The Saudis originally took loans from Saudi banks, due to a fear of external interference. Eventually they were forced to seek external loans because of the royal family’s reluctance to clearly define between the family fortune and that of the state.

Oil as a constraint:
Saudi Arabia’s abundance of oil is also a constraint. While Saudis can influence oil prices they can not dictate them. When they decrease production in order to boost prices, consumer loyalty is affected and buyers seek alternate sources. Consequently, Saudi Arabia is pushed towards a balance of production in order to maintain a stable price.

The Saudis do not have the capacity to expand their production, only to increase it. Thus, they have successfully acquired the majority share in OPEC in order to monopolize the market and curtail Iraqi and Iranian production. Whereas in the 1980s Saudi Arabia produced three million barrels/day, in 1990 it produced six million to substitute for Iraq. However, Saudi Arabia’s influential role in the oil market is not a monopoly, and Iraq is returning to the market after signing a huge deal with the French.

Critical Variables for Saudi Arabia (Internal)

One of the classic questions asked in the West is, ‘How will the country look in the year 2005?’ The Western media wistfully predicts the demise of the Saudi royal family, but does not predict that the Saudis will be stopped from becoming wealthier.

The Saudis must change because they no longer have as much to give as they did before. They will not be able to meet the expectations of their youth, and the near future is likely to witness a quick turnover of kings.

Factors that will dictate what Saudi Arabia will be like in 2005 include the following:

Oil market and oil prices: fluctuation with instability;
The question of succession: predictions of turmoil with regard to succession but not of the destruction of the royal family;
Regional alliances: possibility of hostile alliances formed by Saudi’s neighbors;
US-Saudi alliance: where will it be?;
Islamic threat: will the internal and external threat continue?;
System of distribution of wealth: poor get poorer while rich get richer;
Political consultation: establishment of a multiple party system.


Decision Making

Decision making poses problems in matters of foreign policy. The King cannot afford to lose the religious scholars and needs to be able to rely on religious ruling (fatwa). He has to consider his constituency, the tribal system, and the structure of the family. He also has to consider maintaining the oil interests, the defense relations with the US, and the implications of radicalism. The King cannot afford to make mistakes.

Key Foreign Policy Decisions and Relationships

The key decisions that Saudi Arabia must face concern the support of the Islamic resistance in Afghanistan, and whether the US forces are really needed or whether there are alternatives to the Western defense forces.

As with any of the Arab states, the kingdom of Saudi Arabia faces certain foreign policy imperatives, dictated by its basic characteristics - geography, demography, resources and so on - which together constitute both assets and constraints. These, together with the political system (which determines the decision-making process), constitute the parameters within which foreign policy is framed.

Basic Characteristics

Geography:
Saudi Arabia is a huge desert kingdom with two seaboards giving access to crucial sea lanes, but not an open sea. The country is estimated to possess 26% of the world’s oil resources, yet there is a serious shortage of water. Saudi Arabia is depending far too much on its renewable water resources - in other words, it is using up its resources faster than they are being replenished.

Demography:
The population is small in comparison to the geographic size. According to official Saudi estimates the total population is around 18 million, including about five million expatriates. According to independent estimates, the total figure is probably nearer to 12 million. (The Saudi authorities have not revealed how they arrived at their higher figure.) In any case, the Saudi population is smaller than that of Iraq (at least 18 million), dwarfed by that of Iran (over 60 million) and probably less than that of Yemen.

Different traditions and history distinguish the different regional and provinces, within which the communities have had different levels of exposure to the outside world, historically speaking. The vast majority of the population is Sunni Muslim of the Wahhabi sect, but a Shi’ite minority is concentrated in the eastern province.

Economy:
A $12 billion windfall in unanticipated oil revenues (owing to higher than expected world prices) has given the Saudis their first current account surplus in 13 years. In 1996 the government budgeted for revenues of $30 billion but actually gleaned $42 billion.

The oil boom of the 70s and early 80s turned to a steep fall in prices and profits in the mid 80s. This continued to drain foreign reserves until 1990-91 when the kingdom faced the sudden and considerable costs of the second Gulf War. The war forced the kingdom to incur the first sovereign debt in its modern history.

Three years ago, under this mounting pressure, the Saudis introduced some economic restructuring measures, but commentators suspect that these do not go far enough to produce change that is significant enough to reduce the dependency on oil reserves.

The principal concern is how to generate enough jobs to meet the needs of the burgeoning number of young people entering the job market. Along with a high population growth rate have come increased demands for health, education and other forms of welfare traditionally provided by the state.
Political system and decision-making:
The Al-Saud monarchy, ruling in close alignment with the Al-Wahhab family and the ulema, represents the source of authority dating back to the early 19th century in Najd. The modern state or kingdom was established by conquest and was officially founded in 1932. The ulema exercise considerable influence and the King cannot act without their blessing. In addition, there is a hierarchical system or set of mechanisms for consultation within the Al-Saud monarchy and for access to senior princes, governors of the provinces, ministers and so on. The legitimacy of the monarchy rests on its defense of (Wahhabi) Islam, the protection of the Holy Places, patronage and welfare provision, and its Bedouin heritage and culture.

Armed forces:
Saudi Arabia simply does not have the manpower base for a large army. The Saudi National Guard, tasked with defending the kingdom’s borders from within, numbers around 60,000 men and the highest estimate for the army is 100,000, though it is probably no larger than the National Guard. Saudi has justified large acquisitions of expensive and sophisticated armaments by arguing that it needs to enhance the defensive capability of its relatively small forces.

The Saudis now have some 900 main battle tanks and 470 artillery pieces. The air force, numbering 18,000 men, has 295 combat aircraft. Unlike Iran, which has a similar number of aircraft, the kingdom possesses some of the latest designs available in the West. The US contribution to Saudi air defense makes it far more advanced than its rivals.

Against this backdrop of the basic characteristics of Saudi Arabia, the key imperatives and constraints facing the kingdom may be defined as follows:

sources of legitimacy (Islam, holy places, provision of welfare/oil wealth, conquest, Bedouins, Bedouin heritage and culture);
Iraq;
Iran;
Saudi fear of being surrounded (Yemen, Sudan, Jordan, Iraq, Iran);
fear of foreign attempts to tap Saudi oil wealth;
exposure to the vicissitudes of the international oil market

Key foreign policy relationships and decisions:
Saudi Arabia’s key foreign policy relationships and decisions, as discussed by Korany and Dessouki, have revolved around the following:

oil (production, pricing, relations with consumers, etc.);
Islam (e.g., Afghanistan, rivalry with Iran);
defense (especially arms purchases);
relations with US in the interests of defense/oil;
fighting/confronting radicalism (from Nasser to Ba’athism).

Critical variables determining the future of Saudi Arabia:
The critical variables determining the future of Saudi Arabia are as follows:

oil prices, the Saudi income/profit margin, and resulting pressure to implement changes;
who succeeds (by 2005)?;
hostile regional alliances and Saudi perceptions of these;
the Saudi-US alliance;
Islamic radicalism;
economic policy (restructuring, privatization, Saudization);
levels/forms of political participation.