By Bobby Ghosh
His hand over his heart — a gesture as common to the Middle East’s princes as to its paupers — Crown Prince Mohammed bin Salman might admit that he bears at least as much responsibility as the coronavirus pandemic for the state of Saudi Arabia’s economy. It is, after all, the combination of his ill-timed oil war against Russia with the Covid-19 crisis that has left the kingdom facing the steepest contraction in a generation.
Although relatively few Saudis have contracted the virus, the substantial economic damage will likely force the crown prince to make deep cuts to his “Vision 2030” plan.
The centerpiece for an ambitious agenda of economic and social reforms, that plan was conceived in the throes of the last oil slump. Its goal was to wean Saudi Arabia from its dependence on hydrocarbons and create more opportunity for private enterprise. But four years on, more than 60% of government revenue still comes from oil, and low prices have halved the take.
MBS, as the crown prince is commonly known, has ordered austerity measures — most prominently, the tripling of the value-added tax and cuts to bureaucrats’ allowances. But these will sharpen the economic downturn by reducing consumption and inhibiting private-sector investment. In turn, this will compound the frustrations of unemployed Saudis, the majority of them women, who had been promised a shot at prosperity in the prince’s vision of the country’s economic future.
The harsh realities facing Saudi Arabia’s de facto ruler come on top of problems that have bedeviled him since he emerged from relative obscurity five years ago, when his father’s coronation gave him his first taste of real power. They will compound the challenges of ruling a petrostate with a growing population and diminishing wealth. As he prepares to guide his country through the post-pandemic period, his chances of a prosperous and peaceful reign depend on his ability to undo some of the damage he has himself wrought, and to avoid repeating his mistakes.
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