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Thursday, October 27, 2016

“Saudi Gaydar” leads his country to collapse

The war in Yemen, supporting terror in Syria, the sudden failure of the Qatari negotiations on the freezing of oil production and the new economic policies. Behind all this stands the figure of one man – the Deputy crown Prince and the youngest in the world of defense Minister Mohammed bin Salman, became the new phenomenon in international politics. And this phenomenon may lead Saudis to crash.

For decades not only external, but also internal politics of Saudi Arabia determined the feeling of fear that those in power gerontocracy the house of al-Saud experienced in the period 50-70-ies of the last century, when the thrones of the middle East monarchs and a staggered akin to the Saudis dynasty vacated the seat to the Republicans, as it happened in Iraq, Libya, North Yemen, Egypt, Iran. Then the left was preparing the overthrow of the medieval monarchies of the Persian Gulf, then to this was added a threat from supporters of the Islamic revolution’s version of Ayatollah Khomeini, and only the American and British bases saved reactionary regimes.

“The feeling of revenge had never cooled down in the Bedouin hearts of princes and kings, but fear restrained”

Until the beginning of the XXI century the horror of the tottering throne of vaival dynasty, being a real life experience of the elderly, dressed in Riyadh, Mecca, Medina, Jeddah and other cities of KSA. Fought for the preservation of his throne, the Royal family, as expected, the carrot and the stick. The whip served a disgusting, extremely reactionary by any standards and abandon the great traditions of Islamic freethinking click the Wahhabi preachers, and the gingerbread house of Saud did not spare the money: the subjects did not know the taxes, but could always count on financial assistance in exchange for loyalty to the Royal family.

But times change – a generational change, you can defer, but not cancel. The new leaders of KSA, who came to power in the result of harem intrigue and having no understanding of the will and desires of the inhabitants of the Kingdom (the election there was never), never experienced that existential horror at the power of social strata, do not want to remain in the middle Ages, and in some places in dosrednevekovye formations characteristic of the Bedouin tribes of Najd, seized with the help of British guns and gold developed the Ottoman provinces in the Arabian Peninsula. The most prominent representatives of the new generation of the home life of the Arabian Peninsula are the grandchildren of the king: crown Prince Mohammed bin Nyman and Deputy crown Prince, Minister of defense of Saudi Arabia, supervising and at the same time economic reforms Mohammed bin Salman. Behind them are a fairly powerful faction, leading between a behind-the-scenes, but they are not less hard political struggle.

A new generation, in theory, would bring Saudi Arabia on the path of modernization and reform, but very much strange and contradictory it looks. Riyadh continues to direct and indirect armed interference in the internal Affairs of other States, including the terrorist methods, stricter police and religious tyranny inside the country, particularly against the Shiite minority, retains the low oil prices, undermining this stability.

God’s dew

The old generation of the house of as-Saud is well remembered their lost war in Yemen in the 60-ies, when the Republicans (with the help of Egypt and the Soviet Union) cope not only with reactionary tribal leaders, but also with the direct intervention of the Saudis. The feeling of revenge had never cooled down in the Bedouin hearts of princes and kings, but the fear was holding me back. And it took the actual advent of the new generation to KSA again climbed the armed force in the internal Affairs of its southern neighbor.

It is young and inexperienced Ben Salman in the West called the “architect of the war in Yemen”, although in recent years he began to make excuses. So, in an interview with The Economist, the Minister of defense of KSA said, “First, I’m not the architect of the operation in Yemen. We are a country of institutions. The decision to start operations in Yemen were taken in cooperation with the Ministry of foreign Affairs, Ministry of defense, with intelligence, with the Council of Ministers and by the Council on security and policy, then all advice was provided to His Majesty and he made the decision. My job as defense Minister – to implement any decision which His Majesty commanded. I just report all the threats that you see. And ready to take action against any threats.” Very weak on part of the persuasiveness of the justification. On the poisonous comments that the decision on the beginning of the intervention was made shortly after bin Salman became defense Minister (by the way, the youngest in the world), it is justified by the awkward paradoxes that the Houthis seized power in Sana’a only after His Majesty became king.

Meanwhile, well-informed Pro-Iranian experts claim that bin Salman, the most zealously advocated the beginning of military operations against the Houthis in Yemen, although no experience of the military command in 29 years did not possess. And in the end was able to push from the operation of his cousin – crown Prince Naif, who is older than him. In relation to Syria and Iran, the aggressive Saudi policy also significantly increased.

As a result of the intervention of Ben Salman got a situation, which ought to unnerve any defence Minister of any country in the world. We have Huthis missiles “ground–ground” with a range of 550 kilometers, and is 30-50 kilometres from the Saudi border. Armed groups of the Houthis (and among them there are many people with Saudi passports and residence permits), conducting raids on bases of the armed forces Salman bin in the desert. In Aden, who could become the next target of the offensive Huthis, have military airdromes, hangars are in combat, albeit outdated, Soviet aircraft production, and a large number of pilots and aviation engineers are ready to measure their strength with the monarchists.

The loss of the Saudi coalition in the war in manpower exceeded 5,000 people, and the amount of lost equipment in Riyadh, perhaps even stopped counting. If the outcome of the war is not a crushing defeat of the KSA, then what is considered a defeat?

Now Ben Salman tells about the conclusion of the military phase of the Yemeni settlement: “We started the process of political settlement in Yemen, which is an entirely different stage. All our efforts aimed to reach a political solution. But that doesn’t mean we let the police [the Houthis] to expand their control over territory, they must realize that every day when they don’t come close to a political solution, they lose on earth.”

In fairness it should be noted that the military politicians in all countries are the same.

Everything is on sale

The world’s largest exporters and consumers of oil and the countries that are its largest, proven sepsis some time Mohammed bin Salman is also responsible for the economy of the Kingdom. The budget deficit KSA in 2015 was 15% of GDP. This is a huge problem, and it arose not from scratch – the monarchy has managed to literally buy off the Arab spring with a simultaneous tightening of repression against dissidents, but it is also not cheap. In the end the money began to run out, and that bin Salman decided to carry out liberal reforms. He States that the CSA adopted a clear program for the next five years”, the purpose of which is to increase non-oil fiscal revenues while not up to the end articulated policy costs. And we need to understand that the reduction in social programs will lead to revolutionary explosion – as in the Eastern provinces of the country with its significant share of the Shiite population, and in economically, socially and culturally developed Hijaz, where in the fat years formed the family of billionaire – rich, but completely sidelined from power clans, not without contempt are backward Bedouins from Najd.

Social policy KSA decades was based on the rejection of taxation of the population and business with powerful social, economic and infrastructure programs at the expense of oil revenues. If you don’t pay the state anything at all, you can bear the concentration of all power in the hands of the same family. Especially if this power is backed not only by police and intelligence agencies, but also the obscurantist Wahhabi: not everyone is willing to ignore the risk to go to jail, lose our heads or be stoned by the sentence of the court.

“As a result of the intervention of Ben Salman got a situation, which ought to unnerve any defence Minister of any country in the world”

Now Ben Salman, without asking the opinion of the people, decided to impose taxes. By the end of 2016 or in 2017 – VAT or sales tax and luxury tax, but income tax is afraid to approach. It seems that inexperienced Deputy crown Prince just can not imagine what the creation of a tax service from scratch, and does not know about the existence of the concept of “tax collection”. It is directly derived from his statements about how fast he will balance the budget. Plenty of plans – non-oil revenues to the completion of the first five-year plan should be, according to him, neither more nor less, and $ 100 billion per year.

However, he forgets about the basic principle of capitalism that the American slave owners and lovers of tea parties, raising a rebellion against the British crown, formulated as “no taxation without representation”. And English, French, and American bourgeois revolutions arose because of the attempts of monarchs to impose taxes without the consent of Parliament. It is believed that the taxpayer should receive in exchange for their taxes submitting their interests. But this principle has its reverse form – “there is no need for representation without taxation”.

In KSA of Parliament never was, but was not and taxes, as books on history and political economy Ben Salman, apparently, not read – depth knowledge in CSA is generally considered harmful.

Of course, we are talking about privatization – Ben Salman well studied the recommendations of the IMF (but not the consequences of those recommendations, so clearly demonstrated to the world, including the “Arab spring”). He intends to privatize health care, the education sector, some sectors of the military industry and infrastructure companies. “This will reduce partially the pressure on the government, and some of them can give a good profit,” says Ben Salman reporters, his liberal enthusiasm to surprise reminding liberals of the school of Gaidar. In addition, we are talking about the sale of state-owned companies that owns the overseas business, on unused assets, the deposits of uranium ore, the land and property in Mecca, Medina, Jeddah and rural areas, finally, (this last item not by value) on the sale of shares of the national oil company, Saudi Aramco. And the crown Prince are thrilled about this step”.

A liberal would not be a liberal (Ben Salman monarchist only in a political sense, when all the power in the hands of the same family; in Economics, it is that a liberal), if not destroyed grants and subsidies. Already went earlier subsydiowanie growth of prices for electricity and gasoline, but it was not enough for him. The aim of the reforms announced “free energy markets”.

According to estimates by McKinsey, the implementation of programmes Ben Salman will require a huge investment – $ 4 trillion for the period up to 2030, and the money from the CSA no. Moreover, without this money, privatization, and Deputy crown Prince suggests that for these the expected (optimistic hopes) investment profitability remains an open question. Saudi private capital and so prefer to invest abroad but not at home, and peculiarities of national legal systems clearly will not promote the inflow of foreign money.

In parallel, there is the problem of foreign workers. Bin Salman said the problem of unemployment in KSA (and this is a serious issue, as 70% of the population – young people under 30 years), and threatening to expel from the Kingdom of foreigners, freeing ten million jobs. He emphasizes that, can take this measure at any time convenient to him, though, in his own words, this is “the last resort”.

But in KSA the lowest in the world the proportion of women – 17%, and it is absurd to think that they will stay home if household incomes are falling. Is it conceivable to create a high-performance, dynamic modern economy, if it is not involved women who are not even allowed to travel without permission of husband or father, and until recently even to drive a car.

The end of the social contract

The introduction of taxes, reduction of subsidies and the abandonment of the guarantees of employment in the public sector actually mean that the ruling family had given bin Salman carte Blanche for a complete reorganization of economy and social sphere of society while simultaneously tightening political monopoly of one family on power.

Anything can happen, but it’s hard to imagine the Hejaz multimillionaires or basardi in Jeddah, which will agree to this. As well as the young, doomed the reforms Ben Salman on unemployment, but wants to enjoy the benefits of modern civilization, which it lacks so far.

A prominent expert on the region Vladimir Alekseev noted that in 1932 with the creation of the CSA among the chiefs of tribal unions of all parts of the new Kingdom have signed agreements with the obligations of the parties. We are talking about such clans, as al-Sheikh (founders of Wahhabism), the Saudis, al Ali, al Jiluwi, al Rashid, al Sulayem, the AU-Sudairi, As-Sonian and so on. After the discovery in 1938 in KSA oil and the beginning of its production al Saud guaranteed the powerful financial injections of the most influential tribal clans. However, the decline in world oil prices in half has led to the fact that the income of Saudis has fallen sharply and now the Royal family is unable to meet its financial obligations to the tribes. “And this means that they can now repudiate their obligations,” – said Alekseev.

A new generation of Saudi rulers, wanting to keep the barbaric political-religious content of the Saudi regime through the strengthening of the police state, refuse that allowed them in the twenty-first century to keep the medieval monarchy – liabilities in socio-economic sphere. But multi-billionaires and the elite of the army, the leaders of the tribal entities and the sheikhs leading family clans do not support this path, knowing that it leads to powerful social and political upheavals, and perhaps to the fact that the Saudi state will break up into 4-5 pieces, of which it was build is the power 80 years ago. And one of the mechanisms of this collapse will be the economic liberal reforms of Deputy crown Prince Mohammed bin Salman.

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