Understanding Saudi Arabia’s Recalibrated Foreign Policy

Saudi Arabia is trying, with mixed success, to recast itself on the international stage. The kingdom, whose gross domestic product reached $1 trillion in 2022 for the first time, wants an economy that can keep pace with the global energy transition and a foreign policy that is less reliant on the United States. Saudi policies are shaped by the ambitions of its de facto leader, Crown Prince Mohammed bin Salman (commonly known as MBS), to consolidate his hold on power, make the country less dependent on hydrocarbon exports and transform the kingdom into a significant middle power – one that pursues its interests by increasing its regional and global influence and broadening its external ties. As it works toward these goals, Riyadh is increasingly placing itself at the centre of high-stakes diplomacy and mediation efforts. Yet unless Riyadh makes further changes, its apparent efforts at self-transformation are likely to hit a ceiling that falls short of its hopes.

Saudi Vision 2030

One way to understand many of Saudi Arabia’s recent policy innovations is through the lens of Saudi Vision 2030, the crown prince’s flagship development initiative launched in 2016. MBS announced his new strategy soon after his father came to power in 2015 and named him deputy crown prince, head of the newly created Council of Development and Economic Affairs and minister of defence. Today, MBS is both crown prince and prime minister. His success as a leader – at least during the present period – is being judged in large part by his ability to see Saudi Vision 2030 to fruition.

The central goal of Saudi Vision 2030 is to better position Saudi Arabia to weather the global transition to clean energy through economic diversification. The realisation that the country must reduce its dependence on hydrocarbon sales is not new – oil makes up 74 per cent of all exports – but the urgency has grown acute after the global economic fallout from the COVID-19 pandemic, when oil prices fell to record lows. The diversification mindset has persisted even following Russia’s invasion of Ukraine, which pushed global energy prices to new highs, leading to record profits in 2022 for Saudi Aramco, the state oil company. Saudi officials argued to Crisis Group that while they saw the price spike as a final opportunity to reap benefits from the country’s hydrocarbon wealth, efforts to transform the economy continue.  

Riyadh is therefore significantly expanding its non-oil economic activity. It plans to do so by, for example, bolstering religious and non-religious tourism. It hopes to attract foreign residents and capital through mega-projects like Neom Line, a linear city no more than 200m across that will stretch for 170km along the Red Sea coast, run on renewable energy and accommodate nine million people. Vision 2030 will also draw on Saudi Arabia’s $700 billion sovereign wealth fund to make unprecedented investments in developing non-oil sectors, such as renewable energy, sports and entertainment, and artificial intelligence. In this vein, Saudi Arabia intends to develop its own professional football league by acquiring superstars such as Cristiano Ronaldo, Karim Benzema and Neymar, as well as investing in competitive athletics abroad, including billions devoted to football, golf, mixed martial arts and various other sports.

To back up his economic diversification plans, the crown prince has started to open up Saudi Arabia’s conservative society, but only in some respects. As commentators have noted, the reforms are tightly focused on the social and cultural domain. In that space, MBS is projecting a more tolerant version of Sunni Islam to replace rigid adherence to its Wahhabi variety, which is rooted in literalist interpretations of Islam’s most sacred texts. He is also spearheading religious and labour reforms that aim to give more rights to women in particular. These include removing the infamous religious police that monitored strict adherence to religious doctrine; allowing women to drive; and dropping the requirement that women seek a guardian’s approval for work or travel.

When it comes to political rights, however, the situation remains grim. MBS has maintained an absolute monarchy, ruling with an iron fist and leaving no space for dissenting political views. Saudi Arabian citizens face arrest for social media posts that mildly criticise government policies. In a prominent recent case, Saudi authorities sentenced to death a retired teacher (and the brother of a dissident living in exile in the UK), Mohamed Elghamdi, for calling out corruption to his dozen or so followers. This punishment is the most severe they have handed down for social media activity. Other citizens who have used such platforms to voice disapproval of government policies have received long prison terms, ranging between twenty and 45 years.

While MBS has released some high-profile women activists who were jailed for promoting women’s right to drive, others have been detained since, with dozens of them remaining under house arrest and unable to leave the country. He has not only targeted civil society and everyday citizens who dare to speak up, but also people in the powerful Saudi political and economic elite, including members of the royal family. In 2017, he launched a so-called anti-corruption campaign, arresting hundreds of princes, business leaders and other prominent personalities, reportedly forcing them to hand over their fortunes in an apparent bid to eliminate potential opponents of his rule.

A New Focus Abroad

To complement his uneven domestic reforms, MBS has begun pursuing a foreign policy that places a new emphasis on diplomatic initiatives, both to smooth over relations with Saudi Arabia’s neighbours and to resolve long-running conflicts within and beyond the Middle East.

For one thing, Saudi Arabia aims to expand its external relationships in ways that could bring in greater foreign investment. Examples from the past year include Riyadh’s hosting of a dizzying number of major summits with the Gulf Cooperation Council (GCC) as well as the U.S., China, and Central Asian states, among others. Among the world leaders who visited were U.S. President Joe Biden, Chinese President Xi Jinping and Japanese Prime Minister Fumio Kishida. As part of the GCC, Saudi Arabia also took part in the sixth Russia-GCC joint ministerial meeting for strategic dialogue in Moscow.

But the kingdom’s geostrategic manoeuvres go further. It has put considerable effort into resolving disputes with its neighbours and establishing itself as a regional and global diplomatic heavyweight. The Saudis ended a nearly four-year blockade of Qatar in January 2021; resumed diplomatic relations with Iran in March after more than seven years of severed ties; and are engaged in talks with Houthi rebels in an attempt to end the kingdom’s military intervention in Yemen. They founded a Red Sea Council in 2020 that includes all states bordering the basin and, in 2023, became a dialogue partner with the Shanghai Cooperation Organisation, a Eurasian regional security organisation that includes China, Russia and India. Saudi Arabia is in talks to become a member of BRICS – the group of emerging economies comprising Brazil, Russia, India, China and South Africa – by January 2024. Perhaps most ambitiously, it has over the past several months facilitated negotiations with the objective of ending the brutal and seemingly intractable wars in Sudan and Ukraine, hosting talks on the former from May to July and the latter in August.

Riyadh says it is motivated by a desire for a better regional business climate. A Saudi official told Crisis Group, “Saudi Vision 2030 won’t work without regional stability and security”. But there is more to it than that. The new approach is also informed by Saudi perceptions that the U.S. has become unreliable in its longstanding de facto role as a guarantor of Gulf security, putting more pressure on Saudi statecraft to create a geopolitical climate that is conducive to its goals and interests.

The Why and How of Hedging

Saudi fears about U.S. reliability have been building up for years, starting with President George W. Bush’s invasion of Iraq in 2003, which the Saudis tried to dissuade the U.S. from launching. President Barack Obama’s cold shoulder to long-time U.S. partners like Egypt’s Hosni Mubarak amid the 2011 Arab uprisings also raised hackles among the Saudi ruling class. The Saudis were further dismayed by Obama’s 2015 nuclear deal with Iran, which they said would provide Tehran with funds to finance its regional power projection.

An episode the Saudis found particularly jarring was when the U.S. failed to adequately respond, in their view, to a major attack on Aramco facilities in 2019, which took around half of the country’s oil production temporarily offline. President Donald Trump’s administration initially reacted to the attack, which it attributed to Iran, with hawkish rhetoric, saying the U.S. was “locked and loaded”. But it then indicated the U.S. did not want war with Iran and declined to intervene militarily. The Saudis were especially concerned that the U.S. stood down under a president whom they had deemed a friend and ally, and made great efforts to court, including by supporting his administration’s “maximum pressure” campaign against Iran. The events highlighted the extent to which U.S. policy tends to be governed by interests and political pressures independent of who sits in the White House.

President Biden’s subsequent election only heightened the sense in Riyadh that it needed a radically different approach that was far less reliant on U.S. support, even if that meant rapprochement with neighbours with whom it had traditionally tense relations. During the presidential campaign, Biden attacked Saudi Arabia for its human rights record and conduct in Yemen. He also warned the kingdom that it would “pay the price” for the 2018 murder of Saudi Arabian journalist Jamal Khashoggi (a U.S. resident). After winning the election, Biden released a U.S. intelligence report that said the crown prince had approved the operation “to capture or kill” Khashoggi at the Saudi consulate in Istanbul. He also ended U.S. support for Saudi Arabia’s “offensive operations” in Yemen.

The Biden administration has since backpedalled furiously – with the president visiting the kingdom for bilateral and multilateral summits and setting the stage for the infamous Biden-MBS fist bump. Recently, it has even been flirting with a deal that would extend U.S. security guarantees and support for a civilian nuclear energy program in exchange for an unlikely Saudi-Israeli normalisation deal. Still, there is no sign that Riyadh intends to deviate from the hedging strategy it has adopted with respect to the U.S.

A significant part of Saudi Arabia’s efforts to move away from its traditional reliance on the U.S. is to deepen political and economic ties with rival powers like China and Russia, as well as to position itself as a major leader of the so-called Global South. Gulf experts have described these manoeuvres as serving Riyadh’s objective of encouraging a new “non-aligned movement”, in which it would assume a leadership role. For their part, Saudi officials and experts say they are simply evincing a “Saudi-first” nationalism that has become the ethos of the kingdom’s foreign policy.

The kingdom has moved down this new path energetically. It has refused to follow the U.S. and European push to isolate Russia in the aftermath of the Ukraine invasion and continues to work with Russia on oil policy in the OPEC+ alliance. It has also deepened its ties with China. After hosting China’s President Xi for the first ever China-Arab summit in December 2022, it further increased economic ties with its largest trading partner, among other things signing dozens of MOUs to enhance both oil and non-oil economic cooperation. Riyadh and Beijing have also expanded their relationship into the political realm, as seen in the March China-brokered Saudi-Iranian agreement to resume relations. Riyadh has also broadened its network of alliances and partnerships. Beyond the above-referenced commitments to the Shanghai Cooperation Organisation and BRICS, it has signed up to economic agreements and strategic dialogues with both regional powers and emerging economies in Africa, South America and Asia.

MBS Makeover

Another way to understand at least some elements of Saudi Arabia’s new foreign policy is as part of an effort by MBS to remake his international image. That image was deeply tarnished by a series of moves that were widely derided as coercive and even brutal, while doing little to achieve Saudi objectives. These included the kingdom’s intervention in neighbouring Yemen starting in 2015; its imposition of the above-referenced air, land and sea blockade of Qatar from 2017 to early 2021; its abduction and roughing-up of the prime minister of Lebanon, Saad Hariri, in 2017; and the murder of Khashoggi at the Saudi consulate in Istanbul in October 2018.

The desire to distance the kingdom from these acts is understandable given both how poorly they were received and how poorly they panned out. In Yemen, the intervention wound up strengthening Iranian support for Houthi rebels; led to attacks (attributed to Iran) on Saudi Arabia’s territory and international shipping critical to its economic well-being; and caused further reputational damage given the high number of civilian casualties caused by Saudi attacks. The Qatar blockade failed to gain wider support beyond the other participating states – the United Arab Emirates, Bahrain and Egypt – and eventually ended without Doha having satisfied any of Riyadh’s thirteen demands. The detention and temporary forced resignation of Hariri in Saudi Arabia exasperated world leaders and deepened their worries about MBS’s judgment and temperament. The gruesome Khashoggi murder alienated many of the kingdom’s traditional supporters in the U.S. Congress.

Cumulatively, these moves made MBS deeply unpopular among many Western leaders, something that did not serve their interests, even in a world where the Saudis had begun working actively to hedge their reliance on Washington. Thus, it is unsurprising that the kingdom’s new foreign policy – with its emphasis on good relations in the neighbourhood as well as global conflict resolution – would have a rehabilitative dimension for the crown prince among its other purposes.  

Four Limiting Factors

Whatever benefits Saudi Arabia may gain from its recalibrated foreign policy (and there will doubtless be some) it will also run into roadblocks so long as key underlying challenges remain unaddressed.

First, the kingdom has done too little to resolve fundamental differences with its neighbours, particularly Iran. The two countries have reopened their respective embassies, named ambassadors and exchanged delegations of senior officials. Yet they have not meaningfully addressed old sources of friction, including Iran’s relations with militias across the region, interference by each of the two sides in the other’s internal affairs, maritime border disputes and others. Tackling these issues in serious bilateral and regional talks will likely be a prerequisite for durably defusing tensions between these regional heavyweights.

Secondly, Saudi Arabia almost surely lacks the capacity to take on an extensive array of diplomatic initiatives. It already faces challenges with many conflict files, including in Yemen and Sudan. These mediation efforts, like the conflicts they are trying to resolve, are highly complex. In Yemen, a further complication is Saudi Arabia’s status as a party to the conflict. Riyadh’s ability to handle several major mediation exercises simultaneously will likely require a much more sizeable expert staff with deep knowledge of the relevant files. That will take time to develop, and there is a risk that the kingdom will bite off more than it can chew in the meantime. Right now, however, the kingdom shows no interest in trimming its ambition. Saudi officials have expressed a desire to play a larger role in mediating the Ukraine war after a surprisingly successful convening in Jeddah in August, which included China, and have even suggested to Crisis Group that they are exploring ways to restart the dormant Israel-Palestinian peace process, as they continue to advocate for the 2002 Arab Peace Initiative.

Thirdly, Saudi Arabia faces competition from the UAE, a neighbour that does not necessarily want to see Riyadh emerge as the region’s diplomatic and economic pace setter. A fellow GCC member that has long pursued its own ambitious economic and foreign policies, the UAE is a regional heavyweight in its own right. Abu Dhabi finds itself increasingly sparring with Riyadh over political and economic issues, including efforts to resolve the Yemen war, disparate oil production policies, geostrategic influence in the Red Sea and the Horn of Africa, and approaches to key mediation files like Sudan. The Wall Street Journal reported in July that MBS told a group of local journalists during an off-the-record briefing in December that the UAE “had stabbed us in the back”. It is not clear what MBS was referring to, but he could well have been talking about one or more of the policy differences noted above. In the same briefing, MBS said he had presented the UAE with a list of demands, threatening punitive measures if Abu Dhabi did not comply; he told the journalists, “It will be worse than what I did with Qatar”. Whether this statement was serious or performative bravado, tensions between Riyadh and Abu Dhabi are real, and how MBS handles them will be an important sign of whether the Saudis are truly prepared to turn the page on the coercive regional policies that have got them into trouble in the recent past.

Fourthly, even if some of the faded outrage over Khashoggi’s murder and the war in Yemen has not kept Washington from pushing for closer ties, Riyadh’s human rights record will continue to matter in U.S.-Saudi relations. Many U.S. politicians and civil society actors hold deeply negative views of MBS that, under some circumstances, could create political costs for any administration that gets too close to him. Those costs increase when news breaks like the recent Human Rights Watch report of Saudi border guards killing hundreds of Ethiopian migrants on the Saudi-Yemeni border or the death sentence for Ghamdi, the social media critic. Right now, the Biden administration appears to be ready to absorb these costs. But as the Khashoggi affair demonstrated, the U.S. political mood toward the kingdom can shift quickly. While Riyadh’s hedging strategy means that it will have powerful friends regardless of which way the wind blows in Washington, a kingdom that wants maximum flexibility to pivot between major-power camps will need to clean up its act with respect to human rights.

Conclusion

Saudi Arabia and its reputationally tarnished but still ambitious crown prince are looking ahead to a changed world – in which it will enjoy a more prominent place. They want the kingdom to have a diversified economy, be a regional leader at peace with its neighbours and be seen around the world as a diplomatic heavyweight. These objectives are by themselves unobjectionable, but there is a long way to go if they are to be achieved. If the kingdom can deal with key underlying challenges – coming to grips with the core issues that drive tensions with Tehran, developing its diplomatic capacity, arresting the competitive spiral with the UAE and taking far more seriously the need to protect human rights – then the gap between Riyadh’s aspirations and reality can begin to narrow. Until then, it may still be able to make progress on certain fronts, but wholesale transformation will likely remain beyond reach, and the ultimate success of Vision 2030 will be at risk.