“Crises or Opportunities, a Reflection on the Economic, Political, and Security Challenges to the Kingdom of Saudi Arabia”
Date: 2016-09-07

HRH Prince Turki Al-Faisal, -Chairman at  KFCRIS- participated in the 42nd annual forum "Intelligence on the World, Europe, and Italy" on September 2nd, 2016. His Royal Highness gave a speech entitled “Crises or Opportunities, a Reflection on the Economic, Political, and Security Challenges to the Kingdom of Saudi Arabia” In his speech, Prince Turki highlighted how Saudi Arabia reads the nature of the problems and the challenges facing the region.

Speech Title: “Crises or Opportunities, a Reflection on the Economic, Political, and Security Challenges to the Kingdom of Saudi Arabia”
Speaker: HRH Prince Turki AlFaisal

In the Name of God the Merciful, the Compassionate. May God’s Peace and Blessing be upon you 
Thank you for inviting me to speak to you today. My goal in today's presentation is to present to you a tour d'horizon, as ship captains have called it for centuries. To conduct a tour d'horizon is to simply take a 360 degree look around you to assess the current weather conditions. Where is there calm, and where are there storms? And then, once the tour d’horizon has been taken, the captain turns his eyes to the ship itself - what is the condition of the vessel as it prepares to set off for the horizon? Through this assessment a ship captain can then determine the best way to guide his vessel safely to port. So I shall conduct my own tour d'horizon to assess how Saudi Arabia – my ship of state – will sail safely into a safe and prosperous future. And therefore my talk today is entitled “Crises or Opportunities, a Reflection on the Economic, Political, and Security Challenges to the Kingdom of Saudi Arabia”.

Ladies and Gentlemen

The economic sphere is one of intense excitement in the Kingdom these days because of the recent announcement of Vision 2030, a sweeping economic and social reform program that is gradually being rolled out in order to implement the changes needed to help the Kingdom continue its development as a thriving and prosperous society. Envisioned by King Salman himself, Vision 2030 is spearheaded by the Deputy Crown Prince Muhammad bin Salman. It directly addresses the three greatest economic challenges facing the Kingdom today: unemployment, diversification, and privatization.

Unemployment is an issue for Saudi Arabia, as it is for many other countries, including other members of the G20. The unemployment rate for Saudi men and women between 16 and 29 is nearly 29 percent. Further, two-thirds of the nation’s 29 million people are under 30. Around 2 million people will enter the workforce over the next decade, or approximately 200,000 people each year. Not only will jobs be needed, but these new entrants must possess the skills that will make them employable.

Fortunately, Vision 2030 picks up where the late King Abdullah left off, by announcing major investments in the Saudi education system, by streamlining the bureaucracy, and by diversifying the sources of income. King Abdullah’s economic modernization programs included the King Abdullah Project for the Development of Education which provided over $3 billion for educational reform. The 2015 Saudi budget increased spending on education by 3 percent, reaching 25 percent of the total budget. Vision 2030 will continue this educational progress with increased investment and improved curricula.

But in order to provide jobs for these many new workers, the Kingdom realizes it must diversify its economy so that it can become less dependent on oil and begin generating businesses, careers, and income outside the petroleum sector.  In order to achieve this goal, 5% of Aramco, the state oil company, will become available for public offer, in what will perhaps be the largest IPO in history. The money generated from this sale will be placed in a sovereign wealth fund, which will also be sourced by Saudi fiscal assets and the sale of state-owned real estate and other government assets. This fund will be used to transform Saudi Arabia into an investment-driven economy, which will help drive diversification.

Finally, Vision 2030 also seeks to address the challenge of privatization. The Saudi government knows that its economy must become much more driven by a vibrant private sector and that the role of government must be diminished. The stated target is to increase the private sector’s contribution to GDP from 40 percent today to 65 percent by 2030. Much of this private sector growth will come through public-private partnerships aimed at improving the nation’s power generation, transportation, manufacturing, and digital infrastructures. Mr. Khaled Al-Falih, the chairman of Aramco, is the new minister of Energy, Industry, and Natural Resources, which will soon be creating public-private partnerships in its areas of concern.

Vision 2030 will also play a part in addressing what are widely seen as the three most pressing political challenges facing the Kingdom: a lethargic bureaucracy, transparency, and accountability. As the Saudi economy has grown more advanced, government bureaucracies have had to be built to manage the entire system. And while this has been beneficial in certain regards, it has also led to a great deal of wasted time, stifled innovation, and added costs to doing business. Vision 2030 will streamline government and do away with many of the bureaucratic drags on the economy by enhancing business competition, and thus more efficiency, into the various areas now managed solely or largely by government bureaucracies, such as education and health.

It is important to admit that the lack of transparency has led to corruption in the form of abuses of power, and the use of middlemen, or wasta, to do business. Being aware of the problem, the government and private business leaders will continue to do everything in their power to alleviate these hindrances to commerce. Indeed, one very important aspect of Vision 2030 is a drive to increase transparency in the economy and make sure that no entity is allowed to avoid the scrutiny of the law and the obligation to honestly report all business activities. A follow-up department, headed by a ministerial rank official, has been set up to follow the implementation by government ministries of projects that have been approved.

Ladies and Gentlemen.

As it has been doing for decades, the Kingdom will continue to seek to increase the participation of its women in all fields.  At 50% of the population, women are a highly valued component of the population in the Kingdom, and great steps have been made in recent years to increase their inclusion in the labor force.  More women graduate from universities than men; in all disciplines.  Women have graced the membership of the Consultative Assembly for three years, occupying 20% of its seats. Women have been fully enfranchised in the electoral system: as voters and electees.  While women now make up 7% of the work force, by 2030 that proportion should rise to 30%.

The other challenge that the Kingdom faces is terrorism.  Al Qaida and DAESH, which I prefer to call Fahish; those of you who know Arabic will surely agree with me that is a more appropriate name for them.  It means obscene.  Hizbollah in the Hijaz, the Iranian terrorist tool which has been dormant since the Khobar Towers attack in 1996, has been reactivated by its Iranian masters. It is responsible for a few random shootings and lobbing Molotov cocktails at police vehicles. Its aim is to drive a wedge between the majority Sunni population and their brethren, the Shi’ah minority. Their cohorts in Lebanon, Syria and Iraq are actively enflaming the sectarian divide in those countries. There is a confluence of aims between them and Fahish, which, along with its attacks on Sunnis, has also targeted Shi’ah mosques in the Kingdom. Fahish, too, wants to set Shi’ah against Sunnah. Fortunately, in Saudi Arabia, such a threat is of concern to all its people, regardless of sect. This threat has been a strong unifying force, especially following the Arab Spring turmoil and the various conflicts that have erupted as a result. In short, with wars and terrorism raging around the Kingdom, its citizens have much greater concerns than sectarian differences, and there is every sign that the vast majority of Saudis consider themselves Saudis first, and Sunni or Shi’ah second. The funerals that followed the Fahish attacks on the Shi’ah mosques brought out spontaneous popular marches that proclaimed the unity of the Saudi peoples’ social fabric and the rejection of any efforts to divide the people along sectarian lines.  As for al Qaida, it was eliminated from the Kingdom and moved its operations to Yemen. The Kingdom, with its coalition partner, the UAE, and Yemeni government forces have taken them on. Mukalla has been liberated, and al Qaida operatives who have fled are being mopped up.  I look forward to hearing from or reading the apologies of reporters and pundits who accused the Kingdom and its coalition partners of being down right complicit with al Qaida or, at least, to have allowed it to expand its writ over territory in Yemen.

However, in the failing states of Iraq, Lebanon, Syria, Libya, and Yemen, terrorist groups found havens where they thrive. Since the American invasion of Iraq, which led to the breakdown of state institutions and their substitution with a sectarian based government structure, the Iraqi people have been cursed with a shortsighted sectarian driven and corrupt leadership under the previous Maliki government that led to the alienation of Sunnis. This coincided with the popular uprising in Syria in 2011, which was brutally dealt with by Bashar al Assad, leading to the militarizing of the uprising and the breakdown of authority.  Bashar added fuel to the fire by inviting the remnants of al Qaida to return to Syria so that he can claim to be fighting terrorists.  A perfect storm was unleashed as these terrorists found that they could operate on both sides of the border. With the shameful flight of thousands of Maliki’s sectarian security forces when a few hundred Fahish terrorists attacked Mosul, the so-called Islamic state proclaimed itself

Since then, the Kingdom has been working with other coalition partners to eradicate the group. The international coalition that has formed to fight Fahish was inaugurated in Jiddah, Saudi Arabia in 2014. However, Saudi Arabia believes that defeating Fahish and the extremist ideology that fuels it, will take much more than simply bombing those who have already decided to join it. Fahish and all the terrorists operating in the above-mentioned states are the symptoms of the disease.  The disease, Ladies and Gentlemen, is the failing states themselves. Much larger steps are needed, such as removing Assad.  Stopping the killing, wholeheartedly, and not in the quarter-hearted way that is now happening, is the priority. Solving the Palestinian crisis, which allows for the long-standing recruiting propaganda used by terrorists to gain recruits, is a must. Debunking the false theological arguments used to convince young Muslims that terrorism is allowed by Islam, is imperative.

The recently announced 37 nation Muslim coalition to fight terror, which the Kingdom is spearheading, will take on terrorists, wherever they rear their ugly heads. Furthermore, recent military exercises, codenamed Northern Thunder, have been conducted in the north of the Kingdom on its border with Iraq. Numerous nations took part, including the UAE, Egypt, Jordan, Bahrain, Kuwait, Morocco, Malaysia, and more, and nearly 150,000 troops and hundreds of tanks and planes were involved.

These exercises are being carried out in order to prepare for cooperative operations. Pooling intelligence, financial, and military resources is the way to carry the fight to the terrorists. The Kingdom’s successful campaign against al-Qaida, and, now, Fahish, is to prevent them from acting.  The Saudi people are the vital component in this effort. Citizens cooperate with the security forces and report suspicious activities in their neighborhoods, leading to the prevention of terrorist acts.

Saudi Arabia views it as absolutely essential to security and prosperity in the Middle East that failing states be assisted in their attempts to restore order and not allow Tehran to sow sectarian conflict to achieve dominance over these failing states. With the general military withdrawal of Washington from the Middle East, the Kingdom has seized the mantle of security by forming the broad coalition I mentioned before.  The Kingdom continues to work with the world community to meet this challenge. With its GCC partners, it has addressed Iran with the invitation to be a constructive partner in a regional security order and not to be a voraciously sectarian seeker of domination over the Arab world. 

Ladies and Gentlemen

We in Saudi Arabia have always been keenly aware of the important choice between defense or offense. For many years, I would say that the Kingdom chose defense. But times are changing. Through alliance building, financial investment, and new strategic thinking, the Kingdom is on the offensive to address its economic, political and security challenges. It is amusing to hear and to read critics of Saudi Arabia’s active engagement with these challenges as alarming, thoughtless, and reckless; when most of these critics used to criticize the Kingdom as weak, retiring, and inactive. May Allah grant us the wisdom to accurately assess our objectives, the discretion to know when it is best to advance or withdraw, and the ability to pursue our goals with both passion and patience. The Saudi ship of state is sailing in turbulent seas with thunder and lightning ever present. Under the captainship of King Salman and his two first mates, the Crown Prince, Muhammad bin Nayef and the Deputy Crown Prince, Muhammad bin Salman, the ship is steering a steady course that will bring us to safe shores, anon. And with that I say, safe sailing to us all.

Thank you.


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