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Getting the Saudi fight against corruption right

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Kuwaiti billionaire Maan al-Sanea should have seen it coming after Saudi Crown Prince Mohammed bin Salman vowed to root out corruption.

Embroiled in one of the kingdom’s largest financial scandals and collapses that involved a bitter $22 billion battle with a prominent Saudi merchant family, cost some of the world’s biggest banks billions of dollars, and is being slugged out in courts across the globe, Mr. Al-Sanea was low hanging fruit. He was arrested in October when police raided his Saudi mansion two weeks before Prince Mohammed’s frontal assault on the kingdom’s political and economic elite.

Mr. Al-Sanea’s arrest failed to set off alarm bells. Members of the ruling family and business community as well as senior officials likely saw it as a one-off incident. Together with Mr. Al-Sanea, they also grossly underestimated Prince Mohammed’s brashness and ruthlessness and ignored his warning in June that “no one who got involved in a corruption case will escape, regardless if he was a minister or a prince.” 

Mr. Al-Sanea, the ruling family and business community had good reason to be complacent: they, like the crown prince and the Salman branch of the family, were all part of a system and a way of doing business that went back to the founding of Saudi Arabia.

That is why rather than creating a large number of enemies and opening himself up to accusations of selectively targeting people in a bold move that appeared to be more about grabbing power than rooting out corruption, Prince Mohammed may have been well-advised to make his anti-corruption stand differently.

The crown prince’s anti-corruption committee, established hours before the first arrests and announcement of dismissals of prominent princes, officials and businessmen were made, has projected itself as an enforcement agency with the powers to arrest, freeze assets and impose travel bans rather than a regulatory body that would introduce legislation designed to fundamentally alter an ingrained system.

Rooted in a system that until the late 1950s made no distinction between the budgets of the state and the ruling family, Saudi laws still only barely delineate the dividing lines between them nor do they contain anything that would amount to a code to prevent conflict of interest or regulate the way members of the ruling family do business with the state. In fact, business deals often amount to insider baseball in a country in which the family’s finances and sources of revenue are a closely held secret. In fact, if revealed, the Fortune 500 billionaire’s list could well look very different.

Members of the ruling family and associated businessmen initially often made their money by representing foreign companies and receiving huge commissions on government contracts. They often took loans from banks which they failed to pay back. National Commercial Bank, where numbered accounts of princes were managed by senior management, nearly collapsed at the beginning of this century because of unpaid loans.

Life magazine editor Noel F. Bush on a visit in 1943 during which he travelled in the country with its first king, Ibn Saud, portrayed a ruler who operated on the principle of ‘the state is mine’ and doled out welfare to his subjects. It is a system that has since repeatedly been upgraded but whose fundaments remain in place.

“Our unemployment rate would drop rather significantly if the billions we squandered on kickbacks and lavish personal enrichment schemes dressed up as public-works projects were spent instead on the development of small to medium enterprises, vocational training and 21st-century education reforms… In Saudi Arabia, senior officials and princes become billionaires as contracts are either enormously inflated or, at worst, a complete mirage,” wrote Jamal Khashoggi, a Saudi journalist who recently moved to the United States in anticipation of the crown prince’s crackdowns.

Mr. Khashoggi cited the example of an airport built “in the wrong location simply to benefit the princes who own the land. They received the land for free from the government and then got extravagant compensation for the property.”

Prince Mohammed’s plans to diversify and streamline the economy, loosen strict social codes to further his economic reforms, and, in a world in which autocracies can no longer primarily rely on repression, cater to social and job aspirations of an in majority young population while avoiding political change and tightening his grip on power, may well be the most far-reaching upgrade of the system.

No doubt, Prince Mohammed’s tackling of corruption and targeting of prominent people strikes a popular cord with many Saudis who have long been unhappy with arbitrary privileges members of the ruling family were able to accrue to further their business and financial interests.

Nonetheless, the impression that the most recent wave of arrests constituted a power grab rather than a systemic tackling of corruption is reinforced by the fact that the crown prince’s dealings as well as that of his tack of the ruling family remain beyond scrutiny.

The $500 million purchase by Prince Mohammed of the Serena, the world’s 15th largest yacht, raised eyebrows when it was disclosed in 2016 by The New York Times at a time that the crown prince had imposed austerity measures as a result of which many in the kingdom were struggling to make ends meet. The 32-year old crown prince never clarified how he had amassed his wealth.

Nor is it clear how his father, King Salman, funded the use of two offshore companies in the British Virgin Islands to take out mortgages on his London homes worth $34 million and manage a yacht. Similarly,  this week’s publication by the International Consortium of Investigative Journalists (ICIJ) of the Paradise Papers disclosed offshore holdings by several other members of the monarch’s branch of the family.

The New York Times moreover reported that a major Saudi investment firm founded by one of the king’s sons, and now chaired by another, owned a significant stake in a conglomerate that does extensive government business, including in a shipbuilding partnership with a French defense contractor. A smaller firm founded by another of King Salman’s sons operated in sectors regulated and/or funded by the state such as health care, telecommunications and education.

To be clear, offshore assets are not illegal nor are members of the ruling family barred under Saudi law from benefitting from doing business with a state that was named after the family. Equally clear, however, is that Saudi Arabia may benefit more from a reformer who exudes transparency, lives up to his vow that all are equal under the law, and tackles corruption structurally rather than punitively.

To achieve that, Prince Mohammed may be better served by an anti-corruption committee that is less vindictive and more focused on developing and enforcing a set of laws, rules and regulations that ensures rule of law by institutionalizing anti-corruption norms, policing conflict of interest, and introducing transparency into the finances of the state as well as the ruling elite.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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Middle East

Saudi Arabia and Iran cold war

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After almost seven decades, the cold war has reached the middle east, turning into a religious war of words and diplomacy. As Winston Churchill says that “diplomacy is an art of telling someone to go to hell in such a way that they ask for the direction”. So, both the regional powers are trying to pursue a policy of subduing the adversary in a diplomatic manner. The root of the conflict lies in the 1979, Iranian revolution, which saw the toppling of the pro-western monarch shah Muhammad Reza Pahlavi and replaced by the so-called supreme leader Ayatollah Khamenei. From a Yemini missile attack to the assassination of the supreme commander QassimSoleimani, the political, ideological and religious differences between Iran and Saudi Arabia are taking the path of confrontation. The perennial rivalry between the two dominant Shiite and Sunni power house ins an ideological and religious one rather than being geo strategic or geo political. Back to the time when Saudi Arabia supported Saddam Hussain against the united states of Americathe decline of Saddam and his authoritarian regime was made inevitable and with this, Iran and Saudi Arabia rosed as the powerful, strategic and dominant political forces in the middle east.it was from here that the quest for supremacy to be the prepotent and commanding political powercommenced. The tensions escalated or in other words almost tended to turn into scuffles when in 2016, the Iranians stormed the Saudi embassy as a demonstration of the killing of a Shia cleric. The diplomatic ties were broken and chaos and uncertainty prevailed.

This cold war also resembles the original one., because it is also fueled by a blend of ideological conviction and brute power politics but at the same time unlike the original cold war, the middle eastern cold war is multi-dimensional and is more likely to escalate .it is more volatile and thus more prone to transformation. This followed by several incidents with each trying to isolate the other in international relations. The Saudis and Iranians have been waging proxy wars for regional dominance for decades. Yemen and Syria are the two battlegrounds, fueling the Iran-Saudi tensions. Iran has been accused of providing military assistance to the rebel Houthis, which targets the Saudi territory. It is also accused of attacking the world naval ships in the strait of Hormoz, something Iran strongly denies.  This rivalry has dragged the region into chaos and ignited Shia-Sunni conflict across the middle east. The violence in the middle east due to this perennial hostility has also dire consequences for the economy of the war-torn nations. In the midst of the global pandemic, when all the economic activities are at halt, the tensions between the two arch rivals will prove hazardous and will yield catastrophic results. The blockade of the shipping and navigation in the Gulf, attacks on international ships, and the rising concerns of the western powers regarding this issue has left Iran as an isolated country with only Russia supporting her.

A direct military conflict between Saudi Arabia and Iran will have dire consequences for the neighboringcountries. A direct military confrontation might not be a planned one, but it will be fueled due to the intervention of the other key partners, who seek to sought and serve their personal and national intrigues. Most importantly middle east cannot afford a conflict as it is a commercial hub for the world. The recent skirmishes in Iraq sparked fears of wider war when Iraq retaliated for killings of QassimSoleimani. If the US president had not extended an olive branch, the situation might have worsened. The OIC, which is a coalition of 57 Muslim countries has also failed in bringing measures to deescalate the growing tensions. The OIC, where the Saudi Arabia enjoys an authoritarian style of dominance has always tried to empower her own ideology while rising the catch cry of being a sacred country to all the Muslims. Taking in account, the high tensions and ideological and the quest for religious dominance, the international communities such as UN and neighboring countries should play a positiveand vital role in deescalating these tensions. Bilateral trade, communications between the two adversaries with a regional power playing the role of mediator and extending an olive branch to each other will yield better results and will prove fruitful in mitigating the conflict if not totally subverting it.

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First Aid: How Russia and the West Can Help Syrians in Idlib

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Authors: Andrey Kortunov and Julien Barnes-Dacey*

The next international showdown on Syria is quickly coming into view. After ten years of conflict, Bashar al-Assad may have won the war, but much is left to be done to win the peace. This is nowhere more so than in the province of Idlib, which is home to nearly 3 million people who now live under the control of extremist group Hayat Tahrir al-Sham (HTS) with external Turkish protection and humanitarian assistance from the United Nations.

The question of humanitarian access into Idlib is now emerging as a central focus of new international politicking. In so doing, this small province could be pivotal to the future of the larger stalemate that has left the United States, Europe, and Russia locked in an unwinnable status quo.

Russia has said that it plans to veto an extension of cross-border UN aid delivered from Turkey, authorised under UN Security Council resolution 2533, which is up for renewal in July, potentially depriving the population of a vital lifeline amid desperate conditions. Moscow says that all aid should be channelled from Damascus via three new government-controlled crossing points to the northern province. Western governments, to say nothing of the local population, are sceptical, given the Syrian government’s hostility towards the province’s inhabitants. For its part, the UN says that cross-lines aid cannot compensate for a closure of cross-border access.

As ever, the two dominant players—the US and Russia—are talking past each other and are focused on countering each other’s moves—to their mutual failure. It is evident that US condemnation and pressure on Russia will not deliver the necessary aid, and also evident that Russia will not get its wish for the international recognition of the legitimacy of the Syrian government by vetoing cross-border access. While these will only be diplomatic failures for the US and Russia, it is the Syrian people who will, as ever, pay the highest price.

But a mutually beneficial solution to Idlib is still possible. Russia and the US, backed by European states, should agree to a new formula whereby Moscow greenlights a final one-year extension of cross-border aid in exchange for a Western agreement to increase aid flows via Damascus, including through Russia’s proposed cross-lines channels into Idlib. This would meet the interests of both sides, allowing immediate humanitarian needs to be met on the ground as desired by the West, while also paving the way for a transition towards the Damascus-centred international aid operation sought by Moscow.

This imperfect but practical compromise would mean more than a positive change in the humanitarian situation in Idlib. It would demonstrate the ability of Russian and Western actors to work together to reach specific agreements in Syria even if their respective approaches to the wider conflict differ significantly. This could serve to reactivate the UN Security Council mechanism, which has been paralysed and absent from the Syrian track for too long.

To be sure the Syrian government will also need to be incentivised to comply. Western governments will need to be willing to increase humanitarian and early recovery support to other parts of government-controlled Syria even as they channel aid to Idlib. With the country now experiencing a dramatic economic implosion, this could serve as a welcome reprieve to Damascus. It would also meet Western interests in not seeing a full state collapse and worsening humanitarian tragedy.

The underlying condition for this increased aid will need to be transparency and access to ensure that assistance is actually delivered to those in need. The West and Russia will need to work on implementing a viable monitoring mechanism for aid flows channelled via Damascus. This will give Moscow an opportunity to push the Syrian regime harder on matters of corruption and mismanagement.

For its part, the West will need to work with Moscow to exercise pressure on Ankara to use its military presence in Idlib to more comprehensively confront radical Islamists and ensure that aid flows do not empower HTS. A ‘deradicalisation’ of Idlib will need to take the form of a detailed roadmap, including that HTS comply with specific behaviour related to humanitarian deliveries.

Ultimately this proposal will not be wholly satisfactory to either Moscow or the West. The West will not like that it is only a one-year extension and will not like the shift towards Damascus. Russia will not like that it is an extension at all. But for all sides the benefits should outweigh the downsides.

Russia will know that Western actors will respond to failure by unilaterally channelling non-UN legitimised aid into the country via Turkey. Russia will lose the opportunity to slowly move Idlib back into Damascus’s orbit and the country’s de facto partition will be entrenched. This outcome is also likely to lead to increased instability as aid flows decrease, with subsequent tensions between Moscow’s allies, Damascus and Ankara.

The West will need to acknowledge that this approach offers the best way of delivering ongoing aid into Idlib and securing greater transparency on wider support across Syria. The alternative—bilateral cross-border support—will not sufficiently meet needs on the ground, will place even greater responsibility on Turkey, and will increase the prospect of Western confrontation with Russia and the Syrian regime.

Importantly, this proposal could also create space for wider political talks on Idlib’s fate. It could lead to a renewed track between Russia, the US, Turkey and Europeans to address the province’s fate in a way that accounts for Syria’s territorial integrity and state sovereignty on the one hand and the needs and security of the local population on the other hand. After ten years of devastating conflict, a humanitarian compromise in Idlib will not represent a huge victory. But a limited agreement could still go a long way to positively changing the momentum in Syria and opening up a pathway for much-needed international cooperation.

* Julien Barnes-Dacey, Middle East and North Africa Programme Director, European Council on Foreign Relations (ECFR)

From our partner RIAC

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Iran’s Impunity Will Grow if Evidence of Past Crimes is Fully Destroyed

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No reasonable person would deny the importance of preventing a nuclear-armed Iran. But that issue must not be allowed to continue overshadowing Iran’s responsibility for terrorism and systematic human rights violations. These matters represent a much more imminent threat to human life, as well as longstanding denials of justice for those who have suffered from the Iranian regime’s actions in the past.

The Iranian people have risen multiple times in recent years to call for democratic change. In 2017, major uprisings broke out against the regime’s disastrous policies. Although the ruling clerics suppressed those protests, public unrest soon resumed in November 2019. That uprising was even broader in scope and intensity. The regime responded by opening fire on crowds, murdering at least 1,500. Amnesty International has reported on the torture that is still being meted out to participants in the uprising.

Meanwhile, the United Nations and human rights organizations have continued to repeat longstanding calls for increased attention to some of the worst crimes perpetrated by the regime in previous years.

Last year, Amnesty International praised a “momentous breakthrough” when seven UN human rights experts demanded an end to the ongoing cover-up of a massacre of political prisoners in the summer of 1988.

The killings were ordered by the regime’s previous supreme leader Khomeini, who declared that opponents of the theocracy were “enemies of God” and thus subject to summary executions. In response, prisons throughout Iran convened “death commissions” that were tasked with interrogating political prisoners over their views. Those who rejected the regime’s fundamentalist interpretation of Islam were hanged, often in groups, and their bodies were dumped mostly in mass graves, the locations of which were held secret.

In the end, at least 30,000 political prisoners were massacred. The regime has been trying hard to erase the record of its crimes, including the mass graves. Its cover-up has unfortunately been enabled to some degree by the persistent lack of a coordinated international response to the situation – a failure that was acknowledged in the UN experts’ letter.

The letter noted that although the systematic executions had been referenced in a 1988 UN resolution on Iran’s human rights record, none of the relevant entities within that international body followed up on the case, and the massacre went unpunished and underreported.

For nearly three decades, the regime enforced silence regarding any public discussion of the killings, before this was challenged in 2016 by the leak of an audio recording that featured contemporary officials discussing the 1988 massacre. Regime officials, like then-Minister of Justice Mostafa Pourmohammadi, told state media that they were proud of committing the killings.

Today, the main victims of that massacre, the principal opposition Mujahedin-e Khalq (MEK), are still targets of terrorist plots on Western soil, instigated by the Iranian regime. The most significant of these in recent years was the plot to bomb a gathering organized near Paris in 2018 by the MEK’s parent coalition, the National Council of Resistance of Iran (NCRI). The Free Iran rally was attended by tens of thousands of Iranian expatriates from throughout the world, as well as hundreds of political dignitaries, and if the attack had not been prevented by law enforcement, it would have no doubt been among the worst terrorist attacks in recent European history.

The mastermind of that attack was a high-ranking Iranian diplomat named Assadollah Assadi. He was convicted in a Belgian court alongside three co-conspirators in February. But serious critics of the Iranian regime have insisted that accountability must not stop here.

If Tehran believes it has gotten away with the 1988 massacre, one of the worst crimes against humanity from the late 20th century, it can also get away with threatening the West and killing protesters by the hundreds. The ongoing destruction of mass graves demonstrates the regime’s understanding that it has not truly gotten away with the massacre as long as evidence remains to be exposed.

The evidence of mass graves has been tentatively identified in at least 36 different cities, but a number of those sites have since been covered by pavement and large structures. There are also signs that this development has accelerated in recent years as awareness of the massacre has gradually expanded. Unfortunately, the destruction currently threatens to outpace the campaign for accountability, and it is up to the United Nations and its leading member states to accelerate that campaign and halt the regime’s destruction of evidence.

If this does not happen and the 1988 massacre is consigned to history before anyone has been brought to justice, it will be difficult to compel Tehran into taking its critics seriously about anything, be it more recent human rights violations, ongoing terrorist threats, or even the nuclear program that authorities have been advancing in spite of the Western conciliation that underlay 2015 Joint Comprehensive Plan of Action.

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