Khashoggi and Saudi relations with the West: How much damage has been done?
The murder of Saudi Journalist Jamal Khashoggi on 2 October at the Saudi consulate in Istanbul triggered an international crisis that has put Saudi Arabian relations with the US and other important allies to the test.
Recent statements by the US President indicate that the killing of Khashoggi is unlikely to produce a major economic impact in the form of sanctions against the Kingdom of Saudi Arabia (KSA), as initially warned by his administration. At least in terms of trade and investment, the US and Europe are unlikely to alter substantial aspects of the relations with the Saudis.
From the stability of oil prices in the international market to undermining the regional influence of Iran, there is too much at stake in the links between the US and the KSA to afford a major disruption in the relations. At the outset of the crisis, for instance, President Trump made it clear that the US$350 billion arms and security deal, announced in May 2017, would not be jeopardized.
However, the US and Europe, while defending their own economic and geopolitical interests – which require stable relations with the KSA – also have to construct a coherent narrative to justify these relations to their voting public. Such is the complex paradox lying at the core of the hesitations in the West about the Khashoggi case.
Will the Crown Prince be removed?
In this context, some commentators point to the alleged recklessness of the Crown Prince, and suggest his replacement in order to return to normal relations. International media insinuate that discussions are taking place inside the government of KSA about this issue, while US Senator Lindsey Graham, a leading voice within the Republican Party, openly asked the Saudi establishment to remove the Crown Prince and select a less troubling figure.
The fact that some actions taken by the Prince during the past few years have had undesirable consequences for KSA allies and the US in particular, seems to justify such position. Considering that the current geopolitical dynamics of the US and Saudi Arabia alliance are determined by the role of Iran in the region, there are reasons to believe that strategies enforced by the Saudi government have been counterproductive.
The blockade over Qatar, for instance, reportedly encouraged the country to develop successful strategies to adapt to its current situation, and prompted a rapprochement with Iran, with which Qatar jointly exploits the world’s largest natural gas field, in the Persian Gulf. Further examples include Saudi Arabia’s controversial role in the Yemeni war; the apparent brief detention of the Lebanese Prime Minister in Riyadh; and the well-publicized arrest of tens of princes and businessmen in an alleged crusade against corruption in the Kingdom. These moves have variously created more internal enemies for the Prince, fomented increasing concerns among Saudi Arabia’s allies, and allegedly allowed Iran to capitalize on the Saudis’ tactical missteps.
Reputational cost
Aside from the standard concerns of international relations, an aspect less discussed among analysts is the reputational and therefore business cost of the Khashoggi case. The extent of such damage should not be disregarded and the negative impact on public relations and worldwide perception about the KSA, an issue in which the Crown Prince has shown particular interest, might have a lasting effect.
Ironically, the reputational stakes are higher precisely because Saudi Arabia has made such a show lately of its own attempts at reform, after the launch of the ambitious “Vision 2030” in 2016. This plan sets out the country’s transformation into an open economy with a focus on infrastructure, education and tourism. Such a liberal-style strategy, increasing the openness of the country to the world, brings with it new levels of scrutiny and accountability, whether in relation to investors, consumers, or any other stakeholder.
International businesses nowadays operate under the premise that the reputational damage caused to a country can be transferred to companies associated or doing business with its government. This has already been illustrated by the withdrawal of sponsorship for the Saudi Future Investment Initiative, known as “Davos in the desert”, by major multinational companies and the cancellation of attendance by senior business representatives from around the world.
Perhaps the veiled suggestions by the media and senior policymakers about a change in the Saudi hierarchy intend to pave the way for Saudi Arabia to overcome the crisis in a dignified way while fulfilling the expectations of public opinion. It would certainly diminish the reputational damage caused to the Kingdom, while assuring continuity of business relations as usual. However, there are no concrete indicators of such a scenario unfolding in the near future.
