Saudi Arabia Anti-Corruption Crackdown: How will it Affect the Country’s Future?

Photo Credit: Outernationalist

On November 4, 2017, Saudi Arabia launched an anti-corruption campaign aimed to tackle the various corruption problems throughout the Kingdom. King Salman bin Abdulaziz issued a royal order to establish the anti-corruption committee and appointed Crown Prince Mohammed bin Salman as the leader of the initiative.

It appears that the goal of this crackdown is to eradicate corruption at all levels of government, and so far it has demonstrated considerable momentum. Since the issuance, 208 individuals have been called in for questioning, and seven of them have been released without charge. According to a list obtained by CNN, 17 prominent figures have been arrested; including Prince Alwaleed bin Talal, the billionaire businessman of Kingdom Holding, the formal head of the royal court Khaled Al-Tuwaijri, Saudi media mogul Waleed Al-Ibrahim, and Prince Turki bin Nasser. Three ministers were removed from their positions, and 10 former ministers were detained.

Despite the very real need to curb corruption in the Kingdom, the motives behind the reform appear to be mostly a means to centralize and consolidate the Crown Prince’s power. Many speculate that this anti-corruption drive is ultimately designed to purge potential rivals to the Saudi throne. In many non-democratic countries, anti-corruption initiatives are often used by the ruling elites as a way to gain public support and legitimacy for personally motivated power grabs. China’s anti-corruption initiative, for example, has been used by General Secretary Xi Jinping to eliminate key members of his rival faction, with the benefit of demonstrating to the public that he is serious about fighting corruption.

Corruption in Saudi Arabia has long been a patronage system, those in charge reward a small network of loyalists. Grand corruption within the oil industry is endemic and has been largely tolerated. However, as the price of oil remains low and the scarcity of water remains high, the Saudis have had to make overdue modernization reforms and invigorate the investment portfolio in the sovereign wealth fund to maintain stability. Regardless of the motives behind the anti-corruption agenda, it is imperative the Saudis act prudently with remaining reserves and resources. The Crown Prince will likely successfully spin this as a sincere effort to create a more transparent, diverse economy in pursuit of their 2030 vision – and who wouldn’t want to believe that?

Of course, any real impact requires increased transparency, a willingness to prosecute abuses of power and theft, and broadly applied limitations on nepotism. In the short-term, avoiding the risk of doing business with the wrong person may have the unintended consequence of less foreign investment, time will tell whether this crackdown is good for the Kingdom or just the Crown Prince Mohammed bin Salman.

Dessy Pramita is the Anti-Corruption/Conflict Taskforce Fellow at the Center for International Private Enterprise (CIPE)