In Stratfor's 2018 Annual Forecast, we wrote that Saudi Arabia's Crown Prince Mohammed bin Salman would continue using his consolidated power to pursue sweeping reforms designed to reduce the country's dependence on oil and encourage investment within the country's borders. A recent announcement that the country's corruption crackdown is over indicates not that the crown prince is done using his power to push for change, but that the country is keen to appear stable to investors.
When a Saudi public prosecution official announced the end of the anti-corruption campaign, it looked more like the end of a first phase than the end of an era. The splashy infographic posted on Twitter left big questions about the corruption campaign's future, as well as the status of Saudi billionaire Alwaleed bin Talal. Released in English, the announcement was almost certainly aimed at reassuring international investors. As the Saudi government gears up for an initial public offering of Saudi Aramco stock sometime this year or next, investors are looking for stability, transparency and certainty.
Yet this was a strange way to provide that, not least because of some odd accounting in the Saudi announcement. Though 350 suspects were rounded up in November, the public prosecutor said that 90 had been released and that 95 were still being detained, leaving the status of the remaining 165 an open question.
The Saudi government said it had recovered $100 billion in cash and assets, a tidy sum that the government has already said will be used to partly fund a citizens' account program. The program will be allotted $8.5 billion in 2018, and it is meant to offset the effects of value-added taxes, gas price increases and general cost of living challenges for ordinary Saudis. In addition, the government needs to fund additional one-off allowances, such as the $13 billion promised several weeks ago to civil servants, soldiers and pensioners. It's unclear where the rest of the recovered funds will go, but it's a nice top-up for the 2018 budget, which stands at $261 billion with an expected deficit of $52 billion. And this Robin Hood approach has been popular with Saudi citizens, some of whom have taken to Twitter to express apprehension over the economic changes from the country's Vision 2030 plan.
Now the question remains: Just how much has the anti-corruption campaign reworked Saudi Arabia's society? There may be a strain on the relationship between the released detainees and the government, and it's unclear how the crackdown will affect the culture of the kingdom's business community. The government implied that Saudi Arabia's corruption problem is largely limited to those arrested during this campaign. However, that is unlikely, and the possibility for new waves of arrests remains. It's also unlikely that those detained were arrested solely for corruption. Rather, they were also targeted as a means for the Saudi government to rework patronage networks in favor of Crown Prince Mohammed bin Salman as he seeks an ever-greater centralization of his power. Should the released detainees cross the crown prince again — perhaps by showing disloyalty to his vision through their business decisions — they could well find themselves back in fetters.
The potential for future arrests — both of new detainees and old ones — remains. This is not the last time Saudi Arabia will target corruption. As changes within the kingdom unfold, the crown prince will continue his work to remove obstacles to his vision for the country's future.