Saudi Arabia: From carbons to computers
In 1938, SoCal drilled the first producible oil well in Saudi Arabia. It was and remains the largest single oil find in history. Even today, Saudi Arabia possesses 17 percent of the world’s proven oil reserves.
It was to change the future of the impoverished desert kingdom and to introduce a new power center in world affairs. But that had to wait until an Arab-Israeli war in 1973.
On Yom Kippur, the Jewish holiday which fell on Oct. 6 that year, Egypt and Syria attacked Israel. The United States and other nations supported Israel. In a surprise move, the Organization of Arab Petroleum Exporting Countries cut oil exports to those allies of Israel. By the embargo’s end in March 1974, the price of oil had risen from $3 per barrel to $12 globally.
Saudi Arabia had become a force to be reckoned with: It had the world’s most essential commodity in abundance, making the Saudis incalculably rich.
The world started paying homage to Saudi Arabia, which had been regarded as another Third World commodity exporter, and a remnant of regional wars and family disputes. The British Empire had dropped it as a protectorate. Just not worth it.
After 1973 the Saudi royal family, flush with money, began haunting the hotspots of Europe. Hard for the world to comprehend when Saudi Arabia, home to the two holiest sites in Islam, Mecca and Medina, promoted Wahhabism, an extremist form of Islam and its state religion, around the world. The country has financed the madrasas that have produced militant Islamists, including al-Qaeda and the Taliban. Washington has intensified its efforts to keep secrets about possible Saudi connections to the attacks on Sept. 11, 2001: 15 of the 19 hijackers were Saudis.
The Saudis have diverted global criticism by building up what amounts to the “our culture” defense. Saudis could do things others couldn’t because, as I was told repeatedly on a visit there, “It is our culture.” The brutal suppression of dissent or the cruel treatment of women was all excused by “our culture” – a kind of blanket amnesty for oppression. Stoning, beheading and amputations for crime were all right as part of “our culture.”
The Saudi royal family continues to be one of the world’s most persecuting regimes: a neo-medieval monarchy with world status.
From the 1980s, Saudi Arabia has sought to diversify its economy but with limited success. Its citizens didn’t embrace industrialization.
There had to be another way. That way was to be high technology, not as the creator of it but as the owner. The Chinese were buying in and so would the Saudis.
Inside Saudi Arabia, web-based technologies were undermining the absolute grip the kingdom had maintained on its citizens’ supply of information. Google, Facebook and Twitter were gaining users rapidly. Twitter, in particular, was seen as a threat to the stability of the kingdom. Dissidents were undermining the royal family. To the Saudi elite, this was a disaster.
In 2015, there was a change in leadership. The new king, Salman bin Abdulaziz, promoted his son Mohammad bin Salman (often referred to as MBS) to crown prince with nearly all the power of the monarch he is destined to be.
Ruthless De-Facto Ruler
MBS, who is 35 years old, has proven himself a ruthless de facto ruler. In what was billed as a crackdown on corruption, he detained hundreds of rich Saudi royals and businessmen and coerced them into turning over about $100 billion in money and assets in exchange for their release. His role in the murder of Saudi journalist and Washington Post contributor Jamal Khashoggi at the Saudi Embassy in Istanbul cemented his status in the kingdom as a ruler to be feared.
According to the excellent book “Blood and Oil: Mohammad bin Salman’s Ruthless Quest for Global Power” by Wall Street Journal reporters Bradley Hope and Justin Scheck, the Saudis found a mole inside Twitter, an Egyptian executive at the company. He started a flow of IP addresses to Saudi Arabia. The mole then recruited a Saudi national who also worked at Twitter, and the floodgate of IP addresses was opened wide.
Al-Waleed bin Talal, a member of the Saudi royal family and the country’s richest man, led the original Saudi investments in Silicon Valley by arranging early participation in Uber and then buying into Twitter. He still owns in his own name 4.7 percent of Twitter. For 83 days, he was locked up, incommunicado, in a luxury suite in the Ritz-Carlton hotel in Riyadh. His freedom reduced his fortune.
MBS fancies himself as part of the new global aristocracy made up of hyper-rich venture capitalists and hedge fund managers. On an April 2018 visit to Silicon Valley, he obviously enjoyed rubbing shoulders with the tech elite; he dressed California-casual in a blazer with an open-neck shirt. The previous month, when he visited the White House, he was swathed in traditional robes.
Data is hailed as the new oil and Saudi Arabia wants to control and manipulate that as much as it has controlled and manipulated its oil. Its tool for this — besides Al-Waleed’s billions, now that he has been newly humbled by his detention — is its sovereign wealth fund, the Public Investment Fund (PIF), which is valued at over $400 billion and is set to balloon when Saudi Aramco, the primarily state-owned oil company, is finally sold off.
Nefarious Knowledge
There is an old saying in Arabic about “seeking knowledge, even in China.” Saudi Arabia has adopted some of China’s nefarious knowledge about data, using it to learn about people, track them down, and, as demonstrated in the case of Jamal Khashoggi, silence them.
MBS wants Saudi Arabia to be a modern world force, and to silence its internal critics, and he believes the PIF will provide these things. He wants to be a player among the hyper-rich; to be a member of the celebrity culture which reveres technology billionaires and hedge fund managers. Saudi Arabia is a BlackRock, Inc. investment partner; it also has invested in SoftBank.
A former member of the National Security Council told me, “Soon it will be the largest investment fund in the world: a power-hungry ball of malice.” The worry is that the fund will be used to advance geopolitical interests, like opposing Israel and countries with large Shi’a populations, like Iraq and its arch-enemy Iran.
“We may not always hate Iran, but the Saudis will because of the Sunni-Shi’a divide,” my former NSC source said.
Back in the energy crisis of 1973, The Economist called Saudi Oil Minister Sheik Ahmed Zaki Yamani the most important man in the world, as he may have been at that time. That is the kind of thing MBS would like to have said of himself.
MBS is apparently getting the celebrity credentials he yearns for: He has an enormous yacht, with a crew of 52, and he is said to be dating actress Lindsay Lohan, although he is a married man with four young children. But that, he might argue, is his culture.
