Saudi Arabia celebrates the 80th anniversary (solar calendar) of its founding today, a milestone that provides an opportunity for assessing the Kingdom’s standing in the international arena.
The leadership of the Custodian of the Two Holy Mosques, King Abdullah, along with the windfall of vast oil revenues, has brought Saudi Arabia unprecedented influence and made it the key power broker in the region.
King Abdullah’s Israeli-Palestinian peace plan is still the most credible of any plans for a viable end to this most intractable of conflicts.
Saudi Arabia has invested tens of billions of dollars in aiding Palestine, Lebanon, Egypt, Jordan, Yemen, Iraq, Pakistan and Morocco to just name a few. Also, it has taken the lead in organizing an Arab and Muslim response to help end the civil war in Syria. Finally, the Kingdom hosted an extraordinary meeting of heads of state of the Organization of Islamic Cooperation during the holy month of Ramadan in Makkah to tackle the core issues that are dividing the Muslim world and come up with solutions to the most pressing problems facing Muslims around the world.
These signs all point to the fact that the Kingdom has become the de facto leader of the Muslim world, and not only because it is the birthplace of Islam and home of its two holiest cities, Makkah and Madinah.
Saudi Arabia has by far the largest economy in the Middle East and North Africa region — some $575 billion at the end of 2011. The Kingdom’s economy is substantially larger than Iran’s, the region’s second economic power.
Initial estimates for 2012 by the IMF show the Saudi GDP surpassing the $600 billion mark for the first time, consolidating the Kingdom’s emerging pivotal standing within the G20 grouping.
Furthermore, the Kingdom is by far the largest exporter and holder of the largest trade and account balance surpluses in the Muslim world. Finally, the Saudi Arabian Monetary Agency (SAMA), the Saudi central bank, is the third largest net foreign asset holder in the world, behind only China and Japan, with an estimated position of over $750 billion. Just 5 years ago, the reserve position of SAMA was about $300 billion.
The Saudi Kingdom is the world’s largest producer, exporter and holder of oil reserves, and finds itself in the unique position of having about 90 percent of the world’s spare capacity, which makes its influence in today’s international economic system difficult to overstate. Saudi Aramco has a sustained production capacity of between 12.0 to 12.5 million barrels per day (mb/d). In contrast, Russia, holder of the world’s second largest sustained production capacity, has a potential of between 10.0 to 10.5mb/d. Within OPEC, Saudi Arabia’s dominance is complete. The Kingdom pumps three times more oil than OPEC’s second largest producer, Iran, which has had great difficulty keeping its sustained production capacity from decreasing. Saudi Arabia’s strength becomes even clearer when taking into consideration the fact that the Kingdom exports four times more oil than Iran. Translated into cash, Saudi Arabia’s revenue from petroleum exports averaged about $320 billion in 2011, while Iran collected about a fourth of this, on par with Abu Dhabi, and even Kuwait.
Saudi Arabia’s new role comes with expanded responsibilities, especially in terms of economic aid and development. The Kingdom has emerged as the leading single donor to most Muslim countries, and has one of the five largest global foreign aid programs. The Kingdom committed an initial $3.25 billion to Yemen at the recent Riyadh conference on Yemen and over $4 billion to Egypt to help the new government meet the dire challenges facing the country after the upheaval of last year. Furthermore, the Saudi leadership has committed over $2.5 billion in financial aid to Lebanon, in addition to several more billion dollars waiting to be disbursed to Palestine, Jordan, Pakistan and many more countries, including Gulf Cooperation Council (GCC) members Bahrain and Oman. In addition to these expenditures, Saudi Arabia is heavily investing in its own defense (an essential step, considering the botched US invasions of Iraq and Afghanistan have made the Arab and Muslim worlds significantly less stable). On top of the estimated annual $30 billion military budget, approximately $100 billion is being spent over the next several years as part of the new Saudi defense doctrine. This program will expand, upgrade and maintain the various armed services of the Ministry of Defense, Ministry of Interior, National Guard and General Intelligence Presidency.
Thus, on the Kingdom’s 80th anniversary (according to the solar calendar), it has become clear that Saudi Arabia’s will to power is real, and stems from the Kingdom’s deep historical roots and ideology as professed by its founder, King AbdulAziz. After the unprecedented extraordinary dramatic events that occurred in the Arab world last year, King Abdullah and Crown Prince Salman have earned Saudi Arabia the leadership role in the region and have ensured that it is the preeminent Sunni Muslim power. By providing much needed aid and backing of various Muslim and Arab causes, the Saudi leadership has earned wide Muslim and Arab support. The mandate for the Saudi leadership now is to consolidate Saudi Arabia’s regional standing on the world stage.
Prince Turki Al-Faisal is one of the founders of the King Faisal Foundation and the chairman of the King Faisal Center for Research and Islamic Studies. He is a former director of the General Intelligence and was the Kingdom’s ambassador to the United Kingdom and the United States.